Search found 1834 matches

by jalbert
Sun Apr 23, 2017 2:25 pm
Forum: Investing - Theory, News & General
Topic: Location of SPIAs, which account?
Replies: 49
Views: 1884

Re: Location of SPIAs, which account?

Don't you also need to think of the tax consequences? I would rather leave my roth with more aggressive equities. If SPIA is purchased with tax deferred then all SPIA income is taxed and can cause more taxation of Social Security. For my case, I would prefer to use taxable money since most of the S...
by jalbert
Sun Apr 23, 2017 1:40 pm
Forum: Investing - Help with Personal Investments
Topic: Which Vanguard fund for Roth IRA
Replies: 14
Views: 943

Re: Which Vanguard fund for Roth IRA

Holding int'l stock in a taxable account enables reimbursement for foreign taxes essentially withheld and paid from dividends. But int'l stocks throw off more dividends than US stock and typically less of them are qualified. If wanting or needing to utilize the dividend income, the foreign tax credi...
by jalbert
Sun Apr 23, 2017 12:52 am
Forum: Investing - Theory, News & General
Topic: Location of SPIAs, which account?
Replies: 49
Views: 1884

Re: Location of SPIAs, which account?

I'll have to look into this more. I thought I had heard they actually count as your RMD. Of course, if you make the IRA smaller buy buying the SPIA, you would reduce the RMD, maybe by a lot. The SPIA payout fulfills the RMD requirements for the assets that are annuitized. Remaining trad assets that...
by jalbert
Sat Apr 22, 2017 2:22 pm
Forum: Investing - Help with Personal Investments
Topic: A few questions about International... VXUS, VEA, VWO... low returns
Replies: 24
Views: 1303

Re: A few questions about International... VXUS, VEA, VWO... low returns

1. No, VXUS is not composed of VEA and VWO in any meaningful sense. However, you can replicate VXUS by mixing together VEA and VWO in your own portfolio. VWO tracks an index that includes China A-shares, VXUS tracks an index that currently excludes China A-shares. If you specifically want China A-s...
by jalbert
Fri Apr 21, 2017 1:12 pm
Forum: Investing - Help with Personal Investments
Topic: SP500, Russel 2000 and mid caps?
Replies: 24
Views: 1735

Re: SP500, Russel 2000 and mid caps?

They appear to be among the most commonly cited indices. Individuals often talk about incorporating a tilt in their portfolio and unless the SP500 and Russel 2000 cover the entire market it seems like there would be a "built in" tilt by holding those two funds. Maybe towards large caps? W...
by jalbert
Thu Apr 20, 2017 9:58 pm
Forum: Investing - Help with Personal Investments
Topic: SP500, Russel 2000 and mid caps?
Replies: 24
Views: 1735

Re: SP500, Russel 2000 and mid caps?

The OP asked if the SP500 + R2000 was a substitute for the total market index, and I asked for clarification of why those two indices were being considered. It is not a bad thing to hold them together or just to hold the SP500, but not necessarily optimal either. The R2000 has been the index most su...
by jalbert
Thu Apr 20, 2017 5:39 pm
Forum: Investing - Theory, News & General
Topic: When Isaac Newton timed the market
Replies: 1
Views: 712

When Isaac Newton timed the market

Even Isaac Newton succumbed to emotion in investing.
by jalbert
Thu Apr 20, 2017 5:02 pm
Forum: Personal Consumer Issues
Topic: Improving my Math Skills
Replies: 27
Views: 2927

Re: Improving my Math Skills

Good Morning, When I was in high school I was not very interested in math. Mainly, I was a thick-headed teenager who did not like working for a demanding calculus teacher, so I dropped calculus and gave up on math. "I'll never use this anyway," I thought. In college I took pre-algebra and...
by jalbert
Thu Apr 20, 2017 4:51 pm
Forum: Investing - Help with Personal Investments
Topic: SP500, Russel 2000 and mid caps?
Replies: 24
Views: 1735

Re: SP500, Russel 2000 and mid caps?

Thr Russell 1000 is completed by the Russell 2000 to make the Russell 3000, which is a total market index, but with more stringent liquidity/investability screens than the CRSP or S&P total market indices, hence it has only 3000 stocks in it. By replacing the Russell 1000 by the S&P500 you a...
by jalbert
Thu Apr 20, 2017 2:48 pm
Forum: Investing - Help with Personal Investments
Topic: Contribute to SEP IRA and traditional IRA in same tax year?
Replies: 15
Views: 581

Re: Contribute to SEP IRA and traditional IRA in same tax year?

From the IRS SEP Plan FAQ: If the SEP-IRA permits non-SEP contributions, you can make regular IRA contributions (including IRA catch-up contributions if you are age 50 and older) to your SEP-IRA, up to the maximum annual limit. However, the amount of the regular IRA contribution that you can deduct ...
by jalbert
Tue Apr 18, 2017 2:05 pm
Forum: Personal Consumer Issues
Topic: Security deposit issues upon rental move-out. Or, how do I not get ripped off?
Replies: 39
Views: 2530

Re: Security deposit issues upon rental move-out. Or, how do I not get ripped off?

Normally the security deposit is one months rent, right? So it's basically a wash. You are right though, you won't be able to use them as a reference. I don't think it is unusual for deposits to be more than one month's rent, as the landlord will want to protect against the proposed strategy. If th...
by jalbert
Tue Apr 18, 2017 1:40 pm
Forum: Personal Consumer Issues
Topic: Security deposit issues upon rental move-out. Or, how do I not get ripped off?
Replies: 39
Views: 2530

Re: Security deposit issues upon rental move-out. Or, how do I not get ripped off?

This is why many people leave without paying the last months rent. This is usually a bad idea (unless the rental agreement specifies that month's rent is paid at movein) because 30 days of late fees as well as a month's rent may be deducted from your deposit. It also precludes using the landlord as...
by jalbert
Tue Apr 18, 2017 1:35 pm
Forum: Personal Consumer Issues
Topic: Security deposit issues upon rental move-out. Or, how do I not get ripped off?
Replies: 39
Views: 2530

Re: Security deposit issues upon rental move-out. Or, how do I not get ripped off?

This won't help the OP with the current situation, but a useful strategy is to schedule a walkthrough with the landlord or property manager when surrendering the apartment, and any issues may be discussed at that time. A good landlord should be willing to do this and write the refund check during th...
by jalbert
Mon Apr 17, 2017 11:19 pm
Forum: Investing - Theory, News & General
Topic: Assuming a random walk for retirement planning
Replies: 17
Views: 2436

Re: Assuming a random walk for retirement planning

I think there is a tendency to equate random with uniformly distributed, that is, where all outcomes are equally likely and independent of each other so that outcomes are completely arbitrary. The notion of a random walk is a precisely defined mathematical concept and does not mean that it follows t...
by jalbert
Mon Apr 17, 2017 10:48 pm
Forum: Investing - Theory, News & General
Topic: Is all the money flowing into index funds bad?
Replies: 21
Views: 2907

Re: Is all the money flowing into index funds bad?

The same wall street firms concerned about compromises in market efficiency from pervasive index fund investing don't seem to raise issues with investing in equities in countries where the govt suspends trading on stocks when they feel like it, or imposes other restrictions on a free market.
by jalbert
Mon Apr 17, 2017 3:34 pm
Forum: Investing - Theory, News & General
Topic: Investors backing off their equity AA primarily due to 8-year bull market?
Replies: 56
Views: 4461

Re: Investors backing off their equity AA primarily due to 8-year bull market?

I haven't been following market news. Is there a growing trend of investors backing off their equity AA, stopping auto-investment in equity or even selling equity shares, primarily because of the 8-year bull market? Not because they are needing the money anytime soon. What percentage of market tran...
by jalbert
Sat Apr 15, 2017 2:47 am
Forum: Investing - Theory, News & General
Topic: Assuming a random walk for retirement planning
Replies: 17
Views: 2436

Re: Assuming a random walk for retirement planning

If recoveries followed crashes more reliably than by chance, you would expect historical sequences to show a higher certainty equivalence than randomly drawn sequences, but they do not. It is never going to be possible to prove that a random walk is the correct model for retirement planning, but I ...
by jalbert
Sat Apr 15, 2017 2:30 am
Forum: Investing - Help with Personal Investments
Topic: Yet another Vanguard study on DCA vs Lump Sum
Replies: 55
Views: 3048

Re: Yet another Vanguard study on DCA vs Lump Sum

The risk is being diminished solely because while you are DCA, your asset allocation includes more cash than you would otherwise target. Under standard portfolio theory, holding more cash doesn't improve your risk-adjusted returns, it just reduces risk and returns together. That's fair. I was more ...
by jalbert
Fri Apr 14, 2017 12:43 pm
Forum: Investing - Help with Personal Investments
Topic: Best 2050 Target Date Fund
Replies: 20
Views: 1659

Re: Best 2050 Target Date Fund

If in a taxable account, Vanguard's product will be much more tax efficient. In a retirement account, both are acceptable choices, but I agree with others that the lower fees of Vanguard's index fund-based product should be much preferred. The good news about a target date fund is you may no longer ...
by jalbert
Fri Apr 14, 2017 12:33 pm
Forum: Investing - Help with Personal Investments
Topic: Yet another Vanguard study on DCA vs Lump Sum
Replies: 55
Views: 3048

Re: Yet another Vanguard study on DCA vs Lump Sum

Do we really even need an empirical study to show that DCA lowers expected return, but also lowers variance of return? If expected return is greater than zero for an asset, then lump sum always has a higher expected return. If variance of return is greater than zero then the variance of an average o...
by jalbert
Wed Apr 12, 2017 12:39 pm
Forum: Personal Finance (Not Investing)
Topic: Aggressive mortgage banker at Citibank - what's the point
Replies: 14
Views: 1470

Re: Aggressive mortgage banker at Citibank - what's the point

It is actually very difficult to compare rates because higher origination fees can buy down the rate. Even with post-2008-crisis changes to lending regulations, this is not as transparent as would be desirable. If you move forward with a mortgage, you at some point get a good faith estimate that may...
by jalbert
Tue Apr 11, 2017 9:17 pm
Forum: Investing - Theory, News & General
Topic: Bloomberg - The Math Behind Futility
Replies: 8
Views: 1470

Re: Bloomberg - The Math Behind Futility

OK, this is about "What" to own and not "When" to own it. Suppose I only buy VTI and just market-time buying and selling? Then this paper does not apply. There must be some other paper that does apply though. I don't have a reference, but the idea is that the outsize gains of th...
by jalbert
Tue Apr 11, 2017 7:16 pm
Forum: Investing - Help with Personal Investments
Topic: Help with my girlfriends retirement account
Replies: 11
Views: 1306

Re: Help with my girlfriends retirement account

It was my intention to slowly arm her with the knowledge to be able to manage it herself, starting with If You Can and The Millionaire Next Door. The reality is though that those are probably way too lofty of ambitions, some people just aren't readers. Providing suggestions for reading materials is...
by jalbert
Tue Apr 11, 2017 3:26 pm
Forum: Investing - Theory, News & General
Topic: Assuming a random walk for retirement planning
Replies: 17
Views: 2436

Re: Assuming a random walk for retirement planning

He's selecting from the historical record, so he's not making any assumptions about the distribution. Actually it is assuming the discrete distribution corresponding to a histogram of historical returns i.e. with the probability of an outcome being proportional to the frequency of the outcome in th...
by jalbert
Tue Apr 11, 2017 2:13 am
Forum: Investing - Theory, News & General
Topic: Assuming a random walk for retirement planning
Replies: 17
Views: 2436

Re: Assuming a random walk for retirement planning

What probability distribution was used to generate the random time series of returns? (Being a random walk does not mean outcomes are uniformly distributed, and it is very unlikely that equity and bond returns are uniformly distributed).
by jalbert
Tue Apr 11, 2017 12:20 am
Forum: Investing - Help with Personal Investments
Topic: Help with my girlfriends retirement account
Replies: 11
Views: 1306

Re: Help with my girlfriends retirement account

Agree with livesoft about the Lifepath option. Put Blackrock in charge of rebalancing and asset allocation changes.
by jalbert
Mon Apr 10, 2017 1:12 pm
Forum: Investing - Help with Personal Investments
Topic: Zero-income-year - Roth Conversion or Capital Gains?
Replies: 22
Views: 1053

Re: Zero-income-year - Roth Conversion or Capital Gains?

I hadn't considered ACA subsidies. I assume they are income based and not asset based? Health insurance will be the driver for this. When you enroll, you will estimate your income, and you will need to have enough income to qualify for a premium tax credit. This is how much to Roth-convert. If you ...
by jalbert
Sun Apr 09, 2017 11:41 pm
Forum: Investing - Theory, News & General
Topic: one last stupid question [What are "cash equivalents"?]
Replies: 44
Views: 4038

Re: one last stupid question [What are "cash equivalents"?]

I would consider a FDIC Bank CD or short term bond that is backed by the government as being a cash equivalent as long as the maturity is aligned with your need of the cash. When your need for the cash changes unexpectedly from 1 year to 6 months you will experience the difference between cash and ...
by jalbert
Sun Apr 09, 2017 2:28 pm
Forum: Investing - Help with Personal Investments
Topic: My First Vanguard Account - VPAS, May Move from Schwab
Replies: 12
Views: 1079

Re: My First Vanguard Account - VPAS, May Move from Schwab

The single most important service an advisor should be offering is working with a client to understand risk tolerance and capacity, and establish an appropriate asset allocation.
by jalbert
Sat Apr 08, 2017 7:03 pm
Forum: Personal Finance (Not Investing)
Topic: LLC or other liability protection as landlord
Replies: 17
Views: 1320

Re: LLC or other liability protection as landlord

Why would one need a commercial umbrella policy for a small real estate operation? Wouldn't the umbrella be secondary to a required primary, basic commercial insurance policy which might generally cover fire and other perils, third party liability claims, loss of rental income, etc? Not sure one ne...
by jalbert
Sat Apr 08, 2017 6:48 pm
Forum: Personal Finance (Not Investing)
Topic: Choosing to put less than 20% down...why is this wrong?
Replies: 51
Views: 4884

Re: Choosing to put less than 20% down...why is this wrong?

With an 800 credit score, you may qualify for a HELOC after purchase with 20% down. You can likely open it at no cost, and then not use it except in an emergency. This makes some of your down payment available without actually holding it as cash and paying a higher interest rate plus PMI on a larger...
by jalbert
Sat Apr 08, 2017 6:38 pm
Forum: Investing - Theory, News & General
Topic: one last stupid question [What are "cash equivalents"?]
Replies: 44
Views: 4038

Re: one last stupid question [What are "cash equivalents"?]

Cash as an asset class is fully liquid. Short-term bonds and CDs may be useful to increase yield by managing liquidity but they are not cash. Bucket portfolios might target 1 year of living expenses in cash and 1 year in short-term bonds or CDs. The short-term bonds are not cash.
by jalbert
Sat Apr 08, 2017 6:30 pm
Forum: Investing - Theory, News & General
Topic: Do Index Funds Drive Apple Up?
Replies: 27
Views: 2348

Re: Do Index Funds Drive Apple Up?

Investment of funds in index funds is unlikely to cause Apple stock's percentage market cap in the index to increase. If anything, less liquid stocks would get a bigger boost (as a percentage of market cap) from the increased demand to buy. But just because an investor uses an index fund doesn't mak...
by jalbert
Sat Apr 08, 2017 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: LLC or other liability protection as landlord
Replies: 17
Views: 1320

Re: LLC or other liability protection as landlord

At some level of scale real estate turns into a business and your umbrella wont help. Insurance companies will sell a commercial umbrella policy that will provide coverage in such cases. Although they cost more than a personal umbrella, by virtue of excluding non-rental assets (cars, personal resid...
by jalbert
Sat Apr 08, 2017 5:59 pm
Forum: Investing - Help with Personal Investments
Topic: VG has any funds for Frontier Markets??
Replies: 23
Views: 1695

Re: VG has any funds for Frontier Markets??

Veiex/Vemax, the Vanguard emerging market index fund, invests in China A-shares, which have frontier market status in the MSCI taxonomy.
by jalbert
Fri Apr 07, 2017 2:50 am
Forum: Investing - Help with Personal Investments
Topic: VBTLX or MWTRX? Vanguard Total Bond Market Index Fund or Metro West
Replies: 11
Views: 620

Re: VBTLX or MWTRX? Vanguard Total Bond Market Index Fund or Metro West

MWTRX looks like a great deal for Metropolitan West. It has a 30-day SEC yield of 1.89% and an ER of 0.67%. This means MW gets to keep a substantial fraction of the bond portfolio's interest. VBTLX has a 30-day SEC yield of 2.51%. Thus, VBTLX has an additional 62 basis point per year cushion of inco...
by jalbert
Thu Apr 06, 2017 6:50 pm
Forum: Investing - Theory, News & General
Topic: "Bonds" that allow you to bet that interest rates will rise
Replies: 11
Views: 1084

Re: "Bonds" that allow you to bet that interest rates will rise

GNMA IO (interest only) STRIPs have strong positive correlation with interest rates. When interest rates rise, prepayment risk is lowered so the expected number of interest payments increases, increasing the value of the strip. But this is no free lunch-- these instruments will get crushed if intere...
by jalbert
Tue Apr 04, 2017 10:20 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond Fund (VCORX) One Year on:
Replies: 58
Views: 5439

Re: Vanguard Core Bond Fund (VCORX) One Year on:

Surprisingly, the worst three year period during the Great Depression with default rates totaling to 12.88 percent barely makes it into the top five credit events for non financials. 12.88% is the actual loss of principal from actual defaults. With a default rate that high, you can be sure that cre...
by jalbert
Tue Apr 04, 2017 4:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond Fund (VCORX) One Year on:
Replies: 58
Views: 5439

Re: Vanguard Core Bond Fund (VCORX) One Year on:

It's not that people overreacted to the magnitude of the drop in corporates. The problem was the fact that it occurred when equities were down 50% or more.

Risk should be evaluated as overall portfolio risk, not by looking at asset classes in isolation.
by jalbert
Mon Apr 03, 2017 9:47 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond Fund (VCORX) One Year on:
Replies: 58
Views: 5439

Re: Vanguard Core Bond Fund (VCORX) One Year on:

I also disagree with those who dismiss higher bond fund returns by saying if you want such higher returns, then add more equities to your portfolio. The risks between equities and bonds are are far greater than having a slightly higher corporate bond presence in the better performing bond fund. Sti...
by jalbert
Mon Apr 03, 2017 4:13 pm
Forum: Investing - Help with Personal Investments
Topic: Is anyone decreasing % of bonds this year?
Replies: 91
Views: 6893

Re: Is anyone decreasing % of bonds this year?

One major benefit of bonds is so you will be able to stay the course when stocks get volatile and reap the benefits of doing so.
by jalbert
Mon Apr 03, 2017 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: Verbal abuser at work
Replies: 37
Views: 2606

Re: Verbal abuser at work

As a start, your friend should politely direct the "dotted line" manager to your friend's actual manager when the dotted line manager requests something from your friend, who should say that his or her actual manager is in charge of managing his or her work priorities. Your friend should b...
by jalbert
Mon Apr 03, 2017 3:39 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond Fund (VCORX) One Year on:
Replies: 58
Views: 5439

Re: Vanguard Core Bond Fund (VCORX) One Year on:

I don't necessarily agree that higher return for a bond fund automatiocally means higher risk. Supposedly, the bond choices by managers can provide the edge for one fund over another even when they are in the same category. Nonetheless, when active managers generate excess return, it is a very fund...
by jalbert
Mon Apr 03, 2017 3:34 pm
Forum: Investing - Help with Personal Investments
Topic: Borrow from my 401 to fund my SEP?
Replies: 15
Views: 890

Re: Borrow from my 401 to fund my SEP?

If you file an extension for filing income taxes, you also extend the deadline for a 2016 SEP-IRA contribution, I think until Oct 15 (should be verified). You can prepare your 2016 return so you know the precise payment to make with the extension request. This is preferable due to risks associated w...
by jalbert
Sun Apr 02, 2017 12:57 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond Fund (VCORX) One Year on:
Replies: 58
Views: 5439

Re: Vanguard Core Bond Fund (VCORX) One Year on:

Vanguard also rates vcorx has having higher risk than the total bond market index fund, so how much of the excess return is due to active mgmt skill vs just taking more risk is unclear.
by jalbert
Sat Apr 01, 2017 10:33 pm
Forum: Investing - Theory, News & General
Topic: Active. Passive. Closet. Shells games.
Replies: 3
Views: 693

Re: Active. Passive. Closet. Shells games.

There are tools out there to measure a funds "Active Share" (how much it overlaps it's index) https://activeshare.info/ Sort of. It chooses an index to compare to, not necessarily the correct one, leading to unexpected results. E.g. for vtsmx (TSM) it gives an active share of 10% because ...
by jalbert
Fri Mar 31, 2017 11:35 pm
Forum: Investing - Help with Personal Investments
Topic: Physician-Resident looking for Portfolio Advice
Replies: 34
Views: 2530

Re: Physician-Resident looking for Portfolio Advice

The US stock funds are all SP500 funds, which is ok, but you could additionally use: Vanguard Extended Market Index Fund Institutional ER 0.07% with the S&P500 holding for market completion (80/20 ratio). You also could just throw everything in all the accounts into target retirement/lifecycle f...
by jalbert
Thu Mar 30, 2017 4:52 pm
Forum: Investing - Help with Personal Investments
Topic: What index fund would you recommend putting my money towards that pays annually?
Replies: 26
Views: 1434

Re: What index fund would you recommend putting my money towards that pays annually?

My ultimate goal is to be able to keep investing more over time to build a decent passive income ($10,000)+ a year in payouts. I just want to have back up so if anything were to go wrong I will have enough money to get myself out of a jam. The first point is to decide how much you need in an emerge...
by jalbert
Thu Mar 30, 2017 2:41 pm
Forum: Investing - Theory, News & General
Topic: Doubting Shiller -- what is the "correct" P/E?
Replies: 44
Views: 2763

Re: Doubting Shiller -- what is the "correct" P/E?

What is the logic for a PE that reflects fair value being constant over time, even short-term time frames? Changes in perceived market risk should lead to repricing of risk premia, leading to changes in PE for it to continue to reflect fair compensation for the risk of future expected cash flows fai...

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