Search found 799 matches

by cb474
Tue Jan 16, 2018 3:45 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

But you can't "hold the bonds for their duration", can you? Think about it. You on day one are going to purchase shares in a bond fund. Then at the end of the month, the first mortgage payment comes due. You haven't had time to hold it for the duration ... the bond fund has one duration and you hav...
by cb474
Mon Jan 15, 2018 11:08 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

b474, 1) Come on. It is a 400K house. You lose 200K if you sell it at 50% loss. It has nothing to do with whether it is fully paid off. The only difference is if you do not pay off the house, you have the liquidity to last longer without selling the house. That depends entirely on what happens in t...
by cb474
Mon Jan 15, 2018 11:04 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

Again, I don't think I'm following this. Surely you're not saying that a fixed bond ladder matched precisely to the projected mortgage payments has exactly the same risk as a never ending bond ladder aka a bond mutual fund? Yes, I agree that the value must change but that is irrelevant with the fix...
by cb474
Mon Jan 15, 2018 10:54 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

B) 300K 60/40 portfolio with the 300K mortgage. In a recession, the stock crash 50% and the bond stay flat. My annual expense is 60K per year. For (A), I can only last 90K/60K = 1 1/2 years. For (B), 210K/60K = 3 1/2 years. Please tell me how (A) is less risky? It is not. This is a little bit of an...
by cb474
Mon Jan 15, 2018 10:20 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

I don't think that my points conflict with the content of the articles, but the author doesn't spend much time talking about mortgage rates at 3% and below. He talks about average mortgage rates over time being 7% and whether 7.8% average market returns is something worth borrowing money at 7% for ...
by cb474
Sun Jan 14, 2018 10:46 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

I was thinking about this question recently and ran across an interesting series of articles about whether or not to pay off one's mortgage or invest the money in savings instead: http://www.theretirementcafe.com/2014/05/investing-mortgage.html http://www.theretirementcafe.com/2014/05/selling-stock...
by cb474
Fri Jan 12, 2018 4:22 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

But you don't know beforehand what your returns are going to be. Surely, you're not saying that after a couple of years and you lose 40% in the stock market, you can then decide to sell your stocks out and pay the mortgage? I agree. That strategy does not make sense. It assumes you know before hand...
by cb474
Thu Jan 11, 2018 8:28 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

Let’s look at some numbers. I made inflation = 0% for simplicity Option 1 Mortgage amount: $200,000 Term: 15 years Rate: 2.5% Payment: 1,333.58 Total interest paid over 15 years: $40,044.12 Prepayment plan of $1,000 per month toward principal: Total Interest paid: 20,543.12 Savings (rounded): $19,0...
by cb474
Tue Jan 09, 2018 10:38 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard switching all accounts to brokerage accounts?
Replies: 65
Views: 8972

Re: Why is Vanguard switching all accounts to brokerage accounts?

I don't think anyone mentioned this yet in this thread. Another feature lacking in the brokerage accounts is that you cannot do automatic exchanges between funds, only automatic purchases (from your bank account) and sales. When Vanguard bugged me about switching a year ago, I thought this was a fea...
by cb474
Tue Jan 09, 2018 10:12 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

With your last point, that you could use your investments to make your mortgage payments to avoid defaulting, that is true as long as your investments don't crash at the same time your house loses a lot of value and you lose your job, say, as happened again to many people in 2008. So counting on th...
by cb474
Mon Jan 08, 2018 11:07 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

That aside, doesn't holding a mortgage also entail other risks, which make it no so well compared to a riskless asset, like a treasury, but with a negative yield. If you get foreclosed on, you could lose your equity in the house--where is the analogy to a treasury here? If you get foreclosed on, yo...
by cb474
Mon Jan 08, 2018 10:44 pm
Forum: Investing - Theory, News & General
Topic: Paying off mortgage before investing at all?
Replies: 75
Views: 7611

Re: Paying off mortgage before investing at all?

This is the very point I was trying to convey, merely suggestions of the obvious pros/cons and or associated variables of what each path may involve. My path, paying off the mortgage sooner rather than later and saving the 4.5% interest versus investing the extra principal payments to get minimal d...
by cb474
Mon Jan 08, 2018 4:26 am
Forum: Investing - Theory, News & General
Topic: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?
Replies: 155
Views: 16758

Re: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?

This is just the problem with arbitarily picking a point in time and back testing data, while also looking at an incredibly short period of time. You can make the differences between two minorly different funds look just about any way you want. In fact, if you go back over the entire history of IJS...
by cb474
Mon Jan 08, 2018 4:01 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

But you have to look at the total portfolio. You can't just look at the mortgage part and the stock part. There is also a bond part. If you think of the mortgage as a negative bond and you have more "positive" bond than negative bond, then you have a net positive bond allocation ... whether or not ...
by cb474
Sun Jan 07, 2018 5:13 am
Forum: Investing - Theory, News & General
Topic: Paying off mortgage before investing at all?
Replies: 75
Views: 7611

Re: Paying off mortgage before investing at all?

But in the course of discussing this question, the author makes a point that I hadn't seen before. If you have a mortgage and are making your regular mortgage payments, but are simultaneously using extra income to save for retirement in equities, you are effectively borrowing money to invest in equ...
by cb474
Sun Jan 07, 2018 4:54 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

Thanks for the articles .... they were very interesting. I think that the idea that if you have a mortgage and have stock holdings means that you are automatically leveraged is provocative ... but I'm not completely convinced. If we have more bond holding than mortgage value .... then we're not lev...
by cb474
Sun Jan 07, 2018 4:43 am
Forum: Investing - Theory, News & General
Topic: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?
Replies: 155
Views: 16758

Re: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?

Here's the growth chart we've all been waiting for https://i.imgur.com/PpqLTJm.png There is substantial outperformance even including dividends, of course, because the gap was so wide to begin with. At the same time, grap is right that over longer periods the difference hasn't materialized. Of cour...
by cb474
Tue Jan 02, 2018 5:14 am
Forum: Investing - Theory, News & General
Topic: Paying off mortgage before investing at all?
Replies: 75
Views: 7611

Re: Paying off mortgage before investing at all?

Can someone make a valid argument for focusing all efforts on paying off all forms of debt FIRST (including a mortgage) before investing in any other way? (This means putting off retirement investing until mortgage is paid...) I didn't see this thread and was just commenting on this in another mort...
by cb474
Tue Jan 02, 2018 4:57 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17358

Re: Why Buy Bonds If You Have A Mortgage?

I was thinking about this question recently and ran across an interesting series of articles about whether or not to pay off one's mortgage or invest the money in savings instead: http://www.theretirementcafe.com/2014/05/investing-mortgage.html http://www.theretirementcafe.com/2014/05/selling-stocks...
by cb474
Tue Jan 02, 2018 4:01 am
Forum: Investing - Theory, News & General
Topic: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?
Replies: 155
Views: 16758

Re: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?

Here's the growth chart we've all been waiting for https://i.imgur.com/PpqLTJm.png There is substantial outperformance even including dividends, of course, because the gap was so wide to begin with. At the same time, grap is right that over longer periods the difference hasn't materialized. Of cour...
by cb474
Wed Jun 28, 2017 4:16 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

Swedroe says that high-dividend yield funds can have better than expected returns, because they tend to end up selecting for value exposure. He also says that the high-dividend factor detracts from the performance of the fund (which is masked by the benefits of the value factor). He says, "a high di...
by cb474
Mon Jun 26, 2017 7:53 pm
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

+1 That's exactly what I think. It might not make a difference. It probably won't make a difference. But since the only real evidence we have suggests that it might make a difference, and since it costs nothing, to me it wouldn't feel right not to try. Plus, I kind of enjoy the process (including c...
by cb474
Mon Jun 26, 2017 7:43 pm
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

How do you come to the conclusion that VIHAX is not a good international value fund? Sure, in the US stock buybacks are very common, and therefore, dividends may not be a good metric for value and you may exclude many value stocks that opt for doing buybacks. However, international stocks are much ...
by cb474
Sun Jun 25, 2017 2:22 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

People should also keep in mind, as I note a few posts above, that the "magic" of perfectly even 25/25/25/25 proporations doesn't make a lot of sense, because depending on what funds you use for LB, SV, ILV, and ISV you would actually be tilting a lot more or less to small and value. Vanguard's VSIA...
by cb474
Sat Jun 24, 2017 2:46 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

Returns for each slice will vary widely over time. That randomness will dilute our striving for precision in our allocation percentages and funds. We just do what we can. Who knows, perhaps our forced choices due to our account locations and sizes, will do better than the precisely allocated ones? ...
by cb474
Sat Jun 24, 2017 2:35 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

First of all, VTRIX isn't really a value fund, at least in the academic sense (although the name suggests otherwise). It is more of a international large-cap core actively managed fund. Second, I agree that there are much better metrics to use to get value exposure than dividends such as price-to-b...
by cb474
Fri Jun 23, 2017 4:04 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

Yeah, the volume is always low on new Vanguard funds. Sometimes it eventually picks up, others not. But even if the volume was good, I wouldn't want it. I think the arguments for high dividend yield funds don't hold much water and probably are worse for one's portfolio than just sticking with total ...
by cb474
Fri Jun 23, 2017 3:43 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

You could theoretically do this now with Vanguard index funds if you consider VIHAX (International High Yield) as a proxy for ILV. So, you could go 25 VTSAX (LC) / 25 VSIAX (SCV) / 25 VIHAX (ILV) / 25 VFSVX (IS). If they would ever get rid of that ridiculous purchase fee (load) of 25 bps for VIHAX,...
by cb474
Fri Jun 23, 2017 2:56 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

You could theoretically do this now with Vanguard index funds if you consider VIHAX (International High Yield) as a proxy for ILV. So, you could go 25 VTSAX (LC) / 25 VSIAX (SCV) / 25 VIHAX (ILV) / 25 VFSVX (IS). If they would ever get rid of that ridiculous purchase fee (load) of 25 bps for VIHAX,...
by cb474
Thu May 25, 2017 10:58 pm
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

A couple posts where TrevH plays with some variations sort of close to your options: https://www.bogleheads.org/forum/viewtopic.php?p=489116#p489116 https://www.bogleheads.org/forum/viewtopic.php?p=489178#p489178 I only went through the first two pages of the thread, so there could be more in here. ...
by cb474
Thu May 25, 2017 10:38 pm
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 719
Views: 309666

Re: Ultimate Buy and Hold - 8 slices vs 4

. Good Evening Bogleheads... Thought it was interesting how close the 4 slice combo of (LB,SV,ILV,IS) and the 8 slice combo of (LB,LV,SB,SV,ILB,ILV,ISB,ISV) did performance wise. For most of the near 40 years you can't see one line over the other. Looks like a reasonable way to greatly simplify the...
by cb474
Mon Nov 21, 2016 10:12 pm
Forum: Investing - Theory, News & General
Topic: Boglehead Contest leaders as S&P 500 Index makes new high
Replies: 17
Views: 3304

Re: Boglehead Contest leaders as S&P 500 Index makes new high

172!

I am pleasantly surprised that my guess is within the realm of where the market has actually been and not wildly off the mark. On November 9th I would have been at the top of the list. I figure if I come in plus or minus 50 points, that's not bad. Although I guess it doesn't mean anything.
by cb474
Thu Nov 17, 2016 8:57 pm
Forum: Investing - Theory, News & General
Topic: Can Treasuries Still be Considered a "Riskless" Asset?
Replies: 8
Views: 1138

Re: Can Treasuries Still be Considered a "Riskless" Asset?

Perhaps I should have been clear in my OP that I understand that "riskless" really just means they are the lowest risk asset. I was just using the term of art. I thought the quotation marks around "riskless" in the heading conveyed that point. I'm just not sure if this is true anymore. I don't know ...
by cb474
Thu Nov 17, 2016 8:30 pm
Forum: Investing - Theory, News & General
Topic: Can Treasuries Still be Considered a "Riskless" Asset?
Replies: 8
Views: 1138

Can Treasuries Still be Considered a "Riskless" Asset?

Prefatory remark: I am really not trying to start a political discussion and maybe it's impossible to have this discusion here. I leave it up to the moderators to decide. But I'm wondering if people need to reevaluate the risk of treasuries in the long run, given the results of the presidential elec...
by cb474
Sat Jan 09, 2016 8:26 pm
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

Listen. You are giving your opinion on currency risk here, it is not a topic with conclusive proof, and others have presented with plenty of counterarguments. I'm asking specifically about others' experiences with currency-hedged ETFs, not whether you think the product is necessary. Adults can disa...
by cb474
Sat Jan 09, 2016 3:30 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

Is anyone here using a currency-hedged international etf like HEMA/DBAW/HAWX/etc. for their international allocation? I found a paper https://www.aqr.com/~/media/files/papers/aqr-risk-without-reward-the-case-for-strategic-fx-hedging.pdf whose summary says: "We show that foreign currency exposure me...
by cb474
Fri Jan 08, 2016 3:28 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

Is anyone here using a currency-hedged international etf like HEMA/DBAW/HAWX/etc. for their international allocation? I found a paper https://www.aqr.com/~/media/files/papers/aqr-risk-without-reward-the-case-for-strategic-fx-hedging.pdf whose summary says: "We show that foreign currency exposure me...
by cb474
Wed Jan 06, 2016 5:35 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

... In the 1970s and 80s U.S. equity markets correlated more highly to international equity markets, than from the 1990s to the present. So correlations have been getting lower, not higher. ... Where is that data coming from? The data on Portfolio Visualizer implies International only had a 0.56 co...
by cb474
Wed Jan 06, 2016 3:36 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

I don't really by the "Americanism" argument, since domestic bias is consistent among investors of all countries. People tend to prefer to invest in whatever country they live in. But certainly the argument you make about the U.S. economy can not be made about most countries (not any other country, ...
by cb474
Tue Jan 05, 2016 8:21 pm
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

Agreed. A few people may be only investing in poorly run 401k with lousy choices, but in general many have good low cost options. Personally I am close to market weight. Currency issues were not my friend this year, but some other year may make me happy - time will tell. I try to do market weight a...
by cb474
Mon Jan 04, 2016 8:37 pm
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

Currency risk (which I think is real and not in general rewarded like market risk, others disagree) and investing costs including taxes can be different for different investors and so even if one does believe in MPT one might not want to invest in stocks at global cap weight. I take your point and ...
by cb474
Mon Jan 04, 2016 5:00 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

I buy Vanguard Total world fund. To me it is the ultimate realization of passive "own the market" investing - at least for equities. I see no reason to over-weight any country over another. I also believe the currency question is overblown. Yes, that's right about currency. The currency risk of int...
by cb474
Sun Jan 03, 2016 2:41 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

I buy Vanguard Total world fund. To me it is the ultimate realization of passive "own the market" investing - at least for equities. I see no reason to over-weight any country over another. I also believe the currency question is overblown. Yes, that's right about currency. The currency risk of int...
by cb474
Sat Jan 02, 2016 4:35 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

This thread will be revisited at the end of the year. Here we are at the end of the year and international is down -6.43% YTD. Could Bogle and Buffett be right? No. Taylor, thanks for that original link to Jack's comments on International. He has never said it "any plainer" than that. 50% of domest...
by cb474
Wed Nov 18, 2015 4:10 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard auto exchange
Replies: 7
Views: 1430

Re: Vanguard auto exchange

It appears as if this function has been removed for those of us "upgraded" to brokerage accounts, unless I'm just missing it. Vanguard rep confirms. Can anyone here confirm this? Looks like I will have to mail in this TLH trade. People have been saying in the thread about the "upgrade" that you can...
by cb474
Tue Sep 29, 2015 7:35 pm
Forum: Investing - Theory, News & General
Topic: To ETF or Not to ETF
Replies: 92
Views: 44728

Re: To ETF or Not to ETF

I wonder what the logic is for counting family members who reside at the same address?
by cb474
Tue Aug 25, 2015 12:39 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

Jack Bogle: I Wouldn't Risk Investing Outside the U.S I won't be buying any foreign stocks for some time so there should be more for you. Enjoy. :beer As I keep saying, this has all already been discussed above in the thread (on the first page) in much greater detail, it would behoove anyone truly ...
by cb474
Mon Aug 24, 2015 1:05 am
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

InvestorNewb: Jack Bogle speaks about International Investing in this recent video posted by SailingAway: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=156734&newpost=2351679 I intend to stay-the-course with about 30% of equity in my international stock fund. Best wishes. Taylor Yes, sounds...
by cb474
Sun Aug 23, 2015 4:22 pm
Forum: Investing - Theory, News & General
Topic: Are any US-only investors having 2nd thoughts?
Replies: 123
Views: 20850

Re: Are any US-only investors having 2nd thoughts?

I don't consider owning the entire domestic market and its thousands of stocks to be "one basket". Perhaps many baskets, but in the same barn? Depends on what you are looking at. That one basic has all the same currency and soveign risk (guess what those apply to the US as much as they do to lets s...