Search found 7277 matches

by Kevin M
Mon Aug 29, 2016 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone have just a regular ol' Savings Account?
Replies: 16
Views: 1208

Re: Anyone have just a regular ol' Savings Account?

Seems fine to me. I never thought in terms of "emergency fund", but more in terms of having sufficient liquidity to cover shorter-term expected and unexpected expenses. Sound like what you are doing. Any fixed-income solution with little-to-no term risk and good liquidity works fine for th...
by Kevin M
Mon Aug 29, 2016 1:12 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Re: Automatic Vanguard brokerage account upgrades

I don't like the experience of having my settlement money market fund changed--to one with a lower yield--without my asking for it, but I don't see this as Vanguard's fault . And in my case they didn't actually move any money out of Prime into Federal, and I assume they didn't do this for anyone. W...
by Kevin M
Mon Aug 29, 2016 1:01 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Re: Automatic Vanguard brokerage account upgrades

You cannot direct dividends to be reinvested in a different fund on the VBS platform. I have no knowledge if this was/is possible on the mutual fund platform. Yes, it is possible. For a mutual fund account, under Account Maintenance -> Holding level dividend and capital gain elections -> Change ele...
by Kevin M
Mon Aug 29, 2016 12:33 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Article on "Under the radar tax benefit for muni bond funds"
Replies: 23
Views: 2819

Re: Allan Roth Article on "Under the radar tax benefit for muni bond funds"

Unlike Allan's article, everything #Cruncher wrote makes sense to me and is consistent with my understanding about how bonds and bond funds work, and he makes some of the same points I was preparing to make in my reply. I just find the way Allan explains things in the article to be confusing at best...
by Kevin M
Sun Aug 28, 2016 4:03 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Re: Automatic Vanguard brokerage account upgrades

Check? I'm paranoid enough already. Banks are for banking. They have hundreds of years of experience, government regs (not the SEC) and insurance (Fed as last resort) to protect us from banking fraud. Securities firms are for investing. They have decades of years if experience, government regs (the...
by Kevin M
Sun Aug 28, 2016 3:45 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Re: Automatic Vanguard brokerage account upgrades

I am however, concerned about this settlement fund business. I looked into my account right now and it looks like my settlement fund is listed as "Vanguard Tax exempt Money Market Fund". So, it seems to be neither the "Vanguard Prime Money Market Fund" nor this new "Federal...
by Kevin M
Sun Aug 28, 2016 3:10 pm
Forum: Investing - Theory, News & General
Topic: Help explain: bond prices and interest rate link
Replies: 24
Views: 1667

Re: Help explain: bond prices and interest rate link

Or, if it's OK with the OP that we hijack this thread to continue the discussion here, I'm game. I'm okay with that :) OK, thanks kayanco. Let's start by bringing CDs into the discussion of how price and change in yield are related for bonds, since that's the topic of this thread. We've seen severa...
by Kevin M
Sun Aug 28, 2016 12:45 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Re: Automatic Vanguard brokerage account upgrades

The other thread did not use "Automatic", but used the word "Forced": https://www.bogleheads.org/forum/posting.php?mode=reply&f=10&t=198365 Thanks. That link doesn't work for me, but I searched and easily found the post: Forced Upgrade to Brokerage Structure - Bogleheads...
by Kevin M
Sun Aug 28, 2016 12:43 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Re: Forced Upgrade to Brokerage Structure

I didn't see this thread, so started my own: Automatic Vanguard brokerage account upgrades - Bogleheads.org . (Moderators, feel free to merge that thread into here if you want). To clarify, as I detail in my post in the other thread, my brokerage accounts are being automatically upgraded, but not mu...
by Kevin M
Sun Aug 28, 2016 12:35 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Re: Automatic Vanguard brokerage account upgrades

There may be a semantic distinction going on here. Because of new Federal regs on MM accounts (floating value and/or partial closes) Vanguard is requiring all(?) settlement accounts to move to the Federal Money market account. So in my thinking the automatic change was to the settlement fund in the...
by Kevin M
Sat Aug 27, 2016 1:40 pm
Forum: Investing - Theory, News & General
Topic: Help explain: bond prices and interest rate link
Replies: 24
Views: 1667

Re: Help explain: bond prices and interest rate link

What I don't understand is why people have bonds in their portfolios since interest rates have been so low and there is nowhere to go but up which means that bond prices will fall. Wouldn't that make bonds as risky as stocks? Even when bond prices fall, bond investments may still make money, becaus...
by Kevin M
Sat Aug 27, 2016 1:12 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion or Tax Gain Harvest?
Replies: 7
Views: 735

Re: Roth Conversion or Tax Gain Harvest?

I do not see how it is possible that generating approximately $95K of capital gain harvesting tax free (which otherwise would be taxed at 15% or 30% in future years) does not trump conversions of my tIRA that might be in the 25% and 28% bracket instead of the 33% or 35% bracket. Isn't the delta on ...
by Kevin M
Sat Aug 27, 2016 12:57 pm
Forum: Investing - Theory, News & General
Topic: Automatic Vanguard brokerage account upgrades
Replies: 31
Views: 1897

Automatic Vanguard brokerage account upgrades

[Thread merged into here, see below. --admin LadyGeek] I know there are a zillion threads on upgrading Vanguard accounts from the old platform to the new platform, and this may have been mentioned already, but Vanguard has automatically upgraded a couple of my brokerage accounts; the did not upgrad...
by Kevin M
Thu Aug 25, 2016 2:57 pm
Forum: Investing - Theory, News & General
Topic: Are there other reasons besides volatility to avoid 100% equities?
Replies: 115
Views: 6793

Re: Are there other reasons besides volatility to avoid 100% equities?

When comparing stocks to bonds shouldn't you use the same investment time frame? What I mean is bonds will give a nominal return if held to maturity and if short enough than inflation will be less of a factor - but there is then the nominal reinvestment risk along with the differential of nominal v...
by Kevin M
Thu Aug 25, 2016 1:50 pm
Forum: Investing - Theory, News & General
Topic: Help explain: bond prices and interest rate link
Replies: 24
Views: 1667

Re: Help explain: bond prices and interest rate link

longinvest, You said you didn't want to get into a CD vs. bond thing, but that seems to be exactly what you are doing. Note that I didn't even mention CDs in my original reply to OP, but simply tried to answer OP's questions about the relationship between bond price and yield, and the relevance to t...
by Kevin M
Wed Aug 24, 2016 10:35 pm
Forum: Investing - Theory, News & General
Topic: Help explain: bond prices and interest rate link
Replies: 24
Views: 1667

Re: Help explain: bond prices and interest rate link

The year-to-date (YTD) return of Vanguard's Total Bond Market index fund (VBTLX) was 6.08% as of 08/23/2016. I don't remember seeing any CD offering a rate anywhere near that, in late 2015 or early 2016. It is common to confuse strategy with outcome, and to exhibit hindsight bias and recency bias. ...
by Kevin M
Wed Aug 24, 2016 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion or Tax Gain Harvest?
Replies: 7
Views: 735

Re: Roth Conversion or Tax Gain Harvest?

This question has been asked before, including by me about a year ago in this thread: Roth conversion/recharacterization game or 0% cap gains tax rate - Bogleheads.org . My simple-minded thinking at the time was basically this: Off the top of my head, without any complex math or assumptions, paying ...
by Kevin M
Wed Aug 24, 2016 4:37 pm
Forum: Investing - Theory, News & General
Topic: Help explain: bond prices and interest rate link
Replies: 24
Views: 1667

Re: Help explain: bond prices and interest rate link

In short, if you hold Vanguard Total Bond Market Index Fund and you plan to be holding it for more than six years, you should want interest rates to rise. Correction: If you plan to hold the fund for more than six years from today, then you should want interest rates to rise (by a lot), and soon , ...
by Kevin M
Wed Aug 24, 2016 2:56 pm
Forum: Investing - Theory, News & General
Topic: Help explain: bond prices and interest rate link
Replies: 24
Views: 1667

Re: Help explain: bond prices and interest rate link

"The worst performance was on a question about how bond prices respond to rising interest rates . Only 28 percent of people in 2015 got that one right. The correct answer is that bond prices will fall." It's even more fundamental than this. Bond price and bond yield (aka, interest rate) a...
by Kevin M
Wed Aug 24, 2016 1:39 pm
Forum: Investing - Help with Personal Investments
Topic: CD vs Short Term Inv Grade Bond
Replies: 12
Views: 1604

Re: CD vs Short Term Inv Grade Bond

Hi all, I have some emergency cash. I'm debating an Ally 5 yr CD @ 1.7% <snip> I personally prefer to keep money that's likely to be needed in the short term in a cash account yielding 1% or more (I earn 3% on $15K in a reward checking account). An emergency fund is a bit different, since you don't...
by Kevin M
Wed Aug 24, 2016 11:59 am
Forum: Investing - Theory, News & General
Topic: Are there other reasons besides volatility to avoid 100% equities?
Replies: 115
Views: 6793

Re: Are there other reasons besides volatility to avoid 100% equities?

How does each of those same technical points not also relate to long term risks of bonds converting from nominal to real value with a random variable inflation increasing over time? I get how stocks are riskier over time. I have trouble understanding under this logic given the argument of investing...
by Kevin M
Sun Aug 21, 2016 4:04 pm
Forum: Investing - Help with Personal Investments
Topic: New 401K, help with allocation
Replies: 2
Views: 209

Re: New 401K, help with allocation

Would be better to consider this as part of your overall portfolio, so knowing about the rest of the portfolio is important. Often it's a good idea to start by using the best (or least bad) fund(s) in a 401k, and rounding out your asset allocation with the other accounts. Also, knowing the expense r...
by Kevin M
Sun Aug 21, 2016 3:55 pm
Forum: Investing - Theory, News & General
Topic: Are there other reasons besides volatility to avoid 100% equities?
Replies: 115
Views: 6793

Re: Are there other reasons besides volatility to avoid 100% equities?

There are no doubt periods were stock returns were very bad. But there were also periods of very bad bond returns, and those periods too are real world results. This is why it probably is prudent to diversify your risks, and hold some stocks and some fixed income, and maybe some real estate too. Ev...
by Kevin M
Sun Aug 21, 2016 3:33 pm
Forum: Investing - Theory, News & General
Topic: Are there other reasons besides volatility to avoid 100% equities?
Replies: 115
Views: 6793

Re: Are there other reasons besides volatility to avoid 100% equities?

I have a few general questions about asset allocation I'm hoping to get some feedback on. I've searched the forums on why someone shouldn't go all in on equities, and the most prominent and well supported argument is to avoid higher volatility. If someone is OK with that volatility, and can hold a ...
by Kevin M
Sun Aug 21, 2016 3:18 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

This thread seems to be confusing between adjusting asset allocation based on after-tax Principal vs adjusting asset allocation based on tax treatment of growth/gain. Good observation. As Kitces discusses, both should be considered. This is what I am trying to get at, and many others in recent post...
by Kevin M
Sun Aug 21, 2016 2:23 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

That will reduce the tax cost in the taxable account. Repeating the calculation, I get $10,000 over 15 years becoming $31,721 tax-free, $30,425 before selling in taxable, $28,038 after selling and paying $2837 $2,387 tax, and the $3683 tax loss is 16.96% of the gains. The tax loss increases over ti...
by Kevin M
Sun Aug 21, 2016 2:20 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

# Incidentally, I think Kitces uses sloppy terminology, using "brokerage account" as a synonym for tax-free account, and sometimes using "IRA" as a synonym for traditional IRA. I have traditional IRA brokerage accounts, and I have Roth IRAs." Brokerage is a taxable account....
by Kevin M
Sat Aug 20, 2016 10:26 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

This thread seems to be confusing between adjusting asset allocation based on after-tax Principal vs adjusting asset allocation based on tax treatment of growth/gain. Good observation. As Kitces discusses, both should be considered. This Kitces paper to me was more thorough and answered all my ques...
by Kevin M
Sat Aug 20, 2016 4:35 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

I calculate the basis as 16,582 (increased from 10,000 due to reinvested dividends) I get a basis of 28,229. Every year, the gain is 6% unrealized gains and 1.7% reinvested dividends after paying tax, so 17/77 of the 82,570 is gain. Yes, my basis calculation was wrong, and I've verified that yours ...
by Kevin M
Fri Aug 19, 2016 4:14 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

Over a long time period, the compounding of dividend taxes makes the tax cost over 20%, which means that taxable and tax-deferred stocks lose about the same fraction of gains to taxes. I finally decided to try and work this out for myself. David, please tell me if I'm on the right track if you can ...
by Kevin M
Fri Aug 19, 2016 3:27 pm
Forum: Investing - Help with Personal Investments
Topic: New Vanguard accounts
Replies: 31
Views: 3513

Re: New Vanguard accounts

The upgrade button didn't take us thru any of the screens you mentioned. It was one click and done. <snip> When the trust was created, we filled out new account forms for mutual fund and vanguard brokerage accts, went thru medallion signature guarantee to re-title the accounts in trust name. This m...
by Kevin M
Fri Aug 19, 2016 2:18 pm
Forum: Investing - Help with Personal Investments
Topic: New Vanguard accounts
Replies: 31
Views: 3513

Re: New Vanguard accounts

We have IRA, rollover IRA and trust accts at Vanguard. Initiated the upgrade on Friday, Aug 12 and by Monday Aug 15th, the upgrade was done, including trust accts. Interesting. So there must be something different about your trust account and our trust accounts. I'm assuming you did this all online...
by Kevin M
Fri Aug 19, 2016 1:35 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

So you have $10K before tax to contribute annually. Let's use a constant 25% tax rate, so you can contribute $10K to a traditional 401k or $7,500 to a Roth 401k (since you must pay 25% tax on the $10K before the contribution to the Roth). I'm paying the taxes for the Roth contribution. Because I ca...
by Kevin M
Fri Aug 19, 2016 1:15 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

Well, technically the government is on the hook for your entire basis at ordinary income rates as you could theoretically tax loss harvest it and put it against your ordinary income. Yes, but the extent to which this applies depends on the size of your losses, due to the annual $3K limit. With a $3...
by Kevin M
Fri Aug 19, 2016 12:26 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

The following model is incorrect: So we can solve this equation to get the equivalent after-tax amount given a pre-tax gain or loss in the various account types. TF = T x 0.85 = TD x 0.75 where TF = tax-free, T = taxable, and TD = tax-deferred. So if TD = $1,000, then TF = $7,500 and T = $882.35 (0....
by Kevin M
Thu Aug 18, 2016 10:02 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

Yes, adding a taxable account to the mix changes things, but not as much as you think. It really comes down to basis. If your basis is $100K and the account is $200K, and your LTCG is 15% and will always be 15%, then the government owns 7.5% of the account. If your basis is $100K and the account is...
by Kevin M
Thu Aug 18, 2016 9:37 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

gilgamesh: Assuming we're talking about capital gain/loss, which is the main risky component of return, and assuming a 15% capital gain tax rate, the government shares 15% of your gain or loss in a taxable account, so it is symmetrical. Start with $100 and assume 10% pre-tax gain of $10. Government ...
by Kevin M
Thu Aug 18, 2016 9:17 pm
Forum: Investing - Help with Personal Investments
Topic: Want to build a "Core Four" Schwab ETF portfolio
Replies: 19
Views: 5866

Re: Want to build a "Core Four" Schwab ETF portfolio

Using Morningstar's Instant Xray , a rough Total Intl. Stock Market (VXUS) approximation to the nearest 5% using Schwab ETFs might be: SCHF 75% SCHC 10% SCHE 15% Is this still accurate? If not does anyone know the correct answer and how I can learn to derive the answer for myself ? Thank you Have y...
by Kevin M
Thu Aug 18, 2016 7:30 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

Case closed as far as I'm concerned. The case is closed, but not in the way you seem to think. There appears to be some mental block to grasping the concept that $10,000 in a tax-deferred account is equivalent to $8,500 in a Roth given a 15% tax rate on contributions to the Roth and distributions f...
by Kevin M
Thu Aug 18, 2016 6:57 pm
Forum: Investing - Theory, News & General
Topic: Second Guessing Having A % In Short Bonds in Retirement
Replies: 21
Views: 1329

Re: Second Guessing Having A % In Short Bonds in Retirement

Im tapping into the 401 to try and minimize the future RMD's.<snip> Why not convert to a roth from the 401 while in the 28% bracket and help control/reduce future RMD's and TAXES? <snip> None which has anything to do with my original question of, why should I hold ST bonds, when I'll just be sellin...
by Kevin M
Thu Aug 18, 2016 5:24 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me choose a non-municipal bond fund for my taxable account
Replies: 26
Views: 1261

Re: Please help me choose a non-municipal bond fund for my taxable account

VFITX Kevin, that is twice now that you have used VFITX as a reference. Is that because you believe it to be the best treasury fund for my purpose and/or the purpose of this discussion? I ask because at least two other posters have specifically recommended VSIGX to me, in part because of its tax ef...
by Kevin M
Thu Aug 18, 2016 4:55 pm
Forum: Investing - Theory, News & General
Topic: Second Guessing Having A % In Short Bonds in Retirement
Replies: 21
Views: 1329

Re: Second Guessing Having A % In Short Bonds in Retirement

<snip> If you have a taxable account, then you don't need to start tapping your 401k. Do you have 75+ years of RLE without anything in a taxable account?!? No. Taxable account only holds about 5% of the overall total. However I'll be adding to it over the next year or so while I sell off the condo ...
by Kevin M
Thu Aug 18, 2016 4:44 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me choose a non-municipal bond fund for my taxable account
Replies: 26
Views: 1261

Re: Please help me choose a non-municipal bond fund for my taxable account

You only really need to worry about a share price drop in a muni fund if you have to sell a bunch of shares for some reason. If you are just collecting the dividends, don't worry, the price will move back up shortly. This is just plain wrong. With a sustained increase in interest rates, bond prices...
by Kevin M
Thu Aug 18, 2016 4:18 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

My point is that even with or without a bond allocation it is substantially better to place the stock fund in a Roth IRA. But this is not true if you accurately account for the impact of taxes on risk and return. Without a bond allocation it is a moot point, since you will have stocks in all locati...
by Kevin M
Thu Aug 18, 2016 3:47 pm
Forum: Investing - Help with Personal Investments
Topic: AA - Knowing the answer but reluctant to get there
Replies: 9
Views: 971

Re: AA - Knowing the answer but reluctant to get there

1. I have a hard time with the thought of now buying investment grade bond funds because of the "all time" low rates (seems like with bond funds the participant is buying the yield, duration, and risk rather than being equal to buying the individual bonds). This one is easy. Buy 5-year CD...
by Kevin M
Thu Aug 18, 2016 3:22 pm
Forum: Investing - Theory, News & General
Topic: Second Guessing Having A % In Short Bonds in Retirement
Replies: 21
Views: 1329

Re: Second Guessing Having A % In Short Bonds in Retirement

I retired last year at 55 and will need to start tapping into my 401 after the first of the year. More details...... Bonds, percentages of total portfolio, rounded........ 26% Direct CD's <snip> 75+ Years of residual living expenses. You cannot hold direct CDs in a 401k, so the CDs must be in an IR...
by Kevin M
Thu Aug 18, 2016 3:09 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

There may be more subtle nuances that make it slightly better to hold higher-risk assets in a Roth... My best IRA plans lead me to put my best stock fund in a Roth IRA. Patrick, not sure what your point is, but your example doesn't address any nuances from what I can tell. Do you understand that if...
by Kevin M
Thu Aug 18, 2016 2:26 pm
Forum: Investing - Theory, News & General
Topic: The annuity puzzle, and a suggestion
Replies: 108
Views: 6827

Re: The annuity puzzle, and a suggestion

While people tend to downplay these kinds of deep risks, Larry reminds us not to confuse the improbable with the impossible. Any comment on this particular risk, Larry? Joe Tomlinson wrote "How Safe Are Annuities?" a few years ago to try to answer this question: http://www.advisorperspect...
by Kevin M
Thu Aug 18, 2016 2:13 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8273

Re: Bonds in Taxable

The problem with "first-order approximations" is that they are reliable only when you are dealing with relatively small incremental decisions and smooth differentiable functions. However, the tax code is far from smooth or differentiable, and even has some abrupt discontinuities, so first...
by Kevin M
Thu Aug 18, 2016 1:57 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me choose a non-municipal bond fund for my taxable account
Replies: 26
Views: 1261

Re: Please help me choose a non-municipal bond fund for my taxable account

I don't understand the muni paranoia. I thought investment grade munis were the next safest after treasuries. In 2008, VWIUX only lost 0.07 percent. To see the risk, you need to look at drawdown over periods of crisis, not just annual returns. From Sep 19, 2008 to Oct 10, 2008, VWIUX dropped more t...

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