Search found 19921 matches

by grabiner
Thu Jul 27, 2017 11:57 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Global Wellesley Income and Global Wellington Funds in registration
Replies: 19
Views: 2345

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

After all the posts on percentage of foreign equity, I'll be very interested to see what percentage they use with these funds. Anybody wanna take a guess? It surprised me that the press release didn't say, although this may be because of legal restrictions; the proposed prospectus didn't say either...
by grabiner
Thu Jul 27, 2017 7:38 pm
Forum: Investing - Theory, News & General
Topic: Asset location question
Replies: 2
Views: 310

Re: Asset location question

In your situation, I would prefer to keep stock indexes in the taxable account, because you get more in tax efficiency than most investors; you expect to leave much of this portfolio to your heirs, and will never pay taxes on the gains on stocks you never sell. If you continue to hold Vanguard Inter...
by grabiner
Thu Jul 27, 2017 7:30 pm
Forum: Investing - Theory, News & General
Topic: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?
Replies: 6
Views: 469

Re: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?

International Explorer has not been a Vanguard fund for the entire time period, which makes past performance even less useful in evaluating future results than it would normally be. The tell-tale chart should have a logarithmic scale, so that a 20% gain looks the same regardless of where you start. ...
by grabiner
Thu Jul 27, 2017 7:08 pm
Forum: Investing - Help with Personal Investments
Topic: Why are they beating S/P? What am I missing?
Replies: 67
Views: 2869

Re: Why are they beating S/P? What am I missing?

My guess is something we are missing and this isn't apples to apples data. If you look at the year by year cumulative returns the portfolio beats the index portfolio for pretty much every year. That is statiscally highly unlikely. Since these are cumulative returns, they are not independent. A port...
by grabiner
Thu Jul 27, 2017 6:56 pm
Forum: Investing - Help with Personal Investments
Topic: 100% Stock Portfolio For Late Starter?
Replies: 25
Views: 1501

Re: 100% Stock Portfolio For Late Starter?

Let’s say you're 40 yrs. old and a first time investor with a 25 year time horizon to retire. You don't mind volatility and want to be 100% stocks for the rest of your life. You also keep a significant cash reserve (18 months to 2 years savings) in cash equivalents. What are your thoughts on this? ...
by grabiner
Wed Jul 26, 2017 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: Car Loan vs Investments
Replies: 9
Views: 785

Re: Car Loan vs Investments

One case where it is far better to borrow the money is when you might otherwise have to reduce or postpone contributions to any available tax-deferred or tax-advantaged retirement plan like a 401(k) or IRA while you save up to pay cash for it. The loss of the tax advantage and long term loss of com...
by grabiner
Wed Jul 26, 2017 10:17 pm
Forum: Investing - Theory, News & General
Topic: Changes in your risk profile
Replies: 13
Views: 664

Re: Changes in your risk profile

We know your asset allocation should be based on your need, willingness, and ability to take risk. If your "need" to take risk has decreased because of the recent strong market performance, and you act on that need by reducing the amount of "new" money being put into the market,...
by grabiner
Wed Jul 26, 2017 10:08 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Global Wellesley Income and Global Wellington Funds in registration
Replies: 19
Views: 2345

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

I was a bit surprised by the initial expense ratios but this is where Vanguard's "at cost" structure cuts against them, it should be a bit more expensive than the base funds but I think it was more like 2x as expensive. Certainly an intriguing proposition for Wellesley/Wellington fund lov...
by grabiner
Wed Jul 26, 2017 9:58 pm
Forum: Investing - Help with Personal Investments
Topic: estimating tax on mutual fund?
Replies: 5
Views: 445

Re: estimating tax on mutual fund?

If you use tax software, see what happens to your taxes if you add this amount in capital gains to your income. There are many provisions in the tax code which phase out with income, so you might pay more than 15% tax. For example, if you are in the phase-out for the child tax credit, every $1000 co...
by grabiner
Tue Jul 25, 2017 9:32 pm
Forum: Investing - Theory, News & General
Topic: Traditional IRA or ROTH
Replies: 37
Views: 1668

Re: Traditional IRA or ROTH

Also, keep in mind that you currently need in excess of about a $2.25 million portfolio (assuming a 4% withdrawal) to achieve enough income (~$90k) to 'fill up' the 15% federal tax bracket for a married filing jointly couple claiming the standard deduction and no special exemptions. However, once y...
by grabiner
Tue Jul 25, 2017 9:05 pm
Forum: Investing - Theory, News & General
Topic: Traditional IRA or ROTH
Replies: 37
Views: 1668

Re: Traditional IRA or ROTH

I've been involved in a lot of ROTH vs Traditional IRA discussion over the past few years. In a book I was recently reading, the author indicated he advised his daughter to go with a Traditional IRA vs a ROTH. Seems like paying the taxes on $5,500 a year and then being able to take tax-free money o...
by grabiner
Tue Jul 25, 2017 8:55 pm
Forum: Investing - Help with Personal Investments
Topic: Low risk return over 2.8%? Suggestions?
Replies: 18
Views: 1666

Re: Low risk return over 2.8%? Suggestions?

Business debt is fixed at 4.15% for 5 years. Only other debt is a home mortgage at 3.375% for 12 years. The best comparison is to a low-risk investment of the same duration; see Paying down loans versus investing on the wiki. The business debt is worth paying off quickly, because it is a risk-free,...
by grabiner
Tue Jul 25, 2017 8:50 pm
Forum: Investing - Help with Personal Investments
Topic: Can anyone help me by putting some numbers to "tax cost ratio" ?
Replies: 7
Views: 476

Re: Can anyone help me by putting some numbers to "tax cost ratio" ?

Seems like the M* TCR isn't real reliable and just makes it more complicated than it is. Can't you just add up the annual distributions and divide by the share price, then use that fraction times the total you have in the fund to get the amount you will get taxed on for that year? This will work; y...
by grabiner
Tue Jul 25, 2017 8:41 pm
Forum: Investing - Help with Personal Investments
Topic: choosing the best retirement account or a management account
Replies: 3
Views: 305

Re: choosing the best retirement account or a management account

Welcome to the forum! The most important factors in determining your returns are the expenses, and the assets you are invested in. If you have a bond index fund with 0.10% expenses, you should expect to earn 0.10% less than the bond market. If you have an actively managed stock fund with 0.50% expen...
by grabiner
Sun Jul 23, 2017 9:52 pm
Forum: Investing - Help with Personal Investments
Topic: Business brokerage account: seeking tax efficient, medium risk fund
Replies: 7
Views: 514

Re: Business brokerage account: seeking tax efficient, medium risk fund

However, unless you pay AMT, you can deduct CA tax from federal. We do hit AMT, but since these are qualified dividends, isn't it just 15% federal long-term cap gains rate [for the 33% tax bracket]+9.3% state [without federal deduction]? Since you pay AMT, this is correct; it is 15%+9.3%. If you di...
by grabiner
Sun Jul 23, 2017 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Business brokerage account: seeking tax efficient, medium risk fund
Replies: 7
Views: 514

Re: Business brokerage account: seeking tax efficient, medium risk fund

If you are in a high federal and CA tax bracket, TM Capital Appreciation is likely to save you slightly more in lower taxes than it costs in expenses. Is my math right? Tax rate: 15% federal + 9.3% CA. So comparing: VTCLX 0.09% 1.67% TTM yield, 100% qualified, $40.58 dividend taxes per $10,000 inve...
by grabiner
Sun Jul 23, 2017 8:30 am
Forum: Investing - Help with Personal Investments
Topic: Business brokerage account: seeking tax efficient, medium risk fund
Replies: 7
Views: 514

Re: Business brokerage account: seeking tax efficient, medium risk fund

⋅ VTSAX Total stock market index (0.04%, 92.75% qualified of 1.92% TTM yield) -- Bread and butter benchmark. ⋅ VFIAX S&P 500 index (0.04%, 100% qualified of 1.88% TTM yield) -- I like this a bit better because dividends are 100% qualified, and slightly more stable. ⋅&nb...
by grabiner
Sun Jul 23, 2017 8:22 am
Forum: Investing - Help with Personal Investments
Topic: When to switch from Roth 401k to traditional 401k
Replies: 21
Views: 1295

Re: When to switch from Roth 401k to traditional 401k

Ordinarily most people are likely better off making traditional contributions to their work-based plans. A pension changes that analysis, so that Roth contributions are likely better if you have a significant pension coming. TFB blog post, "Most TSP participants should switch to the Roth TSP&q...
by grabiner
Sat Jul 22, 2017 9:12 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Drives Municipal Bond Yields
Replies: 42
Views: 3108

Re: Larry Swedroe: What Drives Municipal Bond Yields

Nice article by Larry, and it makes a point that I've been arguing on this board for quite a while: that for about a decade now, yields on high grade munis have been comparable (and often higher) than Treasuries of equal maturity. So why does the conventional dogma about bonds in tax-advantaged sti...
by grabiner
Sat Jul 22, 2017 9:06 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Drives Municipal Bond Yields
Replies: 42
Views: 3108

Re: Larry Swedroe: What Drives Municipal Bond Yields

Why is the distribution yield of Vanguard's intermediate and LT muni funds so much higher than the SEC yield? 2.81% v. 1.87% for VWIUX, 3.57% v. 2.47% percent for VWLUX? Because interest rates have fallen. If a bond is purchased at par for $1000 with a 4% yield, it will pay a coupon of $40 per year...
by grabiner
Sat Jul 22, 2017 3:12 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Drives Municipal Bond Yields
Replies: 42
Views: 3108

Re: Larry Swedroe: What Drives Municipal Bond Yields

An interesting point: Many investors can bear liquidity risk, because they buy individual bonds with the intent of holding them to maturity. For them liquidity is not a major risk, at least in some portion of their portfolio; the reduced liquidity in the market makes municipal bonds more attractive....
by grabiner
Sat Jul 22, 2017 2:41 pm
Forum: Investing - Help with Personal Investments
Topic: Help with 78 yo widow's investments
Replies: 8
Views: 783

Re: Help with 78 yo widow's investments

If she's in the 10% tax bracket, she will have 0 taxable gains up to the 15% tax bracket which is $37,950. The top of the 10% bracket is $9325 so she has roughly 28K of gains to work with. She (meaning you) might be able to accomplish this in 2017 since a lot of that $97K is in bonds. Do what you c...
by grabiner
Sat Jul 22, 2017 2:26 pm
Forum: Investing - Help with Personal Investments
Topic: Help! Saxo and Currency
Replies: 2
Views: 258

Re: Help! Saxo and Currency

On an international trading platform, you might be interested in your gain in many different currencies. Consider the following situation: You buy 100 shares for AUD 100 per share when AUD 1=USD 1. The price rises to AUD 109 per share, so you have a profit of AUD 900. In addition, the AUD strengthen...
by grabiner
Fri Jul 21, 2017 11:10 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

You could buy a bond portfolio which would pay as much every year as your mortgage payment, which would be a mixture of short-term and longer-term bonds. If that bond portfolio costs less than $100K (that is, the after-tax rate on your mortgage is lower than the after-tax rate on a bond portfolio o...
by grabiner
Fri Jul 21, 2017 9:28 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

As long as you can pay the mortgage payment out of earned income it makes sense to hold a low interest mortgage. You're not relying on short term investment results to make the payment. If any relatively young person with a 30+ year investment horizon really believes their investment portfolio is g...
by grabiner
Fri Jul 21, 2017 7:26 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

How long do people stay in their houses? How does that influence the discussion? The time you will stay in your home affects the duration of the mortgage payment. If you sell your home in five years, then a mortgage prepayment is equivalent to buying a five-year bond, because you will get the money...
by grabiner
Fri Jul 21, 2017 7:12 pm
Forum: Personal Finance (Not Investing)
Topic: Chipping away at the mortgage
Replies: 32
Views: 5267

Re: Chipping away at the mortgage

Grabiner, thanks for your time/response. I thought one is supposed to compare their mortgage to that of a fixed income investment. In my case, I though the closest thing would be VCADX. If not that, then I assumed to compare against the Total Bond Market Index Adm, since I would only invest in eith...
by grabiner
Thu Jul 20, 2017 9:23 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

Unless you rebalance every day (say, you own a target date fund), desired asset allocation is often not the same as your actual allocation on any given day. So, you may be short stocks or bonds, and decide to direct your excess cash flow to just one or the other to make up for that divergence. I ch...
by grabiner
Thu Jul 20, 2017 8:20 pm
Forum: Personal Finance (Not Investing)
Topic: Chipping away at the mortgage
Replies: 32
Views: 5267

Re: Chipping away at the mortgage

Is the following thinking correct? VCADX yields 1.81% with a duration of 5 yrs. We are 25% fed, 9.3% CA. So, that's a rate 34.3%. Hence we are paying 2.71% on the mortgage after tax deductions. B/c that's more than the current yield on VCADX, makes sense to pay down the mortgage. No, because the du...
by grabiner
Thu Jul 20, 2017 8:15 pm
Forum: Investing - Help with Personal Investments
Topic: Which funds would you pick, given this constrained list?
Replies: 6
Views: 538

Re: Which funds would you pick, given this constrained list?

The HSA is only a small part of your portfolio, so it's fine to have one fund there and adjust the rest of your allocation accordingly, treating your HSA and IRA as if they were a single account saving for retirement. (I hold only one fund in my own HSA.) If Vanguard Total Stock Market is part of yo...
by grabiner
Thu Jul 20, 2017 8:02 pm
Forum: Investing - Theory, News & General
Topic: Cash out refinance residence to invest?
Replies: 11
Views: 875

Re: Cash out refinance residence to invest?

What is your tax bracket? This is important even though a loan to carry municipal bonds is not deductible; if you don't hold any munis and don't pay AMT, interest on the cash-out up to $100,000 is deductible. You can keep your risk level constant as you take out the loan, by buying stock in your tax...
by grabiner
Thu Jul 20, 2017 7:30 pm
Forum: Investing - Help with Personal Investments
Topic: Cost-basis and Keeping Track Capital Gains Mutual Funds
Replies: 6
Views: 564

Re: Cost-basis and Keeping Track Capital Gains Mutual Funds

You should keep track of your own cost basis; you can do this in a spreadsheet, or programs such as Quicken can do this. The reason is that brokerages occasionally get things wrong, or have issues they don't know about (a wash sale in a different account); you are ultimately responsible for getting ...
by grabiner
Thu Jul 20, 2017 7:19 pm
Forum: Investing - Help with Personal Investments
Topic: Advice about bond funds in a taxable account
Replies: 9
Views: 597

Re: Advice about bond funds in a taxable account

What is your tax bracket? Vanguard doesn't offer an AZ fund, so I would recommend munis in a 28% or higher tax bracket, and it's probably close to break-even in a 25% bracket if you aren't in some phase-out such as the child tax credit. Intermediate-Term Tax-Exempt is the standard Boglehead recommen...
by grabiner
Thu Jul 20, 2017 7:03 pm
Forum: Investing - Theory, News & General
Topic: Market vs Limit order
Replies: 50
Views: 3271

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 grabiner
Thu Jul 20, 2017 6:50 pm
Forum: Investing - Help with Personal Investments
Topic: Move FTABX (tax free bond) to mortgage?
Replies: 11
Views: 627

Re: Move FTABX (tax free bond) to mortgage?

Does it change anything if I will sell the house in 5 years? Yes, it does. This reduces the duration of your mortgage to five years. Any prepayment is equivalent to buying a five-year bond, since you get the money back with interest when you sell. Therefore, the fair comparison is now to an interme...
by grabiner
Wed Jul 19, 2017 9:19 pm
Forum: Personal Consumer Issues
Topic: My Costco/TrueCar auto shopping experience
Replies: 34
Views: 4836

Re: My Costco/TrueCar auto shopping experience

I just bought a new car, so I have just gone through this ordeal. Once you are locked into a dealer's system as having used True Car, they are entitled to a cut of your deal, so they more than likely will not budge from the price you were quoted. This wasn't the case for me in March. I contacted th...
by grabiner
Wed Jul 19, 2017 8:55 pm
Forum: Personal Finance (Not Investing)
Topic: Advice Needed - Investing, Saving, Debt reduction
Replies: 26
Views: 2018

Re: Advice Needed - Investing, Saving, Debt reduction

Since your mortgage is at 3.25%, a very low rate, I wouldn't be in a hurry to pay it down. Roth IRA space is lost if you don't fill it each year. And while it would be good to have paid off the mortgage while the kids are in college, it would be just as good to have enough money in your 529 to pay o...
by grabiner
Wed Jul 19, 2017 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: Move FTABX (tax free bond) to mortgage?
Replies: 11
Views: 627

Re: Move FTABX (tax free bond) to mortgage?

See Paying down loans versus investing on the wiki. If your mortgage is at 2.2% after tax in the top tax bracket, it is presumably a 30-year mortgage, so it has a longer duration than your bond fund, and does not give a fair comparison. If you want to make extra mortgage payments, then it is probabl...
by grabiner
Wed Jul 19, 2017 8:25 pm
Forum: Investing - Help with Personal Investments
Topic: 401k "stupid" questions
Replies: 5
Views: 535

Re: 401k "stupid" questions

Precision isn't that important, particularly since market movements will throw you off; if you rebalance to 60% stock, a market decline may make it 58% the next week. The difference between 60% and 58% is that you lose 1% less if the market loses half its value. Thus, it's fine to round to the neare...
by grabiner
Tue Jul 18, 2017 10:34 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

Interesting thread. I was always curious about this so I took some time to run my numbers in a calculator. mortgage amount 735k/30 years @ 3.625. Fed tax bracket: 33% and State: 6.4%. My rate after tax is 2.273%. So, instead of paying down the principal and I put my money in a National High Yield M...
by grabiner
Tue Jul 18, 2017 10:26 pm
Forum: Investing - Theory, News & General
Topic: Expense Ratios, how high is too high
Replies: 72
Views: 4013

Re: Expense Ratios, how high is too high

It's a trade-off of cost versus benefit. I will pay a bit extra for important diversification. I am willing to pay 0.36% for RZV (Guggenheim S&P 600 Pure Value) because it gives me much better small-cap value exposure than I could get anywhere else. Also, while I happen to hold this fund in my H...
by grabiner
Tue Jul 18, 2017 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: Good Service for Flagship Investors
Replies: 27
Views: 2785

Re: Good Service for Flagship Investors

My poor experiences comprise the following: 1) Taxable account- SpecID sell orders for TLH processed as FIFO generating taxable gains (covered shares). 2) Taxable account- Generated wash sale by re-investing dividends going against clear instructions from me on their website. 3) Taxable account: Re...
by grabiner
Tue Jul 18, 2017 9:29 pm
Forum: Investing - Help with Personal Investments
Topic: Review of significant AA portfolio change
Replies: 2
Views: 337

Re: Review of significant AA portfolio change

I don't think the vanguard ETFs are that much more tax efficient than the corresponding mf. They are equally tax efficient, because they are share classes of the same fund. The best way is to sell losers, sell gainers to offset the losers, pick an amount of capital gains you can live with and sell ...
by grabiner
Tue Jul 18, 2017 9:20 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in a Taxable Account.
Replies: 9
Views: 1069

Re: Bonds in a Taxable Account.

Most advice points to the 25% income tax bracket where an investor may invest in tax exempt or taxable. I have also read the 28% bracket. There is a calculation that can be completed to assist with what fund may be better. While I am unsure of the fund ticker symbols but based on your post and high...
by grabiner
Tue Jul 18, 2017 6:44 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

I personally feel much more comfortable with the first scenario than the second. Heck, I have $1.4 million in invested assets and about $320k mortgage at 3.375% 30 year fixed, and 2.21% after-tax, and I'm still not paying off that mortgage - though I'm paying it down faster over time to pay it in 1...
by grabiner
Mon Jul 17, 2017 9:18 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

Even better, if the market crashes or you have a financial setback you can hold off on investing your freed-up payments for a while. Vanguard or Fidelity cannot foreclose on your house if you stop investing for a while, but your mortgage lender will if you stop making payments, no matter how good y...
by grabiner
Mon Jul 17, 2017 7:09 pm
Forum: Personal Finance (Not Investing)
Topic: 4% mortgage rate vs 2.5% BND yield
Replies: 92
Views: 6458

Re: 4% mortgage rate vs 2.5% BND yield

To get a fair comparison, you need to match durations. If you have 25 years left on your mortgage, then an extra mortgage payment is equivalent to buying a 25-year bond. 25-year zero-coupon Treasury bonds yield 3.00%, so you break even investing in a 25-year Treasury bond in your IRA rather than pay...
by grabiner
Mon Jul 17, 2017 6:22 pm
Forum: Investing - Help with Personal Investments
Topic: Help with my Moms IRA, age 70 with 90% stocks
Replies: 21
Views: 1709

Re: Help with my Moms IRA, age 70 with 90% stocks

LOL. The loan is not for any other reason than that she feels comfortable with the cash on had to cover short term living expenses if needed. This would be better done by a Home Equity Compensation Mortgage, a loan which allows you to draw on the equity in your home as needed, but with interest onl...
by grabiner
Mon Jul 17, 2017 6:18 pm
Forum: Investing - Help with Personal Investments
Topic: Invest the rest of the year in a tax account or save toward 2018 Roth
Replies: 9
Views: 576

Re: Invest the rest of the year in a tax account or save toward 2018 Roth

If you don't want to sell in January 2018 to fund your Roth (and you might not want to, because of capital gains), you can invest your spare money towards the Roth once 2018 states. If it takes you until April to fund the Roth, you haven't lost anything significant, since all your money was invested...
by grabiner
Mon Jul 17, 2017 6:15 pm
Forum: Investing - Help with Personal Investments
Topic: Which Vanguard bond fund for taxable account?
Replies: 9
Views: 829

Re: Which Vanguard bond fund for taxable account?

FWIW, I had a telephone consult with the VG folks re: my portfolio last week. I am I also in the 25%!tax bracket and have more bond fund money than I'd like to in taxable because there is no room elsewhere. In response to my specific question about whether or not I should transfer any of it to tax-...

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