Search found 572 matches

by Thesaints
Fri Jul 21, 2017 2:51 am
Forum: Investing - Help with Personal Investments
Topic: ibond purchases on treasurydirect
Replies: 9
Views: 478

Re: ibond purchases on treasurydirect

All savings bonds have identical guarantee, be those in paper or electronic format.
by Thesaints
Fri Jul 21, 2017 2:00 am
Forum: Personal Finance (Not Investing)
Topic: Kicking the net worth habit
Replies: 13
Views: 896

Re: Kicking the net worth habit

IMO he should be trying to maximize cash flow. First thing that comes to mind would be converting his net worth (according to its standard definition) to an annuity.
by Thesaints
Fri Jul 21, 2017 1:57 am
Forum: Investing - Theory, News & General
Topic: Do politically stable times, or more volatile times, benefit the investor--or does it make a difference?
Replies: 8
Views: 444

Re: Do politically stable times, or more volatile times, benefit the investor--or does it make a difference?

We have homogeneous stock market data for the US starting in 1926. There have been 90 years since and the statistical parameters of the first 45 are very similar to those of the second 45 years. It is worth remarking than in the former we had 3 wars, the Nazi were in Paris, the Soviets in Berlin and...
by Thesaints
Fri Jul 21, 2017 1:43 am
Forum: Personal Finance (Not Investing)
Topic: Kicking the net worth habit
Replies: 13
Views: 896

Re: Kicking the net worth habit

Not sure I understand. Net worth is calculated in one, and only one, way. We can discuss which rates to apply for DCF purposes and on the exact value of non-liquid holdings, but it ends there pretty much.
by Thesaints
Fri Jul 21, 2017 1:40 am
Forum: Investing - Help with Personal Investments
Topic: Which cost basis is best average cost or FIFO
Replies: 6
Views: 373

Re: Which cost basis is best average cost or FIFO

Not to hi-jack the thread, but since we are talking cost basis here, I figured I would ask. Since I have just started investing in a taxable account this year, I switched my cost basis to SpecID with Vanguard this week. It shows all of my past transactions into VTSAX as the same price, and the purc...
by Thesaints
Fri Jul 21, 2017 1:18 am
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

willthrill81 wrote:Absolutely. MC simulations have a surprisingly strong tendency to predict extreme results at both ends of the spectrum.


Tell that to the bond desk at LEH.
by Thesaints
Fri Jul 21, 2017 1:16 am
Forum: Investing - Theory, News & General
Topic: The Quest for Perfection
Replies: 95
Views: 3682

Re: The Quest for Perfection

raven15 wrote:This is the perfect portfolio:
...


"perfect" for whom ?
by Thesaints
Fri Jul 21, 2017 1:14 am
Forum: Investing - Theory, News & General
Topic: US and International Bond Fund Allocation
Replies: 17
Views: 1090

Re: US and International Bond Fund Allocation

Whereas I'm fully convinced that with stocks global market cap weight, possibly tweaked to minimize volatility in case foreign holdings are not currency-hedged, is the way to go, with bonds things are quite different. First of all, I'm sure that in most cases foreign bonds have to be currency-hedged...
by Thesaints
Fri Jul 21, 2017 12:58 am
Forum: Personal Finance (Not Investing)
Topic: Kicking the net worth habit
Replies: 13
Views: 896

Re: Kicking the net worth habit

Feels like you are in the same situation as Montgomery Brewster...
by Thesaints
Fri Jul 21, 2017 12:47 am
Forum: Investing - Help with Personal Investments
Topic: Which cost basis is best average cost or FIFO
Replies: 6
Views: 373

Re: Which cost basis is best average cost or FIFO

There is no general rule. FIFO or average (single, or double, category) can each be better than the other depending on the particular situation. Specific identification is certainly the best. No other method can generate lower taxable load, except for average single category in case of gains and los...
by Thesaints
Thu Jul 20, 2017 8:43 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

We only recognize downturns have ended after they are over.
by Thesaints
Thu Jul 20, 2017 8:40 pm
Forum: Investing - Help with Personal Investments
Topic: Please explain Capital Gains tax after retirement
Replies: 23
Views: 1204

Re: Please explain Capital Gains tax after retirement

The instructions for the worksheet are pretty straightforward. They were written for the average taxpayer, who did not go to college and didn't do that well in high-school either.
It would take a grand total of 20 minutes for a normal person.

Don't give a man a fish, teach him how to fish.
by Thesaints
Thu Jul 20, 2017 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: move US Savings Bonds to Vanguard
Replies: 8
Views: 524

Re: move US Savings Bonds to Vanguard

1998 + 30 = 2028. We are in 2017, so that makes it another 10 years of joy.
by Thesaints
Thu Jul 20, 2017 8:30 pm
Forum: Investing - Theory, News & General
Topic: The Quest for Perfection
Replies: 95
Views: 3682

Re: The Quest for Perfection

You think you bought all those stocks for free, but you did not. Vanguard very likely would have bought them on the same date as yours for cheaper and could sell them on the same date as you will at a higher price. Furthermore those 30 different stocks are nowhere as diversified as the vanguard inde...
by Thesaints
Thu Jul 20, 2017 8:26 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

I use a formal definition of risk, which is objective rather than subjective. "My" definition of diversification is also quite formal. If you say that diversification is the process of "spreading assets across multiple classes to reduce risk", then I'd object that it is more effi...
by Thesaints
Thu Jul 20, 2017 6:34 pm
Forum: Investing - Help with Personal Investments
Topic: Please explain Capital Gains tax after retirement
Replies: 23
Views: 1204

Re: Please explain Capital Gains tax after retirement

[ Generally I agree that knowing/understanding what you are doing is very useful. In this particular case ,however, the worksheet in question https://apps.irs.gov/app/vita/content/globalmedia/capital_gain_tax_worksheet_1040i.pdf is a bizarre series of questions, that even if filled out correctly, w...
by Thesaints
Thu Jul 20, 2017 6:33 pm
Forum: Investing - Theory, News & General
Topic: US and International Bond Fund Allocation
Replies: 17
Views: 1090

Re: US and International Bond Fund Allocation

FOREIGN BONDS ... In a portfolio context, foreign exchange exposure may produce the benefit of additional diversification. Even with no expected return, the lack of full correlation between currency movements and other asset-class fluctuations reduces portfolio risk. Mmmh... then why is Vanguard Mi...
by Thesaints
Thu Jul 20, 2017 6:28 pm
Forum: Personal Consumer Issues
Topic: It is time to talk about the educational system!
Replies: 4
Views: 284

Re: It is time to talk about the educational system!

newcatintown wrote:Think you missed the point. :oops:


Sorry. It must be because of that PhD...
by Thesaints
Thu Jul 20, 2017 6:18 pm
Forum: Investing - Help with Personal Investments
Topic: move US Savings Bonds to Vanguard
Replies: 8
Views: 524

Re: move US Savings Bonds to Vanguard

Wife and I hold 9 Series EE & I US Savings Bonds currently value $3099. yielding from 3.62% to 5.84%. The paper bonds are registered in her or my name individually. 1. Is there a way to move these bonds directly into our taxable Vanguard account setup as a family trust account without loosing A...
by Thesaints
Thu Jul 20, 2017 6:12 pm
Forum: Personal Consumer Issues
Topic: Flying first class/ business......
Replies: 13
Views: 2115

Re: Flying first class/ business......

Oh, I love flying! That exciting tinge of anticipation on departure day, the pageantry at the airport, the succulent provisions on board, the relaxation of many hours spent comfortably reclined enjoying the latest movie or a custom-made cocktail... and at the end of all of it, distant lands and stra...
by Thesaints
Thu Jul 20, 2017 6:05 pm
Forum: Investing - Help with Personal Investments
Topic: Please explain Capital Gains tax after retirement
Replies: 23
Views: 1204

Re: Please explain Capital Gains tax after retirement

AlohaJoe is correct. By manually filling the worksheet one understands what is the effect of every single income and deduction component on total taxes and may tweak things to further optimize. A tax calculator just spits out an amount and one doesn't know how that particular number came about, maxi...
by Thesaints
Thu Jul 20, 2017 5:12 pm
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)
Replies: 33
Views: 3548

Re: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)

Gold ain't too real and most definitely it is not a good hedge against inflation. Post 1971 (the only period that counts) it performed at its worst when inflation was at its highest.
by Thesaints
Thu Jul 20, 2017 5:09 pm
Forum: Investing - Help with Personal Investments
Topic: Please explain Capital Gains tax after retirement
Replies: 23
Views: 1204

Re: Please explain Capital Gains tax after retirement

Try to fill out the Qualified Dividends and Capital Gains Worksheet in the Form 1040 instructions for line 44 and all your doubts will be easily solved.
by Thesaints
Thu Jul 20, 2017 4:14 pm
Forum: Investing - Theory, News & General
Topic: Market vs Limit order
Replies: 48
Views: 2830

Re: Market vs Limit order

This discussion brings up another point: A good use of limit orders is to place a standing limit order for a security that trades on low volume such as preferred stock that you want to buy at the low price you want to pay, usually significantly below market. Every once in a while you get lucky and ...
by Thesaints
Thu Jul 20, 2017 3:51 pm
Forum: Investing - Help with Personal Investments
Topic: Can anyone convince me I need international stock in my portfolio?
Replies: 96
Views: 3100

Re: Can anyone convince me I need international stock in my portfolio?

There should be a GOOD reason for people to invest in places they know nothing about rather than just hoping that diversity will save them. From that point of view, many retail investors don't know much of their domestic market either. Shouldnt there be some common sense check that you are investin...
by Thesaints
Thu Jul 20, 2017 3:44 pm
Forum: Investing - Help with Personal Investments
Topic: Can anyone convince me I need international stock in my portfolio?
Replies: 96
Views: 3100

Re: Can anyone convince me I need international stock in my portfolio?

The convincing argument has little to do with past performance and a lot more with observed and forecasted markets decorrelation. But haven't the US and ex-US stock markets been becoming more correlated due to globalization, and if so, why would we have a reason to think this trend will stop? Certa...
by Thesaints
Thu Jul 20, 2017 3:41 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

thesaints: "Therefore the value of rebalancing in this case was $1,248, plus the reduction in the variance of your invested capital along the way." Thanks. I agree there is value to rebalancing IF you start with 40% bonds. But there was really no value in the reduction in the variance. In...
by Thesaints
Thu Jul 20, 2017 2:33 pm
Forum: Personal Consumer Issues
Topic: SAT scores - whats the point??
Replies: 37
Views: 1518

Re: SAT scores - whats the point??

Because weeding out lower scores is a lot cheaper than having a specialist, if not a board of them, looking at each application.
It is the same reason why banks look at the FICO scores.
by Thesaints
Thu Jul 20, 2017 2:30 pm
Forum: Investing - Help with Personal Investments
Topic: Can anyone convince me I need international stock in my portfolio?
Replies: 96
Views: 3100

Re: Can anyone convince me I need international stock in my portfolio?

The convincing argument has little to do with past performance and a lot more with observed and forecasted markets decorrelation. Mr. Bogle may have said that US investors don't need foreign stock holdings (I don't know in which frame of reference he said so), but he is also 92-yo. Anyway, Plato, wh...
by Thesaints
Wed Jul 19, 2017 11:13 pm
Forum: Investing - Help with Personal Investments
Topic: Considering pension plan in asset allocation
Replies: 37
Views: 1293

Re: Considering pension plan in asset allocation

You don't need to speculate on the expenses you might have in retirement, but only on those you would like to have. In other words don't try to guess how much cable will be in 2035, but try to imagine whether you see yourself retiring on 50k or 100k a year. Trying to calculate the minimum necessary ...
by Thesaints
Wed Jul 19, 2017 9:06 pm
Forum: Personal Consumer Issues
Topic: Would you let your teenager spend all his savings on a gaming computer?
Replies: 106
Views: 3966

Re: Would you let your teenager spend all his savings on a gaming computer?

Maybe a less formal accounting would be a better practice in this case. I'd leave "net worth" and "depreciation" alone (btw everything instantly depreciates to about zero if it is destroyed) Didn't you say he would be "building" such a computer ? That could be a great w...
by Thesaints
Wed Jul 19, 2017 9:01 pm
Forum: Investing - Theory, News & General
Topic: Backdoor Roth?
Replies: 15
Views: 996

Re: Backdoor Roth?

AND I just contributed the max for both her and myself into the vanguard traditional IRA's I just opened last week. That's ok. An IRA becomes "traditional" or "non-deductible" only after you file your 2017 taxes and take the deduction, or file Form 8606. You can convert to a Rot...
by Thesaints
Wed Jul 19, 2017 8:47 pm
Forum: Personal Consumer Issues
Topic: Cheap eggs... how bad?
Replies: 82
Views: 5995

Re: Cheap eggs... how bad?

I pay about $3.50 for six larger-grade eggs. They are quite good...
by Thesaints
Wed Jul 19, 2017 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: Approaching major milestone, need cool-headed advice
Replies: 28
Views: 3029

Re: Approaching major milestone, need cool-headed advice

At 65 you will be eligible for Medicare...
by Thesaints
Wed Jul 19, 2017 8:20 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

I too find "risk" very vague mainly due to volatility proposes. For example, a 100% equity allocation that gains 100% over 10 years then drops by 50% in the 11th year has a larger remainder balance than a 50/50 portfolio that gains 55% for the bond allocation and same 100% for equity foll...
by Thesaints
Wed Jul 19, 2017 7:54 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

CULater wrote: "And if you think that longer time periods are always safe, then consider the 15 years from 1968 through 1982, when after adjusting for inflation the S&P 500 lost a total of 4.62%." If one had invested $10,000 in the S&P500 at the beginning of 1968, he would have $2...
by Thesaints
Wed Jul 19, 2017 7:47 pm
Forum: Investing - Theory, News & General
Topic: The Quest for Perfection
Replies: 95
Views: 3682

Re: Total Stock Market Index Fund (TSM) is Efficient

6. The lower expense ratio holdings in this sort of portfolio could help, as well. (The individual stocks and bank accounts/CDs/iBonds have a zero expense ratio, saving a few basis points over Total World. You can be absolutely sure that trying to replicate a total index, either stocks or bonds, by...
by Thesaints
Wed Jul 19, 2017 7:31 pm
Forum: Personal Consumer Issues
Topic: Flying first class/ business......
Replies: 13
Views: 2115

Re: Flying first class/ business......

Differently from Coach, airlines do not routinely overbook in F or J. You would lose your seats only in the event of flight cancellations/missing connections or, more rarely, equipment change. In all those cases the airline will offer you the choice of getting you to your final destination most expe...
by Thesaints
Wed Jul 19, 2017 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: avoiding capitol gains tax
Replies: 7
Views: 647

Re: avoiding capitol gains tax

What do those accounts consist of ?
You can certainly transfer shares of stocks, or mutual funds, and bonds without realizing a capital gain.
by Thesaints
Wed Jul 19, 2017 5:36 pm
Forum: Personal Finance (Not Investing)
Topic: Not raising rent for 10 years in California
Replies: 17
Views: 2337

Re: Not raising rent for 10 years in California

White Coat Investor wrote:Why anyone would buy a rent-controlled building as an investment is beyond me.


People buy gold and that has lower chances of appreciation.
by Thesaints
Wed Jul 19, 2017 5:35 pm
Forum: Investing - Theory, News & General
Topic: The Death of Buy and Hold
Replies: 25
Views: 2905

Re: The Death of Buy and Hold

The author confuses diversification, which strictly speaking is a process for removing risk by holding non-perfectly correlated vehicles across the same asset class. This risk removal is the only free lunch one can get in the world of finance, although some would object that risk is not always undes...
by Thesaints
Wed Jul 19, 2017 5:26 pm
Forum: Investing - Theory, News & General
Topic: Backdoor Roth?
Replies: 15
Views: 996

Re: Backdoor Roth?

Contribute to a non-deductible IRA (no income limit) and convert to a Roth (no income limit).
Problems arise when you already have a traditional IRA because the amount converted into a Roth will be pro rated amongst all of your IRA accounts and, likely, generate taxable income.
by Thesaints
Wed Jul 19, 2017 5:18 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

Treasuries generally have a high negative correlation to equities in a flight to quality situation like a stock market crash or sometimes even only in a correction. That's not really true. In 2008 the stock market crashed and bonds tanked, for instance. False. TBM was up 5.05% in 2008. It was also ...
by Thesaints
Wed Jul 19, 2017 5:15 pm
Forum: Investing - Theory, News & General
Topic: Stocks just got cheaper... per Vanguard [sudden change in Vanguard fund P/Es]
Replies: 23
Views: 3061

Re: Stocks just got cheaper... per Vanguard [sudden change in Vanguard fund P/Es]

The "10" in "PE10" stands for "10 years". In 40 quarters companies can and do change a lot. 10 years ago Apple was a personal computers company... I agree with what you write regarding P/E ttm, but the CAPE has a very questionable predictive power. It depends what you ...
by Thesaints
Wed Jul 19, 2017 5:08 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 98
Views: 2770

Re: Risk, Return, and Rebalancing

Doc wrote: Treasuries generally have a high negative correlation to equities in a flight to quality situation like a stock market crash or sometimes even only in a correction.


That's not really true. In 2008 the stock market crashed and bonds tanked, for instance.
by Thesaints
Wed Jul 19, 2017 2:38 pm
Forum: Personal Finance (Not Investing)
Topic: Those Of You In a HCOLA - What's Your Financial Plan
Replies: 45
Views: 3333

Re: Those Of You In a HCOLA - What's Your Financial Plan

bigred77 wrote:?.. enjoy the amenities that make those areas HCOL locations in the first place (weather, beaches, mountains, culture, arts, excitement, what have you).


You may add "compensations" to the list
by Thesaints
Wed Jul 19, 2017 2:35 pm
Forum: Investing - Theory, News & General
Topic: Stocks just got cheaper... per Vanguard [sudden change in Vanguard fund P/Es]
Replies: 23
Views: 3061

Re: Stocks just got cheaper... per Vanguard [sudden change in Vanguard fund P/Es]

The "10" in "PE10" stands for "10 years". In 40 quarters companies can and do change a lot. 10 years ago Apple was a personal computers company...

I agree with what you write regarding P/E ttm, but the CAPE has a very questionable predictive power.

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