Search found 3310 matches

by alex_686
Thu May 24, 2018 2:34 pm
Forum: Investing - Theory, News & General
Topic: ETF: Compound vs. Day/Swing trading (catch the wave)
Replies: 3
Views: 71

Re: ETF: Compound vs. Day/Swing trading (catch the wave)

Nckhrs, you have come to the wrong site. Bogleheads is based on passive index investing. Write up a IPS, update it once a year, re-balance your portfolio rarely. There is extensive theoretical academic and empirical studies that back this method up. In particular for the individual investor. What yo...
by alex_686
Thu May 24, 2018 2:12 pm
Forum: Investing - Theory, News & General
Topic: Help me understand zero coupon bonds
Replies: 5
Views: 186

Re: Help me understand zero coupon bonds

And someone correct me if I am wrong, but I believe when buying zeros in small lots, one wouldn't actually get the full 2.09% on those. And a follow up question... Is there a difference worth considering when buying zeros at auction versus on the secondary market? If you buy at auction you get the ...
by alex_686
Thu May 24, 2018 8:36 am
Forum: Investing - Theory, News & General
Topic: Low net asset ETF — Issues?
Replies: 17
Views: 640

Re: Low net asset ETF — Issues?

So the latter two would have no tax consequences for the shareholders? As in, they wouldn’t be forced to sell shares? Maybe. In the last 2 the fund will still sell all of the assets. If they have a unrealized capital gain then it will be realized and you will see that at the year end when dividends...
by alex_686
Wed May 23, 2018 8:53 pm
Forum: Investing - Theory, News & General
Topic: Low net asset ETF — Issues?
Replies: 17
Views: 640

Re: Low net asset ETF — Issues?

Can you expand on the “pull the plug” issue? What options does the fund company have if it discontinues the fund? Do the shareholders have any options? 3 options Liquidation - sell everything and return the cash Merge - shares are converted into a bigger fund. Repurpose - instead of tracking silver...
by alex_686
Wed May 23, 2018 8:11 pm
Forum: Investing - Theory, News & General
Topic: Low net asset ETF — Issues?
Replies: 17
Views: 640

Re: Low net asset ETF — Issues?

So, a low net asset value ETF is not viable. At this size the fund family has to be subsidizing the fund. You can figure this out by reading the prospectus and seeing what fees are being waived. Either the ETF is going to grow into a viable fund or the fund family will pull the plug. Track the asset...
by alex_686
Wed May 23, 2018 12:26 pm
Forum: Investing - Help with Personal Investments
Topic: CD Ladder in IRA
Replies: 3
Views: 343

Re: CD Ladder in IRA

My question is this - does the interest earned on the ladder within an IRA count toward your yearly contribution limit - especially if you don't continue the ladder Only new money, i.e. contributions, count. Investment gains from trading, dividends, interest, etc. all happen inside the IRA wrapper ...
by alex_686
Wed May 23, 2018 11:36 am
Forum: Investing - Help with Personal Investments
Topic: Investment Allocation Help
Replies: 8
Views: 256

Re: Investment Allocation Help

Hi alex_686. Thank you for your reply. Prudential Goalmaker is an asset allocation tool that is part of Prudential Retirement 401k I have through work. It looks at your Time Horizon (21) and your Risk Category (I prefer to be risky with my 401k at this point) to determine where to allocate your fun...
by alex_686
Wed May 23, 2018 11:23 am
Forum: Investing - Help with Personal Investments
Topic: Investment Allocation Help
Replies: 8
Views: 256

Re: Investment Allocation Help

One method was subtract your age from 100, so that would be 56% stocks. The other method (I believe is Warren Buffets method) is put 90% in S&P index fund and 10% in short-term governments. ...I want to follow Warren Buffets method although I don't know what is meant by short-term governments. 100 ...
by alex_686
Wed May 23, 2018 10:43 am
Forum: Investing - Help with Personal Investments
Topic: Investment Allocation Help
Replies: 8
Views: 256

Re: Investment Allocation Help

First, I am not sure what Prudential GoalMaker is. Is it a taxable portfolio manager or is it a annuity? Bogleheads have a strong bias against most annuities. Second, I would review the performance of the last 2 indexes. The underlying indexes have had positive returns. Are you considering the reinv...
by alex_686
Tue May 22, 2018 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: Buy an old farmhouse?
Replies: 43
Views: 2941

Re: Buy an old farmhouse?

City people, country people, it takes all kinds. A shared room in the city sounds like hell to me, while the OP's potential house and land sounds like heaven. +1 with this. Figure out what lifestyle you want. I could go on and on with the plus and minus of town verse farm life. Kids won't have frie...
by alex_686
Tue May 22, 2018 2:21 pm
Forum: Investing - Theory, News & General
Topic: Theory: Total World Index a Sure Fire Win [VT/VTWSX]
Replies: 91
Views: 5922

Re: Theory: Total World Index a Sure Fire Win [VT/VTWSX]

guyesmith wrote:
Tue May 22, 2018 2:15 pm
Theory: The Total World Index a Sure Fire Win [VT/VTWSX]
There is a fair amount of evidence that a marketed weighted portfolio should be the most efficient portfolio and I tend to believe it. Or if not fully believe it, it is the starting point for building a portfolio.
by alex_686
Mon May 21, 2018 5:02 pm
Forum: Investing - Help with Personal Investments
Topic: Investments that are unique *and* sensible?
Replies: 12
Views: 1313

Re: Investments that are unique *and* sensible?

Actually, I think the winners are mostly the covered people who live beyond the life expectancy. I strongly suspect that the "cut" that the insurance company takes is rather small in comparison. When offering annuities, insurance companies must get prior approval form the state regulator. State reg...
by alex_686
Mon May 21, 2018 4:29 pm
Forum: Investing - Help with Personal Investments
Topic: Equal Weighting
Replies: 14
Views: 883

Re: Equal Weighting

If you did this allocation you are under-weighting the US and over-weighting the UK, Europe, and Japan. Why? In Behavioral Economics this is refereed to as "Naive Allocation". Lots of people chose it. On the plus side it is easy to do. On the down side there is no rational for it and it tends to lea...
by alex_686
Mon May 21, 2018 12:46 pm
Forum: Investing - Help with Personal Investments
Topic: Pimco INCOME BOND FUND PONAX beating VWIAX Wellesley ~~ too good to be true?
Replies: 26
Views: 1700

Re: Pimco INCOME BOND FUND PONAX beating VWIAX Wellesley ~~ too good to be true?

BUT I would have expected the Bond Fund to have lagged VWIAX This is because you are comparing VWIAX to other normal bond funds. Here is one trick they use - it is called the carry trade. You go long long term bonds and short short term bonds, earning the spread between these 2. For example, borrow...
by alex_686
Mon May 21, 2018 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: Fractional Shares?
Replies: 6
Views: 366

Re: Fractional Shares?

Fractional shares can't be transferred. They are a service offered by brokers and thus strictly a internal process. Every brokerage house that I know off automatically sells the shares to themselves using end of day prices.
by alex_686
Mon May 21, 2018 12:11 pm
Forum: Investing - Help with Personal Investments
Topic: Pimco INCOME BOND FUND PONAX beating VWIAX Wellesley ~~ too good to be true?
Replies: 26
Views: 1700

Re: Pimco INCOME BOND FUND PONAX beating VWIAX Wellesley ~~ too good to be true?

Apples to oranages. One is a bond fund, the other is not. I like the Pimco bond funds. If you think active management can produce returns this is the logical result of what it should look like. They select the slice of the bond market that they want and go for it. If they think that the credit sprea...
by alex_686
Mon May 21, 2018 11:58 am
Forum: Investing - Help with Personal Investments
Topic: Can I transfer brokerage Acct without speaking to FA?
Replies: 20
Views: 1157

Re: Can I transfer brokerage Acct without speaking to FA?

To repeat, it is the receiving broker who needs to initiate the ACATS transfer. So you must start with Vanguard. Unless there is something tricky - like a mutual fund that Citi has networked but Vanguard does not - you don't have to talk with Citi. Of course I am sure that you Citi FA will want to t...
by alex_686
Mon May 21, 2018 11:26 am
Forum: Personal Finance (Not Investing)
Topic: Finance a $28,000 house for Brother?
Replies: 73
Views: 5116

Re: Finance a $28,000 house for Brother?

As I recall many lenders do not make mortgages for less than about $75,000(???) because a lot of their costs are the same for a $75K loan or a $750k loan so they would rather make fewer large loans. I have not done it but it is apparently possible to buy a house with a home equity loan at some plac...
by alex_686
Mon May 21, 2018 9:27 am
Forum: Personal Finance (Not Investing)
Topic: Are high dividend stocks advantageous for the 15% tax rate?
Replies: 46
Views: 3558

Re: Are high dividend stocks advantageous for the 15% tax rate?

i dont understand why this idea of 25-50 DGI stocks is so popular right now. you are, by definition, selecting companies that are returning more cash to shareholders than the market average through dividends. this means that these companies are on average reinvesting less money into their operation...
by alex_686
Mon May 21, 2018 9:05 am
Forum: Personal Finance (Not Investing)
Topic: Are high dividend stocks advantageous for the 15% tax rate?
Replies: 46
Views: 3558

Re: Are high dividend stocks advantageous for the 15% tax rate?

Well, I'm talking about using this "fund" for current income, so there is no later. First, I understand the allure of using a dividend framework instead of a total return framework for investment. It seems so simple. However, total return is foundation and a dividend framework is deeply flawed. Sec...
by alex_686
Sun May 20, 2018 11:51 am
Forum: Investing - Help with Personal Investments
Topic: Investment allocation
Replies: 13
Views: 566

Re: Investment allocation

terran wrote:
Sun May 20, 2018 11:38 am
I'm confused. Isn't that exactly what I said?
I misread your post. Sorry, you are right.
by alex_686
Sun May 20, 2018 11:22 am
Forum: Investing - Help with Personal Investments
Topic: Investment allocation
Replies: 13
Views: 566

Re: Investment allocation

I agree that the allocation should be considered as a whole across all accounts, but there are better things to put in particular accounts, so to the extent possible while keeping your desired overall asset allocation, you may consider putting particular investments in certain accounts. I have to s...
by alex_686
Sat May 19, 2018 12:26 pm
Forum: Investing - Theory, News & General
Topic: Is Vanguard anti-competitive?
Replies: 29
Views: 2938

Re: Is Vanguard anti-competitive?

All mutual funds are corporations. For example, Vanguard Total Stock Market Index Fund is a corporation. It has a board of directors, files tax returns, and issues common stock. i.e., each share of the fund is 1 share of the common stock. Normally they don't pay taxes and all profits of that fund g...
by alex_686
Fri May 18, 2018 2:29 pm
Forum: Investing - Theory, News & General
Topic: Are you concerned that over 75% of IPOs are unprofitable?
Replies: 8
Views: 807

Re: Are you concerned that over 75% of IPOs are unprofitable?

Behind a paywall so I will speculate. The Dot.Com boom and bust was about a gold rush. A mad dash to stake out land. Did that land hold gold? Well, we would find out latter. The current boom is slightly different. The businesses have higher quality businesses plans. They have paths to profitability ...
by alex_686
Fri May 18, 2018 10:02 am
Forum: Investing - Theory, News & General
Topic: Is Vanguard anti-competitive?
Replies: 29
Views: 2938

Re: Is Vanguard anti-competitive?

So REITs are RICs (Regulated Investment Companies) as defined under the Investment Company Act of 1940, just like Mutual Funds and ETFs, that are allowed to act as untaxed a.k.a. pass through conduits of investment, on the condition that they pass through all profits to the shareholders who then pa...
by alex_686
Fri May 18, 2018 9:47 am
Forum: Investing - Theory, News & General
Topic: Bank Interest Rates — when will they go up?
Replies: 25
Views: 2774

Re: Bank Interest Rates — when will they go up?

david1082b wrote:
Thu May 17, 2018 11:23 am
Fed Funds rate is 1.69% https://fred.stlouisfed.org/series/FEDFUNDS
Here is a niffty little tool on the market's expected fed fund rate for the next year.

http://www.cmegroup.com/trading/interes ... -fomc.html
by alex_686
Fri May 18, 2018 8:35 am
Forum: Investing - Help with Personal Investments
Topic: Long term investment in grains/wheat
Replies: 22
Views: 1313

Re: Long term investment in grains/wheat

Become a farmer, invest in land.

Land has a few drawbacks. Lumpy, illiquid, requires skill, you become a small business owner overnight.

Not all investment thesis are actionable.
by alex_686
Thu May 17, 2018 4:41 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1645

Re: How do stock buybacks work, and how do index funds handle them?

Correct. You have to rebalance if free float weights change. My point was that a shard buyback reduces the number of fees float shares. Whether or not that leads to a change in free float cap weight depends on how the price changes in response to the buyback. As long as price movements offset the r...
by alex_686
Thu May 17, 2018 11:09 am
Forum: Investing - Help with Personal Investments
Topic: Rates are going up. Should I pull $ out of Munis?
Replies: 10
Views: 984

Re: Rates are going up. Should I pull $ out of Munis?

I agree. If the rates go up by another 75bps by mid next year dont know what will happen. Actually, we have a decent idea of what will happen. Read up on duration and how intrest rates will affect your portfolio. The market also has a decent history of predicting where rates will go. Here are links...
by alex_686
Thu May 17, 2018 11:02 am
Forum: Investing - Help with Personal Investments
Topic: Rates are going up. Should I pull $ out of Munis?
Replies: 10
Views: 984

Re: Rates are going up. Should I pull $ out of Munis?

Read up on the "Sunk Cost Fallacy". Your bonds have fallen in value because rates of risen faster than expected. Probably not as bad once you have figured in reinvested dividends. In any event, it is water under the bridge. Make decisions on future events, not past ones. Expected rate increases are ...
by alex_686
Thu May 17, 2018 10:59 am
Forum: Investing - Help with Personal Investments
Topic: Allocation help
Replies: 10
Views: 345

Re: Allocation help

I am just annoyed that my ETF allocation is under performing VTI big time this year. Thanks for your input. I might buy small amount of health and tech in my IRA in the future. FYI, I am a proponent of low volatility funds. They are a lower risk fund, hence lower return. As far as I can figure thin...
by alex_686
Thu May 17, 2018 10:20 am
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1645

Re: How do stock buybacks work, and how do index funds handle them?

For a float-adjusted Index, the fund should only have to rebalance if the free float market cap weight changes, which depends on whether a price movement from the buyback offsets the reduction in free float shares. You don't have to adjust float-adjusted indexes when a stock changes price, you chan...
by alex_686
Thu May 17, 2018 9:13 am
Forum: Investing - Help with Personal Investments
Topic: Margin debt ratio
Replies: 39
Views: 2400

Re: Margin debt ratio

It's been called "picking up nickels from in front of bulldozers" - it's an apt description and you probably read Andrew Lo's "Capital Decimation Partners" paper? About a fund that makes a nice living for its managers for 9 years, then wipes out its entire investment capital in the 10th, investors ...
by alex_686
Thu May 17, 2018 7:14 am
Forum: Investing - Help with Personal Investments
Topic: Margin debt ratio
Replies: 39
Views: 2400

Re: Margin debt ratio

Is there any reach about a leveraged bond fund and a leveraged stock fund? Say 60% bonds and 40% stocks, both funds leveraged 2x? Yes. For bond funds look under "Banks" You are basically taking on duration risk just like a bank. For stocks look under "Hedge Funds". HF have historically earned above...
by alex_686
Wed May 16, 2018 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: Percent Confidence in Planning Scenario
Replies: 27
Views: 1005

Re: Percent Confidence in Planning Scenario

Getting from 96% and 100% is essentially gaming the model. The errors in the model are almost certainly greater than 4%. Or one could go the other way and not game the model. One can get much closer to 100% by investing heavily in TIPS, the ultimate low risk low return asset. To get downside protec...
by alex_686
Wed May 16, 2018 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off Debt vs. Investing
Replies: 25
Views: 1364

Re: Paying off Debt vs. Investing

Let me counter your arguments a bit. Implicit in your counter-arguments is that there is a division between Homo Economicus (Rational Man) and Homo Sapiens (Normal Man). This is true. While spreadsheets and math will work on one, heuristics and rules of thumb work on the other. It is hard for the 2 ...
by alex_686
Wed May 16, 2018 10:52 am
Forum: Personal Finance (Not Investing)
Topic: Paying off Debt vs. Investing
Replies: 25
Views: 1364

Re: Paying off Debt vs. Investing

The conventional wisdom says that you should compare the interest rate on your debt to the expected return on your investments. Ignoring the fact that debt payments represent a guaranteed return and investments do not (which I realize is not actually something to ignore), it's as simple as putting ...
by alex_686
Wed May 16, 2018 10:28 am
Forum: Investing - Help with Personal Investments
Topic: Model ETF portfolios
Replies: 9
Views: 667

Re: Model ETF portfolios

On this forum we follow a number of in investment principles . " Never try to time the marke t" is an important one. " Stay the course " is another one. " Keep costs low " is also important I will modestly take the other side. Why are there updates? Investment theory changes, there are secular shif...
by alex_686
Wed May 16, 2018 9:04 am
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1645

Re: How do stock buybacks work, and how do index funds handle them?

If interest is tax deductible business expense that is not true? You can create value for equity holders by increasing leverage? I am ignoring agency costs here, that's a separate argument. Now there are preferred states of dress. Investors like some but not a lot of leverage. The is a optimal bala...
by alex_686
Tue May 15, 2018 1:53 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3624

Re: Vanguard Junk Bond fund

By "downgrades" do you mean defaulting bonds ? Are there other causes of loss of principal apart from rising interest rates ? VWEAX has a stellar record of near zero defaults. First, how can you tell if VWEAX has had zero defaults? I will extend in 2 different ways. The past 10 years have been kind...
by alex_686
Tue May 15, 2018 12:01 pm
Forum: Investing - Theory, News & General
Topic: Would you be willing to temporarily change your AA?
Replies: 27
Views: 1491

Re: Would you be willing to temporarily change your AA?

My underlying question was, would you be willing to change your AA? Even if temporarily? If we had another 2008 type correction, with blood in the streets, stock prices down -50%, would you be willing to sell some, or all of your bond position and just load up on equities? Obviously, this question ...
by alex_686
Tue May 15, 2018 11:23 am
Forum: Personal Consumer Issues
Topic: Audiobooks and the Overdrive App
Replies: 19
Views: 1612

Re: Audiobooks and the Overdrive App

Can the Overdrive app on my Windows PC transfer the book to my Kindle E-reader? The Kindle E-reader now supports Audible. Thanks Paul I don't think so. In my library system I have to chose. I can download the audio book from overdrive or I can download the Kindle file via Amazon. If I download the ...
by alex_686
Tue May 15, 2018 11:20 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3624

Re: Vanguard Junk Bond fund

I have a gut feeling that skilled choice of bonds is essential whereas VICSX is an index fund so committed to have no choice in bond quality ? I'm not so sure about that and it would be an anomaly if true. Fund managers rarely add alpha after fees. All risks being known and equal, an extremely low-...
by alex_686
Tue May 15, 2018 10:54 am
Forum: Investing - Help with Personal Investments
Topic: Anyone have experience with 'baby bonds'
Replies: 5
Views: 578

Re: Anyone have experience with 'baby bonds'

Are you talking about Prefered Stock? Yes, I own index mutual funds that invest in prefered stock. My AA allocates 20% of my bonds to higher risk bonds, such as junk and prefered. Higher risk and returns than conventional bonds. They tend to be concentrated in the banking sector. Not for everybody, ...
by alex_686
Mon May 14, 2018 6:06 pm
Forum: Investing - Help with Personal Investments
Topic: Should I decrease my international exposure?
Replies: 8
Views: 883

Re: Should I decrease my international exposure?

I am not a big fan of backtesting. Why did US outperform international? Will these factors hold? Will the market still act the same? 2 points. International and US markets have become more integrated, so I expect the markets to become more similar. Second, US did not outperform international, growth...
by alex_686
Mon May 14, 2018 4:07 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1645

Re: How do stock buybacks work, and how do index funds handle them?

But this isn't the way it works in practice. First, the company is buying back shares on the open market...share buying generally (by anyone) leads to a higher share price. Second, buying back shares means that the same amount of earnings is allocated to a smaller number of shares (EPS goes up). If...
by alex_686
Mon May 14, 2018 3:54 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1645

Re: How do stock buybacks work, and how do index funds handle them?

Is this realistic for buybacks? That means if I have shares of a company that buys back, my net worth reliably increases. Versus with dividends, net worth typically doesn't change. It seems to me that the market cap of a company that buys back should go down, because the company just spent a lot of...
by alex_686
Mon May 14, 2018 3:51 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1645

Re: How do stock buybacks work, and how do index funds handle them?

Share buybacks don't automatically reduce market cap. First, share buy backs affect market cap in exactly the same way as dividends. In theory the market cap should drop by the amount of cash returned to the shareholders. Second, distributed cash - like dividends - are reinvested back into the inde...
by alex_686
Mon May 14, 2018 3:29 pm
Forum: Investing - Theory, News & General
Topic: Gross Margin - why aren't traffic acquisition costs counted as COGS for tech companies?
Replies: 16
Views: 726

Re: Gross Margin - why aren't traffic acquisition costs counted as COGS for tech companies?

Are the numbers you are quoting "pro forma" or "audited" accounting reports? "Pro forma" has a long and complex history. Pro Forma allows management to present the accounting in a favorable light. For example, management can ignore a 1 time charge to goodwill. It is a non-cash expense and has a low ...
by alex_686
Mon May 14, 2018 2:56 pm
Forum: Investing - Theory, News & General
Topic: New inflation-protected ETF launches: iShares Inflation Hedged Corporate Bond ETF (LQDI)
Replies: 27
Views: 2198

Re: New inflation-protected ETF launches: iShares Inflation Hedged Corporate Bond ETF (LQDI)

Is there any way for an individual investor to purchase inflation swaps directly? Was googling and didn't turn up anything... No. Swaps are limited to institutions. They tend to be customized products. Notional values start in the millions. The Big Short by Michael Lewis walks one through how hard ...