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by TheTimeLord
Mon Mar 18, 2024 6:38 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

protagonist wrote: Mon Mar 18, 2024 6:08 pm
TheTimeLord wrote: Mon Mar 18, 2024 5:09 pm
protagonist wrote: Mon Mar 18, 2024 5:04 pm Nice to see the 2034s over 2%, even though the stock market is also going up.
I can only hope the trend continues until my April 2024s mature.
Why?
1. I own stock. I always want the stock market to go up.
2. I intend to buy more 2034s with the proceeds from my April 2024's.

Pretty selfish, I know.
That is what I was assuming that is what you were planning to do but what I was wondering if you are happy with the current price on 2034s why you don't just sell the Apr 2024s on the secondary market and buy the 2034s instead of hoping for the trend to continue. Is it that you will lose a few bps on the Apr 2024s or just thinking you will get a better price in a month on the 2034s or something I am missing entirely?
by TheTimeLord
Mon Mar 18, 2024 5:09 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

protagonist wrote: Mon Mar 18, 2024 5:04 pm Nice to see the 2034s over 2%, even though the stock market is also going up.
I can only hope the trend continues until my April 2024s mature.
Why?
by TheTimeLord
Mon Mar 18, 2024 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: 5 and 10-yr TIPS at auction, original or reopening?
Replies: 2
Views: 960

Re: 5 and 10-yr TIPS at auction, original or reopening?

chemocean wrote: Wed Feb 28, 2024 1:16 pm What are the advantages and disadvantages of buying 5 and 10- year TIPS at a reopened Treasury action versus the auction when these TIPS are originally offered by Treasury at auction?
My question would be what is the advantage of buying in a reopening auction versus buying on the secondary market?
by TheTimeLord
Sat Mar 16, 2024 10:39 am
Forum: Personal Investments
Topic: Bond ladder for regular fixed payment
Replies: 9
Views: 1204

Re: Bond ladder for regular fixed payment

Yes, the nominal treasury ladder is perfect for matching to a nominal expense. Thanks i know it’s rather obvious but i often need assurance that i am on the right track. Are there similar tool as tipbondladder for nominal bonds? Not my area of expertise (since I have no area of expertise) but I think I have seen laddering STRIPS mentioned for nominal expenses like this, although I would like to have someone explain how you allow for the taxes when building a STRIPS ladder. That said if want to match an annual $100 expense for 10 years and you already have the $1,000 required to meet the obligation you don't have to build a rigid ladder do you? Seems like you have multiple option here that could accomplish you goal provide I am understandin...
by TheTimeLord
Fri Mar 15, 2024 10:47 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

FactualFran wrote: Fri Mar 15, 2024 10:41 am
TheTimeLord wrote: Fri Mar 15, 2024 10:35 am This is wild, I pulled my numbers of eyebonds.info this morning but have no clue where I got 307.671, I don't see it on any line. :oops: :oops: :oops:
307.671 was the Reference CPI for 1/1/2024.
Thank you, at least now I know I am sloppy not crazy.
by TheTimeLord
Fri Mar 15, 2024 10:45 am
Forum: Investing - Theory, News & General
Topic: Should I exclude LMP/TIPS ladder from portfolio tracking?
Replies: 43
Views: 2541

Re: Should I exclude LMP/TIPS ladder from portfolio tracking?

I think tracking may have been the wrong term. When I wrote the OP I think my portfolio was getting close to hitting some round number and I realized the gains coming from inflation adjustments in TIPS probably weren't that relevant to my planning. So what I was thinking is my TIPS are going to do what they are designed to do in maintaining purchasing power so from an investing perspective it might be more productive to be more focused on how my Risk Portfolio is invested instead of my portfolio as a whole. Hopefully this makes more sense.
by TheTimeLord
Fri Mar 15, 2024 10:35 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

Lyrrad wrote: Fri Mar 15, 2024 10:20 am
TheTimeLord wrote: Fri Mar 15, 2024 6:38 am Are my calculations correct that if I had been able to buy $10,000 of a magic TIPS that was issued on 1/1/2022 (none were) and matured on 3/15/2024 (none did) that I would have received $11,123 at maturity in inflation adjusted principal ($10,000 * (307.671/276.589))?
No.

10,000 * 307.50065/276.58900 = $11,117.60

https://eyebonds.info/tips/2022/tips00_2022.html
https://eyebonds.info/tips/2024/tips00_2024.html
https://www.treasurydirect.gov/auctions ... i-history/
This is wild, I pulled my numbers of eyebonds.info this morning but have no clue where I got 307.671, I don't see it on any line. :oops: :oops: :oops:

Thanks for the correction. :sharebeer
by TheTimeLord
Fri Mar 15, 2024 6:38 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

Are my calculations correct that if I had been able to buy $10,000 of a magic TIPS that was issued on 1/1/2022 (none were) and matured on 3/15/2024 (none did) that I would have received $11,123 at maturity in inflation adjusted principal ($10,000 * (307.671/276.589))?
by TheTimeLord
Thu Mar 14, 2024 7:50 pm
Forum: Investing - Theory, News & General
Topic: 5M, probably enough to retire to a frugal lifestyle
Replies: 180
Views: 15181

Re: 5M, probably enough to retire to a frugal lifestyle

goblue100 wrote: Thu Mar 14, 2024 7:39 pm in the words of Warren Zevon, sung by Linda Ronstadt, "poor, poor, pitiful me". I only have 1.5 million to live on. I feel like I'm a step ahead of frugal.
Also the words of Warren Zevon "There's a train leavin' nightly called "When All is Said and Done"".
by TheTimeLord
Thu Mar 14, 2024 10:09 am
Forum: Investing - Theory, News & General
Topic: Index Investing Basics - Revisited
Replies: 125
Views: 7918

Re: Index Investing Basics - Revsited

If you start reading about market predictions and adjusting your portfolio based on them, then have then become an active not a passive investor. No one knows what is going to happen. I would say if you deviate from the world market capitalization you are an active investor. In fact if you hold the SP500 index you are active because you are excluding all the other stocks in the US market arbitrarily. But historically does it really matter if you own VOO, VTI, VONE, VTHR, ITOT or SPTM? In other words are you making a distinction without a difference? Regardless of the result it is an active decision even if it makes little or no difference. Why not the SP 400 or 600? It’s an arbitrary decision but 500 is certainly more catchy. Back to my qu...
by TheTimeLord
Thu Mar 14, 2024 9:20 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

What makes you think these will do any better than TIPS at keeping up with inflation? The expected return of Tbills and money market funds is about the same as TIPS, but the uncertainty of those returns is much larger over longer periods due to reinvestment risk. So not only are you no more likely to keep up with inflation, but the risk of you not doing so is much higher. As I've shared, I also have lots of short-term Treasuries in taxable, but I acknowledge the long-term riskiness of them, and my longer-term TIPS contribute to my ability to take that risk. Fifty percent inflation over 5 years is about 8.5% per year. There simply is no investment with an expected return that high--certainly no safe investment. Stocks should have an expecte...
by TheTimeLord
Thu Mar 14, 2024 8:56 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

If you don’t use tips are you deciding no fixed income and going 100% stocks to better keep up with inflation? Or are you using tbills or savings accounts/cds? If you are going to have some fixed income, tips seem like the better deal than total bond but I’m interested in other ideas. For now just individual t-bills in taxable and money market in tax advantage account. What makes you think these will do any better than TIPS at keeping up with inflation? The expected return of Tbills and money market funds is about the same as TIPS, but the uncertainty of those returns is much larger over longer periods due to reinvestment risk. So not only are you no more likely to keep up with inflation, but the risk of you not doing so is much higher. As...
by TheTimeLord
Thu Mar 14, 2024 8:36 am
Forum: Investing - Theory, News & General
Topic: Index Investing Basics - Revisited
Replies: 125
Views: 7918

Re: Index Investing Basics - Revsited

BitTooAggressive wrote: Thu Mar 14, 2024 6:56 am
TimeIsYourFriend wrote: Wed Mar 13, 2024 9:03 am If you start reading about market predictions and adjusting your portfolio based on them, then have then become an active not a passive investor. No one knows what is going to happen.
I would say if you deviate from the world market capitalization you are an active investor.

In fact if you hold the SP500 index you are active because you are excluding all the other stocks in the US market arbitrarily.
But historically does it really matter if you own VOO, VTI, VONE, VTHR, ITOT or SPTM? In other words are you making a distinction without a difference?
by TheTimeLord
Tue Mar 12, 2024 9:10 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611498

Re: Now that long TIPS yields are 60 bp off their highs I will…

Just verifying that this is the number people who own TIPS should be aware of, as opposed to the headline number people are hearing commonly reported in the financial news.

https://www.bls.gov/news.release/cpi.nr ... djustment.
Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 3.2 percent over the last 12 months
to an index level of 310.326 (1982-84=100). For the month, the index increased 0.6 percent prior to
seasonal adjustment.
by TheTimeLord
Tue Mar 05, 2024 8:35 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4107
Views: 455421

Re: Trading Treasuries (nominal and TIPS)

Based on what you paid. Thank you for your answer. It's so much to go through compare to buying a mutual funds. Maybe this will be helpful. https://www.treasurydirect.gov/marketable-securities/tips/ Treasury Inflation Protected Securities (TIPS) We sell TIPS for a term of 5, 10, or 30 years. As the name implies, TIPS are set up to protect you against inflation. Unlike other Treasury securities, where the principal is fixed, the principal of a TIPS can go up or down over its term. When the TIPS matures, if the principal is higher than the original amount, you get the increased amount. If the principal is equal to or lower than the original amount, you get the original amount. TIPS pay a fixed rate of interest every six months until they mat...
by TheTimeLord
Sat Mar 02, 2024 12:36 pm
Forum: Personal Consumer Issues
Topic: Do you simplify financial details with your love ones?
Replies: 16
Views: 1948

Re: Do you simplify financial details with your love ones?

What exactly is it you were telling her when you try to explain it and her eyes glazed over? Practically almost everything financial or technically related. This morning my mom was telling me that she worries her insurance bill will go up because at the her HOA meeting they were saying insurance has gone up a lot. I tried to explain that it's unrelated to her insurance, but it's the HOA's insurance which tend get incorporated into her HOA bill. She didn't get it, but I didn't try to further clarifying it because she will face increase cost somewhere, and knowing which bill will go up doesn't help. On the technical, I tried to explain how a password manager works and eventually tell her that it generates, stores and enter the password for y...
by TheTimeLord
Sat Mar 02, 2024 11:21 am
Forum: Personal Consumer Issues
Topic: Do you simplify financial details with your love ones?
Replies: 16
Views: 1948

Re: Do you simplify financial details with your love ones?

What exactly is it you were telling her when you try to explain it and her eyes glazed over?
by TheTimeLord
Sat Mar 02, 2024 10:46 am
Forum: Personal Investments
Topic: Are people's interest payment exceeding their X?
Replies: 17
Views: 1687

Re: Are people's interest payment exceeding their X?

livesoft wrote: Sat Mar 02, 2024 10:40 am Not happening. We avoid getting interest in our taxable accounts (and indeed in all our accounts). Our 1099-INT show we were paid $19 in interest for all of 2023 which is about double the amount of 2022. We prefer to get qualified dividends if we must get income because we don't pay tax on those.
No one specified taxable account or that the interest was being used to actually cover expenses, just that it exceeded their X.
by TheTimeLord
Sat Mar 02, 2024 10:42 am
Forum: Personal Investments
Topic: Are people's interest payment exceeding their X?
Replies: 17
Views: 1687

Re: Are people's interest payment exceeding their X?

02nz wrote: Sat Mar 02, 2024 10:36 am "With rising rates"

They're definitely no longer rising, and it seems they're about to come down again. But nobody knows for sure.
Ok, with the changes in rates we have experience over the past couple years. If I remember correctly the recent highs were in the Oct.-Nov. 2023 but I believe we did see a bit of a spike in rates like the 2 year over the past couple weeks. But that has eased over the past couple days.
by TheTimeLord
Sat Mar 02, 2024 10:37 am
Forum: Personal Investments
Topic: Are people's interest payment exceeding their X?
Replies: 17
Views: 1687

Re: Are people's interest payment exceeding their X?

If nominal interest is 5% and you are withdrawing 3-4%, this would be the case, no? As this problem is normally configured that may or may not be true. The 3%-4% is an amount of the original portfolio value indexed upward by inflation. The 5% is an amount of the present portfolio value. You would have to go through the accumulated portfolio history and see if 3%-4% incremented by years of inflation is or isn't more or less than 5% of whatever value the portfolio has incremented to now. This illustrates that this is not a simple computation of what is today's interest rate. The question was intended to be posed in regards to one's current unintended situation not a temporary or permanent portfolio strategy. Merely an observation of the effe...
by TheTimeLord
Sat Mar 02, 2024 9:58 am
Forum: Personal Investments
Topic: Are people's interest payment exceeding their X?
Replies: 17
Views: 1687

Re: Are people's interest payment exceeding their X?

If nominal interest is 5% and you are withdrawing 3-4%, this would be the case, no? if you have all your assets in a MM fund, yes. I guess technically if you needed a 3% WR and your MM was paying 5% you could be as high as 40/60 and have your interest payments cover X. And there seems to be more than a handful of BH who seem to have a WR in 2% vicinity. Yes; although some probably have pensions and/or social security which offset some of their expenses so their "X" might not be as big a drain as those still aspiring. Totally agree the occurrence of this is likely highly concentrated in retirees with conservative portfolios. Just thinking it must have been an interesting change from being paid almost nothing on fixed income assets...
by TheTimeLord
Sat Mar 02, 2024 9:50 am
Forum: Personal Investments
Topic: Are people's interest payment exceeding their X?
Replies: 17
Views: 1687

Re: Are people's interest payment exceeding their X?

jebmke wrote: Sat Mar 02, 2024 9:46 am
toddthebod wrote: Sat Mar 02, 2024 9:46 am If nominal interest is 5% and you are withdrawing 3-4%, this would be the case, no?
if you have all your assets in a MM fund, yes.
I guess technically if you needed a 3% WR and your MM was paying 5% you could be as high as 40/60 and have your interest payments cover X. And there seems to be more than a handful of BH who seem to have a WR in 2% vicinity.
by TheTimeLord
Sat Mar 02, 2024 9:47 am
Forum: Personal Investments
Topic: Are people's interest payment exceeding their X?
Replies: 17
Views: 1687

Re: Are people's interest payment exceeding their X?

jebmke wrote: Sat Mar 02, 2024 9:42 am Ours has for a long time; much of it is in IRAs.
Congrats.
by TheTimeLord
Sat Mar 02, 2024 9:37 am
Forum: Personal Investments
Topic: Are people's interest payment exceeding their X?
Replies: 17
Views: 1687

Are people's interest payment exceeding their X?

With rising rates it seems like a real possibility some retirees here and some of the really heavy savers would have annual interest payments that exceed their X (annual expenses needed from their portfolio). I was wondering if this is actually happening or is it just a unicorn (an imaginary creature).
by TheTimeLord
Thu Feb 29, 2024 7:21 pm
Forum: Personal Consumer Issues
Topic: Cloud based backup options for sensitive files
Replies: 92
Views: 7386

Cloud based backup options for sensitive files

Are there any viable cloud based storage options that would be safe for backups of sensitive documents? I wonder if the amount of data these options hold in total make them high value targets. In other words, why do you rob banks, because that's where the money is. I also wonder if using one would void insurance provided by brokers. Looking forward to the discussion.
by TheTimeLord
Thu Feb 29, 2024 12:43 pm
Forum: Investing - Theory, News & General
Topic: Do cap-weighted funds strictly align with BH philosophy?
Replies: 118
Views: 8895

Re: Do cap-weighted funds strictly align with BH philosophy?

If anyone is "playing favorites", it's the Wall Street stock pickers that determine the market proportions in the first place. Yes. Now we are getting somewhere. I think 90% of solving a problem is asking the right question. I get where you are coming from but I don't think you are asking exactly the right question. As I suggested before, the cap weighted index is a objective view of what the market is. That is, you really can't game it. It is a true reflection. However, the argument that it is the best portfolio is somewhere between weak to non-existient. Not the most efficient (highest return per unit of risk), diversified, or whatever. The problem with other methods of portfolio construction is that they require subjective inp...
by TheTimeLord
Wed Feb 28, 2024 7:54 pm
Forum: Investing - Theory, News & General
Topic: Do cap-weighted funds strictly align with BH philosophy?
Replies: 118
Views: 8895

Re: Do cap-weighted funds strictly align with BH philosophy?

When 10 companies are weighted at 31% of 500, you are playing favorites. You are invested in frontrunners. You are choosing current winners and have only .03% invested in a company that could be the next Apple, so when it does soar, you won't have been invested in it properly until *after* it does. This, in essence, goes against BH philosophy. So are you saying we should be equal weight all 500 stocks in the S&P 500 (0.2% per stock) and always selling the winners to invest in the laggards to maintain that weighting so you never own more than 0.2% of the next Apple? Just trying to understand the mechanics of what you are suggesting. RPS begins at 0.2% per company at the beginning of each financial quarter and then rebalances at the end ...
by TheTimeLord
Wed Feb 28, 2024 7:39 pm
Forum: Investing - Theory, News & General
Topic: Do cap-weighted funds strictly align with BH philosophy?
Replies: 118
Views: 8895

Re: Do cap-weighted funds strictly align with BH philosophy?

A market cap fund is about as far away from stock "picking" as one can get... When 10 companies are weighted at 31% of 500, you are playing favorites. You are invested in frontrunners. You are choosing current winners and have only .03% invested in a company that could be the next Apple, so when it does soar, you won't have been invested in it properly until *after* it does. This, in essence, goes against BH philosophy. So are you saying we should be equal weight all 500 stocks in the S&P 500 (0.2% per stock) and always selling the winners to invest in the laggards to maintain that weighting so you never own more than 0.2% of the next Apple? Just trying to understand the mechanics of what you are suggesting. RPS begins at 0.2...
by TheTimeLord
Wed Feb 28, 2024 6:05 pm
Forum: Investing - Theory, News & General
Topic: Do cap-weighted funds strictly align with BH philosophy?
Replies: 118
Views: 8895

Re: Do cap-weighted funds strictly align with BH philosophy?

thatbrian wrote: Wed Feb 28, 2024 12:34 am
SnowBog wrote: Wed Feb 28, 2024 12:03 am
A market cap fund is about as far away from stock "picking" as one can get...
When 10 companies are weighted at 31% of 500, you are playing favorites. You are invested in frontrunners. You are choosing current winners and have only .03% invested in a company that could be the next Apple, so when it does soar, you won't have been invested in it properly until *after* it does.

This, in essence, goes against BH philosophy.
So are you saying we should be equal weight all 500 stocks in the S&P 500 (0.2% per stock) and always selling the winners to invest in the laggards to maintain that weighting so you never own more than 0.2% of the next Apple? Just trying to understand the mechanics of what you are suggesting.
by TheTimeLord
Tue Feb 27, 2024 1:46 pm
Forum: Personal Investments
Topic: Quality Factor ETFs: QUAL vs. VFQY
Replies: 12
Views: 1188

Re: Quality Factor ETFs: QUAL vs. VFQY

Beensabu wrote: Tue Feb 27, 2024 1:43 pm
TheTimeLord wrote: Tue Feb 27, 2024 10:17 am Quality factor something that is in the eye of the beholder?
This. All the funds have different screens.

It's a weird "factor". I like to think of it as a combo of the RMW and CMA factors, and those are the five-factor model loadings I would look for if you're interested in "quality".
I guess to me looking at the holdings of these 2 Quality ETF make me feel like there is no real definition so you are more or less picking a portfolio style not a well defined concentration.
by TheTimeLord
Tue Feb 27, 2024 12:46 pm
Forum: Personal Investments
Topic: Quality Factor ETFs: QUAL vs. VFQY
Replies: 12
Views: 1188

Re: Quality Factor ETFs: QUAL vs. VFQY

Is there anything in each prospectus that defines how they select? The answer is here. QUAL is a passive fund that follows the MSCI USA Sector Neutral Quality Index. VFQY is a active fund run by Vanguard's Quant group. I personally don't find the word phrase "active fund" as dirty. Benchmarks can have issues and there is certainly no reason why one should be handcuffed to them. There is more than one way to skin a cat. I have no opinion on Vanguard's quants or this fund - I just haven't put in the research. On this specifically, the theory behind the Quality Factor is that firms with quality earnings (stable, few restatements) have unique qualities. As advertised, they tend to be safer stocks. I mean, equities are risky but these...
by TheTimeLord
Tue Feb 27, 2024 11:46 am
Forum: Investing - Theory, News & General
Topic: Retirees apparently tend to maintain assets - lessons for BH investors?
Replies: 129
Views: 16926

Re: Retirees apparently tend to maintain assets - lessons for BH investors?

HomerJ wrote: Tue Feb 27, 2024 11:41 am
carminered2019 wrote: Tue Feb 27, 2024 11:04 am Fourth year in retirement and it’s hard to think about spending down my portfolio because my whole life I aimed for maximum return. I retired in 2019 with 52X and now sitting on 84X and will alway aim for growth vs drawdown.
None of this really applies to you, because you have a pension that covers all your expenses anyway. So you're not spending down your portfolio.

Your portfolio is all extra. What do you plan to do with 84 years worth of expenses, anyway? You have kids or a charity in mind?
Then technically doesn't he have infinity X?
by TheTimeLord
Tue Feb 27, 2024 10:17 am
Forum: Personal Investments
Topic: Quality Factor ETFs: QUAL vs. VFQY
Replies: 12
Views: 1188

Quality Factor ETFs: QUAL vs. VFQY

So both QUAL (Ishares) and VFQY (Vanguard) are as I understand it quality factor ETFs, but when I look at their holdings it seems they define quality quite differently. Can some explain what is going on here, or is Quality factor something that is in the eye of the beholder?
by TheTimeLord
Sun Feb 25, 2024 2:08 pm
Forum: Investing - Theory, News & General
Topic: LMP/TIPS Ladder Pros & Cons Master Thread
Replies: 71
Views: 5889

Re: LMP/TIPS Ladder Pros & Cons Master Thread

TheNightsToCome wrote: Sun Feb 25, 2024 12:20 pm
rossington wrote: Sun Feb 25, 2024 2:34 am Have TIPS provided returns that more closely match one's personal inflation (which typically exceeds the CPIU) than a TSM index over any 10-30 year period?
If so how many times has it happened?
Total real return to US stocks has been negative over at least 20 years and less than 2% for at least 30 years in the past:

https://dqydj.com/sp-500-historical-return-calculator/
Maybe I am wrong but buying and holding equities for a long period of time without withdrawals seems to be different than an LMP/TIPS ladder where a portion of the ladder is consumed annually. I apologize if I am missing something. This would seem more applicable to rolling ladders to me.
by TheTimeLord
Sun Feb 25, 2024 2:01 pm
Forum: Investing - Theory, News & General
Topic: LMP/TIPS Ladder Pros & Cons Master Thread
Replies: 71
Views: 5889

Re: LMP/TIPS Ladder Pros & Cons Master Thread

For me one of the real pros of individual TIPS is illustrated by the following link once you click the inflation adjusted checkbox. Unfortunately, you will have to check it manually yourself as information does not seemed to be saved as part of the link PortfolioVisualzer supplies.


https://www.portfoliovisualizer.com/bac ... os9zVFg56x
by TheTimeLord
Sat Feb 24, 2024 5:16 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35048

Re: Can you do better than BND?

I am fairly convinced (with admittedly, only partial evidence) that the answer to the question McQ has posed in this thread, i.e., "Can you do better than BND?" is "sometimes yes and sometimes no", but that predicting at any given time precisely what will do better is probably not possible. cheers StillGoing +1 Great comment. But I suspect even this statement will not be universally agreed with. :wink: The truth is that nobody on Earth can predict what combination of fixed income investments will produce the maximum return. All you can do is settle on something that will suffice for your needs. Very smart people can sometimes spend a lot of time trying to optimize something that can't be optimized in advance. Is that a ...
by TheTimeLord
Sat Feb 24, 2024 11:04 am
Forum: Personal Investments
Topic: Heavy Value Tilt Away from Mag 7 stocks
Replies: 221
Views: 13738

Re: Heavy Value Tilt Away from Mag 7 stocks

I guess my response would be:

11/19/2021
1/5/2023
2/23/2024
by TheTimeLord
Fri Feb 23, 2024 9:43 am
Forum: Investing - Theory, News & General
Topic: LMP/TIPS Ladder Pros & Cons Master Thread
Replies: 71
Views: 5889

LMP/TIPS Ladder Pros & Cons Master Thread

It seems to me the discussion of LMP/TIPS ladders is spread out and fragmented all throughout many, many threads and it could possibly be beneficial to have a master thread for people to reference and to minimize distraction caused in other threads. Enjoy.
by TheTimeLord
Thu Feb 22, 2024 5:20 pm
Forum: Investing - Theory, News & General
Topic: Settlement time for stock trades going to T+1 this year
Replies: 22
Views: 3567

Re: Settlement time for stock trades going to T+1 this year

I guess I am the only one whose first thought was this will make it easier for hackers to transfer money out of your account before the are detected. Since mutual funds and US Treasuries were already T+1, this is just more of the same. And the reason here is to reduce another risk, counterparty risk. The longer a trade goes unsettled, the more chance a broker or counterparty may fail and never settle the trade. So say you sold a stock and the price falls after your trade, or buy and it rises after your trade. The other party defaults, you lose the gain or do not avoid the loss as expected. Shorter the window the less risk of default. Regulators would prefer t+0 same day settlements to reduce the risk further, but that is a much larger tech...
by TheTimeLord
Thu Feb 22, 2024 2:09 pm
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS = 2.2% real!
Replies: 26
Views: 4695

Re: 30 yr TIPS = 2.2% real!

Always passive wrote: Thu Feb 22, 2024 2:01 pm Why hold anything riskier if the goal is peaceful retirement?

“30-year TIPS auction gets real yield of 2.20%, highest in 14 years”
Highest auction but I am pretty sure you could have got a better YTM on the secondary market back in the October-November timeframe.

viewtopic.php?p=7516047#p7516047
aj76er wrote: Mon Oct 23, 2023 8:52 am 20yr TIPS real yields hit 2.73% this morning :shock:

The title of this thread may need to be updated soon …
by TheTimeLord
Thu Feb 22, 2024 1:37 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35048

Re: Can you do better than BND?

We have roundtripped to vineviz's thread first 20% in Bonds You backtest an era of falling rates this is what you get. That doesn’t make it a good plan for the future. To be fair, this thread is predicated on backtesting, while vineviz's arguments were based on duration matching which doesn't depend on any prevailing interest rate environment or historical performance. And I do think people are incorrectly focused on short term performance/volatility (as Kevin M has pointed out) when what really matters is the performance/volatility over the investment horizon. If you need the money 30 years from now, a 30 year TIPS is as riskless as you can get, with a 30 year nominal Treasury being close (IMHO). Bond ladders and barbells make a lot of se...
by TheTimeLord
Thu Feb 22, 2024 8:05 am
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35048

Re: Can you do better than BND?

Bogleheads are an elite group of investors with far more knowledge than the average investor. And yet, the reaction to bond fund performance in 2022 is evidence of a real lack of knowledge of the basics. This can lead to behavioral errors when confronted with a challenging market. In this case, the market of 2022 was pretty normal and to be expected. It's easy to put together a 3-fund portfolio after reading a book or two. It's much more difficult to go beyond superficial knowledge and avoid behavioral errors after the portfolio is set up. So yes, while many Bogleheads can do this, most investors are not prepared intellectually or behaviorally to self-manage a portfolio. Pretty ironic that so many otherwise informed people believe rising r...
by TheTimeLord
Thu Feb 22, 2024 8:01 am
Forum: Investing - Theory, News & General
Topic: Settlement time for stock trades going to T+1 this year
Replies: 22
Views: 3567

Re: Settlement time for stock trades going to T+1 this year

I guess I am the only one whose first thought was this will make it easier for hackers to transfer money out of your account before the are detected. Since mutual funds and US Treasuries were already T+1, this is just more of the same. And the reason here is to reduce another risk, counterparty risk. The longer a trade goes unsettled, the more chance a broker or counterparty may fail and never settle the trade. So say you sold a stock and the price falls after your trade, or buy and it rises after your trade. The other party defaults, you lose the gain or do not avoid the loss as expected. Shorter the window the less risk of default. Regulators would prefer t+0 same day settlements to reduce the risk further, but that is a much larger tech...
by TheTimeLord
Wed Feb 21, 2024 8:13 am
Forum: Investing - Theory, News & General
Topic: Agency Bonds, any reason to avoid?
Replies: 16
Views: 1273

Re: Agency Bonds, any reason to avoid?

I noticed a couple threads discussing Agency bonds and the fact they are frequently called but if someone doesn't care if they are called (perhaps even prefers it :oops: ) is there any reason to avoid Agency bonds? No. Although the de facto not de jure guarantee of FMAC and FNMA bonds could be a problem, in theory. But in practice AFAIK none of them defaulted in the worst national housing crisis in the USA since the 1930s. I cannot think why someone would prefer that a bond was called? if they need liquidity, there is always the secondary market. A call just represents the option value kicking in, against the bondholder. Which is why these bonds are usually rated on Yield-to-Call or Yield-to-Worst. Sorry for the poor wording. I was saying ...
by TheTimeLord
Tue Feb 20, 2024 7:49 pm
Forum: Investing - Theory, News & General
Topic: Should I exclude LMP/TIPS ladder from portfolio tracking?
Replies: 43
Views: 2541

Re: Should I exclude LMP/TIPS ladder from portfolio tracking?

I guess I am trying to avoid having the LMP/TIPS ladder's affect on my total portfolio return influence how I allocate my Risk Portfolio. This right here is what I also struggle with. I cannot understand how folks determine an AA for their RP in isolation of the size of their LMP. It must influence need/willingness/ability to take RP risk. If you use the entire portfolio as an RP, you would choose an asset allocation that meets your needs for withdrawals, including any minimum requirements. If you split that portfolio into LMP and RP, then the LMP can provide some or all of the minimum needs, which allows the now-smaller RP to only be concerned with withdrawals above the minimum. To use an SWR illustration, you could have a $1m total portf...
by TheTimeLord
Tue Feb 20, 2024 5:56 pm
Forum: Investing - Theory, News & General
Topic: Should I exclude LMP/TIPS ladder from portfolio tracking?
Replies: 43
Views: 2541

Re: Should I exclude LMP/TIPS ladder from portfolio tracking?

I track both. I track my AA with (in my case TIPS ladder) worked in, and as I consume the ladder the AA will change faster. I also track the "risk portfolio" on it's own. And I've got a target AA for that until the ladder starts. It's somewhat loose, but since I plan to use VPW to withdraw from the risk portfolio I need to know it's AA since it drives the suggested flexibility for future spending I am sure I will still do my once a month marked to market tracking for the value total portfolio (single number, just total of account balances), but I don't see it adding any real value to the detailed spreadsheets I use on a daily basis. I would like to view my RP's market value. For my TIPS ladder, I'd prefer the default to be a view...
by TheTimeLord
Tue Feb 20, 2024 2:19 pm
Forum: Investing - Theory, News & General
Topic: Agency Bonds, any reason to avoid?
Replies: 16
Views: 1273

Re: Agency Bonds, any reason to avoid?

alex_686 wrote: Tue Feb 20, 2024 1:31 pm Agencies are considered the most liquid and saftest assets class after Treasuries.
Good information, I was wondering if liquidity could be an issue. Thanks.
by TheTimeLord
Tue Feb 20, 2024 1:21 pm
Forum: Investing - Theory, News & General
Topic: Agency Bonds, any reason to avoid?
Replies: 16
Views: 1273

Re: Agency Bonds, any reason to avoid?

FactualFran wrote: Tue Feb 20, 2024 1:20 pm Not all agency bonds are callable. If you are subject to state income tax, then be aware that the interest income of some agency bonds is included in state taxable.
I would be holding them in a tax deferred account.
by TheTimeLord
Tue Feb 20, 2024 12:07 pm
Forum: Investing - Theory, News & General
Topic: Agency Bonds, any reason to avoid?
Replies: 16
Views: 1273

Re: Agency Bonds, any reason to avoid?

I noticed a couple threads discussing Agency bonds and the fact they are frequently called but if someone doesn't care if they are called (perhaps even prefers it :oops: ) is there any reason to avoid Agency bonds? No. Although the de facto not de jure guarantee of FMAC and FNMA bonds could be a problem, in theory. But in practice AFAIK none of them defaulted in the worst national housing crisis in the USA since the 1930s. I cannot think why someone would prefer that a bond was called? if they need liquidity, there is always the secondary market. A call just represents the option value kicking in, against the bondholder. Which is why these bonds are usually rated on Yield-to-Call or Yield-to-Worst. Sorry for the poor wording. I was saying ...