Search found 7376 matches

by Kevin M
Fri Sep 30, 2016 12:06 pm
Forum: Investing - Help with Personal Investments
Topic: Anybody using Andrews CU 3% IRA CD?
Replies: 39
Views: 4563

Re: Anybody using Andrews CU 3% IRA CD?

Just FYI, my transfer from Vanguard to Andrews FCU just completed this week, so the offer is still available. Between this slice and the Pentagon FCU CD's, I have nearly all FI in CD's at 3%. The remaining slice is in LTT. Did you transfer from Vanguard to checking account then to Andrews IRA? I wa...
by Kevin M
Fri Sep 30, 2016 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: Should I invest in bonds now
Replies: 7
Views: 613

Re: Should I invest in bonds now

Assuming you are willing to add a little complexity to your portfolio, you are a perfect candidate for buying a CD directly from a bank or credit union to add some fixed income to your portfolio. I've summarized the benefits of this type of CD in this blog post: CD 5-Year Report Card: Part 2 (Risk a...
by Kevin M
Thu Sep 29, 2016 8:08 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

Total Bond Market Index returns: 2008: 5.15% 2009: 6.04% 2010: 6.54% 2011: 7.69% 2012: 4.15% 2013: -2.15% 2014: 5.89% 2015: 0.40% YTD 5.81% Useful information if you have a time machine. Actually, if you have a time machine, you could have done much better. Kevin Nothing to do with a time machine. ...
by Kevin M
Thu Sep 29, 2016 4:51 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

Kevin and I have been going round and round on the CD/Treasury question for some time. We are apparently talking past each other because we are coming from different directions. He is trying to get the most return from his "safe" FI investment and I am trying to get the best FI "dive...
by Kevin M
Wed Sep 28, 2016 7:03 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market strange transactions
Replies: 14
Views: 1882

Re: Vanguard Prime Money Market strange transactions

Not sure how long it will take for the funds to go from one settlement account to the other. I don't think they move by themselves. I think you have to sell the old account with money going to your (now new) settlement account. Brokerage platform! You only have one settlement fund at any point in t...
by Kevin M
Wed Sep 28, 2016 12:06 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

Federal funds rates averaged 5.85% from 1971 through 2016, with most of the low rates following the 2008 crash http://www.tradingeconomics.com/united-states/interest-rate So if you trust historical data as a guide (I don't particularly, but still.....), I don't see the wisdom in tying money up for ...
by Kevin M
Wed Sep 28, 2016 11:24 am
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

BMO Harris is offering the 2% CD. Does anyone know of a better offer elsewhere? The best 5 year CD rate I see on http://www.depositaccounts.com is 2.3% at Mountain America Credit Union. This is a good rate, and I have had CDs there for a few years. The early withdrawal penalty (EWP) is 365 days of ...
by Kevin M
Wed Sep 28, 2016 10:51 am
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

Neigh!" I did not intend to claim a dollar equivalence. I was just trying to say that the EWP is in some respects term risk. Then yes, of course this is true. This is why I say "much less term risk", not "no term risk". To Kevin's point about putting only what you "nee...
by Kevin M
Tue Sep 27, 2016 1:46 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

If you are going to consider your fixed income portfolio in isolation I will agree with Kevin. Doc and I have had this discussion before, but for those of you who have not participated ... Kevin is "ignoring any withdrawal option" cost and claiming the same term risk. But in a flight to q...
by Kevin M
Tue Sep 27, 2016 12:36 pm
Forum: Investing - Help with Personal Investments
Topic: Allocation in tax deferred account
Replies: 4
Views: 302

Re: Allocation in tax deferred account

If you know that your bond allocation in your IRAs will be growing at a slower rate, as you have said a couple of times, then why not just invest it all in stocks to get faster growth? I think the answer is that you misspoke, and what you meant is that the expected return of the bonds in your IRA is...
by Kevin M
Tue Sep 27, 2016 11:34 am
Forum: Investing - Theory, News & General
Topic: Bonds: TTM vs SEC yield
Replies: 4
Views: 474

Re: Bonds: TTM vs SEC yield

In searching around I've seen people say that the SEC yield is more accurate. Does that mean the NAV is expected to go down an amount to bring the two in line? SEC yield is a type of yield to maturity (YTM)--it's the average YTM of the fund's holdings over a trailing 30 day period. Vanguard also pu...
by Kevin M
Tue Sep 27, 2016 12:59 am
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

Index Fan wrote:Total Bond Market Index returns:

2008: 5.15%
2009: 6.04%
2010: 6.54%
2011: 7.69%
2012: 4.15%
2013: -2.15%
2014: 5.89%
2015: 0.40%

YTD 5.81%

Useful information if you have a time machine. Actually, if you have a time machine, you could have done much better.

Kevin
by Kevin M
Mon Sep 26, 2016 7:34 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

The TTM is 2.42% the 7 days yield is 1.89% ; which is quite a bit less. Minor correction: The SEC yield of TBM is 1.89%, and SEC yield for bond funds is a trailing 30-day average yield to maturity. SEC yield for money market funds is an annualized 7-day trailing average of income distributions. I a...
by Kevin M
Mon Sep 26, 2016 7:24 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market vs. 2% CD
Replies: 23
Views: 4135

Re: Total Bond Market vs. 2% CD

The CD is a much better deal on a risk-adjusted basis. This is easy to see by comparing to the 5-year Treasury yield of 1.13%. Both CD (I'm assuming FDIC insured) and Treasury have essentially no credit risk, and ignoring any early withdrawal option for the CD they have the same term risk (aka inter...
by Kevin M
Mon Sep 26, 2016 7:07 pm
Forum: Investing - Theory, News & General
Topic: TIPS - Did you give up?
Replies: 391
Views: 43447

Re: Who's Tipping? [TIPS - Treasury Inflation Protected Security]

My conclusions were that I-bonds may be a better deal currently than long or short tips, <snip> I Bonds currently are a better deal because you get a slightly positive real yield (0.1%) with almost no term risk, compared to negative TIPS yields beyond 7-year maturity, and even less real yield than ...
by Kevin M
Mon Sep 26, 2016 4:44 pm
Forum: Investing - Help with Personal Investments
Topic: IRA CD question
Replies: 32
Views: 2002

Re: IRA CD question

I don't know about PenFed or NWFCU; I have mine in local CUs. It is worth a call to wherever you have your CDs. They don't seem to advertise this feature on their websites. Sure, or you can try to find their IRA CD disclosures on their website. Sometimes it's easy, sometimes it's impossible. For ex...
by Kevin M
Mon Sep 26, 2016 12:28 pm
Forum: Investing - Theory, News & General
Topic: Here we go again
Replies: 12
Views: 1647

Re: Here we go again

A reminder that international has underperformed for the last 20+ years, arguably 30 depending on how you invested. All at the cost of higher taxes and fees. You have to be careful about just looking at the endpoint performance. I've become a fan of one of John Bogle's favorite tools, the telltale ...
by Kevin M
Sun Sep 25, 2016 3:49 pm
Forum: Investing - Help with Personal Investments
Topic: how to start Substantially Equal Periodic Payments
Replies: 4
Views: 563

Re: how to start Substantially Equal Periodic Payments

I helped a friend manage his 72t distributions and also helped him with his tax returns. You don't report any of the calculation details to IRS--just keep for your records in case of an audit.

Kevin
by Kevin M
Sun Sep 25, 2016 11:38 am
Forum: Investing - Help with Personal Investments
Topic: IRA CD question
Replies: 32
Views: 2002

Re: IRA CD question

Over the last year or so CDs have indeed become a legitimate yield play. My average yield premium over Treasuries of same maturity for direct CDs purchased over last six years is about 115 basis points, so the "yield play" has been going on for quite a bit longer than the last year. It's ...
by Kevin M
Sat Sep 24, 2016 10:37 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

So saying that I increased my tax-advantaged space by buying I Bonds or EE bonds greatly overstates the case compared to using the exact same phrase with respect to making a contribution to my IRA or 401k/403b. Whatever tax-advantaged space buying savings bonds creates is much, much less useful to ...
by Kevin M
Sat Sep 24, 2016 9:18 pm
Forum: Investing - Help with Personal Investments
Topic: IRA CD question
Replies: 32
Views: 2002

Re: IRA CD question

Hi Kevin, I spoke with a CSR at Achieva and to get the higher "plus" rate, they say you have to have an active checking account with them. Not sure what they consider active, but they do have a fee after one year of an account sitting idle. Have you heard this as well? It's only a 0.1% bu...
by Kevin M
Fri Sep 23, 2016 7:31 pm
Forum: Investing - Help with Personal Investments
Topic: IRA CD question
Replies: 32
Views: 2002

Re: IRA CD question

A related question.... If you use CDs - regardless of whether brokered or bank - in your IRA and you are of RMD age, how do you take your RMDs? I assume you just keep enough in more liquid assets, such as a bond fund, to cover your RMDs until the CDs come due. Is that all there is to it? I don't kn...
by Kevin M
Fri Sep 23, 2016 5:09 pm
Forum: Investing - Help with Personal Investments
Topic: IRA CD question
Replies: 32
Views: 2002

Re: IRA CD question

I have recently become a big fan of Allan Roth, reading his book and many of his published articles. I really am interested in his idea of using fdic insured cd's for part of your fixed income. Obviously you get the most benefit by holding them within an IRA. Yes, I started following Allan's advice...
by Kevin M
Fri Sep 23, 2016 10:46 am
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

I think you're being argumentative regarding the word "space." Not my intention. There's a huge difference between the true tax-advantaged space in my IRAs and whatever tax-advantaged space is created when I buy an I Bond (or EE Bond, which I don't own), so I think it's important to highl...
by Kevin M
Thu Sep 22, 2016 2:38 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

True, but if you're talking about higher real rates, this would be even worse for an EE bond holder, and that's what this thread is about. The early withdrawal option of of the CD is much better than the EE bond after a year (or less, and you can't even do an early EE bond withdrawal for one year),...
by Kevin M
Thu Sep 22, 2016 2:14 pm
Forum: Investing - Help with Personal Investments
Topic: What Percentage To Put In International Stock?
Replies: 58
Views: 4728

Re: Why not market weight in international stocks?

It should be noted that since Mr. Bogle first recommended 0%-20% foreign stocks in 1993, U.S. stocks have significantly outperformed international stocks. He has been right for U.S. investors. Taylor, this is true, but it's also true that US small-cap value stocks have vastly outperformed total US ...
by Kevin M
Thu Sep 22, 2016 1:02 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

EE Bonds in the present interest rate environment are still not as safe as TIPS, but they're worth considering, for someone wanting to commit to creating a future supplement to their basic, guaranteed income floor of social security, pensions, SPIA's and the like 20 years from today, and maybe 20 y...
by Kevin M
Wed Sep 21, 2016 4:43 pm
Forum: Personal Finance (Not Investing)
Topic: Revocable Trust and IRAs
Replies: 7
Views: 621

Re: Revocable Trust and IRAs

No. It complicates things upon inheritance, and limits the stretch based on the expected lifetime of the eldest beneficiary. Unless you have a very strong reason to name the trust as beneficiary, I would not do it. I don't (and I do have a living trust).

Kevin
by Kevin M
Wed Sep 21, 2016 4:38 pm
Forum: Personal Consumer Issues
Topic: Should I lease a Tesla?
Replies: 148
Views: 10955

Re: Should I lease a Tesla?

I was notified this morning of a software release, so I got excited. Just an incremental release for Falcon Wing Doors. I feel like a kid waiting for the Sgt. Pepper's Lonely Hearts Club Band album to arrive at my record store :D Yeah, I got the minor update on my loaner Tesla MS85 a couple of days...
by Kevin M
Wed Sep 21, 2016 12:24 pm
Forum: Investing - Help with Personal Investments
Topic: Rebalancing Bond Question
Replies: 3
Views: 398

Re: Rebalancing Bond Question

Keep in mind that a given amount of stocks in a Roth is riskier than same amount in taxable. The government shares some of the risk and return in the taxable account in the form of capital gain tax (or tax deduction for losses). See this Wiki article for a more detailed explanation: Tax-adjusted ass...
by Kevin M
Wed Sep 21, 2016 11:28 am
Forum: Personal Consumer Issues
Topic: Should I lease a Tesla?
Replies: 148
Views: 10955

Re: Should I lease a Tesla?

So we made the decision to purchase the Tesla. I'm just waiting on the Autopilot 2.0 to come out before we make the plunge. Good for you! I've had my MS 70D less than a year, and am strongly considering upgrading to a MS P100D, but pretty sure I won't do it until I'm sure I'm getting the AP 2.0 har...
by Kevin M
Mon Sep 19, 2016 8:30 pm
Forum: Investing - Theory, News & General
Topic: American Funds claims to beat Index funds
Replies: 42
Views: 3268

Re: American Funds claims to beat Index funds

I realize that my comparison looked at an international fund, and the article quoted mentions US funds, but I still wanted to mention that I forgot to make one of the most important points about the comparison; it's the main point that John Bogle makes with his telltale charts. Once again, here is t...
by Kevin M
Mon Sep 19, 2016 8:10 pm
Forum: Investing - Help with Personal Investments
Topic: Transfer Emergency Fund Into iBonds!
Replies: 23
Views: 1751

Re: Transfer Emergency Fund Into iBonds!

My emergency fund is 6 months at the moment, but I am going to grow it to 12 month and I am single. I was asking about dollars, not months, but it doesn't really matter, since the numbers in my reply apply exactly to you unless you have a living trust and were planning on making the maximum annual ...
by Kevin M
Mon Sep 19, 2016 4:41 pm
Forum: Investing - Theory, News & General
Topic: [NY Times article: 100% Stock Allocation in Retirement]
Replies: 127
Views: 12655

Re: [NY Times article: 100% Stock Allocation in Retirement]

Why one would invest in stocks at all if they are planning to possibly lose all of it, I'm not sure, <snip> Because of the higher expected returns. Generally higher expected return comes with higher risk, and the risk includes the possibility of extremely poor returns, even over a long time period,...
by Kevin M
Mon Sep 19, 2016 4:29 pm
Forum: Investing - Theory, News & General
Topic: American Funds claims to beat Index funds
Replies: 42
Views: 3268

Re: American Funds claims to beat Index funds

Many comments about the front-end loads, but loads typically are waived in 401k/403b accounts. Although the ER of RERBX is high in my daughter's plan, there are no loads, and since there are exactly 0 low-cost funds and 0 index funds, we don't have much choice but to use the least-bad fund available...
by Kevin M
Mon Sep 19, 2016 2:17 pm
Forum: Investing - Theory, News & General
Topic: American Funds claims to beat Index funds
Replies: 42
Views: 3268

Re: American Funds claims to beat Index funds

I don't have any general thoughts, other than Larry Swedroe has written about American Funds as one of the relatively good actively-managed fund companies. My personal experience is that we selected American Funds EuroPacific Growth fund (RERBX) as the international stock fund holding in my daughter...
by Kevin M
Mon Sep 19, 2016 12:48 pm
Forum: Investing - Help with Personal Investments
Topic: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?
Replies: 33
Views: 2430

Re: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?

With respect to the $1M CD example don't we also have to consider FDIC insurance limits on large accounts and, if so, that's a little extra complication. Perhaps you missed it, but I addressed this in an earlier reply: For our taxable, I'm uncomfortable with trying to buy and manage sufficient CDs ...
by Kevin M
Mon Sep 19, 2016 3:05 am
Forum: Investing - Help with Personal Investments
Topic: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?
Replies: 33
Views: 2430

Re: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?

For our taxable, I'm uncomfortable with trying to buy and manage sufficient CDs for $1M+. If you're concerned about FDIC/NCUA deposit insurance, it's easy to get it to $1M with prudent use of ownership categories. A joint account with two people alone gets you to $500K, and you can use trust or POD...
by Kevin M
Mon Sep 19, 2016 1:52 am
Forum: Investing - Help with Personal Investments
Topic: Transfer Emergency Fund Into iBonds!
Replies: 23
Views: 1751

Re: Transfer Emergency Fund Into iBonds!

How big is your emergency fund? Unless the annual purchase limit is a constraint, I would not buy I Bonds at current composite rate of 0.26%, which is much less than the 1% you can earn in a simple savings account. Add some CDs for the money you are unlikely to need for more than one year, and you ...
by Kevin M
Mon Sep 19, 2016 1:26 am
Forum: Investing - Help with Personal Investments
Topic: Transfer Emergency Fund Into iBonds!
Replies: 23
Views: 1751

Re: Transfer Emergency Fund Into iBonds!

How big is your emergency fund? Unless the annual purchase limit is a constraint, I would not buy I Bonds at current composite rate of 0.26%, which is much less than the 1% you can earn in a simple savings account. Add some CDs for the money you are unlikely to need for more than one year, and you ...
by Kevin M
Sun Sep 18, 2016 9:41 pm
Forum: Investing - Help with Personal Investments
Topic: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?
Replies: 33
Views: 2430

Re: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?

For our taxable, I'm uncomfortable with trying to buy and manage sufficient CDs for $1M+. If you're concerned about FDIC/NCUA deposit insurance, it's easy to get it to $1M with prudent use of ownership categories. A joint account with two people alone gets you to $500K, and you can use trust or POD...
by Kevin M
Sun Sep 18, 2016 8:50 pm
Forum: Investing - Help with Personal Investments
Topic: Transfer Emergency Fund Into iBonds!
Replies: 23
Views: 1751

Re: Transfer Emergency Fund Into iBonds!

How big is your emergency fund? Unless the annual purchase limit is a constraint, I would not buy I Bonds at current composite rate of 0.26%, which is much less than the 1% you can earn in a simple savings account. Add some CDs for the money you are unlikely to need for more than one year, and you c...
by Kevin M
Sun Sep 18, 2016 8:37 pm
Forum: Investing - Help with Personal Investments
Topic: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?
Replies: 33
Views: 2430

Re: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?

To understand potential loss (or gain) with an increase (decrease) in interest rates, look at fund duration. Duration of VWIUX is 4.7 years, which translates to a loss (or gain) of about 4.7% for a yield increase (decrease) of one percentage point. There are lots of caveats to this duration rule of ...
by Kevin M
Sun Sep 18, 2016 7:57 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

Continuing to overstate the case. I can't think of a single 20-year nominal liability that I need to match. Mortgage payment? OK, that's a reasonable example, but since I paid off all mortgages long ago (four at the time), it doesn't apply to me (so my statement as phrased stands, although it may n...
by Kevin M
Sun Sep 18, 2016 6:26 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

The idea in the article is much like the notion of creating a liability matching portfolio <snip> ... Or even more simply, think of it this way: If you have the specific need to have a guaranteed $20,000 (nominal) available to you 20 years from now, one way you have of achieving this is buying $10,...
by Kevin M
Sun Sep 18, 2016 4:51 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

I just bought a 7-year CD with an APY of 3%. [...] That's a very good rate. Where did you find it? I think I heard about it here on the forum back in January or February (it has been available since July 2015), but you also can find it here using my go-to source for CDs: 6+ Year Individual Retireme...
by Kevin M
Sun Sep 18, 2016 4:46 pm
Forum: Investing - Theory, News & General
Topic: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look
Replies: 82
Views: 10704

Re: "Uncle Sam Pays Almost Twice The Yield On Treasurys--If You Know Where To Look

In the late 80's and early 90's I had the habit of buying EE bonds a couple times a year from accumulated loose change my husband threw into a basket in his desk draw each day. It was a little investment that required no effort. I thought it would someday help pay for my son's education. We put him...
by Kevin M
Sun Sep 18, 2016 4:02 pm
Forum: Investing - Theory, News & General
Topic: [NY Times article: 100% Stock Allocation in Retirement]
Replies: 127
Views: 12655

Re: [NY Times article: 100% Stock Allocation in Retirement]

Bernstein has the best take on this that I have ever heard.Whatever you can afford to lose and not hurt your retirement put into stocks. No disrespect to Bernstein or anyone else who repeats this particular advice, but this statement is really not helpful at all. It might work for ultra-high net wo...
by Kevin M
Sun Sep 18, 2016 3:14 pm
Forum: Personal Consumer Issues
Topic: Tesla S
Replies: 807
Views: 128621

Re: Tesla S

<snip> Do you know if the tax credit also applies to the Wall Connector hardware, or is it just for the installation? Somehow I thought that the tax credit applied only to business installations, but I may have been wrong: EV Charging Station Federal Tax Credit Fact Sheet . Apparently the credit is...

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