Search found 46075 matches

by dbr
Mon Mar 18, 2024 9:08 am
Forum: Personal Investments
Topic: Reported bond fund return inconsistancy
Replies: 8
Views: 373

Re: Reported bond fund return inconsistancy

Portfolio Visualizer shows a return for Jan-Feb of 2024 for VBTLX of -1.61% and for SWAGX of -1.53%. Those numbers are a legitimate report for that parameter for that date range. For Jan 2018 to Feb 2024 the data for CAGR are 0.63% and 0.52%.
by dbr
Mon Mar 18, 2024 8:22 am
Forum: Personal Finance (Not Investing)
Topic: Medicare: Getting Part A and D only
Replies: 40
Views: 2005

Re: Medicare: Getting Part A and D only

I'm kicking this around. I know I'm not getting any younger and may change my mind, but for most of the years of my life, I've gone to a Dr once a year, for a physical. Typical Dr office costs are in the $200-400 range (a physical would probably be somewhat more). I'd pay more per year in just a few months of Part B. Thoughts? Too risky? Too something else I'm not thinking of? Very serious, very expensive health problems occur unpredictably no matter your previous health. You can also be seriously injured and even permanently disabled by accident. You have the opportunity to take Medicare and Medigap in one form or another and would be really stupid not to do it. Also, the worst economy in the world is to short change your health insurance...
by dbr
Sun Mar 17, 2024 4:09 pm
Forum: Personal Investments
Topic: Newbie - Front Load End and ER
Replies: 11
Views: 677

Re: Newbie - Front Load End and ER

Just off hand the "evil" front end load may be far less harmful than what seems to be an innocent AUM. In the first place the AUM is charged forever and in the second place as the holding grows the AUM grows with it. The front end load is only billed against the initial purchase. Of course the best thing is no load, no AUM, and a minimal ER.
by dbr
Sun Mar 17, 2024 4:06 pm
Forum: Investing - Theory, News & General
Topic: How to prove that I am not losing money with bond funds?
Replies: 118
Views: 14597

Re: How to prove that I am not losing money with bond funds?

I read so many times that as long as I keep a bond fund to the duration of the bond fund maturity, I will not lose my capital. This is just my opinion, but I think this is one of many instances where you take some platitude and then by changing one word it becomes nonsensical. I see this on BH forums a lot. I believe what you have may have read many times is that changes in interest rate are irrelevant if you buy a bond and hold a bond to maturity. That is true enough to be useful. So by changing that to bond fund it becomes effectively nonsense. That's what I think anyway. Some other people might agree with you. One thing's for sure: if you hold a bond fund long enough, you're likely to make some money eventually. Yes, nonsense indeed. On...
by dbr
Sun Mar 17, 2024 3:49 pm
Forum: Personal Investments
Topic: Newbie - Front Load End and ER
Replies: 11
Views: 677

Re: Newbie - Front Load End and ER

For example, if you have a financial advisor and are paying an assets under management fee, then most likely any loads are waived. That would show as a different class fund, such as R instead of C. In a 401k you should also not be paying loads but it may be hard to find where the actual charges are listed, or in this case that there are none.
by dbr
Sun Mar 17, 2024 3:03 pm
Forum: Investing - Theory, News & General
Topic: Anybody heard stories of well "prepared" retirees running out of money?
Replies: 87
Views: 9941

Re: Anybody heard stories of well "prepared" retirees running out of money?

I can understand the flexibility of probabilities, but I wonder if there are actual & recent real-life cases proving their point , or if it a strategy to get more $ from investors. This might include experiences in which people started with sound recommended practices (like 4% or the above) and had to re-adjust way down permanently & prematurely . I am not talking about normal slow-go/no-go phases and I assume that most prudent (I almost wrote sane) people will use some references to foresee the problem before running out of money, So any case? I don't personally know anyone who ran out of money in retirement, but if one had retired in 2000 and started the 4% SWR adjusted to annual inflation, that person would have had to abandon t...
by dbr
Sun Mar 17, 2024 2:35 pm
Forum: Personal Investments
Topic: Newbie - Front Load End and ER
Replies: 11
Views: 677

Re: Newbie - Front Load End and ER

@dbr Thank you. From what you are saying, I will never see a receipt or trade order report in the brokerage account showing that I paid 5% front-end load, did I understand correctly? everything is "behind the scenes" but I actually only invested 95% of what I paid. Did I get it right ? In effect. There will have to be a receipt for the $10,000 but it may not be on the same paperwork as the trade. Someone might have an illustration they can show us. Fidelity describes it this way: Sales charge (load) on purchases The category “Sales Charge (Load) on Purchases” in the fee table found in a fund’s prospectus includes sales loads that investors pay when they purchase fund shares (also known as “front-end sales loads”). Keep in mind th...
by dbr
Sun Mar 17, 2024 2:21 pm
Forum: Personal Investments
Topic: Newbie - Front Load End and ER
Replies: 11
Views: 677

Re: Newbie - Front Load End and ER

Fund expenses are paid out daily by the fund before the net asset value per share is calculated. The ER is technically a report after the fact of actual expenses paid for and is not a commission. A complete report would be in the Annual Report and Annual Report of Supplementary Information.

Someone would have to show you a report with a sales load as I have never had that. Most likely it is something like send in $10,000 and receive a correctly tallied report of $9,500 invested at the correct price and number of shares. $500 will have disappeared from the account at some point.
by dbr
Sun Mar 17, 2024 12:32 pm
Forum: Personal Investments
Topic: [Potential] Investment Help [for relatives]
Replies: 4
Views: 457

Re: [Potential] Investment Help [for relatives]

There is no simple "best" for the purpose you are considering.

There has to be a sit down evaluation of needs and wants and resources to meet those wants, including existing annuities and Social Security.

Each tool has its own advantages and disadvantages. Preference and judgement have to be applied to every individual situation. It may very well be true that any of several choices are about equally helpful, taken all in all, and agonizing over this or that is not very helpful.
by dbr
Sun Mar 17, 2024 11:21 am
Forum: Personal Investments
Topic: VBILX vs MassMutual Stable Value Diversified HELP please
Replies: 3
Views: 377

Re: VBILX vs MassMutual Stable Value Diversified HELP please

You ask what to do "Now that rates are going to be getting cut . . ." I expect that both the Crediting Rate of the Stable Value Fund and the SEC Yield of the bond fund will drop, and that share price of the bond fund will rise. Since I am investing for total return (both yield and capital gains) I expect that the bond fund would be better for me. Good post. This is the essence of it unless in fact interest rates go up soon or eventually. Seriously, the two instruments are just different animals and basically you pays your money and you takes your choice. A classic answer to such dilemmas is to invest half in each. At least then you will never feel you were all wrong. It is also true that in the long run trying to parse fixed inco...
by dbr
Sun Mar 17, 2024 11:14 am
Forum: Investing - Theory, News & General
Topic: How to prove that I am not losing money with bond funds?
Replies: 118
Views: 14597

Re: How to prove that I am not losing money with bond funds?

… add up all the money you have invested in the bond fund and compare that to how much it is worth today If the amount you have invested is greater than what it sells for today then you have lost money. That seems to be ignoring income received from the fund. Yes I should add if one is reinvesting their dividends that would work. If not that, one would have to add up what dividends they have received to add that to the current value. Is it more complicated than that? Maybe I am missing something. The dividends have to be actually reinvested for the total value gained or lost to be reported as a return. Otherwise one should account for the withdrawal of the dividends by only computing an internal rate of return or a time weighted average re...
by dbr
Sun Mar 17, 2024 11:09 am
Forum: Investing - Theory, News & General
Topic: How to prove that I am not losing money with bond funds?
Replies: 118
Views: 14597

Re: How to prove that I am not losing money with bond funds?

… add up all the money you have invested in the bond fund and compare that to how much it is worth today If the amount you have invested is greater than what it sells for today then you have lost money. That seems to be ignoring income received from the fund. Right. There is a lot of nuance here about how the distributions have been handled. Return is defined to include all the distributions along the way. If those are not included then one has taken a withdrawal from the holding. But cost basis becomes complicated because the reinvested dividends are tallied up as new investment cost. This is for tax reasons given that the dividends are taxed when paid and should not result in double taxation when the reinvested dividends might be sold. A...
by dbr
Sun Mar 17, 2024 10:50 am
Forum: Investing - Theory, News & General
Topic: Anybody heard stories of well "prepared" retirees running out of money?
Replies: 87
Views: 9941

Re: Anybody heard stories of well "prepared" retirees running out of money?

delamer wrote: Sun Mar 17, 2024 10:43 am
fortunefavored wrote: Sun Mar 17, 2024 10:08 am Outside of the big ones (divorce, illness, gambling, drugs) - nope, never heard of it.

Of what percentage of overall retired people are living a Bogleheads Approved Plan? Less than 1%?
I honestly don’t know what a “Bogleheads Approved Plan” is.
I also don't like the idea that something like that exists. This forum and supporting materials such as the Wiki, reading recommendations, etc. should be for education and not for direction. One should never invest because they are in accord with what someone else tells them to do.
by dbr
Sun Mar 17, 2024 9:56 am
Forum: Investing - Theory, News & General
Topic: Theoretically, would VTI be an effective long term retirement investment, even when held in a taxable account ?
Replies: 30
Views: 2980

Re: Theoretically, would VTI be an effective long term retirement investment, even when held in a taxable account ?

Curious about the legitimacy of this recommendation for some low-income earners. Thanks ! Financial planning this way is irresponsible as the basics needing to be accomplished first need to be accomplished first. Investment selection is the last step in financial planning preceeded at least by determination of asset allocation and asset location. Obviously tax considerations enter financial planning so it is true that a total stock index fund is tax efficient. The difference is probably more significant for a high income investor than for a low income investor. Note the greatest tax benefit for such a stock index fund comes from tax free inheritance with basis step up or tax free gifting to qualified charities. I think counting on BRK to b...
by dbr
Sun Mar 17, 2024 9:30 am
Forum: Investing - Theory, News & General
Topic: Anybody heard stories of well "prepared" retirees running out of money?
Replies: 87
Views: 9941

Re: Anybody heard stories of well "prepared" retirees running out of money?

I know a lot of people ending up with no assets due to drug or gambling addiction, ill health, mental illness, or divorce. I can't think right now of anyone otherwise with decent assets and a decent financial plan running out money anytime after the great depression (meaning 1929-1940 as experienced by my grandparents since deceased.) There are people who have been financially ruined by bankruptcies such as Enron, GM, etc. but I never knew any such person and for that to have happened does not qualify as well prepared.
by dbr
Sun Mar 17, 2024 9:22 am
Forum: Personal Investments
Topic: HELP - what to invest in for 750,000 windfall
Replies: 14
Views: 1967

Re: HELP - what to invest in for 750,000 windfall

Hi all, new to Boglehead community and investing generally. I’m expecting windfall of about 750,000. I want to use all of it to invest long term over next 15-20 years so I can hopefully retire early (currently, 38). Where would you invest this money if you were me and how would you allocate it? Thank you for your help. I surprised no one answered this yet. Fidelity, Schwab, or Vanguard are the common "where to" choices. Do not have it Advisor Managed. True. And the one important thing is to not pay a "tax" to advisors. But "where" can mean what broker, or it can mean what selection of specific instruments such as afore mentioned mutual funds or ETFs. Most of the brokers can efficiently hold most of the funds o...
by dbr
Fri Mar 15, 2024 8:50 am
Forum: Personal Investments
Topic: Cash or CD's Instead of Bond Funds
Replies: 61
Views: 5438

Re: Cash or CD's Instead of Bond Funds

Fixed income assets include any variety of things from large buried in the basement to some kind of risky long term high yield bonds. People hold any variety of combinations of all the things in that potential list. While the extremes mentioned just above would be very rare you would certainly find plenty of people holding CDs, for example, rather than bond funds. It might be useful to be more specific regarding what your question really amounts to. Otherwise the answer is just a simple yes. I don't have a good understanding of bond funds, TIPS, etc, so to achieve my AA in my Roth IRA, could I and does it make sense to hold CDs in a tax-deferred account? It can make sense but you are also making an uninformed decision. A better idea would ...
by dbr
Thu Mar 14, 2024 7:45 pm
Forum: Personal Investments
Topic: Cash or CD's Instead of Bond Funds
Replies: 61
Views: 5438

Re: Cash or CD's Instead of Bond Funds

Fixed income assets include any variety of things from large buried in the basement to some kind of risky long term high yield bonds. People hold any variety of combinations of all the things in that potential list.

While the extremes mentioned just above would be very rare you would certainly find plenty of people holding CDs, for example, rather than bond funds.

It might be useful to be more specific regarding what your question really amounts to. Otherwise the answer is just a simple yes.
by dbr
Thu Mar 14, 2024 11:50 am
Forum: Investing - Theory, News & General
Topic: Calculating Time to $1MM and each $100k
Replies: 22
Views: 3020

Re: Calculating Time to $1MM and each $100k

This type of thread needs a warning label. Man Plans, and God Laughs. Flexibility is key. Playing with compound interest calculators is fun, but the stock market doesn't provide returns like this. Sequence of returns is a big deal because it all depends upon how the market behaved during your accumulation period, and how it behaves during your retirement. The counterpoint to this is to play with real market returns using https://portfoliovisualizer.com. Plug in your current portfolio and see how long it would have taken to retire in different time periods. I agree. Compound growth is a useful illustration of concept and definitions of language such as CAGR, YTM, etc. but not even remotely a planning tool or even a planning illustration.
by dbr
Thu Mar 14, 2024 9:04 am
Forum: Investing - Theory, News & General
Topic: Holding 100% stocks after FI best option for longer time horizons?
Replies: 74
Views: 8100

Re: Holding 100% stocks after FI best option for longer time horizons?

Considering our "total portfolio" as Charles Ellis would frame it the amount in equities is quite manageable. My wife's and my earnings capacity, our house, furniture, pension benefits, and other solids make our 100% equity allocation in our portfolio look quite reasonable. I might temporarily hold some cash or treasury bonds from to accumulate money for large purchases (i.e. home renovations) but other than that I don't see any reason to own bonds. However, we are lucky and life in a country with a great social safety net (Germany) where job loss or medical bills are not a problem. I enjoy my job and hope to work as long as possible. Investing is something I do because I like watching the numbers go up and down and I don't want ...
by dbr
Thu Mar 14, 2024 8:39 am
Forum: Personal Investments
Topic: Retiring at 77 - Annuity vs. investment income
Replies: 17
Views: 2628

Re: Retiring at 77 - Annuity vs. investment income

Many, many thanks to everyone who took the time to reply, and sorry for leaving out some information. SS is currently about 1600/month, so she has about a $900 shortfall. The $2500 monthly expenses don’t include possible big-ticket items down the road (like major home repairs) so she needs a nest egg to deal with those as well. That’s why I had been thinking of a SPIA for expenses, with some extra to guard against inflation, and CDs/high interest savings for the rest. Though I also like the idea of VTSAX for some of it. I’m just a little wary of making it overly complex—as long as that’s not doing her a disservice. A TIPS ladder is simple, should be self-liquidating, has zero inflation risk (unlike a SPIA), and can be sold prior to maturit...
by dbr
Thu Mar 14, 2024 8:33 am
Forum: Personal Finance (Not Investing)
Topic: Excel Forumula Help -cumulative percentage growth
Replies: 13
Views: 1236

Re: Excel Forumula Help -cumulative percentage growth

I wonder if a tool such as Portfolio Visulizer might not be useful for gathering the results for market performance of various funds.

https://www.portfoliovisualizer.com/backtest-portfolio

and

https://www.portfoliovisualizer.com
by dbr
Thu Mar 14, 2024 7:39 am
Forum: Personal Investments
Topic: Retiring at 77 - Annuity vs. investment income
Replies: 17
Views: 2628

Re: Retiring at 77 - Annuity vs. investment income

ScubaHogg wrote: Thu Mar 14, 2024 2:39 am
Arlington2019 wrote: Wed Mar 13, 2024 12:03 pm I think a SPIA would… protect against longevity risk.
A non-inflation adjusted SPIA doesn’t protect against longevity risk.

I will die on this hill. Alone if need be.
A more nuanced statement would be that it would partly "protect" against longevity risk.

A problem here is the ambiguous (We could say meaningless.) nature of words like "protect" applied to financial discussion.
by dbr
Thu Mar 14, 2024 7:21 am
Forum: Investing - Theory, News & General
Topic: Calculating Time to $1MM and each $100k
Replies: 22
Views: 3020

Re: Calculating Time to $1MM and each $100k

Thanks all! True, only time will reveal the true duration. =NPER(7%,-10000,-starting_amount,starting_amount+100000,0) in Excel will match that chart's assumptions. You timing will depend on your assumptions. Even more, it will depend on what actually happens. Perfect, thanks! Its just basic compound growth math as implemented in various financial functions in spreadsheets or on a financial calculator. A good exercise would be to learn these functions: https://support.microsoft.com/en-us/office/financial-functions-reference-5658d81e-6035-4f24-89c1-fbf124c2b1d8 Real world growth of actual investments where the return is a not exactly known statistical variable is a different problem. That's the one where you go from $1M to $780K in one day. ...
by dbr
Wed Mar 13, 2024 12:19 pm
Forum: Personal Investments
Topic: What Platforms are DIY Investors Using to Manage Portfolio
Replies: 26
Views: 2543

Re: What Platforms are DIY Investors Using to Manage Portfolio

In my book DIY includes that the "management platform" is "self."
by dbr
Tue Mar 12, 2024 8:44 am
Forum: Investing - Theory, News & General
Topic: Holding 100% stocks after FI best option for longer time horizons?
Replies: 74
Views: 8100

Re: Holding 100% stocks after FI best option for longer time horizons?

That is "best" depending on what outcome 1) you want and 2) are prepared for.
by dbr
Tue Mar 12, 2024 8:41 am
Forum: Personal Investments
Topic: Financial Advisor says my portfolio is akin to a retiree at age 34
Replies: 80
Views: 8052

Re: Financial Advisor says my portfolio is akin to a retiree at age 34

In my opinion the most thoughtful approach to risk in asset allocation is the idea suggested by Larry Swedroe of considering need, ability, and willingness to take risk. I tend by nature to avoid rules of thumb such as some "age in bonds" formula or even comparing to typical target retirement formulas.
by dbr
Tue Mar 12, 2024 8:21 am
Forum: Investing - Theory, News & General
Topic: 20 Lessons From 20 Years of Managing Money - Ben Carlson
Replies: 13
Views: 3671

Re: 20 Lessons From 20 Years of Managing Money - Ben Carlson

Rowan Oak wrote: Sun Mar 10, 2024 10:58 pm
3. No one lives life in the long-term. Long-term returns are the only ones that matter but you have to survive a series of short-terms to get there.

The good strategy you can stick with in those short-terms is preferable to the perfect strategy you can’t stick with.

20 Lessons From 20 Years of Managing Money
Posted March 10, 2024 by Ben Carlson
https://awealthofcommonsense.com/2024/0 ... ing-money/
People may often forget that the long term is the compounded result of a series of short terms. That is one reason investing is less obvious than it might first seem.

I like all the lessons. This should be in the Wiki.
by dbr
Tue Mar 12, 2024 8:17 am
Forum: Personal Investments
Topic: How is a broker going to make money off me?
Replies: 62
Views: 5779

Re: How is a broker going to make money off me?

80% of a firm's profits come from 20% of it's customers. Sounds like you won't be in that 20%. Yes, so when they solicit the opportunity to "help" you with your investing for a fee and the opportunity to buy more expensive funds just say no. I have been with Fidelity for over 40 years and they don't push anything my way, at least not anymore. I have found their customer service and local office to be helpful on occasion. Also I don't leave any money in settlement funds. Being retired I have arranged that all dividends on investments in the taxable account at Fidelity are immediately automatically deposited in my checking account. They also immediately deposit little bits of interest that might accumulate as money moves through th...
by dbr
Tue Mar 12, 2024 8:10 am
Forum: Personal Investments
Topic: Financial Advisor says my portfolio is akin to a retiree at age 34
Replies: 80
Views: 8052

Re: Financial Advisor says my portfolio is akin to a retiree at age 34

I have no dispute with the positive comments about your portfolio, but the fact that the conversation was about how much risk you are taking or should or could take with the fact that you don't even report an asset allocation as such in your OP suggests that some education could benefit you. Perhaps the advisor is doing you a favor to ask you to look at it. A good starting point is here at "Getting Started" https://www.bogleheads.org/wiki/Main_Page A good target would be to read everything in the Wiki, start to finish. Another tool that I think is a good learning experience on the topic is this chart of historical outcomes for different asset allocations: https://engaging-data.com/visualizing-4-rule/ You can set an asset allocatio...
by dbr
Tue Mar 12, 2024 7:55 am
Forum: Investing - Theory, News & General
Topic: How many are holding cash right now?
Replies: 203
Views: 31066

Re: How many are holding cash right now?

Tom_T wrote: Tue Mar 12, 2024 6:14 am
nassau34 wrote: Tue Mar 12, 2024 12:22 am Right, but then what do you do when money market account yields decline, and bond purchases are unattractive due to declining interest rates, and the stock market is at all-time highs?
If you bought bonds now, they will go up in price if rates drop. There is no law that says we can expect to earn 5% at all times. :(
Yes. The dynamic here is should people spend a lifetime dancing nimbly around yields and rates or is it just as effective to set up an asset allocation and investment selection and keep it. Whoever it is can decide what they want to do, but proving that one is surely on a superior track either way is hard to do. Personally I prefer to just find a plan and keep it rather than jump to and fro every day/week/month.
by dbr
Mon Mar 11, 2024 9:07 am
Forum: Investing - Theory, News & General
Topic: Can we expect TBM funds to outperform inflation?
Replies: 62
Views: 5108

Re: Can we expect TBM funds to outperform inflation?

Elysium wrote: Mon Mar 11, 2024 9:01 am


Lastly, if someone don't understand, don't like it, don't trust govt., etc., then TIPS are not for them, move on to next thing and invest in whatever they are comfortable with.
Good write-up, and on that last point if a person does not see a TIPS fund or some form of individual TIPS meeting their wants and needs, then that person should do exactly what you say and forget about it and move on. No one here is telling anyone they have to own TIPS.

However, it is easily possible to want and need things that simply don't exist. Then one has to do without.
by dbr
Mon Mar 11, 2024 8:37 am
Forum: Personal Investments
Topic: Keeping 5 years' expenses in cash/short-term vs. more conventional retirement AA
Replies: 43
Views: 4903

Re: Keeping 5 years' expenses in cash/short-term vs. more conventional retirement AA

dknightd wrote: Mon Mar 11, 2024 8:30 am
KlangFool wrote: Mon Mar 11, 2024 7:53 am Please keep 10 years of expense in cash/fixed income. 5 years is not enough.
Everybody is different, and there is no right answer.
But I like the idea of having 10 years of expenses in cash like things. That way if things go wrong for 5 years, you still have 5 years to figure out how to adapt.
I would think that the idea behind moderating the risk in your portfolio is that things won't go more wrong than your plan can accept. The idea is to winnow out as much of the adapting as possible. Maybe people have a different idea about that.
by dbr
Mon Mar 11, 2024 7:57 am
Forum: Personal Investments
Topic: Keeping 5 years' expenses in cash/short-term vs. more conventional retirement AA
Replies: 43
Views: 4903

Re: Keeping 5 years' expenses in cash/short-term vs. more conventional retirement AA

KlangFool wrote: Mon Mar 11, 2024 7:53 am OP,

Please keep 10 years of expense in cash/fixed income. 5 years is not enough.

KlangFool
If you are at a portfolio of 25 times expenses then 40% in fixed income is prudent. That does not mean 60/40 has any magic property in particular. How much should be held specifically in cash/short term is a more nuanced question and less obvious.
by dbr
Mon Mar 11, 2024 7:52 am
Forum: Personal Investments
Topic: BND or Stable fund
Replies: 106
Views: 10530

Re: BND or Stable fund

slondr wrote: Sun Mar 10, 2024 9:49 pm

I found this chart on stablevalue.org:
Image

This implies that over a long term, bonds will outperform stable value, but only slightly, with large variation and periods of bond outperformance along the way. Stable value shined in 2022, but if/when rates fall in the future bonds will shine for those of us still in accumulation currently buying cheap bonds.
An interesting feature of that chart is the huge rise in bonds before the fall in 2021-2022. If you just draw a straight line under it to reflect the experience of the long term investor the volatility goes away. If you just made your first big bond investment at the top of that hump you are upset about now.
by dbr
Mon Mar 11, 2024 7:47 am
Forum: Personal Investments
Topic: Keeping 5 years' expenses in cash/short-term vs. more conventional retirement AA
Replies: 43
Views: 4903

Re: Keeping 5 years' expenses in cash/short-term vs. more conventional retirement AA

An alternative to keeping a stash of cash and equivalents is to build up a better set of income streams from Social Security, pensions, and annuities. At least the whole picture should be considered and plans devised accordingly.

The "weather a stock market downturn" thought process is a little simple minded as that is just one ill defined particular event in a large picture. Other single events that should be better viewed systematically rather than in isolation are inflation "protection" and sequence of returns "risk."

The end result is that it takes a lot of proving to show that any single detail (such as five years in cash) actually has any significant effect on things.
by dbr
Mon Mar 11, 2024 7:27 am
Forum: Personal Consumer Issues
Topic: Is Calif Really That Expensive - Or Am I Missing Something?
Replies: 133
Views: 15480

Re: Is Calif Really That Expensive - Or Am I Missing Something?

Most of my immediate family including me has lived in Californian and no longer does. It would take an essay to discuss the reasons.

I know many people who have gone to California and are still (happily more or less) there. We also know many others who are no longer there.

These things are matters of individual circumstances and choice.

But I also know people who love Brooklyn or DC.

I can say that one dominant factor is ability to own a suitable home and the high housing costs seem incredibly distorted, whether you mean San Francisco, LA, Seattle, Denver, New York City, Boston or whatever it might be. (We have lived in three of those but not anymore.)
by dbr
Mon Mar 11, 2024 7:16 am
Forum: Personal Investments
Topic: Vanguard Wellington Admiral Shares?
Replies: 4
Views: 1107

Re: Vanguard Wellington Admiral Shares?

Over the past 22 years the return (mean and variability) of VWENX has been essentially the same as (slightly better than) 65/35 total stock/total bond. Max drawdowns have been virtually identical in 2007, 2010, and 2022.

A high dividend yield is a meaningless criterion for preferring one stock/bond portfolio over another one. In a taxable account holding such a fund is expensive.
by dbr
Mon Mar 11, 2024 6:59 am
Forum: Investing - Theory, News & General
Topic: Any investors from the 1981 - 1984 time period here???
Replies: 36
Views: 4308

Re: Any investors from the 1981 - 1984 time period here???

Cost structure of the 401k/403b would be an interesting topic. For example, I don't think I ever heard of a load on a collective investment trust in a 401k. I think that 0.00% ER fund I recall was a CIT, maybe from SSgA, but I could be all wet on that.
by dbr
Sun Mar 10, 2024 4:47 pm
Forum: Investing - Theory, News & General
Topic: How Can I Measure - Find the Tax Efficiency of an ETF?
Replies: 9
Views: 1005

Re: How Can I Measure - Find the Tax Efficiency of an ETF?

Attend to the point that mutual funds and ETFs don't have a tax efficiency. An individual holding a mutual fund or an ETF has a tax cost that depends in excruciating detail on the entire tax situation of that individual as it exists and changes each year. If you want serious numbers you are going to have to calculate hypothetical tax returns under specific situations for your exact holdings and situation and compare year in and year out. If you want general estimates you can roughly predict taxable distributions and tax rates to apply to those. Prediction can be difficult as interest rates change, dividends move somewhat, capital gains distributions can be highly variable. Capital gains taxes from sales are idiosyncratic and possibly can't ...
by dbr
Sun Mar 10, 2024 4:35 pm
Forum: Investing - Theory, News & General
Topic: Can we expect TBM funds to outperform inflation?
Replies: 62
Views: 5108

Re: Can we expect TBM funds to outperform inflation?

I was a 100% equity 0% Bonds a couple years ago, so I'm not looking to bonds to dampen my volatility. However I later learned about SORR and took a look at the 4% rule tables and decided that I liked 75/25 better, especially when I started getting closer to retirement. The 4% rule derives from bonds having the mean return, volatility, and correlation to stocks that they have had historically with historical inflation, then extracting a worst case at 4%. If that is your concern then just imagine bonds will continue to do what they have. In this tool you can find those numbers: https://engaging-data.com/visualizing-4-rule/ It looks like for 1871-1989, which covers the analysis for a 30 year retirement that stocks by that run 6.7% real CAGR a...
by dbr
Sun Mar 10, 2024 4:22 pm
Forum: Investing - Theory, News & General
Topic: Any investors from the 1981 - 1984 time period here???
Replies: 36
Views: 4308

Re: Any investors from the 1981 - 1984 time period here???

I started my first 401k in 1981. Nothing had a load, ERs were below 0.10%, and the company subsidized all the costs and kicked in a contribution. They also offered a defined benefit pension alongside the 401k. I remember wondering why my funds were expensive when I heard about some employer somewhere offering the S&P 500 for 0.00% ER. There were employers who were serious about not letting their employees get plundered by the financial services industry.

My taxable holdings then were shares of stocks, "shares of beneficent interest" in a gas trust, savings, and for awhile some farmland. I don't remember the commission schedule for buying and selling stock.
by dbr
Sun Mar 10, 2024 4:15 pm
Forum: Investing - Theory, News & General
Topic: Stashing cash in retirement: saving accts vs MMAs vs CDs etc
Replies: 7
Views: 830

Re: Stashing cash in retirement: saving accts vs MMAs vs CDs etc

gunny2 wrote: Sun Mar 10, 2024 3:15 pm I'd be interested in how people generally approach(ed) this...the VUSXX thread got me thinking about it. Personally I am kicking myself for having a wad of cash in my savings account for years getting practically no return and finding out there are savings accounts out there getting 4-5%+. n.
Those accounts have not been getting that yield for years but only fairly recently. Beware that interest rates change all the time.
by dbr
Sun Mar 10, 2024 8:27 am
Forum: Personal Finance (Not Investing)
Topic: Retirement Projections: Sanity Check
Replies: 10
Views: 1501

Re: Retirement Projections: Sanity Check

catchinup wrote: Sat Mar 09, 2024 5:44 pm
Changing my asset allocation does not seem to impact my results very much for either tool.

What does impact results is if I increase spending. So for example, if I double my spending I could run out of money by around age 90 it seems.

Do my inputs and calculations seem reasonable?

Those behaviors are typical of the problem. The suggestion is to not worry so much about asset allocation but attend to how realistic your spending plans are. It is not a bad idea to add some contingency to spending. At low withdrawal rates there is lots of headroom anyway.
by dbr
Sun Mar 10, 2024 8:21 am
Forum: Investing - Theory, News & General
Topic: Can we expect TBM funds to outperform inflation?
Replies: 62
Views: 5108

Re: Can we expect TBM funds to outperform inflation?

It is reasonable to expect that TBM funds will deliver positive real returns. The caveat in investing is to never expect what is expected.
by dbr
Sat Mar 09, 2024 1:24 pm
Forum: Investing - Theory, News & General
Topic: William Bernstein On the Financial Industry
Replies: 81
Views: 9771

Re: William Bernstein On the Financial Industry

I think there's a pretty clear distinction between the "good" people in finance and the "bad" people. The good people are those who focus on financial planning while charging reasonable fees for valuable services. These people don't sell you narratives about how to get rich quick, "beat the market" and never use opaque high fee instruments (think whole life insurance and other such nonsense). The bad people create intricate stories to sell high fee products and services to people who don't know any better. There are many good people in the financial services if you know where to look. The essence of the problem seems to be that it is too hard to know where to look and too easy to fall afoul of the bad people. ...
by dbr
Sat Mar 09, 2024 10:11 am
Forum: Personal Investments
Topic: Portfolio Advice - Helping Aging Parents
Replies: 10
Views: 818

Re: Portfolio Advice - Helping Aging Parents

You need to include the 401k in your planning.

Here is the suggested format for financial planning questions: viewtopic.php?t=6211

and for portfolio questions: viewtopic.php?t=6212
by dbr
Sat Mar 09, 2024 8:45 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard so bullish on international exposure in their all-in-one funds?
Replies: 77
Views: 6554

Re: Why is Vanguard so bullish on international exposure in their all-in-one funds?

Why is a country different than a sector or an individual stock? Indeed. The actual question should be "Are the stocks of different countries different?" If the answer is taken to be no then there should be supporting theory and observation why it should be no. More exactly we are probably asking if the risk and return properties of different selections of stocks are different. Fama and French think they discovered that stocks segregated by size and value statistics are different in return properties. That may not be a hypothesis that is much supported anymore, or not? Do we think stocks of the US and stocks of the rest of the world are different in properties of risk and return or that they are not? If we do think they are diffe...
by dbr
Sat Mar 09, 2024 8:28 am
Forum: Personal Investments
Topic: VTIP ETF yield to maturity
Replies: 12
Views: 1962

Re: VTIP ETF yield to maturity

I'm trying to understand the relationship between the rate of return, yield, duration, maturity, and holding period. I know that if someone holds the ETF long enough the rate of return will approach the yield. How long is that holding period? Assuming a constant 2% annual inflation rate, an average duration of 2.5 years, and an average effective maturity of 2.6 years, can I expect the annual return to be 3.83% if held for 2.5 years, or 2.6 years? For an individual bond, you can guarantee a rate of return by holding to maturity. For a fund, you cannot guarantee this, because rates can change at any time. If yields rise by 1% just before you sell a bond fund with a 2.5-year duration, you will have 2.5% less than if rates had not changed. If ...