Search found 4498 matches

by ogd
Wed May 25, 2016 12:34 pm
Forum: Investing - Help with Personal Investments
Topic: Selling VTI Covered Calls
Replies: 28
Views: 1438

Re: Selling VTI Covered Calls

I look at deep ITM covered calls as somewhat equivalent to fresh powder sitting on the sidelines waiting for a buy limit order to execute as the market falls. If you don't mind owning and holding the stock for the long term, then it makes sense to me. As I mentioned above , it is not equivalent, th...
by ogd
Wed May 25, 2016 10:59 am
Forum: Investing - Help with Personal Investments
Topic: Selling VTI Covered Calls
Replies: 28
Views: 1438

Re: Selling VTI Covered Calls

Some people put a low limit order to buy a stock, this is somewhat the same expect you get paid to wait. It is not the same, not even "somewhat". The entirety of your payment is for the potential difference between buying at $X once the price drops to $X (the limit order) and buying at $X...
by ogd
Tue May 24, 2016 6:43 pm
Forum: Investing - Help with Personal Investments
Topic: Selling VTI Covered Calls
Replies: 28
Views: 1438

Re: Selling VTI Covered Calls

I don't want to drag this option talk out if some people don't find that it belongs on this forum, just politely say so. I don't think the talk doesn't belong on this forum, I just think it should realistically conclude that no individual investor should be doing it. :D Only thing better would have...
by ogd
Tue May 24, 2016 5:11 pm
Forum: Investing - Help with Personal Investments
Topic: Selling VTI Covered Calls
Replies: 28
Views: 1438

Re: Selling VTI Covered Calls

Correct, but if you buy the option back before it gets called away and resell a higher strike price. I guess this can 'lose' some,much, all of the gains but it's an option (pun) to do. Ask yourself: why did the buyer buy your option (for much more money) and not the higher strike price? The appreci...
by ogd
Tue May 24, 2016 4:53 pm
Forum: Investing - Help with Personal Investments
Topic: Selling VTI Covered Calls
Replies: 28
Views: 1438

Re: Selling VTI Covered Calls

livesoft wrote:After reading Derman's autobiography, I don't think anybody can do the calculation that you are asking about with any accuracy and precision.

Yup. Which is why I said most individuals who do this don't really know what they're doing, and I'd be including myself here if I ventured into covered calls.
by ogd
Tue May 24, 2016 4:35 pm
Forum: Investing - Help with Personal Investments
Topic: Selling VTI Covered Calls
Replies: 28
Views: 1438

Re: Selling VTI Covered Calls

This is not something hard to do. No one is going to overpay for the option you are selling. The quotes and trading volume are available for you to see, so you are not going to sell cheaper than the market price. Of course, the market price could drop out from under you based on news while you are ...
by ogd
Tue May 24, 2016 4:08 pm
Forum: Investing - Help with Personal Investments
Topic: Selling VTI Covered Calls
Replies: 28
Views: 1438

Re: Selling VTI Covered Calls

I would think the strategy works best in the tax deferred space and just repurchase your position immediately if it gets called away. But that seems far too easy so what am I missing? I would think the bigger problem for some might be having to hold the position in the face of a vicious downturn. Y...
by ogd
Thu May 19, 2016 7:41 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds: High ER or Roth. Which is worse?
Replies: 13
Views: 742

Re: Bonds: High ER or Roth. Which is worse?

Expenses in bond funds can be misleading. Focus on the SEC yield. The SEC yield factors in expenses or you get a apples to apples comparison. No, I think he was right to focus on ER. The SEC yield might be the same in a fund with 1% higher ER, but who knows what kind of risks they have to take to o...
by ogd
Thu May 19, 2016 2:37 pm
Forum: Investing - Help with Personal Investments
Topic: Never-ending Taxable Bond Dilemma
Replies: 24
Views: 2827

Re: Never-ending Taxable Bond Dilemma

Bottom line: What it has meant to my wallet. I believe VWLUX's greater risk is translated directly into a lower NAV and indirectly into bonus shares/dividends. Believe I’ve been adequately compensated for owing VWLUX. Dra : taking a risk at a time that particular risk not only doesn't manifest, but...
by ogd
Thu May 19, 2016 2:30 pm
Forum: Personal Finance (Not Investing)
Topic: Mutual Funds OR ETFs?
Replies: 12
Views: 1244

Re: Mutual Funds OR ETFs?

I prefer index ETF's because they are WAY cheaper than index mutual funds. The only downside is you have to buy in whole share increments, instead of fractional shares that mutual funds allow. At Vanguard, investor shares (the highest expense ratio) are still generally 0.20% or lower. So sure, 0.12...
by ogd
Thu May 19, 2016 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: Mutual Funds OR ETFs?
Replies: 12
Views: 1244

Re: Mutual Funds OR ETFs?

I prefer index ETF's because they are WAY cheaper than index mutual funds. The only downside is you have to buy in whole share increments, instead of fractional shares that mutual funds allow. At Vanguard, investor shares (the highest expense ratio) are still generally 0.20% or lower. So sure, 0.12...
by ogd
Thu May 19, 2016 12:09 pm
Forum: Investing - Help with Personal Investments
Topic: Conservative friend getting out of muni/CDs for what?
Replies: 13
Views: 680

Re: Conservative friend getting out of muni/CDs for what?

My biggest risk is interest rate risk. I do believe that JY will raise interest rates in the next few months. (I know this is timing market to an extent). It's extremely hard to time the bond market. I would say more money has been lost in the last 6 or so years trying to do that than any prospecti...
by ogd
Wed May 18, 2016 3:03 am
Forum: Investing - Theory, News & General
Topic: Are total returns calculated correctly during decumulation?
Replies: 4
Views: 525

Re: Are total returns calculated correctly during decumulation?

This is in contrast to info from both Vanguard and Morningstar which generally show both etf's running similar returns with VTI usually beating VYM by one or two percent depending on the period. This is not true. Over the period you chose, VYM returned 14% higher than VTI (20,052.31 vs 18,628.08). ...
by ogd
Mon May 16, 2016 6:20 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 80
Views: 13483

Re: Riding the yield curve, in action

The Fidelity fund holds the bonds from 10 to 5 years, the VG fund holds the same bonds from 10 to 3 years. Yes -- however, I expect this difference to be captured in the duration. It's 1.3 years or so longer in the Fidelity fund, so it'll have higher returns in times like the recent past. In my equ...
by ogd
Mon May 16, 2016 5:07 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 80
Views: 13483

Re: Riding the yield curve, in action

I'm curious if anyone has thought about the percentage of capital gains distributions related to the yield curve versus other factors. Both funds appear to have bullet type portfolios. Yes, although I wouldn't separate out "capital gains distributions" because it's an artifact of how the ...
by ogd
Sat May 14, 2016 3:02 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Domestic Dividend Funds - VHDYX vs VDADX
Replies: 15
Views: 1110

Re: Vanguard Domestic Dividend Funds - VHDYX vs VDADX

But this is in a "taxable" account and the goal is pure income production, which is why I am looking hard at dividend paying stocks. Their return is far better then the almost zero after-inflation return of treasury bonds. Please, do not make this comparison. It's apples to oranges. Divid...
by ogd
Sat May 14, 2016 1:15 pm
Forum: Investing - Help with Personal Investments
Topic: Never-ending Taxable Bond Dilemma
Replies: 24
Views: 2827

Re: Never-ending Taxable Bond Dilemma

But with current bond yields so low and yields of stocks being more, perhaps it makes sense at this point in time to hold bonds in taxable and free up some tax-advantaged space for stocks (which hopefully are providing significantly higher returns than bonds currently do). This does not make sense ...
by ogd
Thu May 12, 2016 11:32 am
Forum: Investing - Theory, News & General
Topic: "The Value of Active Management" - a thoughtful analysis
Replies: 14
Views: 2752

Re: "The Value of Active Management" - a thoughtful analysis

Sorry Paul, I have to disagree with the last comment: "Again, fees matter. They are one of the only reliable predictors of success." I agreed FEES matter but its NOT the only reliable predictors of success. I did not see you point out any other predictor of success. This has to be somethi...
by ogd
Mon May 09, 2016 8:43 pm
Forum: Investing - Help with Personal Investments
Topic: What should I do w/ 150k lump sum while averaging into VTI - bond funds?
Replies: 11
Views: 803

Re: What should I do w/ 150k lump sum while averaging into VTI - bond funds?

Can't disagree that for the OP the incremental risk for 0.15% may not be worth it but for me an on-line saving account is not an option I want to use. Vanguard has made it so easy that there's not much difference vs using the money market fund, particularly if one already wants to keep that savings...
by ogd
Mon May 09, 2016 6:59 pm
Forum: Investing - Help with Personal Investments
Topic: Muni vs Taxable
Replies: 7
Views: 901

Re: Muni vs Taxable

Why would they come out with a new muni index fund/ETF with longer durations/maturities? It seems intermediate would have more appropriate, given the current interest rate environment and there popularity. Maybe interest rates are not projected to rise that much? Longer bonds are always appropriate...
by ogd
Mon May 09, 2016 5:29 pm
Forum: Investing - Theory, News & General
Topic: Index Bond Funds
Replies: 10
Views: 1306

Re: Index Bond Funds

To extend, once you get down to 1 or 2 years left there is not much premium / discount left in a bond. So no large impact. Plus, my point was that it doesn't matter because there are plenty of bonds with X% yield in that market and there's nothing special about holding that old bond to maturity -- ...
by ogd
Mon May 09, 2016 4:42 pm
Forum: Investing - Theory, News & General
Topic: Index Bond Funds
Replies: 10
Views: 1306

Re: Index Bond Funds

Do index bond funds like BND or BNDX or VTEB sell their bonds after buying them, or do they just ride them out to maturity? Yes, they do, because bond age and the index excludes bonds too short. However, don't get spooked by the fact that the bonds might be sold for a capital loss. In a liquid mark...
by ogd
Thu May 05, 2016 7:31 pm
Forum: Investing - Help with Personal Investments
Topic: Oh boy, what to do
Replies: 27
Views: 4428

Re: Oh boy, what to do

Any input appreciated, and thanks for this great resource. 1) Trust the US economy more. 2) (Above not even required) Trust the market's ability to set price levels more than you trust yours. Professionals trying to time asset allocation against the market fail at it miserably (see "tactical a...
by ogd
Thu May 05, 2016 7:22 pm
Forum: Investing - Help with Personal Investments
Topic: Making my own German index "fund"
Replies: 37
Views: 2014

Re: Making my own German index "fund"

Any comparison of Germany to Indonesia or any other country is irrelevant. I don't question why someone wants to invest in Germany or Small Cap Value or add REITs to their AA. Once they decide on that course of action, the price one pays to invest is no longer a consideration. I think you and I are...
by ogd
Wed May 04, 2016 8:29 pm
Forum: Investing - Theory, News & General
Topic: Downsides of Unconventional Portfolios
Replies: 9
Views: 1070

Re: Downsides of Unconventional Portfolios

The downsides that I see are increased risk (since all portfolios that deviate from a market capitalization weighted strategy should not have optimal risk-adjusted return, or in other words, excess risk for a given expected return), Yes. Diversification is the only free lunch and one should take it...
by ogd
Wed May 04, 2016 6:53 pm
Forum: Investing - Theory, News & General
Topic: LifeStrategy Moderate Growth fund or its components?
Replies: 33
Views: 2896

Re: LifeStrategy Moderate Growth fund or its components?

International Stocks. For the years 2002-2009 international stocks performed much better than domestic stocks. LifeStrategy Moderate Growth produced an annualized return of 6.35%, while Wellington produced an annualized return of 7.97%. Maybe Wellington had more international stocks during those ye...
by ogd
Wed May 04, 2016 1:46 pm
Forum: Investing - Theory, News & General
Topic: LifeStrategy Moderate Growth fund or its components?
Replies: 33
Views: 2896

Re: LifeStrategy Moderate Growth fund or its components?

My only complaint with the LifeStrategy funds (besides relatively high expense ratios) is the need to rebalance almost daily. ... I don't know what the idea of constant rebalancing is, It is the most reasonable reasonable thing to do. Unlike your portfolio, LS has money moving in and out daily. One...
by ogd
Wed May 04, 2016 1:38 pm
Forum: Investing - Theory, News & General
Topic: LifeStrategy Moderate Growth fund or its components?
Replies: 33
Views: 2896

Re: LifeStrategy Moderate Growth fund or its components?

Since LifeStrategy Moderate Growth was "fixed" it has produced an annualized return of 8.07% (12/31/11 - 5/3/16). STAR's annualized return has been 9.03% for this period and Wellington has produced an annualized return of 10.26%. The LifeStrategy funds are lousy funds overseen by a group ...
by ogd
Wed May 04, 2016 1:17 pm
Forum: Investing - Theory, News & General
Topic: Meaning of the label Market Timing?
Replies: 34
Views: 2340

Re: Meaning of the label Market Timing?

I think you are missing my point. This is not about generating superior returns, it is about meeting your financial goals, and the risk and returns need to meet those goals? How you pick your Equity / Bond allocation? Consider if you had the same asset allocation in 2006 and 2015. Your expected ret...
by ogd
Wed May 04, 2016 1:02 pm
Forum: Investing - Theory, News & General
Topic: Mutual funds vs. ETFs ?
Replies: 10
Views: 823

Re: Mutual funds vs. ETFs ?

VG admiral class shares are not (they can not generally be moved out of VG without liquidation). Actually, they can, because of the option to convert to ETF shares before moving. The process is very simple: call Vanguard, optionally tell them the specific lots that they should convert, then the ETF...
by ogd
Tue May 03, 2016 6:31 pm
Forum: Investing - Help with Personal Investments
Topic: Making my own German index "fund"
Replies: 37
Views: 2014

Re: Making my own German index "fund"

And by the logic of most people posting here, we have no reason to invest internationally since everything is priced in and all returns will be the same accounting for risk? Or am I missing something? Yes, everything is priced in and returns will be the same accounting for risk. For all we know. Th...
by ogd
Tue May 03, 2016 6:27 pm
Forum: Investing - Help with Personal Investments
Topic: Making my own German index "fund"
Replies: 37
Views: 2014

Re: Making my own German index "fund"

When an individual index investor makes a decision to invest, price isn't usually part of the rationale. The conventional wisdom is invest today for the long term Let's say your thesis is that Germany is half as risky as Indonesia. Yet for German shares you pay 3x more for the same return. You're m...
by ogd
Tue May 03, 2016 5:47 pm
Forum: Investing - Theory, News & General
Topic: Do bond funds have a tendency to revert to par value?
Replies: 12
Views: 1143

Re: Do bond funds have a tendency to revert to par value?

It is next to impossible to accumulate capital gains in bond funds. If your bond gains value, you must either distribute it when you sell or see it disappear as you approach maturity (meanwhile inflicting high income-taxed distributions upon your taxable shareholders). If you buy a discounted bond, ...
by ogd
Tue May 03, 2016 5:17 pm
Forum: Investing - Help with Personal Investments
Topic: Making my own German index "fund"
Replies: 37
Views: 2014

Re: Making my own German index "fund"

Germany actually has a ratio of .7 now and it's dropping. Scandanavian countries are now running deficits last I checked. To those wondering why I care about public debt, studies have shown high debt levels hinder economic growth. Also, having a budget surplus allows them to take in my immigrants w...
by ogd
Tue May 03, 2016 4:59 pm
Forum: Investing - Theory, News & General
Topic: Meaning of the label Market Timing?
Replies: 34
Views: 2340

Re: Meaning of the label Market Timing?

You use the E/P to get the expected return on your stock. You lost me here. As in, not confused, but completely not onboard. I wouldn't trust this number enough to change my stock allocation by even 1%. The price involves expected changes in earnings that I have very little visibility into. When it...
by ogd
Tue May 03, 2016 4:37 pm
Forum: Investing - Theory, News & General
Topic: Mutual funds vs. ETFs ?
Replies: 10
Views: 823

Re: Mutual funds vs. ETFs ?

Read: https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds , I think it should answer all your questions. Now here is my recommendation: use Vanguard mutual funds because they're simpler to manage. Forget about limit order buy/sells, because they don't do anything good for you; however, I do recomme...
by ogd
Tue May 03, 2016 4:31 pm
Forum: Investing - Theory, News & General
Topic: LifeStrategy Moderate Growth fund or its components?
Replies: 33
Views: 2896

Re: LifeStrategy Moderate Growth fund or its components?

LifeStrategy Moderate Growth is a horrible fund. The STAR fund, which has about the same equity/fixed income allocation, has performed about 100 basis points per year better since the LifeStrategy inception. It was a horrible fund because it had a horrible component, the market-mistiming tactical A...
by ogd
Tue May 03, 2016 3:47 pm
Forum: Investing - Theory, News & General
Topic: Meaning of the label Market Timing?
Replies: 34
Views: 2340

Re: Meaning of the label Market Timing?

Let’s say I want to have the highest rate of return with the minim amount of risk. I.e, I want to be on the efficient frontier. The risk and return of assets change in the market. Do you update your portfolio? I'd be inclined to make an exception for that too (trying to have a more precise grasp of...
by ogd
Tue May 03, 2016 12:39 pm
Forum: Investing - Theory, News & General
Topic: Meaning of the label Market Timing?
Replies: 34
Views: 2340

Re: Meaning of the label Market Timing?

While I agree that the Tactical Asset Allocation group is most deserving of the label, this too is market timing by my standards, if I understand it correctly: 2.4 Variable Ratio Investment (aka Dynamic Asset Allocation or Valuation Driven Investment) In fact, I don't understand why it's not Tactica...
by ogd
Mon May 02, 2016 10:31 am
Forum: Investing - Help with Personal Investments
Topic: Total Bond vs Municipal Bond Funds
Replies: 54
Views: 5873

Re: Total Bond vs Municipal Bond Funds

First of all, VBMFX is 40% treasuries according to the latest annual report, all of which are non-callable. In that case, YTM = YTW. For the muni fund, I would assume that almost all of the holdings are callable, and therefore YTW > YTM. If any one of these bonds isn't called, the SEC yield will un...
by ogd
Mon May 02, 2016 10:13 am
Forum: Investing - Theory, News & General
Topic: Long Term Bond Index Funds - Trying to Understand
Replies: 6
Views: 799

Re: Long Term Bond Index Funds - Trying to Understand

I know that looking at performance is not the way to select investments , however, I'm still puzzled and trying to understand the current situation and understand more behind theory of what is happening. csm: Nowhere is the warning about past performance more clearly (even mathematically) justified...
by ogd
Sat Apr 30, 2016 1:04 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond vs Municipal Bond Funds
Replies: 54
Views: 5873

Re: Total Bond vs Municipal Bond Funds

That's a pretty insulting point, and also incorrect. I'm obviously not confusing the yield with the coupon- the average coupon for VCAIX is 4.4%. I apologize for going too basic for your level -- some people genuinely don't understand this and think of bonds primarily in terms of coupon. Still, the...
by ogd
Thu Apr 28, 2016 9:22 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond vs Municipal Bond Funds
Replies: 54
Views: 5873

Re: Total Bond vs Municipal Bond Funds

This is what's happening inside of the CA fund. It holds a lot of older premium bonds and it is distributing at a cost to capital value. Just to clarify -- the Vanguard fund isn't doing this maliciously, it really is the better thing to do tax-wise. But some managed funds hold premium bonds to attr...
by ogd
Thu Apr 28, 2016 9:18 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond vs Municipal Bond Funds
Replies: 54
Views: 5873

Re: Total Bond vs Municipal Bond Funds

Sure, the SEC yield for VCAIX is 1.28%, but it's actually distributing 2.60 . Total bond is distributing 2.51%. Of course those could change, but the distribution yields have been relatively steady. That should change your calculations just a bit. By that measure, I have a 1 year Treasury distribut...
by ogd
Thu Apr 28, 2016 7:54 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond vs Municipal Bond Funds
Replies: 54
Views: 5873

Re: Total Bond vs Municipal Bond Funds

So....drumroll......What is that "bad" about Total Bond Index int taxable? 2/3 is Treasuries and thus no state or local taxes. Much less risk. I think this should be discussed. Unfortunately, California and a couple other states only give you the exemption if 50% or more assets of a fund ...
by ogd
Thu Apr 28, 2016 7:32 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 175
Views: 9622

Re: dividend stocks

Ogd, Financialdave & Larryswedroe, I just wanted to let you know that I bought into the "Total Stock Market" fund today. My plan is to dca into the fund & let it roll for years. Long term buy & hold. Thank you for all your help & guidance...I appreciate it :) Awesome -- co...
by ogd
Thu Apr 28, 2016 7:25 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond vs Municipal Bond Funds
Replies: 54
Views: 5873

Re: Total Bond vs Municipal Bond Funds

I also totally agree with ogd that these calculators (or any math) merely convert the rates and don't address risk. One must then determine if the extra yield is worth the risk just like one would have to do on taxable bonds. For example, is the yield on an investment grade taxable bond worth the e...
by ogd
Wed Apr 27, 2016 7:30 pm
Forum: Investing - Theory, News & General
Topic: Why not ETFs?
Replies: 57
Views: 4021

Re: Why not ETFs?

I still don't fully comprehend the idea of "properly trading" ETFs. I understand the bid/ask spread and limit orders, etc, but as a buy and hold investor with a 30+ year horizon, why would I care about optimally setting up limit orders over a few cents? Well, who cares about $10 a year? T...
by ogd
Wed Apr 27, 2016 2:36 pm
Forum: Investing - Theory, News & General
Topic: Why not ETFs?
Replies: 57
Views: 4021

Re: Why not ETFs?

But for tax gain harvesting, ETFs win easily. Possibly (haven't been in that situation for a long time), but remember that there are workarounds for MFs. One is transacting by mail, another is the ole' automatic transaction. A third one that I believe works is the big MF escape hatch at Vanguard, c...
by ogd
Wed Apr 27, 2016 11:58 am
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 5378

Re: Allan Roth on why bond funds are better than individual bonds

This is simple and IMO not even debatable issue as one can reproduce easily the risk/returns with just a few bonds but better yet easily beat it with CDs . (Underline mine) I am simply challenging this, as I think that it is misleading . Longinvest: while I would not call it easy , here's how I wou...

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