Search found 217 matches

by Kelly
Tue May 31, 2016 5:32 pm
Forum: Investing - Theory, News & General
Topic: TIAA Traditional account or intermediate term bond index?
Replies: 23
Views: 1740

Re: TIAA Traditional account or intermediate term bond index?

So if TIAA is under financial pressures 9 months from now, they could start paying 1% on all of your vintages of RCP Traditional.


Good to know! I missed this nuance.

Many thanks

Kelly
by Kelly
Mon May 30, 2016 12:09 pm
Forum: Investing - Theory, News & General
Topic: TIAA Traditional account or intermediate term bond index?
Replies: 23
Views: 1740

Re: TIAA Traditional account or intermediate term bond index?

Of course there are reasons. The bond fund could do better than TIAA over the long-term. The liquidity of the bond fund is more likely higher. I have TIAA TA paying more than 4.5% nowadays, but I don't have 100% of my fixed income in that. Over the years, bond funds have actually done just as well....
by Kelly
Mon May 30, 2016 11:53 am
Forum: Investing - Theory, News & General
Topic: TIAA Traditional account or intermediate term bond index?
Replies: 23
Views: 1740

Re: TIAA Traditional account or intermediate term bond index?

I don't. The TIAA rates are great in today's environment. Personally I have a 3% guarantee TIAA tIRA in place of all bonds. The only question seems to be whether you will want to withdraw some someday or can live with the restrictions. Perhaps you want a mixture of both. edit: I forgot to ask you t...
by Kelly
Mon May 30, 2016 10:43 am
Forum: Investing - Theory, News & General
Topic: TIAA Traditional account or intermediate term bond index?
Replies: 23
Views: 1740

TIAA Traditional account or intermediate term bond index?

Folks Is there any reason why someone would want to use Vanguard's Intermediate Term Bond Index (VBILX) with a 2.18% yield when they also have access to two TIAA traditional annuities? One TIAA Traditional Annuity has a 3.25% current crediting rate (Retirement Choice Plus) and doesn't appear to have...
by Kelly
Mon May 23, 2016 7:15 am
Forum: Investing - Theory, News & General
Topic: Should I annuitize my TIAA account?
Replies: 5
Views: 1052

Re: Should I annuitize my TIAA account?

Many thanks for the input. It does strike me as a good idea and I wasn't sure if I was missing anything.

Best

Kelly
by Kelly
Sun May 22, 2016 8:42 am
Forum: Investing - Theory, News & General
Topic: Deconstructing DC area home price gains
Replies: 1
Views: 300

Deconstructing DC area home price gains

Folks I'm trying to determine how much of the price gain in Wash. DC area since 1987 is attributed to inflation and how much is attributed to the decline in mortgage rates. Here's my attempt and any comments are appreciated: -Since 1987 the Case Shiller Home Price Index for the Washington DC area ha...
by Kelly
Sun May 22, 2016 7:35 am
Forum: Personal Finance (Not Investing)
Topic: Understanding How Financial Advisors Are Compensated, by Wade Pfau
Replies: 16
Views: 2122

Re: Understanding How Financial Advisors Are Compensated by Wade Pfau

So you are quibbling about "fee only" vs "Fee-Only". You say it is incorrect and then proceed to tell us why it is true.

No. A NAPFA registered, fee only advisor does not sell anything. Period. That's the clarification I wanted to make.

Kelly
by Kelly
Sun May 22, 2016 7:05 am
Forum: Personal Finance (Not Investing)
Topic: Understanding How Financial Advisors Are Compensated, by Wade Pfau
Replies: 16
Views: 2122

Re: Understanding How Financial Advisors Are Compensated by Wade Pfau

The article and table unfortunately are misleading. One would come away thinking that fee only advisors do not get commissions. He briefly notes that some advisors can switch between paid by client and paid by commissions, but he implies that these would be called fee based. Many firms call themsel...
by Kelly
Mon May 16, 2016 7:47 am
Forum: Investing - Theory, News & General
Topic: When is the last time Vanguard altered target date allocations?
Replies: 8
Views: 1184

When is the last time Vanguard altered target date allocations?

Folks

In Feb Vanguard increased international equity allocation of it's target date funds from 30% to 40%. Does anyone know of any other times that changes were made to these or any other of their funds of funds?

Many thanks

Kelly
by Kelly
Sun May 15, 2016 7:21 am
Forum: Investing - Theory, News & General
Topic: Should I annuitize my TIAA account?
Replies: 5
Views: 1052

Should I annuitize my TIAA account?

Folks I've been contributing to a TIAA traditional account for over 30 years. The account balance is $181,000. If I annuitize with a 2/3 rds survivor benefit the annual payments would be $14,940 for an annuity "rate" of 8.25% (14940/181000). Current market rates from other insurers are 6.2...
by Kelly
Sat May 07, 2016 3:57 pm
Forum: Investing - Theory, News & General
Topic: Sharpe's "Arithmetic of Active Management" explained very well
Replies: 10
Views: 1218

Sharpe's "Arithmetic of Active Management" explained very well

Good Bogelhead stuff

This article does a great job of explaining Nobel economist Bill Sharpe's "Arithmetic of Active Management" thesis

http://www.philosophicaleconomics.com/2016/05/passive/

Kelly
by Kelly
Mon May 02, 2016 7:42 pm
Forum: Investing - Theory, News & General
Topic: LifeStrategy Moderate Growth fund or its components?
Replies: 33
Views: 3063

LifeStrategy Moderate Growth fund or its components?

Folks The Vanguard portfolio builder recommended 4 funds which are the exact components and weights of the LifeStrategy Moderate Growth fund . Is there any reason why the LifeStrategy fund wouldn't produce nearly the same results if held in an IRA (assuming the individual funds were rebalanced to ta...
by Kelly
Sun Mar 27, 2016 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: Raid a Roth for second home down payment or US HELOC?
Replies: 4
Views: 596

Raid a Roth for second home down payment or US HELOC?

I could use a second opinion on this. I need to come up with $100k for a down payment on a second house. I can either take this from my Roth (I've met the age and 5 year requirements) or use a home equity line of credit on the primary residence. That rate is 2.4% or 1.68% after tax assuming a 30% co...
by Kelly
Mon Mar 07, 2016 11:44 am
Forum: Investing - Theory, News & General
Topic: Historical capital gains in an index fund?
Replies: 4
Views: 535

Historical capital gains in an index fund?

Does anyone know where I can find the historical distributions of any large cap index fund? Both Morningstar and Vanguard websites only go back a couple of years.

I'm trying to determine how much, if any, long or short term capital gains an index might have distributed.

Thanks

Kelly
by Kelly
Wed Dec 09, 2015 8:35 am
Forum: Investing - Theory, News & General
Topic: Wade Pfau on Reverse Mortgages
Replies: 41
Views: 4619

Re: Wade Pfau on Reverse Mortgages

I work as a fee only (I don't sell anything) CFP. Because I charge by the hour (and don't charge much) I get a lot of middle America, blue collar pre-retirees who will have to rely on either a reverse mortgage or downsize to a condo or rent an apartment. These folks may have $200k or less saved. If ...
by Kelly
Thu Nov 26, 2015 5:54 pm
Forum: Investing - Theory, News & General
Topic: Why do FDIC insured CDs yield more than treasuries?
Replies: 36
Views: 4910

Why do FDIC insured CDs yield more than treasuries?

Folks, A treasury maturing in one year yields 0.48% but Ally bank has a one year FDIC insured CD yielding 1.05%. Unless I'm missing something the risk is the same: none. My guess is that there's simply much more institutional money flowing into treasuries pushing the yield down. If that is the reaso...
by Kelly
Sun Oct 25, 2015 1:09 pm
Forum: Investing - Theory, News & General
Topic: Between rock and hard place in 401k large cap
Replies: 4
Views: 688

Between rock and hard place in 401k large cap

Folks, What's the better of these two bad options for 401k large cap: Principal SP 500 index at 0.70% ER or American Funds Fundamental Investor R (RFNCX) at 0.96% ER (large blend). The American Funds 3 and 5 year returns would be worse than the Principal SP 500. Other time periods it's better. Here'...
by Kelly
Tue Oct 20, 2015 4:31 pm
Forum: Investing - Theory, News & General
Topic: Question about index holdings
Replies: 1
Views: 279

Question about index holdings

Vanguard SP 500 index's top three holdings are Apple, Microsoft, Exxon http://portfolios.morningstar.com/fund/holdings?t=VFINX&region=usa&culture=en-US The value index's top three holdings are Microsoft, Exxon, Johnson and Johnson http://portfolios.morningstar.com/fund/holdings?t=VIVAX&r...
by Kelly
Mon Oct 05, 2015 2:34 pm
Forum: Personal Finance (Not Investing)
Topic: Northwestern Mutual Whole Life Insurance (65 Life)
Replies: 35
Views: 3715

Re: Northwestern Mutual Whole Life Insurance (65 Life)

5) Cash value can be borrowed for whatever you want, whenever you want. The loan is set ~6%, but really it only costs about 2% since the principle that is borrowed will continue to earn interest. You don't really ever have to pay back the loan since the company will just deduct what is owed from th...
by Kelly
Mon Oct 05, 2015 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: Northwestern Mutual Whole Life Insurance (65 Life)
Replies: 35
Views: 3715

Re: Northwestern Mutual Whole Life Insurance (65 Life)

James Hunt is a retired life actuary who evaluates policies for the consumer federation of america. He charges $100 to work out the internal rate of return of the policy and tell you whether it's worth keeping. I would guess it's returning about 4% so you could treat it as part of your bond allocati...
by Kelly
Sun Oct 04, 2015 9:31 am
Forum: Investing - Theory, News & General
Topic: IBT interview with Dr. Bill Bernstein
Replies: 80
Views: 7650

Re: IBT interview with Dr. Bill Bernstein

I'm always hoping BB will write more books. I've read all of his, many twice and 4 pillars more than that. Maybe we can talk him into another addition to the investing for adults series.
by Kelly
Fri Sep 25, 2015 9:43 am
Forum: Investing - Theory, News & General
Topic: Need idea for teen supply demand exercise
Replies: 12
Views: 1256

Need idea for teen supply demand exercise

Folks I'm teaching investing basics at a local high school on Monday. I have an idea that I will relate basic supply and demand to stock prices. I need some form of simple exercise to demonstrate supply and demand. I've found one idea online that involves splitting the class in half and asking one h...
by Kelly
Tue Sep 22, 2015 11:15 am
Forum: Investing - Theory, News & General
Topic: What are the index fund costs beyond bid ask?
Replies: 13
Views: 1098

Re: What are the index fund costs beyond bid ask?

It does seem that Int'l funds are always costlier regardless of size. Any insight? The phone desk at VGD didn't know the full story either. Although, interestingly, he suspected that some of the cost difference may be attributed to the assumption that one index provider cost more than another. Kelly
by Kelly
Mon Sep 21, 2015 10:40 pm
Forum: Investing - Theory, News & General
Topic: What are the index fund costs beyond bid ask?
Replies: 13
Views: 1098

What are the index fund costs beyond bid ask?

My apologies if this has already been covered. If it has I can't find it. The SP 500 (VFINX) has an expense of 0.17%, while the Mid Cap (VISMX) costs 0.23%. Is there anything beyond bid ask to account for Mid Caps higher price? FTSE All World Ex US (VFWIX) cost 0.29%. Are there additional costs beca...
by Kelly
Sun Sep 20, 2015 9:34 am
Forum: Investing - Theory, News & General
Topic: Where can I open orders for APPL?
Replies: 6
Views: 638

Re: Where can I open orders for APPL?

If you're going to teach high school students about basic finance and personal investing, please be sure to impart the principles of living below your means, paying yourself first, investing early and often, and the tyranny of costs. Too many high school classes I've seen emphasize the definitions ...
by Kelly
Sun Sep 20, 2015 7:58 am
Forum: Investing - Theory, News & General
Topic: Where can I open orders for APPL?
Replies: 6
Views: 638

Re: Where can I open orders for APPL?

That was quick! Thanks to you both.

Kelly
by Kelly
Sun Sep 20, 2015 6:31 am
Forum: Investing - Theory, News & General
Topic: Where can I open orders for APPL?
Replies: 6
Views: 638

Where can I open orders for APPL?

Folks

I'm teaching a high school class on very basic stock market and investing concepts. Is there some place I can see all the bid ask offers for APPL in real time? I'd like to get a screen shot of it.

Many thanks!

Kelly
by Kelly
Thu Sep 17, 2015 6:28 am
Forum: Investing - Theory, News & General
Topic: Question for stats folks
Replies: 4
Views: 705

Question for stats folks

I'd like to better understand the FF 3 factor regression. While I was strong in college stats, after 30 years all I can recall is standard deviation, bell curve an some other basics. My question: if I was to get a stats text book what subjects should I study so that I could understand FF regression ...
by Kelly
Thu Sep 10, 2015 5:31 am
Forum: Investing - Theory, News & General
Topic: Looking for list of systematic risk factors
Replies: 7
Views: 671

Re: Looking for list of systematic risk factors

Yes! I read Bernstein's Deep Risk. Excellent! I think the following would cover it but I'm not sure if I'm missing any big ones. These are risks that effect the entire market Inflation Recession/depression Political (changes in corporate tax rates or regulations) Investor psychology (irrational exub...
by Kelly
Wed Sep 09, 2015 4:53 pm
Forum: Investing - Theory, News & General
Topic: Looking for list of systematic risk factors
Replies: 7
Views: 671

Looking for list of systematic risk factors

Folks I can find lists of unsystematic risk factors but not systematic risk factors like recession, etc. I think I'd know one (risk factor) if I saw one but I'd like to find some authoritative list. I'm not talking about Fama French factors but those that cause declines in the overall market. This i...
by Kelly
Mon Sep 07, 2015 7:48 am
Forum: Investing - Theory, News & General
Topic: Morgan Stanley dividend portfolio vs. iShare Select Dividend
Replies: 2
Views: 400

Morgan Stanley dividend portfolio vs. iShare Select Dividend

Folks I was surprised to see that this brokerage portfolio made up of high dividend payers beat the iShare Select Dividend (DVY) and DFA Large Value. Oddly, the brokerage portfolio has less value loading than DVY (assuming I read the factor analysis correctly). Is there anyone good at factor analysi...
by Kelly
Mon Jun 01, 2015 9:56 am
Forum: Investing - Theory, News & General
Topic: Life Strategy fund for retirement?
Replies: 6
Views: 1205

Life Strategy fund for retirement?

A relative who is retiring is asking how to allocate their savings which is all in their IRA. I like the simplicity of Vanguard's Life Strategy Moderate Growth fund which is 60/40. The 5 bps extra cost is not a big concern and probably worth it for this person who isn't going to be interested in reb...
by Kelly
Sun May 03, 2015 7:13 am
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 5396

Re: Annuities: Bad in principle or practice?

I've analyzed a number of indexed and variable annuities. Equity indexed annuities are designed to be sold. With their caps and floors you'll get a bond like return which makes sense since this is what the insurer invests the premiums in. SPIAs have an IRR of about 4% at life expectancy (late 80's)....
by Kelly
Wed Apr 08, 2015 5:38 am
Forum: Investing - Help with Personal Investments
Topic: Required minimum distribution and year end fund distribution
Replies: 29
Views: 2600

Required minimum distribution and year end fund distribution

Am I correct in assuming that it's best, if possible, to delay an RMD until after Vanguard makes year end distributions? Specifically, is it smart to wait until the day after the record date? This assumes that the RMD will be reinvested in a stock index. Are there any other RMD strategies that are u...
by Kelly
Mon Feb 02, 2015 10:54 am
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1983

Re: Question about dividend strategies

I don't understand his point that investors will bid up the share price after the dividend to fill in the "hole" left in the market cap after the payout. Why would they? Why would they not? Just prior to the dividend the company has potential plus cash; it pays the cash to investors in th...
by Kelly
Mon Feb 02, 2015 9:19 am
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1983

Re: Question about dividend strategies

I don't understand his point that investors will bid up the share price after the dividend to fill in the "hole" left in the market cap after the payout. Why would they?
by Kelly
Mon Feb 02, 2015 8:01 am
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1983

Re: Question about dividend strategies

I didn't think it made any sense. The author is describing a market where investors push up the market cap to fill in the hole left by the dividend payout. Why would they? And why are some folks so passionate about dividend payers? It must be some misunderstanding that receiving 3% (along with a 3% ...
by Kelly
Sun Feb 01, 2015 1:55 pm
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1983

Question about dividend strategies

I recently read this article in seeking alpha (requires registration) http://seekingalpha.com/article/933531-demystifying-the-dividend-illusion In it the author talks about a $100 share that pays a $0.50 dividend. On the ex div date the share price falls to $90.50. So far so good. He then states the...
by Kelly
Sun Jan 18, 2015 9:42 am
Forum: Investing - Theory, News & General
Topic: Sign the fiduciary standard petition
Replies: 0
Views: 326

Sign the fiduciary standard petition

The DOL is going to take another whack at implementing a fiduciary standard. You can sign the petition at this site http://saveourretirement.com/ Background: Thanks to loopholes in the rules that govern advice about retirement investing, banks, brokers, mutual fund companies, and insurance agents ar...
by Kelly
Mon Jan 12, 2015 8:55 am
Forum: Investing - Theory, News & General
Topic: Looking for book on currency exchange rates
Replies: 1
Views: 332

Looking for book on currency exchange rates

Folks, I'm trying to broaden my financial literacy. I'm trying to better understand foreign exchange rates and how these mechanisms work. I'm reading Currency Wars but it assumes that the reader knows at least the basics of international monetary systems. Does anyone know of a more basic book? Kelly
by Kelly
Thu Jan 01, 2015 2:46 pm
Forum: Investing - Help with Personal Investments
Topic: Can annuity withdrawals be rolled to another IRA?
Replies: 2
Views: 321

Can annuity withdrawals be rolled to another IRA?

Someone I know crossed paths with an annuity salesman. They now have a fixed annuity in an IRA and they are still well into the surrender charge period. However, they can take 10% of the value out each year without a surrender charge. He's only 56 so he'd have a 10% penalty if he withdrew it. Does a...
by Kelly
Thu Jan 01, 2015 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: SS benefit for spouse and children at 62
Replies: 9
Views: 814

Re: SS benefit for spouse and children at 62

pshonore wrote:I believe the Mother's (caretaker) benefit stops when the youngest child reaches 16 unless she is otherwise eligible for a spousal benefit.


This is true. If she's working she's subject to the earnings test so she may never get benefits.
by Kelly
Thu Jan 01, 2015 11:52 am
Forum: Personal Finance (Not Investing)
Topic: SS benefit for spouse and children at 62
Replies: 9
Views: 814

Re: SS benefit for spouse and children at 62

He can also file and suspend at his SS full retirement age of 66 and some months (depending on year of birth), allow his own benefit to growth through delayed retirement credits but allow his children under 18 claim their benefit. File and suspend is not allowed until full retirement age. He should ...
by Kelly
Tue Dec 23, 2014 8:51 am
Forum: Investing - Help with Personal Investments
Topic: Fixed Index Annuity Rate Advice
Replies: 8
Views: 1457

Re: Fixed Index Annuity Rate Advice

The "adviser" (I suspect salesman) has you in the fixed account since his commission was higher if he could get you to sign off on this. It's higher since the insurer knows their liability. The market returns most likely have caps like 3-4.5% (the rates you list may be the cap rates but th...
by Kelly
Sun Dec 07, 2014 11:03 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3328

Re: Why do target date funds get so bond heavy?

I read Vgd's target date methodology and it shows that the target date fund attempts to solve for BOTH SPIA and systematic withdrawal. http://www.vanguard.com/pdf/s167.pdf They said that they are trying to solve for a replacement rate from non-Social Security sources of $19,200/yr. They say that it ...
by Kelly
Sun Dec 07, 2014 9:25 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3328

Re: Why do target date funds get so bond heavy?

P.S. It all gets a little silly because if you have, let's say, 30 years until retirement, and you start by investing in a target date fund, the changes are very slow and you have decades to think about it and adjust them to what you learn about your personal risk tolerance. It also gives three dec...
by Kelly
Sun Dec 07, 2014 8:49 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3328

Re: Why do target date funds get so bond heavy?

In addition to Richard's comment, you need to consider the behavioral (or emotional) aspect of investing. How would you feel as an 80 year-old with no human capital left, with 80% in equities during a replay of 2008-2009 - and not knowing if or when the losses will stop? Will you be able to enjoy l...
by Kelly
Sun Dec 07, 2014 8:13 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3328

Re: Why do target date funds get so bond heavy?

A large loss in your portfolio shortly after retirement can devastate the probability of portfolio survival. Yes, I understand this. But, the research has taken that into account. In fact new research shows that a rising equity glide path, starting a number of years after the target date path can i...
by Kelly
Sun Dec 07, 2014 7:54 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3328

Why do target date funds get so bond heavy?

Does anyone know the theory behind target date funds very heavy bond allocation at and after the target date has passed? Vanguard's 2010 fund is 62% bond. Research (Bengen, Pfau, etc) has shown that the safe withdrawal rate in retirement is maximized with a bond allocation of 50% to 70%. See page 12...
by Kelly
Sun Dec 07, 2014 7:34 am
Forum: Investing - Theory, News & General
Topic: New research on funds chasing dividends
Replies: 2
Views: 637

New research on funds chasing dividends

Jason Zweig has an interesting article in the Journal this weekend. He describes how some funds will hold shares for only a few days to capture the dividend. Never hear of this before. Unable to pick stocks that outperform the market, dozens of mutual funds appear to be chasing higher dividend yield...

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