Search found 107 matches

by restingonmylaurels
Mon Nov 13, 2017 11:25 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2295

Re: Right Bond Allocation - Government v. Credit?

For any particular investor CDs are certainly a viable option, but here are some reasons to prefer bonds: 1. A bond fund is more convenient than managing a passle of CDs. This includes purchasing, redeeming, and rebalancing. 2. Most 401k plans do not offer CDs as an option. 3. In an IRA you might h...
by restingonmylaurels
Mon Nov 13, 2017 3:08 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2295

Re: Right Bond Allocation - Government v. Credit?

I see the point, but there is another way to look at it. Just like costs in mutual funds matter, annual returns matter. If one could really get an additional 1% annual return with a certain bond type, over 16 years the 1% could compound to 17%. Some of the many schools that are out there: 1. Treasu...
by restingonmylaurels
Sat Nov 11, 2017 6:50 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2295

Re: Right Bond Allocation - Government v. Credit?

dbr wrote:
Thu Nov 09, 2017 5:19 pm
Yield from investments should not be equated to a withdrawal in support of personal cash flow. It is not as if dividends paid by a bond fund are free money.
dbr, can you explain further what you mean that yield should not be equated to a withdrawal?
by restingonmylaurels
Thu Nov 09, 2017 12:25 pm
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2295

Re: Right Bond Allocation - Government v. Credit?

The choice depends on the resulting property of your whole portfolio. Anything you can affect by choosing one bond allocation over another can be more largely and directly affected by choosing your stock/bond allocation. That only changes if your portfolio is almost entirely bonds. Is your portfoli...
by restingonmylaurels
Wed Nov 08, 2017 8:06 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2295

Re: Right Bond Allocation - Government v. Credit?

Todd, your chart is very illuminating. Would you be able to add Wellesley Income as a fourth fund on the chart over that same time period?
by restingonmylaurels
Mon Nov 06, 2017 9:16 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2295

Re: Right Bond Allocation - Government v. Credit?

Assuming you are comfortable with your stock/bond split (a first order decision), the choice of bond allocation is much less consequential (definitely a second order decision). It all comes down to what you value most from your bond allocation: • Do you want the highest expected return, and are not...
by restingonmylaurels
Sun Nov 05, 2017 11:38 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2295

Right Bond Allocation - Government v. Credit?

In looking at my next lump-sum investment, I analyzed my bond holdings and found out that I am 2/3 credit (corporates domestic and global) and 1/3 government (Treasuries, GNMAs, foreign). This is probably due to the higher yields when I can decide but also the tilts of the funds when I do not decide...
by restingonmylaurels
Sun Sep 03, 2017 4:35 am
Forum: Local Chapters and Bogleheads Community
Topic: There are many roads to ... Baile Átha Cliath? [Dublin...]
Replies: 3
Views: 689

There are many roads to ... Baile Átha Cliath? [Dublin...]

For my 100th post, I thought I would examine a BH sacred cow, albeit with the appropriate sense of trepidation. :( That concerns the oft-used saying that “there are many roads to Dublin.” :confused Now, I actually live in Dublin (the original one, the black pool, Baile Átha Cliath in modern Irish). ...
by restingonmylaurels
Fri Sep 01, 2017 9:11 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio analysis tool
Replies: 4
Views: 342

Portfolio analysis tool

I am wondering what tool do BHs use to analyze their portfolios. Portfolio Watch would be great, given its ready access to all of one's VG funds, but it seems to make a number of errors, including its allocations between stocks, bonds, and short-term reserves and between domestic and international, ...
by restingonmylaurels
Thu Aug 31, 2017 1:41 pm
Forum: Investing - Help with Personal Investments
Topic: A Guide to Moving Abroad
Replies: 10
Views: 1442

Re: A Guide to Moving Abroad

As someone who has lived around the world, both while working full-time and part-time, I would advise trying to continue to fund retirement plans and Social Security in the U.S. and continuing to invest in the U.S., wherever you are in the world. The reasons are manifold but for example, if you join...
by restingonmylaurels
Thu Aug 31, 2017 8:17 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2538

Re: Riskier Bonds vis a vis AA

High-yield bonds should probably be treated as half bonds and half stocks in determining your risk level; consider what happened to them when the stock market crashed in 2008. The 50% ratio does depend on the specific fund; Vanguard High-Yield Corporate, for example, holds higher-quality junk. This...
by restingonmylaurels
Thu Aug 31, 2017 8:08 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund - buying the interest?
Replies: 7
Views: 888

Re: Bond Fund - buying the interest?

Many are familiar with the concept of "not buying the dividend" when purchasing equity funds. When you're dealing with bond funds, there is a difference from equity funds. Many (not all) of Vanguard funds accrue dividends daily. This means that if you buy $10,000 on September 15, the dividend that ...
by restingonmylaurels
Wed Aug 30, 2017 2:53 am
Forum: Investing - Theory, News & General
Topic: Rob Arnott: Dump US stocks buy EM
Replies: 65
Views: 6175

Re: Rob Arnott: Dump US stocks buy EM

Personally, our portfolio has a considerable tilt toward emerging markets. But I wouldn’t be selling U.S. stocks to load up on emerging markets, based on Arnott’s 'reversion to the mean’ forecasts. U.S. stocks can easily stay expensive for years and still provide healthy returns. Living outside the...
by restingonmylaurels
Wed Aug 30, 2017 2:02 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2538

Re: Riskier Bonds vis a vis AA

Would it be appropriate to consider these riskier bond funds to be say half stock and half bond or some other breakdown like that? Yes. From a somewhat fuzzy memory short term corporate were calculated as .1 equity, IT was .2 and HY was .3. If my stock/bond asset allocation is 50-50, but VG HYC/EM ...
by restingonmylaurels
Tue Aug 29, 2017 11:10 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2538

Re: Riskier Bonds vis a vis AA

Risk is not usually rewarded as well with bonds as with equities. This is why experts like Larry Swedroe say "Take your risks on the equity side." Bonds are for safety , and stocks are for growth. "A fitting conclusion is this advice from David Swensen, the highly regarded chief investment officer ...
by restingonmylaurels
Mon Aug 28, 2017 10:57 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2538

Riskier Bonds vis a vis AA

Being a bit conservative investing-wise, I have long been a proponent of taking some risk in bond holdings, such a higher quality junk and EM bond funds. I think the recent 5 and 10-year returns support this concept well and allow for more sleep insurance than allocating the same amounts to stocks. ...
by restingonmylaurels
Tue Aug 22, 2017 11:25 am
Forum: Investing - Help with Personal Investments
Topic: How to Become a Spender?
Replies: 16
Views: 1613

How to Become a Spender?

I am having a financial problem that may be familiar (or not?) to many BHs. Having spent my lifetime saving and investing, now that I can, I find I am having trouble switching my mindset to become a spender. While great for the longevity of my investments and heirs, as my withdrawal rate is pretty m...
by restingonmylaurels
Sat Aug 12, 2017 6:02 am
Forum: Investing - Help with Personal Investments
Topic: Has anyone converted their interest income to QDI?
Replies: 4
Views: 401

Has anyone converted their interest income to QDI?

Interest income earned from CDs and bond funds is taxed at progressive federal rates while dividend income from stocks is not taxed or is taxed at a (mostly) flat rate if qualified dividend income (QDI). All things being equal, it would be preferable to receive one’s income distributions from stocks...
by restingonmylaurels
Thu Aug 10, 2017 3:13 pm
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1364

Re: Does VG Compound Interest?

You will see if you look at fund reports that the bond funds have investments in institutional money market funds (for liquidity and other purposes), so whatever interest arrives and is part of the daily declaration of dividends is invested in at least a money market fund and thus is earning a form...
by restingonmylaurels
Thu Aug 10, 2017 8:44 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1364

Re: Does VG Compound Interest?

There is no cash to reinvest until the coupon is actually paid. The accrued interest on a bond is not compounded by the bond issuer either. Sure, but these coupons are not all paid the day before fund distribution date. They may be paid at various days all during the month. What happens to that cas...
by restingonmylaurels
Thu Aug 10, 2017 8:21 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1364

Re: Does VG Compound Interest?

There is no cash flow to invest with an accrual. An accrual is an accounting method to account for that part of the interest that you have already earned but that won't get paid until the coupon date or when/if the bond is sold before maturity. Agree that cash flow and accrual are different as this...
by restingonmylaurels
Thu Aug 10, 2017 7:48 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1364

Does VG Compound Interest?

From the Management fees and fund distributions wiki, I noted that most VG bond funds accrue/declare interest daily and pay it to fund holders monthly. I am wondering if these interest income accruals, which do not show up as part of the fund’s NAV, are they themselves subject to compounding and if ...
by restingonmylaurels
Thu Aug 10, 2017 3:01 am
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 5331

Re: Should TBM Be Your Only Bond Fund?

It seems that you could get more yield for less interest rate risk by allocating the fixed income part of your portfolio equally to Prime MMR and HYC. TBM has a yield of 2.37% and duration of 6.1 years. Prime MMR has a yield of 1.10% and duration of 0.3 years; HYC has a yield of 4.58% and a duratio...
by restingonmylaurels
Wed Aug 09, 2017 11:57 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

No, because you can always realize capital gains whenever you want to, by selling shares for a capital gain and buying them back. This is most commonly done when you are temporarily in the 15% bracket and pay no tax on your capital gains. The difficulty is that I do not see that I can ever be in th...
by restingonmylaurels
Wed Aug 09, 2017 7:18 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

No, because you can always realize capital gains whenever you want to, by selling shares for a capital gain and buying them back. This is most commonly done when you are temporarily in the 15% bracket and pay no tax on your capitl agins. The difficulty is that I do not see that I can ever be in the...
by restingonmylaurels
Wed Aug 09, 2017 1:43 am
Forum: Investing - Help with Personal Investments
Topic: Never Needing to Withdraw Capital?
Replies: 8
Views: 1424

Re: Never Needing to Withdraw Capital?

Scenario 1 would be a 1% withdrawal rate. Quite safe Scenario 2 would be a 2% withdrawal rate. Again quite safe. I am assuming ~2% interest and ~2% dividend for the bond and stock funds. Someone will correct me if I'm off target. :wink: bloom2708, thanks for that. Could you fill in a few of the det...
by restingonmylaurels
Tue Aug 08, 2017 2:36 pm
Forum: Investing - Help with Personal Investments
Topic: Never Needing to Withdraw Capital?
Replies: 8
Views: 1424

Never Needing to Withdraw Capital?

I have a simple scenario and I know BHs talk a lot about this topic, so if it has already been fully covered, I would appreciate a link. It has to do with living off of the income from one’s investments during retirement, under two scenarios, without ever drawing down the capital. Scenario 1: I have...
by restingonmylaurels
Tue Aug 08, 2017 10:16 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

I am looking at these things as a percent of the fund value. If you sell a fund for $10,000 and pay 5% in capital-gains taxes, you will have $9500 to reinvest. But if the new fund grows by 0.5% per year more than the old fund, it will catch up. For example, if the old fund has doubled in value by t...
by restingonmylaurels
Mon Aug 07, 2017 8:19 am
Forum: Investing - Theory, News & General
Topic: Anyone following the latest in Bitcoin and cryptocurrency news?
Replies: 25
Views: 5424

Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Governments have and will continue to regulate virtual currencies like BTC in areas like money transmitting and money laundering, likely both increasing and diminishing their appeal to different types of more mainstream users. That is, as soon as governments determine what to define it as (e.g. prop...
by restingonmylaurels
Sun Aug 06, 2017 1:44 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

I am looking at these things as a percent of the fund value. If you sell a fund for $10,000 and pay 5% in capital-gains taxes, you will have $9500 to reinvest. But if the new fund grows by 0.5% per year more than the old fund, it will catch up. For example, if the old fund has doubled in value by t...
by restingonmylaurels
Sun Aug 06, 2017 10:20 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

Selling these funds in taxable, and replacing them with index funds, will probably cost you less in taxes now than it saves you in future years from capital gains distributions. If a fund is costing you half a percent per year, and you lose 5% to taxes when you sell, you'll actually be well ahead t...
by restingonmylaurels
Sun Aug 06, 2017 9:35 am
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 5331

Should TBM Be Your Only Bond Fund?

Across a few recent posts, I have listened to others and gathered my thoughts on what I have been doing on the fixed income side of my portfolio and have concluded that it is sub-optimal for TBM to be my only bond fund. It seems that you could get more yield for less interest rate risk by allocating...
by restingonmylaurels
Sun Aug 06, 2017 9:18 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

If the reason you are stuck with STAR is that you hold STAR in a taxable account, it's probably worth switching, even if you would have to pay capital-gains tax. The problem with STAR is that its taxable stock funds distribute a lot of capital gains, and STAR itself has to distribute even more capi...
by restingonmylaurels
Sun Aug 06, 2017 3:36 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

It seems you are aware of the risks. This is a very good bond portfolio for yield and long-term return. It is not a good bond portfolio for stability and positive return during bear markets. Is this an accurate understanding of your strategy? Your approach is defensible and your fund selection is g...
by restingonmylaurels
Sun Aug 06, 2017 3:18 am
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing? [Ultra-short bond vs Prime MM]

This isn't unknown. The Fed has said 6 quarter price increases over the next 18 mo, the bond market doesn't believe them and has priced in 4. I was relying on Jbolden1517's statement. I think the tool that Doc pointed you to is impressive. It nicely breaks down everything. alex_686 and jbolden1517,...
by restingonmylaurels
Sat Aug 05, 2017 1:58 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

If I had a choice, I would probably only have 4 bonds funds but I am stuck with the other three (STIG, GNMA, LTIG) through my investment in STAR. USB is a higher-paying alternative for money markets, TBM is, well, TBM, Wellesley provides exposure also to higher-paying stock dividends, and I have lon...
by restingonmylaurels
Sat Aug 05, 2017 7:49 am
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing? [Ultra-short bond vs Prime MM]

The market believes that the Fed will raise rates 4 times. With that belief we can apply the No Arbitrage Principle and use Forward Returns to ensure that the market efficiently represents those views. When it comes to short term rates, historically the market is very good with with. alex_686, I wa...
by restingonmylaurels
Fri Aug 04, 2017 4:22 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Re: Bond Fund Piñata

Midareff, You reminded about about this M* tool, which I had not looked at in a long time. More to your point, which I believe is that bonds funds in the last year have lost value, beyond their yield. Is that not what one would expect in a rising interest rate environment? I have never been a big pr...
by restingonmylaurels
Fri Aug 04, 2017 12:38 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3340

Bond Fund Piñata

Over time, the number of bond funds I hold directly and indirectly has risen to ten (10)! And every time I think I should cut down that number, I re-discover the reason I opened each separate fund, to cover a box in the 9-square bond style box for duration and credit quality, with a third axis of do...
by restingonmylaurels
Thu Aug 03, 2017 11:40 am
Forum: Investing - Theory, News & General
Topic: VGSTX: Is Vanguard STAR Still A Star?
Replies: 22
Views: 3699

Re: VGSTX: Is Vanguard STAR Still A Star?

I have been invested in this fund for decades. Every time I think about moving away from it (like during the period of poor performance by US Growth), I find a reason to stick around. Last time I looked at Wellington as a replacement, I decided I did not like Wellington's lack of international expos...
by restingonmylaurels
Thu Aug 03, 2017 3:17 am
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing? [Ultra-short bond vs Prime MM]

grabiner,

I appreciate the reference to STIG, I already own a bunch through my STAR fund. Is there any way to discover how often a fund's lower credit quality bonds have actually defaulted?
by restingonmylaurels
Wed Aug 02, 2017 3:11 pm
Forum: Investing - Help with Personal Investments
Topic: Do you hold your VG mutual funds with VG Group or VG Brokerage?
Replies: 19
Views: 1542

Re: Do you hold your VG mutual funds with VG Group or VG Brokerage?

I really don't trade much and the mutual fund dividend/CG re-investments are automatic. Much too early for RMDs. Without any true benefit from SIPC, I cannot find any benefit to combine these accounts, as I much prefer the way my mutual fund account operates as opposed to my brokerage account. I kno...
by restingonmylaurels
Wed Aug 02, 2017 3:02 pm
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing? [Ultra-short bond vs Prime MM]

I have read the prior posts but still do not see the issue I am discussing, that the last 12 months returns for USB and TBM may repeat themselves over the next 24 months due to the continuing rate hikes. I guess I can check back in at the end of 2019 and let you know how it went sticking with shorte...
by restingonmylaurels
Wed Aug 02, 2017 3:19 am
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing? [Ultra-short bond vs Prime MM]

*3!4!/5!, yes I had a look-see.

Can you please make your point either by writing it out here or by copying in the specific parts of the previous thread you are referring to that answers my specific question.
by restingonmylaurels
Wed Aug 02, 2017 3:13 am
Forum: Investing - Help with Personal Investments
Topic: Do you hold your VG mutual funds with VG Group or VG Brokerage?
Replies: 19
Views: 1542

Re: Do you hold your VG mutual funds with VG Group or VG Brokerage?

I took a quick look at the longer one but it was not really answering what I was thinking about. It listed the purported benefits as: * Hold your Vanguard mutual funds, ETFs, and other brokerage securities in the same account. * Use a simpler online process to buy and sell mutual funds and securitie...
by restingonmylaurels
Wed Aug 02, 2017 2:34 am
Forum: Investing - Help with Personal Investments
Topic: Do you hold your VG mutual funds with VG Group or VG Brokerage?
Replies: 19
Views: 1542

Do you hold your VG mutual funds with VG Group or VG Brokerage?

I was in conversation with my Flagship representative the other day in which he pointed out that there was an Upgrade button on the Balances and Holdings webpage that allows me to consolidate my VG mutual funds under VG Brokerage. It says “You have Vanguard mutual fund and brokerage accounts registe...
by restingonmylaurels
Wed Aug 02, 2017 1:38 am
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing? [Ultra-short bond vs Prime MM]

alex_686, Any thoughts on why TBM has under-performed USB over the last year during a period of Fed rate hikes that I described in my last post (reprinted below)? It is this real world return that leads me to prefer short term bonds over the total bond market until the Fed's gets to the end of publi...
by restingonmylaurels
Tue Aug 01, 2017 4:41 pm
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing? [Ultra-short bond vs TBM)

Rkhusky, Your explanation is very helpful and concise. I am trying to expand that to see how it applies during times of rising rates. Understand I am already invested in Admiral funds in both USB and TBM but am trying to decide to what to do right now with new funds, none of which I need in the fore...
by restingonmylaurels
Tue Aug 01, 2017 2:17 am
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing?

alex_686, I appreciate the good explanation but I am not sure where your explanation finally leads one when determining which way to invest in bonds. Are you saying that an investment in TBM, with its higher yield, is always a better decision, as forward contracts and APT ensure that with what is kn...
by restingonmylaurels
Mon Jul 31, 2017 10:09 am
Forum: Investing - Theory, News & General
Topic: What am I missing? [Ultra-short bond vs Prime MM]
Replies: 50
Views: 6174

Re: What am I missing?

alex_686, I agree it is simplified. But every investor has to have a view of what they generally expect in the future, even if that view is only that markets will continue to act like markets have in the past. My view is the Fed will continue raising rates the Fed funds rate over the next few years ...