Search found 642 matches

by jmk
Sun Mar 17, 2024 4:37 pm
Forum: Personal Investments
Topic: Help with PV of anypia using assumption II
Replies: 10
Views: 1122

Re: Help with PV of anypia using assumption II

I found this post from Neurosphere who has his own calculations spreadsheet: Re: SS Calculators, PIA and Cola Adjustments Sanity Check He confirms anypia adjusts for inflation and shows future dollars, if of course you use a dataset that assumes futur inflation and wage growth. The default to assume no growth means there is no future inflation so your PIA will be the same I today and future dollars. Then I prefer Neurosphere's approach to show everything in today dollars, that's how I tend to think anyway I too prefer today dollars, which is how I tend to think too. But note that using the "0/0" assumption (neurosphere option 1, anypia option IV)will indeed resilt in today's dollars, it will ignore the SS assumptions about wage a...
by jmk
Sun Mar 17, 2024 10:08 am
Forum: Investing - Theory, News & General
Topic: How to prove that I am not losing money with bond funds?
Replies: 118
Views: 14622

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

Beensabu wrote: Wed Jan 17, 2024 10:15 pm Have you held a bond fund for its stated average maturity and lost capital yet?
Yes. That’s what made me Google this thread since it went against advice i was given when i invested in 2016.
I have been in vbtlx since 2014 and assumed since i was holding longer than average maturity and duration I’d be fine. But my cost basis shows losses, or minuscule returns, close to when i need the funds.
by jmk
Sun Jan 07, 2024 8:56 am
Forum: Personal Investments
Topic: Help with PV of anypia using assumption II
Replies: 10
Views: 1122

Re: Help with PV of anypia using assumption II

Raspberry-503 wrote: Sat Jan 06, 2024 4:40 pm I know this thread is a year old, but I was playing around with anyPIA and I believe its output is expressed in 2023 dollars isn't it?
so is the number in the social security estimation of benefits? that's twice in the last few weeks that someone makes me doubt this
I believe its outputs are in future dollars reflecting the year you input for when you’ll start receiving benefits.
by jmk
Tue May 09, 2023 5:30 pm
Forum: Investing - Theory, News & General
Topic: Distribution yield of inflation-protected bond funds
Replies: 3
Views: 596

Distribution yield of inflation-protected bond funds

Can someone explain why Vanguard doesn't list a distribution yield for VAIPX and VTAPX?
The $/share and reinvest price are listed, but not the yield itself.
Thank you!
by jmk
Sun Apr 16, 2023 9:03 pm
Forum: Personal Investments
Topic: I-Bonds vs. TIPS
Replies: 31
Views: 5738

Re: I-Bonds vs. TIPS

However, with TIPS real yields now well above the 0% real yield offered by I-bonds, I can't help but think TIPS make more sense. I realize they are lacking the principal protection that I-bonds have, but given the low probability of the bad outcomes I discussed, my gut feeling is that something like the current 5-year TIPS would be stable enough, while offering better real yield. I keep reading that ibonds protect principal while TIPs do not. But according to Treasury Direct, principal is protected: How TIPS protects you against inflation The principal (called par value or face value) of a TIPS goes up with inflation and down with deflation. When a TIPS matures, you get either the increased (inflation-adjusted) price or the original princi...
by jmk
Thu Mar 23, 2023 9:57 am
Forum: Personal Investments
Topic: Looking for ways to lock in high interest rates
Replies: 51
Views: 8495

Re: Looking for ways to lock in high interest rates

Marseille07 wrote: Thu Mar 23, 2023 1:07 am Bond funds don't lock in rates, as the fund manager keeps shuffling bonds.
If locking in is your goal, you need to buy bonds directly.
The ishare "ibond" funds have fixed maturity dates, so they do "lock in the rate".
But buying individual bonds is the only way to "lock in" rates beyond that type of fund.
But are you sure you want to lock in a rate for more than 10y when interests rates can change?
by jmk
Mon Mar 13, 2023 9:05 pm
Forum: Personal Consumer Issues
Topic: Advice for student looking at psychology careers?
Replies: 44
Views: 4924

Re: Advice for student looking at psychology careers?

To give another data point, in a southwest LCOL area, LCSWs makes about 80k as a 1099 private practitioner after giving up 40% off the top to work in a small office that schedules, handles billing, and provides ehr. Working for yourself you would keep everything minus expenses for those things. In community mental health you'll make considerably less in this lcol city, $50- 70k. Malpractice is about $700 per year. The license is $400 or so every two years. There are trainings and other expenses. The msw degree is easy compared to psychology and nursing. My experience as a practicing, licensed clinical social worker in the northeast (fairly HCOL area) when I just did private practice (both contractually for an fairly large private practice a...
by jmk
Sat Mar 04, 2023 12:19 pm
Forum: Personal Consumer Issues
Topic: Transcedental Meditation
Replies: 37
Views: 3538

Re: Transcedental Meditation

I read an account of a woman who paid the $1k and signed up. From recollection, she did not get much more than a mantra for her $1k. The mantra is unique to you, except that they only have a couple hundred or so mantras so it is not totally unique. If you want a mantra, I could give you one for $5. Heck, I'll give you one for free if you want it. I got an official TM mantra in 1980, and did TM every day when I was a teenager, and occasionally now. Under the mumbo jumbo turns out the mantras are based solely on your birthday but have changed over the years. You can google TM mantras and find the complete list for free. (It was accurate for my own!) A key part of TM is that you not try to control the mantra or what happens as you repeat it i...
by jmk
Wed Mar 01, 2023 6:51 pm
Forum: US Chapters
Topic: Roll Call for the Retirement Class of 2023!
Replies: 314
Views: 86607

Re: Roll Call for the Retirement Class of 2023!

I'm getting ready to in July at 59, with wife continuing to work another four years till she's 57.

Funded ratio is 1.5 with 1.6 million.

But, getting cold feet. Having a nice spreadsheet is not the same as in real life pulling the trigger.
by jmk
Fri Feb 24, 2023 7:16 pm
Forum: Personal Finance (Not Investing)
Topic: Does taxable interest paid affect taxes?
Replies: 3
Views: 694

Re: Does taxable interest paid affect taxes?

I should know this but I don't. My 1099-int from two CDs I purchased shows I earned $9 interest (reported to IRS) and also had $19 "taxable interest paid" (not reported). On the Vanguard statement the $19 shows as a negative amount. Does the $19 affect my taxes in any way, or is it only of concern to seller? Did you buy these on the secondary market? Does it say 'accrued interest paid to seller'? If so, you might be able to deduct that. I bought these on the secondary market (through Vanguard brokerage taxable account). The word "seller" doesn't appear on Vanguard's consolidated statement, but the term "taxable interest paid" and "accrued interest paid" are used in different spots, referring to the s...
by jmk
Fri Feb 24, 2023 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: Does taxable interest paid affect taxes?
Replies: 3
Views: 694

Does taxable interest paid affect taxes?

I should know this but I don't. My 1099-int from two CDs I purchased shows I earned $9 interest (reported to IRS) and also had $19 "taxable interest paid" (not reported).

On the Vanguard statement the $19 shows as a negative amount.

Does the $19 affect my taxes in any way, or is it only of concern to seller?
by jmk
Wed Feb 15, 2023 9:54 am
Forum: Personal Finance (Not Investing)
Topic: Sole proprietor, any danger to using another agency's business cards?
Replies: 12
Views: 1547

Re: Sole proprietor, any danger to using another agency's business cards?

I would worry first about (1) state licensing authorities, (2) whatever code of professional responsibility applies to your husband, (3) professional liability and (4) misleading clients about an affiliation with the agency before I would start worrying about the IRS. Is the agency liable in connection with any professional claim against your husband? Does the agency have insurance against such claims (that covers your husband)? Will potential clients know that your husband is an independent contractor? Has an attorney reviewed your husband's agreement with the agency? Agree, and I would ask for a disclosure in materials that he is an independent contractor. Does your husband have insurance? Yes he has individual malpractice insurance. Tha...
by jmk
Wed Feb 15, 2023 9:49 am
Forum: Investing - Theory, News & General
Topic: Best Method of Annualizing Standard Deviation?
Replies: 11
Views: 2302

Re: Best Method of Annualizing Standard Deviation?

I am struck by the magnitude of the difference.
by jmk
Tue Feb 14, 2023 1:08 pm
Forum: Personal Finance (Not Investing)
Topic: Sole proprietor, any danger to using another agency's business cards?
Replies: 12
Views: 1547

Sole proprietor, any danger to using another agency's business cards?

My husband is a 1099-NEC psychotherapist (sole proprietor, no LLC). His sole payer is an agency that provides him clients and an office and admin and billing services, in exchange for a cut of his generated revenue. They provided him with business cards listing him as a therapist for their agency, with their address and logo, just like they do their W2 employees.

Will his using this card with clients potentially challenge his being viewed as a sole proprietor by the IRS if we got audited?
by jmk
Mon Feb 13, 2023 3:00 pm
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 "two fund" 50-50 second worst in history

Dregob wrote: Fri Feb 10, 2023 11:50 pm The chart doesn't give enough weight to inflation. Is 2022 really worse than 1974? What about early 1980s?
I used the CPI figures in the Simba spreadsheet to determine the "real" returns for the years in question.
by jmk
Mon Feb 13, 2023 2:49 pm
Forum: Personal Investments
Topic: Help with PV of anypia using assumption II
Replies: 10
Views: 1122

Help with PV of Anypia Assumption II

PV of future benefits doesn't necessarily relate to the AWI or CPI adjustments. The relevant discount rate for the PV calculation should be a capital markets assumption, and varying it over different subsets of time would be related to changes in risk tolerance expected at those times. The AWI and CPI assumptions should feed into the future benefit estimate. In other words, one calculation is determining PIA based on earnings history and AWI/CPI figures, then once that is known, it can be converted into a future notional principal value as of (say) age 67, then after that it is discounted to the present. Rather than figuring the future benefit myself, unless I was doing something that called for precision, I would just use the SSA's quick ...
by jmk
Mon Feb 13, 2023 1:28 pm
Forum: Personal Investments
Topic: Help with PV of anypia using assumption II
Replies: 10
Views: 1122

Help with PV of anypia using assumption II

I'm trying to figure the PV of my future social security benefit as generated by AnyPia. The program and SSA site recommend using No Benefit Increase/No AWI increase as one's assumption in order to calculate present dollars. But when I look at the Trustee's assumption II, I see cost-of-living adjustments close to expected inflation (2.4%) yet a much higher Average Wage Index (AWI) increase of around 3.7% per year. much beyond expected inflation. Even the lowest assumption III has AWI rising higher than inflation. 1) Can I calculate the PV of Assumption II as PV(Expected inflation,,-benefit, 1)? Of course this is higher than the "none/none". 2) Why is AWI expected to rise much faster than inflation in all three Trustee assumption s...
by jmk
Sat Feb 11, 2023 10:58 pm
Forum: Personal Finance (Not Investing)
Topic: What is your asset to liability ratio? How low would you be willing to take it?
Replies: 56
Views: 3926

Re: What is your asset to liability ratio? How low would you be willing to take it?

I find the "funded ratio" version of this ratio more useful:
Net present value of income stream : net present value of liability stream.
I am for at least 1.25 to 1 (assuming a large drop in income at some points.)
by jmk
Mon Feb 06, 2023 8:24 pm
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 "two fund" 50-50 second worst in history

Dude2 wrote: Sat Jan 21, 2023 10:23 am So take-away is probably that people should utilize these tools at various durations for their various needs. I might need a years worth of money to insulate me in case of job loss (or a short ladder).
It’s actually worse than that. If you’d bought vbtlx six years ago, thinking “I matched the duration”, you’d be up the creek. I used the avg weighted maturity rather than duration of vbtlx for liability matching. But even that 8.2y turned out to be un reliable.
by jmk
Wed Jan 18, 2023 8:58 am
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 "two fund" 50-50 second worst in history

NiceUnparticularMan wrote: Tue Jan 17, 2023 3:19 pm Again, just pointing out that so far, this is much more an unprecedented nominal bond story than an unprecedented (or even all that uncommon) stock story.
Inflation=adjusted bonds as well. At least from the Simba annual synthesized TBM, 2022 was the very worst inflation adjusted annual returns in 152 years of history at -18.5%. And using Shiller's monthly data, Oct 10yT -23.7% real were the worst backwards-12m returnsin the entire 1810 month history.
by jmk
Tue Jan 17, 2023 3:30 pm
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 "two fund" 50-50 second worst in history

NiceUnparticularMan wrote: Tue Jan 17, 2023 3:19 pm By the way, even longer rolling returns for US "total bonds" are historically bad--you have to go out past like 10 years just to get one other similarly bad period. That's pretty amazing given the couple years before were quite good--not all time good, but on the high end.
We don't yet know how long it will take to recovery the TBM back to zero. What was the longest recovery time for the aggregate bond market in history (using Shiller 10y treasury and other proxies for aggregate where necessary) ?
by jmk
Tue Jan 17, 2023 3:17 pm
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 "two fund" 50-50 second worst in history

To get more granularity, I just took a peak at the 12 month backwards returns using Shiller data.
And the worst 12 month backwards 50/50 returns of 2022 were only equaled in 15 months out of 1,810 months. (The data is a few months behind.)
So the worst month of 2022 was in the less-than-1% percentile of months. The 0.8%th percentile to be exact. More than 2 standard deviations.

Of course we'd also want to know recovery time, but it's too soon to tell how long that will take for 2022. And we don't even know the exact final cpi.

So this is just a first pass to get a rough sense of "yes, it was historically sigma event" even when looking at any month in a year not just at dec 31.
by jmk
Tue Jan 17, 2023 2:36 pm
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 "two fund" 50-50 second worst in history

I am a value-type speculator; I do not believe in taking risks that I do not think will compensate me fairly. I also think outside of the box for hedging. I had an add-on CD yielding about 3% for four years at the time in 2020 (opened in 2019) when all treasuries were yielding < 1.25%. I ran with my capital gains and stuffed almost all of my nominal bond allocation in there (because I have small tax-advantaged accounts in comparison to my taxable, most of my investments are taxable). I broke with penalty in late 2022, but I now have a positive gain rather than a bunch of loss in my bonds. I now have similar CDs sitting around for another bite of good fortune. Yes, there is luck; but I try to stack as much as possible on my side. I too have...
by jmk
Tue Jan 17, 2023 2:32 pm
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 "two fund" 50-50 second worst in history

Great, another meaningless comparison based on arbitrary calendar boundaries. 1) Meaningless to be less than 1th percentile from 1871 to today (all recorded stock history)? End of year barometers are a common benchmark with meaning to many, and are published by most companies by law. That metric has its limits, of course; [unnecessary comment removed by moderator ClaycordJCA] . 2) You didn't care to add anything meaningful to my comment in OP wondering how the end-of-year results matched up with the more nuanced monthly drawdowns. Your point that annual "arbitrary" boundaries aren't everything is obvious, and I asked about it in my original post. While we're at it, we should also note the limitation of the symba synthesized retur...
by jmk
Tue Jan 17, 2023 9:08 am
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

Re: 2022 50-50 second worst in history

I'm in the 50/50 AA bucket, however, my 50% fixed income side has been stable value for a couple years and MYGA's more recently. I was down less than 9% overall from 1/1/22 to 12/31/2022 and drawing an income the portfolio entire year! Yes, this is the commonly talked about two-fund version of 50/50 using TBM (and it's synthesized equivalents). I don't have access to a Stable Value fund, but I do have half of my safe in CDs/ibonds etc. So my actual personal loss was also less than 21%. Unfortunately, like a lot of people, my 401k only have TBM. I do not know much about MYGAs, but i worry about the cost of the guarantee and the long run reliability of the companies. But it certainly worked this past year. This year did teach me not to just ...
by jmk
Mon Jan 16, 2023 1:56 pm
Forum: Investing - Theory, News & General
Topic: 2022 "two fund" 50-50 second worst in history
Replies: 117
Views: 17227

2022 "two fund" 50-50 second worst in history

We know 2022 was bad but just how bad was it. Really bad. Taking a peak at the Simba database annual returns, inflation adjusted (using 6.5% for 2022), leaving all defaults on "yes", going back to 1871, and mixing TSM and TBM 50-50, the worst five inflation adjusted returns were as follows. https://i.imgur.com/eUhhUAN.jpg 2022 was the second worst "two fund" 50/50 returns in American history in 152 years, going back to 1871 . Only 1917, just over a century ago, was worse. 2022 50/50 RETURNS were in the 0.7%th percentile. Which is ~2.5 standard deviations from the mean! Just looking at TBM, the inflation adjusted return was the worst in entire 152 year history. I'm curious how this recent 50/50 drawdown stacks up looking ...
by jmk
Sun Jan 08, 2023 8:24 pm
Forum: Personal Investments
Topic: iBonds Gift Delivery
Replies: 26
Views: 2313

Re: iBonds Gift Delivery

Given that the bonds earn interest while they sit in the gift box and can be gifted any time, is there any reason not to hold on before gifting it to see what rates are like in the 2023 bonds before using up my wife's allocation with the gift?
by jmk
Wed Jan 04, 2023 4:27 pm
Forum: Investing - Theory, News & General
Topic: Include ACA Income Limit in i-ORP or Not?
Replies: 48
Views: 4288

Re: Include ACA Income Limit in i-ORP or Not?

I've been fiddling with the extended i-ORP calculator. One thing that surprised me was that if I don't include an ACA taxable income limit the i-ORP result has me using my tax-deferred funds very aggressively in the first years of retirement, almost half of which goes to Roth conversions. If I do include an ACA income limit of 69k, as you'd expect, the tool then greatly limits the tax-deferred withdrawals in the early years to ensure premium subsidies before age 65. Questions: 1) How do I know which of the 2 scenarios yields the better outcome when looking at the report that takes ACA income limit into consideration vs. the one that doesn't? Which number(s) in the report are the key? You can run reports with both options and compare. I was...
by jmk
Sat Dec 31, 2022 3:04 pm
Forum: Investing - Theory, News & General
Topic: Brokered CDs vs. Bank CD Rates
Replies: 44
Views: 7615

Re: Brokered CDs vs. Bank CD Rates

So how does one compare apples to oranges to figure out rates between banks and brokerage? You can't, really. A brokered CD has reinvestment risk relative to the coupon payments, while a direct CD with reinvested interest payments does not have this reinvestment risk. Unless you know the rates at which your brokered CD interest payments are reinvested, you can't know what your investment return will be. I don't think that point is acknowledged enough in discussion of brokerage versus banks. There is of course the additional fee for using the brokerage (~.1%) which often more than pays for itself over the rates one can get from a bank directly. But the bigger danger it seems to be is what rate one gets for those payments. Because non-callab...
by jmk
Sat Dec 31, 2022 1:41 pm
Forum: Investing - Theory, News & General
Topic: Brokered CDs vs. Bank CD Rates
Replies: 44
Views: 7615

Re: Brokered CDs vs. Bank CD Rates

Maybe someone can help me with an issue I have when comparing Bank versus Brokerage bank CDs. Banks list APY, which is the APR including interest taken over the length of the CD, which gets revinvested into the CD. Bank CDs through a brokerage list the YTM, which assumes the periodic interest payments are re-invested at the rate of the CD itself like a bank. In reality, the interest gets deposited into your brokerage "cash" account. This is small enough you usually can't invest in a new CD, and that would be at a different rate in any case. But you could for instance put generated interest into a MM or safe mutual fund, where the interest on the interest will often pay less than the CD itself. (I'm curious: what do folks do with t...
by jmk
Thu Dec 29, 2022 6:41 pm
Forum: Personal Investments
Topic: Maxifi
Replies: 63
Views: 9340

Re: Maxifi

I-orp has an "achille's heal" that asset allocation is not an independent variable. You can't fix AA at the global level, merely at the asset/bucket level. So, for instance, if you keep stocks in taxable, the optimizations tend to preserve that bucket as long as possible, no matter what it does to your overall risk. And to expand on this "achille's heal", if you normally keep Roth @ 100% stocks as part of an otherwise balanced portfolio (aka mix of stocks/bonds), the "optimization" will typically be to move as much as possible into Roth (since the 100% AA may have the best return). You can attempt to "override" this by setting your AA within i-ORP the same for every bucket. For example, if your overa...
by jmk
Wed Dec 28, 2022 11:39 pm
Forum: Personal Investments
Topic: Maxifi
Replies: 63
Views: 9340

Re: Maxifi

Economists have built many of these life-cycle optimization models, which use dynamic programming techniques to solve difficult life-cycle economic problems for economic research purposes, but this is the only one of these models that I am aware of that is commercially available for people to use in their own financial lives. * I really like I-ORP, another free optimizer. It's surprisingly robust. However, it has an "achille's heal" that asset allocation is not an independent variable. You can't fix AA at the global level, merely at the asset/bucket level. So, for instance, if you keep stocks in taxable, the optimizations tend to preserve that bucket as long as possible, no matter what it does to your overall risk. Aside from tha...
by jmk
Mon Dec 26, 2022 5:29 pm
Forum: Personal Investments
Topic: Cash Flow for next 7 years – how to invest
Replies: 8
Views: 1714

Re: Cash Flow for next 7 years – how to invest

I have a bucket of monies to be used within 7 years also.

I wanted convenience + diversification, so went with:
50% Fidelity Lifestrategy Moderate + 50% mix (about 50/50) of CDs and Bank savings accounts, depending on relative interest rates.
This comes to about 30% equity overall, together with a aggregate bond funds, and then CDs for yield and Bank account for liquidity.
I like that Lifestrategy mixes international equity and bonds in with US in one fund. The "Achilles heel" is lack of tax efficiency, but I decided the convenience was worth it and I keep a relatively small amount of money in this bucket.
by jmk
Fri Dec 23, 2022 11:45 am
Forum: Investing - Theory, News & General
Topic: Are We in a new Regime? (Blackrock 2023 Global Outlook)
Replies: 31
Views: 6241

Re: Are We in a new Regime? (Blackrock 2023 Global Outlook)

My own questions as I read:
-how does one know ahead of time if the market has accurately priced=in recession or inflation? is it possible to know this except after-the-fact?
-why aren't the transition to carbon-neutral energy and other costs already priced into the market?
-how do we know what homeostasis will emerge geopolitically in coming decades from the current changes?


-
by jmk
Fri Dec 23, 2022 11:42 am
Forum: Investing - Theory, News & General
Topic: Are We in a new Regime? (Blackrock 2023 Global Outlook)
Replies: 31
Views: 6241

Are We in a new Regime? (Blackrock 2023 Global Outlook)

Was curious on folks' thoughts on Blackrock's 2023 outlook. Unlike Vanguard, they make the case for a new regime. A good read with lots to think about regardless. https://www.blackrock.com/corporate/literature/whitepaper/bii-global-outlook-2023.pdf My summary of key points: We've switched regimes from "The Great Moderation" (four decades of low inflation, bull market in stocks and bonds) to a new regime of permanent inflation and increased volatility. The new inflation is shaped by supply problems, which is different from previous inflations. Inflation will remain persistent due to (i) an aging population, (ii) persistent geopolitical tensions, (iii) transition to carbon net-zero causing supply demand mismatches. Aging population:...
by jmk
Tue Dec 13, 2022 6:56 pm
Forum: Personal Investments
Topic: TIPS Values on Secondary Market
Replies: 33
Views: 2736

Re: TIPS Values on Secondary Market

One thing that puzzled me a bit, why the real yields for TIPS maturing in July 2024 are yielding more than 5 year TIPS on the US Treasury website. The reason is that the nominal US Treasury Bond Yield Curve is inverted, that is shorter term rate is higher than longer term rates, so it shouldn't be surprising that real interest rates on the curve are inverted as well. Another way of asking my question, based on nominal bonds versus tips in the secondary market, why the heck is expected inflation so low in the next 0-1.5y range? https://i.postimg.cc/K108bzhg/Screenshot-2022-12-13-150356.jpg My wild guess is that the market expects inflation to be higher in the short term than during the longer run. What you're saying is what I'd expect to se...
by jmk
Tue Dec 13, 2022 4:06 pm
Forum: Personal Investments
Topic: TIPS Values on Secondary Market
Replies: 33
Views: 2736

Re: TIPS Values on Secondary Market

nedsaid wrote: Tue Dec 13, 2022 1:35 pm One thing that puzzled me a bit, why the real yields for TIPS maturing in July 2024 are yielding more than 5 year TIPS on the US Treasury website. The reason is that the nominal US Treasury Bond Yield Curve is inverted, that is shorter term rate is higher than longer term rates, so it shouldn't be surprising that real interest rates on the curve are inverted as well.
Another way of asking my question, based on nominal bonds versus tips in the secondary market, why the heck is expected inflation so low in the next 0-1.5y range?

Image
by jmk
Tue Dec 13, 2022 9:20 am
Forum: Personal Investments
Topic: TIPS Values on Secondary Market
Replies: 33
Views: 2736

Re: TIPS Values on Secondary Market

Kevin M wrote: Mon Dec 12, 2022 4:21 pm
Image
Any speculation on why the short maturities are 2.3-2.6%? (In other words, why is expected inflation so low 0-1y?) Is it the prospect of deflation (negative overall returns)?
by jmk
Mon Dec 05, 2022 3:05 pm
Forum: Personal Investments
Topic: Confused about TIPS
Replies: 27
Views: 3637

Re: Why are short term TIPs yields so high?

Kevin M wrote: Sun Dec 04, 2022 8:11 pm The Jan 2024 ask yield was 2.16% when I pulled the quotes, which is 2.06% seasonally adjusted. Yes, you would earn about 2.16% above inflation if you bought the Jan 2024 TIPS on Friday and held to maturity, keeping in mind that there is a lag in the inflation numbers used to calculate the TIPS inflation adjustments.
Given the inflation is adjusted every six months and there is a good chance of recession, with secondary TIPs (1-2y) is there danger of deflation affecting the principal? In other words, is it wise to restrict oneself to new TIPs when a recession is likely?
by jmk
Sun Dec 04, 2022 6:01 pm
Forum: Personal Investments
Topic: Confused about TIPS
Replies: 27
Views: 3637

Why are short term TIPs yields so high?

Can someone explain to me why--given short term expected inflation is so high--secondary TIPs market at vanguard the short term tips YTM (worst) is above 2% (e.g. 2.37% maturity 1/24( , when 2-3 years out ago goes down to 1.3%?
To be sure I understand this, Will I really get 2.4% above actual inflation, guaranteed if I hold to maturity?
by jmk
Wed Nov 09, 2022 1:57 am
Forum: Investing - Theory, News & General
Topic: [Calculating expected returns] US stock market nominal returns
Replies: 51
Views: 3424

Re: US stock market nominal returns

jbriar wrote: Tue Nov 08, 2022 7:55 am good idea, a little more conservative than my numbers......
Actually not. CAPE10 of 3.4% + 2% inflation is about the range you were assuming.
by jmk
Wed Nov 02, 2022 2:18 pm
Forum: Personal Investments
Topic: Vanguard's brokered CDs search results page - for dummies
Replies: 7
Views: 1399

Re: Vanguard's brokered CDs search results page - for dummies

Is there a thread or wiki page (I did search, maybe not well) that explains the data you get as results when searching for brokered CDs on Vanguard? I am looking for explanations of the data there as relates to CDs: "Qty bid/ask," "Min Qty bid/ask," "Yield to worst bid," "Yield to maturity bid," for example. Please be kind - I just don't know what these terms mean, and am trying to learn. I'm sure you'll get fuller answers, but I've been buying a lot of brokered CDs recently on vanguard and these "newbie" pointers might help: for some reason you get to the search feature of secondary or new CDs through "my accounts" then "buy" and then "trade bonds and treasuries&qu...
by jmk
Thu Sep 29, 2022 12:20 pm
Forum: Investing - Theory, News & General
Topic: Why don't you factor tilt?
Replies: 882
Views: 55512

Re: Why don't you factor tilt?

Larry Swedroe wrote in one of his early books something that stuck with me: the market is the average, and (paraphrasing) you might consider tilting strategically in so far as are in a unique situation relative to the average.
by jmk
Thu Sep 29, 2022 11:29 am
Forum: Investing - Theory, News & General
Topic: Secondary Market Brokered CD mechanics
Replies: 32
Views: 5939

Re: Secondary Market Brokered CD mechanics

I bought a sec CD through Vanguard brokerage; but was surprised to see the order executed with a "stop limit". The stop limit is much lower than the price listed when I purchased. I've bought secondary CDs before and they simply go through, is this typical? Why is there a stop/limit when I didn't request it, and why is it at such a deep discount? Does that even make sense on a secondary CD? Does this mean it's not guaranteed to execute?
by jmk
Tue Jun 07, 2022 8:58 am
Forum: Personal Investments
Topic: Capital One stops offering IRA's
Replies: 11
Views: 4315

Re: Capital One stops offering IRA's

One of my capital ira transfer to milenium happened already on one cd. It’s staggered in stages but I was angry cause it was prior to the date mentioned on the letter. But my other one (ira money market account) I caught in time and transferred to vanguard without calls to anyone in about 3 weeks
by jmk
Mon May 16, 2022 8:28 pm
Forum: Investing - Theory, News & General
Topic: What's the big deal on TLH
Replies: 129
Views: 18220

Re: What's the big deal on TLH

Nate79 wrote: Thu May 12, 2022 9:36 pm You gain a little money but also gain flexibility for the future using the losses when you need them at a later time without any downside.
Isn't the downside that you're resetting the basis and will pay more tax on the gains in the future? That may or may not make sense, depending on one's unique situation.
by jmk
Wed May 11, 2022 4:54 pm
Forum: Personal Investments
Topic: Milennium? [Millennium Trust - OK for an IRA?]
Replies: 2
Views: 428

Milennium? [Millennium Trust - OK for an IRA?]

My IRA CDs from CapitalOne just switched to Millennium Trust after CapitalOne gave up the IRA business.

Is there anything Millennium offers that Vanguard doesn't, or other reason to leave any IRAs there compared to Fidelity/Vanguard?
by jmk
Wed May 11, 2022 4:51 pm
Forum: Investing - Theory, News & General
Topic: shocking Total Bond fund returns
Replies: 140
Views: 20231

Re: shocking Total Bond fund returns

NiceUnparticularMan wrote: Mon Apr 25, 2022 10:56 am However, what can happen is the market price can change. And rolling bond funds can get something called a roll return that depends on these market price dynamics. Meaning, these bond funds don't necessarily buy bonds and hold them their full term, they often then sell them after some holding period. And market price changes between when they buy and sell these bonds can affect those roll returns positively or negatively.
Do you know the historical range of the "roll return" of the Barclays Aggregate Total Bond Fund?
by jmk
Sat May 07, 2022 3:03 am
Forum: Personal Consumer Issues
Topic: A/C bids/proposals
Replies: 13
Views: 1825

Re: A/C bids/proposals

tibbitts wrote: Sun May 01, 2022 1:38 am So to clarify you have no air conditioning, only an evap cooler, and everywhere except the upstairs is comfortable at all times. And you're going to move in a few years. I have no experience with evap coolers but it seems like it doesn't need much help from air conditioning. I just don't know how an evap cooler and air conditioner would/could combine together. Maybe you just need a tiny air conditioner? Someone will know. I'm guessing you have gas heat?
We have evaporative and air conditioning using the same ducts. We have a damer that keeps the AC air leaving out the cooler, and vice versa.
by jmk
Mon May 02, 2022 5:21 pm
Forum: Personal Investments
Topic: Capital One stops offering IRA's
Replies: 11
Views: 4315

Re: Capital One stops offering IRA's

They are switching accounts to Millennium Trust.
Is there anything Millennium offers that Vanguard doesn't or other reason to leave any IRAs there?