Search found 4711 matches

by ogd
Mon Dec 05, 2016 1:01 pm
Forum: Investing - Help with Personal Investments
Topic: Invest all or dollar cost average
Replies: 8
Views: 637

Re: Invest all or dollar cost average

Ok, so now I'm confused,,,my understanding was from what is briefly read here , that the highest probability of success has a LS . That DCA is basically a market timing . Indeed, lump sum does best when it comes to returns, for the simple reason that markets are expected to go up on average (otherw...
by ogd
Fri Dec 02, 2016 5:52 pm
Forum: Investing - Theory, News & General
Topic: What is the advantage of Mutual Funds over ETFS?
Replies: 26
Views: 1294

Re: What is the advantage of Mutual Funds over ETFS?

But the cash availability even in the same account is an issue with ETFs. Sales of the overweight holdings need to be completed before the funds are available to purchase the underweight holdings. This strings out the transactions in series, and each one of them can be time-consuming and rather cum...
by ogd
Fri Dec 02, 2016 5:16 pm
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs Less Tax Efficient Than Other ETFs?
Replies: 37
Views: 2489

Re: Vanguard ETFs Less Tax Efficient Than Other ETFs?

Whenever there is net selling or net buying of units in a mutual fund, the fund has to buy or sell. Along with possible tax consequences, there are commissions and bid ask spreads to pay as a result. All those invested in the mutual fund share in those costs. Those who are buy and hold will end up ...
by ogd
Fri Dec 02, 2016 4:47 pm
Forum: Investing - Theory, News & General
Topic: What is the advantage of Mutual Funds over ETFS?
Replies: 26
Views: 1294

Re: What is the advantage of Mutual Funds over ETFS?

1) Holding ETFs that get regularly rebalanced in multiple accounts is a self-inflicted complexity problem. The cure for that is simple: consolidate. It's very unlikely that a beginner would do this. ◄ An investor's choice of asset allocation is a personal decision, and not everyone chooses a 3-fund...
by ogd
Fri Dec 02, 2016 4:08 pm
Forum: Investing - Theory, News & General
Topic: What is the advantage of Mutual Funds over ETFS?
Replies: 26
Views: 1294

Re: What is the advantage of Mutual Funds over ETFS?

I completely argree. And I have a major gripe with the wiki on this, because the Trading mechanics doesn't even begin to describe the enormous difference in re-balancing ease with mutual funds compared to ETFs. SpartanBull, if you are asking this question, you have obviously not had the "pleas...
by ogd
Fri Dec 02, 2016 3:26 pm
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs Less Tax Efficient Than Other ETFs?
Replies: 37
Views: 2489

Re: Vanguard ETFs Less Tax Efficient Than Other ETFs?

But are you exposing yourself to potential tax liabilities that you wouldn't in other ETFs? Hi Park, This is all nice and well argued (and I have seen it elsewhere, I believe in a BlackRock marketing article), but in practice the presence of the MF shares seems to not make a difference, as Vanguard...
by ogd
Fri Dec 02, 2016 3:09 pm
Forum: Investing - Theory, News & General
Topic: What is the advantage of Mutual Funds over ETFS?
Replies: 26
Views: 1294

Re: What is the advantage of Mutual Funds over ETFS?

-ETFS are apparently slightly more tax efficient, even though neither are bad in this regard Note, though, that Vanguard's index mutual funds are just as tax efficient as an ETF for the reason detailed in the article.. In practice, perfectly tax efficient after dividends, i.e. no capital gains dist...
by ogd
Thu Dec 01, 2016 1:16 pm
Forum: Investing - Help with Personal Investments
Topic: Aren't rising rates good for bond funds?
Replies: 14
Views: 1131

Re: Aren't rising rates good for bond funds?

Typing at same time. You're correct, it works out to be around 2X duration. Yes. Btw, this is with simplified bond math. A more complete formulation taking into account compounding and bond convexity would probably show shorter intervals, but it's beyond my capabilities to formulate it as calculus....
by ogd
Thu Dec 01, 2016 12:57 pm
Forum: Investing - Help with Personal Investments
Topic: Aren't rising rates good for bond funds?
Replies: 14
Views: 1131

Re: Aren't rising rates good for bond funds?

But if rates are "rising" meaning continually going up, no, that's not good for the returns of bonds or their funds, because they're continually taking capital losses. Eventually though, it still turns positive, it just takes longer. For example, if the yield rose at a steady pace (e.g. 1...
by ogd
Wed Nov 30, 2016 2:05 pm
Forum: Investing - Theory, News & General
Topic: Interm. Term muni - price drop vs sec yield increase
Replies: 18
Views: 1542

Re: Interm. Term muni - price drop vs sec yield increase

Thanks OGD. Then doesn't it mean that you cannot really look at the SEC yield alone to decide if it is adequate for you (as you have suggested in a past thread) - especially if the price has moved significantly during the last 30 days. You really need to look at the SEC yield and apply an adjustmen...
by ogd
Tue Nov 29, 2016 5:03 pm
Forum: Investing - Theory, News & General
Topic: Interm. Term muni - price drop vs sec yield increase
Replies: 18
Views: 1542

Re: Interm. Term muni - price drop vs sec yield increase

Would appreciate if someone could explain why the SEC yield on interm. Term muni fund has gone up by only 26bps (1.64 to 1.90) between nov 8 and nov 28 even though the price has dropped by 3.2% and the duration is 5 yrs. shouldn't we have expected the sec yield to move by a number closer to (price ...
by ogd
Sat Nov 26, 2016 1:36 pm
Forum: Investing - Theory, News & General
Topic: single bonds vs bond funds with increasing interest rates
Replies: 13
Views: 1585

Re: single bonds vs bond funds with increasing interest rates

Now lets assume that the day after I purchase the fund interest rates rise by 1%. I should expect a higher dividend distribution for the following 5.5-7 years but the fund value will be lower. You shouldn't necessarily expect a higher dividend immediately, but you should expect a higher yield throu...
by ogd
Tue Nov 22, 2016 4:00 pm
Forum: Investing - Theory, News & General
Topic: single bonds vs bond funds with increasing interest rates
Replies: 13
Views: 1585

Re: single bonds vs bond funds with increasing interest rates

What I am trying to ask is how does a bond fund function and when can I expect the fund to reach par when interest rates fluctuate or continue to decrease? How does that play out as new bonds are bought and old funds sold before maturity? Correct me if I am wrong, but a fund like VG Total Bond Fund...
by ogd
Mon Nov 21, 2016 6:29 pm
Forum: Investing - Theory, News & General
Topic: What does a bond bear market look like?
Replies: 91
Views: 7998

Re: What does a bond bear market look like?

Anna, I know that higher rates actually lead to higher returns eventually, but doesn't that assume that rates down keep rising for let's say 30 years (mirror image of the bull market. ) No, there are no other assumptions, other than bonds being safe and not defaulting. The recent interest rate incr...
by ogd
Fri Nov 18, 2016 4:18 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19386

Re: Why are bonds dropping? They are supposed to be safe.

"market participants don't have access to the 1% savings account" Can you explain this? I know i am limited to $5mm in my online accts is that what you mean? No, I mean that institutions cannot use these accounts, not to mention getting the $250K FDIC insurance, and they generate the majo...
by ogd
Thu Nov 17, 2016 5:38 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19386

Re: Why are bonds dropping? They are supposed to be safe.

"It's unreasonable to say that the bond in my example is still a hyper-competitive 8.75% investment when it's easily beaten by switching to a 1% savings account." There is a mistake somewhere. Nobody is going to pay you $x for your bond if they could make more money by putting $x in a 1% ...
by ogd
Thu Nov 17, 2016 1:58 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19386

Re: Why are bonds dropping? They are supposed to be safe.

I will try one more time then quit. If you bought this bond when issued, you paid $100 (par). You get paid $8.75 per year every year and on the maturity date you get your $100 purchase price back. My original point was that bonds are guaranteed investments (absent a default by the issuer). Yes, all...
by ogd
Thu Nov 17, 2016 1:48 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19386

Re: Why are bonds dropping? They are supposed to be safe.

I'm the opposite. I'm a bond fund investor who is ALWAYS happy. I love that they are self-correcting. If interest rates go up, the value of my bond holdings goes down... but I start getting larger dividends! What kind of bonds do that? Your yield goes up, but the bonds you already own don't start p...
by ogd
Wed Nov 16, 2016 8:03 pm
Forum: Investing - Theory, News & General
Topic: Why total bond fund rather than short-maturity fund?
Replies: 30
Views: 2623

Re: Why total bond fund rather than short-maturity fund?

There is a possible analysis that one should own long bonds if portfolio is almost all stocks May I ask where this analysis is from? I believe my analysis is pretty rigorous, as it contains about 90 years of historical data. The most often quoted result here is Larry Swedroe's paper: https://www.bo...
by ogd
Wed Nov 16, 2016 5:55 pm
Forum: Investing - Help with Personal Investments
Topic: Asking for advice for VWIUX......
Replies: 17
Views: 1376

Re: Asking for advice for VWIUX......

He strongly felt that in today's tumultuous municipal bond fund market, individual bonds are the "way to go". I know....I have read about funds vs. individual bonds. I am asking because I am inexperienced with municipal bond funds for the long term. Do not listen to him. It's as if you ta...
by ogd
Wed Nov 16, 2016 4:16 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19386

Re: Why are bonds dropping? They are supposed to be safe.

"It's not just about the price, it's also about the yield -- which fluctuates with price" Not true. The yield does not "fluctuate." If I buy a bond at par that pays 4%, I earn 4% per year and get my money back when the bond matures. A bond is just a contract where you know exact...
by ogd
Wed Nov 16, 2016 2:01 pm
Forum: Investing - Theory, News & General
Topic: Why total bond fund rather than short-maturity fund?
Replies: 30
Views: 2623

Re: Why total bond fund rather than short-maturity fund?

Why Total Bond over an intermediate-term Treasury fund? Portfolio 1 is VBMFX (Vanguard Total Bond), Portfolio 2 is VFITX (Vanguard Intermediate-Term Treasury). Average duration is slightly shorter (5.3 years vs. 5.8) on VFITX than on VBMFX/BND. Seems to me that investors have not been rewarded for ...
by ogd
Wed Nov 16, 2016 1:48 pm
Forum: Investing - Theory, News & General
Topic: Why total bond fund rather than short-maturity fund?
Replies: 30
Views: 2623

Re: Why total bond fund rather than short-maturity fund?

Reading through the official boggle wiki on the 3-fund portfolio, it seems that a total bond fund is being suggested. Why suggest a fund with more risk than needed? Why not a completely short-maturity bond fund? All risk is not created equal. Interest rate risk , the difference between short and in...
by ogd
Mon Nov 14, 2016 7:43 pm
Forum: Investing - Theory, News & General
Topic: Muni bonds are getting killed. Are you bailing out?
Replies: 75
Views: 9858

Re: Muni bonds are getting killed. Are you bailing out?

Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase...
by ogd
Mon Nov 14, 2016 4:17 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19386

Re: Why are bonds dropping? They are supposed to be safe.

" You should not own bonds if you cannot stand a loss." Actually, if you "own bonds" (not bond funds) your return is assured (as long as the issuer doesnt default). If you hold the bonds until they mature you get your intereat payments plus the return of your principal at maturi...
by ogd
Mon Nov 14, 2016 3:50 pm
Forum: Investing - Theory, News & General
Topic: Adding to interm. Term muni VWIUX (MUB dropping fast)
Replies: 5
Views: 770

Re: Adding to interm. Term muni VWIUX (MUB dropping fast)

I am wondering how much I should speed up my allocations to VWIUX. I expect that later today VWIUX will fall around 1%. Should I buy my entire allocation gap today or should I assumed that these price drops will continue for at least a few more weeks? Any thoughts. Do not assume anything about the ...
by ogd
Mon Nov 14, 2016 3:35 pm
Forum: Investing - Help with Personal Investments
Topic: Quantitative comparison of Roth vs Traditional vs no IRA
Replies: 6
Views: 747

Re: Quantitative comparison of Roth vs Traditional vs no IRA

Are my calculations correct? Or am I missing something? https://drive.google.com/file/d/0B59UXx ... sp=sharing I think you missed taxes on dividends or bond interest. This affects growth rate (base of the growth exponentiation), and is very damaging. Taxable should pretty much always lose. Or did I...
by ogd
Mon Nov 14, 2016 3:27 pm
Forum: Investing - Theory, News & General
Topic: Cap Weighted vs Equally Weighted Index
Replies: 27
Views: 2075

Re: Cap Weighted vs Equally Weighted Index

Putting higher costs of equally weighted funds aside. I am just talking about measuring active portfolio performance vs an index like an SP500. We always compare the performance to a cap weighted index and I just wanted to know the reason for that. Wouldn't an actual total return be better measured...
by ogd
Mon Nov 14, 2016 12:00 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds suck
Replies: 46
Views: 6406

Re: Bonds suck

Interest rates have nowhere to go but up this point. Predict future returns from there. This is true for interest rates (as in, Fed overnight), but absolutely not for bond yields (as in, longer terms), which is the relevant question. 5 year yields were almost 1% lower back in 2013. You are using th...
by ogd
Mon Nov 14, 2016 11:50 am
Forum: Investing - Theory, News & General
Topic: Web site that lists ROI for individual stocks?
Replies: 3
Views: 367

Re: Web site that lists ROI for individual stocks?

I would like to find a web site that lists the ROI (before taxes) for individual stocks. By ROI I mean what would be the percentage growth of the stock over a 1 / 5 / 10 year period without considering taxes. This info. exists for mutual funds, but does it exist for stocks? I can look at a site lik...
by ogd
Mon Nov 14, 2016 11:44 am
Forum: Investing - Help with Personal Investments
Topic: Bonds suck
Replies: 46
Views: 6406

Re: Bonds suck

Now with the election, it looks like bonds have taken a total dump. What is the current recommended strategy regarding bonds? Just ride it out? Yes, absolutely, and enjoy the higher yield as a silver lining. It's hard to say yet how much higher because SEC yield is a 30-day average, but the 5 year ...
by ogd
Thu Nov 03, 2016 6:53 pm
Forum: Investing - Help with Personal Investments
Topic: Understanding spread between bond fund SEC yield and Distribution Yield
Replies: 8
Views: 919

Re: Understanding spread between bond fund SEC yield and Distribution Yield

My advisor has suggested moving to a ladder of individual bonds for a number of reasons including greater overall yield. First off: DO NOT DO THIS unless it's specifically and only for complex tax reasons. Tell the advisor to go start a fund if he thinks he can find bonds better enough than a respe...
by ogd
Thu Nov 03, 2016 4:29 pm
Forum: Investing - Theory, News & General
Topic: Individual stocks that are sound w/ indexing
Replies: 84
Views: 5380

Re: Individual stocks that are sound w/ indexing

I don't understand the apprehension towards owning individual equities that are universally known to be run by great, honest management! Does anyone on this forum think Warren Buffett, Sergio Brin, Larry Paige, Elon Musk, Jeff Bezos, eg., companies are going out of business in twenty or thirty year...
by ogd
Thu Nov 03, 2016 11:13 am
Forum: Investing - Help with Personal Investments
Topic: Distribution yields for TE and taxable bond funds almost same
Replies: 10
Views: 943

Re: Distribution yields for TE and taxable bond funds almost same

True but your assumption that there are always efficient markets and thus a muni fund that is yielding more on a tax-adjusted basis must be, by definition, riskier isn't necessarily true I don't think. It doesn't require perfectly efficient markets at all, just markets good enough that I can't do b...
by ogd
Tue Nov 01, 2016 11:16 am
Forum: Investing - Theory, News & General
Topic: Why can't stocks be deterministically/objectively/mechanically priced?
Replies: 75
Views: 3815

Re: Why can't stocks be deterministically/objectively/mechanically priced?

The question is in the title: why can't stocks be deterministically/objectively/mechanically priced? By this I mean, why is it not a system where, say, companies hook up their accounting systems to the stock exchange, and share prices are computed based off the hard numbers in companies' books? Tha...
by ogd
Fri Oct 28, 2016 2:17 pm
Forum: Investing - Help with Personal Investments
Topic: Distribution yields for TE and taxable bond funds almost same
Replies: 10
Views: 943

Re: Distribution yields for TE and taxable bond funds almost same

I tend to look at both but yeah, if TE is providing a similar yield then it becomes a no-brainer especially if you are at some of the higher tax brackets Thanks for responding. Essentially, this is my question: Is it a no-brainer? Or, should I rely more heavily on SEC yield since it may be a better...
by ogd
Wed Oct 26, 2016 4:23 pm
Forum: Personal Finance (Not Investing)
Topic: Liquidating RSUs
Replies: 41
Views: 3686

Re: Liquidating RSUs

Dublin is right. I'm not aware of any laws that define punishment for trades that are NOT made, even if the decision to do nothing is based on insider information. Put another way: If the CEO/CFO knows that a quarterly or annual report is going to substantially beat guidance, and therefore likely d...
by ogd
Wed Oct 19, 2016 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Individual Stocks or ETF
Replies: 13
Views: 963

Re: Individual Stocks or ETF

I would like to keep investing for the very LONG TERM so my questions is would it be better to invest in a diversified stock portfolio or ETF. My thoughts are to invest in well established companies with long term growth potential and decent dividends. Absolutely, the index fund. Particularly for t...
by ogd
Tue Oct 18, 2016 4:24 pm
Forum: Investing - Help with Personal Investments
Topic: Diversify Bonds without LONG-term bonds?
Replies: 13
Views: 884

Re: Diversify Bonds without LONG-term bonds?

I know I'm not supposed to predict interest rates but since rates have been at an all-time low, there's really no room to go but up which of course have a negative effect on Bonds. It's funny that your thread should pop up at the same time as another poster is lamenting the recent performance of LT...
by ogd
Tue Oct 18, 2016 11:18 am
Forum: Investing - Help with Personal Investments
Topic: Taxable Bond Allocation & Lower ETF Costs?
Replies: 11
Views: 1067

Re: Taxable Bond Allocation & Lower ETF Costs?

Questions: 1. My wife and I are aiming to invest ~$30k/yr with a 50/50 allocation in a joint taxable account. Does it make sense to invest our bond allocation in tax-exempt bonds even though we are in a relatively low tax bracket already? --- No. --- So you think it would make more sense financiall...
by ogd
Mon Oct 17, 2016 3:18 pm
Forum: Investing - Theory, News & General
Topic: So LT bonds haven't been so bad after all
Replies: 26
Views: 2325

Re: So LT bonds haven't been so bad after all

Just for those who haven't been paying attention and have listened to the masses claiming LT bonds were not the place to be, have you checked the returns you've been leaving on the table? Those are past returns. In bonds, they come necessarily at the expense of future returns through lower yields. ...
by ogd
Thu Oct 13, 2016 2:13 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to make sense of adding bonds
Replies: 47
Views: 4941

Re: Trying to make sense of adding bonds

If you are ever interested in debating it, my premise is simply that: 1) Equities tend to outperform over the long run, and with a 30-40 year duration, you are very likely to have more money in the equities portion, EVEN IF there is a downturn at the time of retirement. 2) A flexible withdrawal str...
by ogd
Thu Oct 13, 2016 12:54 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to make sense of adding bonds
Replies: 47
Views: 4941

Re: Trying to make sense of adding bonds

If all else is equal (and it often isn't because of limited 401(k) options), it is slightly better to put assets with higher expected returns in the Roth . If your traditional account has lower than expected returns and you fall into a lower tax bracket, the IRS will not give back the same share of...
by ogd
Thu Oct 13, 2016 12:25 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to make sense of adding bonds
Replies: 47
Views: 4941

Re: Trying to make sense of adding bonds

ALSO, the article DOES NOT COMMENT on time of distribution. Using the information presented in the article, one could devise a flexible strategy of withdrawal from the account to use a natural rebalancing (taking out bonds only, as stocks are down) until the stocks recover. For longer term recoveri...
by ogd
Wed Oct 12, 2016 1:55 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to make sense of adding bonds
Replies: 47
Views: 4941

Re: Trying to make sense of adding bonds

I went through extensive explanation of how this would work, and how one can use the fluidity available between Roth and Traditional accounts to mitigate risk and avoid bad things happening in a downturn, so I will not belabor that here. Hi Dulocracy -- would I be correct in summarizing that you ha...
by ogd
Tue Oct 11, 2016 3:06 pm
Forum: Investing - Theory, News & General
Topic: Active vs Passive
Replies: 30
Views: 2640

Re: Active vs Passive

I had never heard of Robinhood until today. I can't believe there really is a place where you can buy (domestic) stocks for $0. I know this is about active vs passive. But what if someone has say $5M liquid at their disposal. Couldn't they use Robinhood to create their own ersatz total stock market...
by ogd
Mon Oct 10, 2016 3:23 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to make sense of adding bonds
Replies: 47
Views: 4941

Re: Trying to make sense of adding bonds

I fully understand tax-adjusted asset allocation. To be clear, this is relevant at the time that money is taken out of an account. Until that time, the accounts are fluid. Nope, it is relevant all along the way. You have put your Roth space at risk during the accumulation phase. That can cost you r...
by ogd
Mon Oct 10, 2016 2:27 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to make sense of adding bonds
Replies: 47
Views: 4941

Re: Trying to make sense of adding bonds

I do not think we are really able to continue the discussion productively if we have to consider traditional risks of stocks, but not traditional performance over a long duration. You are saying to ignore the benefits of a strategy you do not like, while pointing out the risks that are directly tie...
by ogd
Mon Oct 10, 2016 12:34 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to make sense of adding bonds
Replies: 47
Views: 4941

Re: Trying to make sense of adding bonds

Aha! I have identified our main issue of dispute. You would be correct if one day someone simply pulled all of their money out of both accounts on the day of retirement. That is not the way it works, however. At retirement, one starts to draw down- slowly- over time (and one builds over time). Dulo...
by ogd
Sun Oct 09, 2016 11:42 pm
Forum: Investing - Theory, News & General
Topic: Active vs Passive
Replies: 30
Views: 2640

Re: Active vs Passive

But taking the management fees and expense fees out, how many managers beat the index? Is there any research on that? I've seen research finding that active manager as a group slightly outperform the market before fees and taxes, but the fees greatly overwhelm that. That leaves you with the problem...

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