Search found 667 matches

by learning_head
Fri Mar 24, 2017 11:18 am
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

Thanks again, #Cruncher ⋅  If I am looking to buy [an] LMP ladder with each rung every few years and last rung near 2045, should not I still go with 2045 year rather than 2040 in this case? An LMP (Liability Matching Portfolio) ladder is a non-rolling ladder where one plans to spend the re...
by learning_head
Wed Mar 22, 2017 12:30 am
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

In Swedroe's "Bond Book" I think in the appendix he opines on the % TIPS vs nominals in the 2% - 3%. real range. Since then real rates have gone through the bottom and the fed has replaced the 20 with a 30. I would suggest that you get a copy of Larry's book and consider if in today's mar...
by learning_head
Tue Mar 21, 2017 11:53 pm
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

Sorry, by "this number" I meant "Adjusted Price". From your response, it sounds like "Adjusted Price" is a better indication of what I would actually pay than "Price", but still not complete as it does not take into account accrued interest. So with Adjusted P...
by learning_head
Tue Mar 21, 2017 9:58 am
Forum: Investing - Theory, News & General
Topic: How to think about CDs
Replies: 4
Views: 925

Re: How to think about CDs

I would also research the insurance position of Credit Unions-- DM200 here has taught me that this is not a given (separate fund). That means you have to pay some attention to the creditworthiness of these institutions OR take a view that the deposit fund would be bailed out if necessary. Do you ha...
by learning_head
Tue Mar 21, 2017 9:33 am
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

... 0.459% yield for the 0.375% coupon TIPS and 0.507% for the 2.375% coupon TIPS. Given that it has a lower duration [1], one would expect the 2.375% TIPS to have a lower yield in our rising yield curve environment. But in fact it has a higher yield. ... we'd both favor the old 2.375% TIPS with it...
by learning_head
Fri Mar 17, 2017 3:43 pm
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

question : does new issue auction pricing tend to be a little better than secondary market ... ? Yes, according to a comparison I did three years ago of 10-year TIPS. (See my post, 10-Year TIPS Auction Yields Compared to Secondary Market .) Thanks!! So, sounds like auction is a better route on aver...
by learning_head
Fri Mar 17, 2017 3:33 pm
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

Judging from the almost flat yield curve 2040 to 2047 it appears the market fears reinvestment risk almost as much as interest rate risk. If you're like me and fear the latter more, a 2040 TIPS looks better than a 2047. It yields only 0.06% points less but has a 7.5 year shorter duration. Hmm.. try...
by learning_head
Fri Mar 17, 2017 3:22 pm
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

Thanks for a lot of info #Cruncher! Very interesting. Thank you for including the links too! Need to look at cumulative inflation, the reason is that it creates risk if get deflation--TIPS cannot go below par at maturity, but the inflation adjustment after you buy it can be negative. So the bigger t...
by learning_head
Thu Mar 16, 2017 11:44 am
Forum: Investing - Theory, News & General
Topic: PurePoint 1.25% online savings $10K min
Replies: 29
Views: 4020

Re: PurePoint 1.25% online savings $10K min

One downside: yet another institution having your confidential info. So, potential hacks into this bank puts your identity at more risk. Also, depending on how this bank shares your info with "affiliates" (even if you limit sharing, it takes some time before such settings take effect, depe...
by learning_head
Thu Mar 16, 2017 10:32 am
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

Please note: I am planning to buy inside 401k, not in taxable acct given that TIPS appear to be less tax-efficient than other stocks / bonds. I was not going to buy a TIPs fund but instead am trying to more closely match with few rungs for LMP. (Good point about e/r of a fund too) I was curious abou...
by learning_head
Thu Mar 16, 2017 9:03 am
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

Hi Doc, are you looking at Fidelity site? As of 9:54am ET today, I see these TIPS yields Jan 2023: bid: 0.211, ask: 0.168 => diff: 4.3 bps (or 20%) Apr 2032: bid: 0.649, ask: 0.612 => diff: 3.7 bps (or 6%) Feb 2042: bid: 1.012, ask: 0.986 => diff: 2.6 bps (or 5%) Feb 2047: bid: 1.023, ask: 1.002 => ...
by learning_head
Wed Mar 15, 2017 9:17 pm
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

Re: tips on buying TIPS: new issue vs secondary market?

I was looking when market was open and quotes were showing independent of numbers bought. Example difference for Feb 2047 TIPS around 9:41am ET this morning: 1.044% vs 1.065% YTM yield, i.e. a 2% difference in yield.
by learning_head
Wed Mar 15, 2017 9:33 am
Forum: Investing - Theory, News & General
Topic: tips on buying TIPS: new issue vs secondary market?
Replies: 24
Views: 1889

tips on buying TIPS: new issue vs secondary market?

I am looking for advice on buying TIPS in 401k brokerage link account at Fidelity. I am planning to have a few rungs maturing every 5 years or so, as it seems simpler than trying to fill every year. For some of my rungs, e.g. 30 years, I have an option of buying new issue vs secondary. I've heard fo...
by learning_head
Tue Mar 14, 2017 8:29 pm
Forum: Investing - Theory, News & General
Topic: Dividends Vs Annuity
Replies: 32
Views: 3059

Re: Dividends Vs Annuity

In many states buying from multiple companies does not increase your effective limits. About which states to do you know that above statements is true? Do you have a source for this info? I thought it was widely recommended to annuitize with multiple companies precisely because above statement is n...
by learning_head
Tue Mar 14, 2017 8:17 pm
Forum: Investing - Theory, News & General
Topic: Dividends Vs Annuity
Replies: 32
Views: 3059

Re: Dividends Vs Annuity

The limit also is typically only 100k but is state dependent. You may want to double check what's typical. Last time I checked a few years ago, only 14 states had annuity limit less than 250k . Today, I checked again and was pleasantly surprised to see some states upped theirs: looks like it's down...
by learning_head
Fri Feb 24, 2017 11:35 am
Forum: Investing - Theory, News & General
Topic: Extreme Valuations, and why you should reconsider
Replies: 307
Views: 20060

Re: Extreme Valuations, and why you should reconsider

willthrill No it isn't market timing. When the assumptions you made in planning and setting your AA have changed then smart people change their plans as well. Could be simply passing of time or change of jobs. Or could be big changes in valuations which create large changes in expected returns. Sam...
by learning_head
Thu Feb 23, 2017 4:33 pm
Forum: Investing - Theory, News & General
Topic: Does anyone own gold?
Replies: 114
Views: 8586

Re: Does anyone own gold?

Some extra GDX (gold-related companies) or GLD / physical gold makes sense to me as
- being uncorrelated with other asset classes
- imperfect inflation and political-craziness protection
- more so with valuations for TSM and bonds seemingly on the high side
by learning_head
Thu Feb 23, 2017 3:49 pm
Forum: Investing - Theory, News & General
Topic: Extreme Valuations, and why you should reconsider
Replies: 307
Views: 20060

Re: Extreme Valuations, and why you should reconsider

Also of course in taxable accounts you get the foreign tax credit for taxes paid, which is why should have preference for international in taxable and domestic in tax advantaged if have option Larry This is NOT quite that simple, Larry. While you get foreign tax credit in taxable account, you also ...
by learning_head
Sun Feb 12, 2017 12:38 am
Forum: Investing - Theory, News & General
Topic: 'Won the game', but what factors could potentially derail it?
Replies: 57
Views: 4510

Re: 'Won the game', but what factors could potentially derail it?

If the US implements a national sales tax or Value-Added Tax (VAT), you'd be taxed on your spending, not your income. The Roth IRA wouldn't protect you from that tax. If a potential VAT were applied to basic consumer goods, it would be regressive and opposed by policy makers. VAT exists in other na...
by learning_head
Sat Feb 11, 2017 11:55 pm
Forum: Investing - Theory, News & General
Topic: Agrument for ROTH 401K
Replies: 36
Views: 1944

Re: Agrument for ROTH 401K

Even assuming this is true, you still ended up paying more tax by going to Roth 401K at 28% marginal tax rate. Do you do your own tax? In USA tax system, we do not tax the first X dollar as the same as the last Y dollar, we do not have a flat tax system. We have tax brackets. ved, It does not matte...
by learning_head
Sat Feb 11, 2017 4:19 pm
Forum: Investing - Theory, News & General
Topic: 'Won the game', but what factors could potentially derail it?
Replies: 57
Views: 4510

Re: 'Won the game', but what factors could potentially derail it?

If the US implements a national sales tax or Value-Added Tax (VAT), you'd be taxed on your spending, not your income. The Roth IRA wouldn't protect you from that tax. If a potential VAT were applied to basic consumer goods, it would be regressive and opposed by policy makers. VAT exists in other na...
by learning_head
Sat Feb 11, 2017 4:02 pm
Forum: Investing - Theory, News & General
Topic: Agrument for ROTH 401K
Replies: 36
Views: 1944

Re: Agrument for ROTH 401K

You need to take into account that your take-home pay with a traditional 401k is higher than that compared to a Roth 401k. That needs to be considered to do a fair analysis comparing the two options. I did this. But the argument is the account has much more gains than contributions Please reread wh...
by learning_head
Thu Feb 09, 2017 9:05 am
Forum: Investing - Theory, News & General
Topic: tax treatment of shares gifted to child?
Replies: 8
Views: 948

Re: tax treatment of shares gifted to child?

... for legal tax avoidance ... Sorry for dumb but real question: If IRS is auditing you, do you tell them the child then gifted you back the resulting amount back? Do you have to coach your child to tell the same story? Or do you leave the funds in child's name and then potentially worry about the...
by learning_head
Thu Feb 09, 2017 8:56 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 63050

Re: Do you think Ric Edelman is correct, never pay down mortgage

2.25% pre-tax . After tax it's maybe 1.7 or 1.5% or so, I'd have to do the math. That's great. Please make sure to account for any fees related to taking out the mortgage. Overall, if it's 1.5-1.7%, I would also not pay it off and get before-tax 3% Andrews CD instead, assuming your overall interest...
by learning_head
Thu Feb 09, 2017 8:22 am
Forum: Investing - Theory, News & General
Topic: Is it wise to buy I bonds yielding lower than TIPS?
Replies: 18
Views: 1566

Re: Is it wise to buy I bonds yielding lower than TIPS?

Four years ago, 10-year TIPS has real yields of negative 0.57%, making 0% real yield series I savings bonds an obviously better choice. Since then, 10-year TIPS have surged to a real yield of positive 0.38%. The I bonds still have some built-in advantages, though -- not only do they defer taxes, bu...
by learning_head
Wed Feb 08, 2017 11:54 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 63050

Re: Do you think Ric Edelman is correct, never pay down mortgage

My rate is 2.25% for 15 years. If I can't beat that investing, then I shouldn't be investing. I ain't paying it down. Your mileage (and interest rate) may vary... Is 2.25% after-tax or pre-tax. If you have enough money, your real choice IMO is: - pay off mortgage to get guaranteed 2.25% return (gue...
by learning_head
Wed Feb 08, 2017 10:32 am
Forum: Investing - Theory, News & General
Topic: Vanguard's Wellesley Income fund is incredible
Replies: 112
Views: 19043

Re: Vanguard's Wellesley Income fund is incredible

I like the steady "active-light" approach for a tiny 15 bp. I'm not an index purist, so Wellesley's solid long-term management for me is a selling point. Another plus: internal rebalancing. I don't always have the guts to rebalance myself, so I leave it to the managers. And balanced funds...
by learning_head
Tue Feb 07, 2017 9:42 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Wellesley Income fund is incredible
Replies: 112
Views: 19043

Re: Vanguard's Wellesley Income fund is incredible

There is no reason to pick this fund for any new money over a LifeStrategy fund IMO. If you don't like international allocation of LifeStrategy funds, pick your own with individual index funds. If you think it's superior, I did not get why. OP mentioned its superior returns but did not compare it to...
by learning_head
Tue Feb 07, 2017 9:08 am
Forum: Investing - Theory, News & General
Topic: Any good alternative to TIPS in taxable account?
Replies: 15
Views: 900

Re: Any good alternative to TIPS in taxable account?

I am very interested in knowing the answer as well. I think the answer depends on what you are trying to achieve. If it's covering basic expenses for the rest of your life, the only semi-alternative I know are CPI-adjusted annuities which have been disappearing lately. Principal still sells them via...
by learning_head
Mon Feb 06, 2017 8:46 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5573

Re: No Inflation-Adjusted SPIAs at Vanguard

I don't get why anyone likes TIPS. They guarantee you a 0% real return. That's only slightly better than a savings account. Granted, it's a guarantee, but it's a guarantee to never get ahead. For those of us who lived through the late '70s as an adult, inflation means something more than to those w...
by learning_head
Mon Feb 06, 2017 8:40 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5573

Re: No Inflation-Adjusted SPIAs at Vanguard

I've not heard anyone outside of the insurance industry recommend that anyone considering a SPIA go all in with them. Vanguard says that most of their clients who are buying them are only putting around 20% of their portfolios in them. When you think about the kind of people who are going to be att...
by learning_head
Sun Feb 05, 2017 7:55 am
Forum: Investing - Theory, News & General
Topic: Good Backdoor Roth Vid. The end is nigh?
Replies: 5
Views: 1376

Re: Good Backdoor Roth Vid. The end is nigh?

Was hoping he would comment on how to preserve any basis in the TIRA if the invested contribution dropped in value before the 12 month conversion. Answer: Leave a few bucks in the TIRA when you convert. Alan, could you elaborate on this? I thought even if you have $0 in your TIRA, you could still h...
by learning_head
Sun Feb 05, 2017 6:56 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5573

Re: No Inflation-Adjusted SPIAs at Vanguard

Insurance companies can try to support their obligations whichever way they want. Yes, that may mean taking on more risk. Point is that I am not the one shouldering that risk, but they are, which is the whole point of my purchasing the product. They have more resources to support such risks than me...
by learning_head
Sat Feb 04, 2017 6:04 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5573

Re: No Inflation-Adjusted SPIAs at Vanguard

I would rather have to deal with finding a new US treasury investment for my maturing TIPS than worry about the havoc that large negative yields are reaping within an unstable insurance industry in this type of future. What would you consider a "large" negative yield? There is no "fi...
by learning_head
Sat Feb 04, 2017 5:55 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5573

Re: No Inflation-Adjusted SPIAs at Vanguard

Did any retirement expert say if you were planning to buy one you better get it before they run out? There was no announcement by anyone that a deadline was coming up. Nope, just suddenly one day the quote comes up as "No Quote". Well, I am no retirement expert but I've tried to give a wa...
by learning_head
Sat Feb 04, 2017 5:51 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5573

Re: No Inflation-Adjusted SPIAs at Vanguard

I would rather have to deal with finding a new US treasury investment for my maturing TIPS than worry about the havoc that large negative yields are reaping within an unstable insurance industry in this type of future. What would you consider a "large" negative yield? There is no "fi...
by learning_head
Sat Feb 04, 2017 11:32 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5573

Re: No Inflation-Adjusted SPIAs at Vanguard

Nothing really replaces CPI-adjusted annuity (incl. social security btw)for assuring guaranteed life-long income stream of stable purchasing power to match your minimal spending needs. TIPS based approaches do not protect from government stopping issuing these securities over time for reinvestment o...
by learning_head
Sun Jan 01, 2017 9:28 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3585

Re: Good time to buy inflation-adjusted SPIA?

BTW I've heard from some who should know that Vanguard takes a very handsome cut on life annuities purchased from Income Solutions compared with most other avenues for purchasing life annuities from Income Solutions. What are other avenues? Quote I have says Vanguard takes 2%. I tried to get quote ...
by learning_head
Sun Jan 01, 2017 12:32 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3585

Re: Good time to buy inflation-adjusted SPIA?

... PF is never going to have us at their mercy because substitutes like TIPS and social security are available. One way to increase your consumption of social security in later retirement, when you need it most arguably, is to defer taking it till age 70. Unfortunately, I don't think this substitu...
by learning_head
Fri Dec 30, 2016 12:32 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3585

Re: Good time to buy inflation-adjusted SPIA?

Here is a potential issue that makes me want to buy one now, even as I am still relatively quite young for any sort of mortality credits (though planning to retire in 5 years or so). TIPS approach assumes there will be ability to buy inflation adjusted SPIA in say 20-30 years. However, that is not a...
by learning_head
Thu Dec 22, 2016 9:54 am
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 3007

Re: TIP: record inflows but price is going down?

@saltycaper: I would think in your explanation of apple analogy, there reason price of apples drops is because there is a greater interest on the seller side the sell than combined interest from all buyer to buy. In other words, seller has some additional knowledge that apples will go bad or any oth...
by learning_head
Wed Dec 21, 2016 8:42 am
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 3007

Re: TIP: record inflows but price is going down?

I understand that for every dollar bought there is a dollar sold. That does not tell us anything about the price movement. However, I think the reason price moves at all is because there is different interest in underlying asset coming from buying side vs selling side. If you are a reluctant seller ...
by learning_head
Tue Dec 20, 2016 11:30 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 3007

Re: TIP: record inflows but price is going down?

PJW, so you are saying that outside of TIP-related ETFs, there is even more selling of underlying TIP related securities? So, in reality and contrary to what most articles claim, on balance, more investors (or rather investor dollars) have been trying to get out of inflation protection since the ele...
by learning_head
Tue Dec 20, 2016 11:26 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 3007

Re: TIP: record inflows but price is going down?

Future inflation expectations (and fear) have increased, and real (TIPS) rates have increased (30 yr from 0.71 to 1.14) since the election, so existing bonds (ETFs/funds) have dropped in value, but people are buying (inflows) to protect against future, increased expectations and fears. And good Bog...
by learning_head
Tue Dec 20, 2016 8:26 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 3007

Re: TIP: record inflows but price is going down?

@alec: Articles talk about "net" inflows, which I assume means (inflows - outflows) and accounts for people existing these.
by learning_head
Tue Dec 20, 2016 7:25 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 3007

TIP: record inflows but price is going down?

Since the election, with increased inflation expectations, investors are more interested in TIPS. Many articles indicate that there has been record amount of inflows into TIP and other such funds as a result. However, TIP price has been going down ever since November 9. What am I missing? I thought ...
by learning_head
Tue Dec 20, 2016 4:53 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3585

Good time to buy inflation-adjusted SPIA?

Hi folks, I am considering purchasing an inflation-adjusted SPIA (tied to CPI-index) within the next few years and trying to decide if now is a good time to buy vs waiting. (I am young enough that mortality credits won't make much difference.) In interest-rate rising environment, nominal annuities (...
by learning_head
Wed Nov 09, 2016 10:10 am
Forum: Investing - Theory, News & General
Topic: Just don't panic
Replies: 61
Views: 9173

Re: Just don't panic

Today's market open is pretty amazing and I think should be memorable. It's funny to see all the websites filled with headlines about market being down huge, next to little tickers showing barely any movement. A very good lesson for how hard it is to predict market behavior, even within hours and mi...
by learning_head
Sun Nov 06, 2016 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: Help-need to select new upcoming employer health insurance option
Replies: 4
Views: 433

Re: Help-need to select new upcoming employer health insurance option

Our premiums would be significantly lower with the high deductible plan ...but doesn't that also mean our pre-tax savings from premiums are lower? Yes, your premium savings of 3k (=7k-4k) are pre-tax, so your after-tax savings for these should be 3k * ( 1- marginal (fed and state) tax rate). If I g...
by learning_head
Sun Nov 06, 2016 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice - 41yo couple
Replies: 23
Views: 2646

Re: Portfolio advice - 41yo couple

I have quite a lot of stock still to vest, as does my wife, so you'll see from the discussion in posts after the first one that I realized I need to sell now. That will also allow me to loss harvest too. My plan is to annually rebalance in about late February each year, which will allow us to sell ...

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