Search found 4509 matches

by rkhusky
Sat Dec 16, 2017 9:41 am
Forum: Investing - Theory, News & General
Topic: Asset allocation
Replies: 2
Views: 117

Re: Asset allocation

If you are at all conversant with spreadsheets and programming, it is instructive to try to replicate the Fama-French analysis using their 3-factor data sets. It really gives you a sense of how simple the factor model is, how well it works in many situations, and also its limitations.
by rkhusky
Sat Dec 16, 2017 9:34 am
Forum: Personal Finance (Not Investing)
Topic: be careful, no longer allowed to prepay local and state taxes for a deduction
Replies: 12
Views: 1014

Re: be careful, no longer allowed to prepay local and state taxes for a deduction

As far as I can tell, between this state and local tax cap and doing away with the personal exemption, I'll have about $7000 more income exposed to taxation than previously. Last year my total taxable income (line 43) was about $10K. (I'm retired, so that $10K is the taxable part of Social Security...
by rkhusky
Sat Dec 16, 2017 7:57 am
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

Caveat: I'm not a practitioner of factor investing, so have not gotten into the nuts and bolts of actually trying to set up a portfolio. This leads to my questions: 1) How can I know which fund to choose if loadings don't correspond to factor premium returns? Loadings do not correspond to premiums, ...
by rkhusky
Sat Dec 16, 2017 7:30 am
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

The above is incorrect. The factors are constructed such that they are zero for the market and involve long and short positions. There is no small factor or value factor in the standard formulation. See. e.g., http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/f-f_developed.html I ...
by rkhusky
Fri Dec 15, 2017 9:47 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

The Factor Model I was looking at was a general model, not FF exactly. My first read was the factor load was simply beta, pending further analysis. R2 comes into play but just for the model accuracy. So the stats made a little more sense like that. That sounds like the model that preceded FF, which...
by rkhusky
Fri Dec 15, 2017 9:45 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

The key difference is that the SmB factor is formulated to be zero for the market, being Small minus Big. Therefore, the SmB factor is zero for the market, even though the market contains small cap stocks. Using terminology like a small factor can lead to people mistakenly thinking that the market ...
by rkhusky
Fri Dec 15, 2017 9:33 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

Well, there is a Morningstar video out there where the example of the disappeared Small-Cap effect re-emerging with the S&P 600 Small-Cap Index is discussed. I didn't make this up. This was also discussed in another thread. The small cap effect is not the same as the SmB factor in the Fama French f...
by rkhusky
Fri Dec 15, 2017 9:26 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

I think most people here who know about SmB and HmL understand that small factor refers to SmB. The reverse is not true: if I talk about HmL and SmB very few will understand what I am saying. Given the discussion has tended towards definitional semantics I'll bow out. Unfortunately, you just cause ...
by rkhusky
Fri Dec 15, 2017 9:21 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

If I had 20 years of history of the RUSSELL 2000 and the same for a small cap fund and did an ordinary least squares regression I would get a number for beta. If I did the same for a LC vs. the 2000 beta should be smaller, proving a SC premium exists for SC funds when regressed with their data. Or ...
by rkhusky
Fri Dec 15, 2017 9:15 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

Well, there is a Morningstar video out there where the example of the disappeared Small-Cap effect re-emerging with the S&P 600 Small-Cap Index is discussed. I didn't make this up. This was also discussed in another thread. The small cap effect is not the same as the SmB factor in the Fama French f...
by rkhusky
Fri Dec 15, 2017 9:12 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

The above is incorrect. The factors are constructed such that they are zero for the market and involve long and short positions. There is no small factor or value factor in the standard formulation. See. e.g., http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/f-f_developed.html I ...
by rkhusky
Fri Dec 15, 2017 9:07 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

Well, there is a Morningstar video out there where the example of the disappeared Small-Cap effect re-emerging with the S&P 600 Small-Cap Index is discussed. I didn't make this up. This was also discussed in another thread. The small cap effect is not the same as the SmB factor in the Fama French f...
by rkhusky
Fri Dec 15, 2017 8:47 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

I have said something similar in the past: As a TSM investor I am exposed to ALL factors, even ones that haven't been discovered yet. Well, no. What you have is a market portfolio where the factors are all cancelled out except for perhaps Profitability/Quality and maybe a whiff of momentum. You hav...
by rkhusky
Fri Dec 15, 2017 4:20 pm
Forum: Investing - Help with Personal Investments
Topic: Target date fund or custom allocation?
Replies: 5
Views: 400

Re: Target date fund or custom allocation?

Stick with the target date fund. You could go with a combination of Vanguard S&P 500, Extended Market and Total International, but you don't have a good low-cost diversified bond fund, so you would have to put that in an IRA. The target date fund handles all rebalancing for you, as well as glide pat...
by rkhusky
Fri Dec 15, 2017 4:05 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

The only thing confusing terminology is your post. Factor investors are always talking about factor loads, I.e. the recognition that many long-only primarily-index funds do not achieve full exposure to these factors but only partial exposure. It's not a confusion of terminology, it's a day to day f...
by rkhusky
Fri Dec 15, 2017 3:51 pm
Forum: Investing - Help with Personal Investments
Topic: TSP 401k Contribution Question
Replies: 17
Views: 918

Re: TSP 401k Contribution Question

Ignis; Do you have 26 or 27 pay periods for 2018? We have 27, but like I said above, not sure if everybody is the same. That is a good question. Our first pay date in 2018 is 01/04, and the first for 2019 is 01/03. I’ll have to check if either of those are affected by the New Years holiday. Hadn’t ...
by rkhusky
Fri Dec 15, 2017 2:48 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

The only thing confusing terminology is your post. Factor investors are always talking about factor loads, I.e. the recognition that many long-only primarily-index funds do not achieve full exposure to these factors but only partial exposure. It's not a confusion of terminology, it's a day to day f...
by rkhusky
Fri Dec 15, 2017 1:28 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

Honestly, you wouldn't say "I'm a factor investor whether I know it or not, because I invest in the market factor?" Actually yes you are a factor investor. That is the whole point of that comment. Granted he should have mentioned BETA, but didn't specifically mention but saying "such as" means exam...
by rkhusky
Fri Dec 15, 2017 12:56 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard not letting me convert $5500 tira to backdoor roth?
Replies: 8
Views: 1009

Re: Vanguard not letting me convert $5500 tira to backdoor roth?

gtaylor wrote:
Fri Dec 15, 2017 11:02 am
Six of one, I guess. If only they would get mobile check deposit on the brokerage accounts. You'd think that would be a standard feature at this point, it's got to save them (us!) some envelope opening expense.
You cannot directly transfer from your bank account into your Traditional IRA?
by rkhusky
Fri Dec 15, 2017 12:47 pm
Forum: Investing - Help with Personal Investments
Topic: What happened to Bridgeway???
Replies: 14
Views: 1238

Re: What happened to Bridgeway???

Thought it was a Quicken problem so I went online and checked my balances on Etrade and saw same thing. . You shouldn't have seen any change to your balance, since the dividend/cap gain compensated for the price drop. On the other hand, I would be quite distressed if I had placed a sell order yeste...
by rkhusky
Fri Dec 15, 2017 12:33 pm
Forum: Personal Finance (Not Investing)
Topic: baffle about Roth IRA contribution using turbo tax
Replies: 17
Views: 618

Re: baffle about Roth IRA contribution using turbo tax

You should end up with a different tax if you use $90,000 vs $96,500 for wages (1040 line 7), with everything else being the same. On the other hand, $90,000 in wages would result in the same tax as $96,500 in wages and $6,500 in IRA deduction (1040 line 32). But the latter is not how you do a Roth ...
by rkhusky
Fri Dec 15, 2017 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: Where to hold temporarily when transferring fund to Vanguard?
Replies: 5
Views: 180

Re: Where to hold temporarily when transferring fund to Vanguard?

You can have the money sent to whatever fund you want (e.g. you can send directly from your bank to VTSAX). If you want a temporary holding place or a place for cash, any of the money market funds will do. I use the Prime Money Market. The SEC yield ratio between Prime MM and Tax Exempt MM is curren...
by rkhusky
Fri Dec 15, 2017 9:07 am
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 71
Views: 2142

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

In all, researchers have identified at least 316 factors, of which Harvey, Liu, and Zhu [2016] point out that nearly all are unlikely to be robust in independent testing. Novy-Marx and Velikov [2015] and Green, Hand, and Zhang [2017] express complementary doubts about the prospective profits from e...
by rkhusky
Fri Dec 15, 2017 8:29 am
Forum: Investing - Help with Personal Investments
Topic: No earned income, Traditional IRA to ROTH Conversion?
Replies: 5
Views: 549

Re: No earned income, Traditional IRA to ROTH Conversion?

Interestingly in PA (Where I live), "The conversion of a traditional IRA to a Roth IRA is generally not taxable. That is, monies transferred from a traditional IRA to a Roth IRA via conversion (whether by a trustee-to-trustee transfer or a roll-over within 60 days) are generally not subject to Penn...
by rkhusky
Fri Dec 15, 2017 8:16 am
Forum: Personal Finance (Not Investing)
Topic: What are your favorite tax deductions and credits for 2017?
Replies: 33
Views: 1903

Re: What are your favorite tax deductions and credits for 2017?

+1 for child tax credit. + child exemptions this year. I'm hoping to be one of the lucky ones that pay negative taxes soon, although Roth conversions may prevent that. A nice choice to have.
by rkhusky
Thu Dec 14, 2017 4:56 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional, Roth, Taxable - what's my right mix?
Replies: 9
Views: 706

Re: Traditional, Roth, Taxable - what's my right mix?

You are able to deduct Traditional IRA contributions while in 25% tax bracket? If not, you should max two Roth IRA's. You are correct I am eligible for two front door roths. Could you expand on that I should -is there an ideal traditional/roth mix I should be aiming for? Max Traditional 401k and Ro...
by rkhusky
Thu Dec 14, 2017 4:50 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio review please for new boglehead
Replies: 6
Views: 523

Re: Portfolio review please for new boglehead

You have way too many funds. For starters, move all your existing 401K holdings into Schwab Indexed Retirement Tr Fd 2025 or WF/BlackRock S&P 500 Index, Vanguard Total Intl Stock Index Inst and SSgA U.S. Bond Index Fund in a ratio of 50/10/40. Move all IRA's to Vanguard and invest in Total Stock, To...
by rkhusky
Thu Dec 14, 2017 11:46 am
Forum: Investing - Help with Personal Investments
Topic: Traditional, Roth, Taxable - what's my right mix?
Replies: 9
Views: 706

Re: Traditional, Roth, Taxable - what's my right mix?

You are able to deduct Traditional IRA contributions while in 25% tax bracket? If not, you should max two Roth IRA's.
by rkhusky
Thu Dec 14, 2017 10:49 am
Forum: Investing - Theory, News & General
Topic: Vanguard VBMFX/VBTLX Bond Fund performance
Replies: 17
Views: 2166

Re: Vanguard VBMFX/VBTLX Bond Fund performance

Endpoint difference? Chart 11/30/17, table 12/13/17. Two weeks a difference makes! :shock: But in a bond fund? edit: Actually the expanded view starts on Jan 1 2007. But if you go to custom view, the default is exactly 10 years. Even that shows VBTLX above the category average, but by a much smalle...
by rkhusky
Thu Dec 14, 2017 10:46 am
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K or Roth 401K at this stage of the game??
Replies: 10
Views: 555

Re: Traditional 401K or Roth 401K at this stage of the game??

$300K salary with no other income and standard deductions puts you in the 33% tax bracket. With a combined SS benefit of $80K, of which 85% is taxed, and an RMD of $75K, that results in income of $145K, which puts you solidly in the 25% bracket, with no other income and standard deductions. Based on...
by rkhusky
Thu Dec 14, 2017 10:36 am
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K or Roth 401K at this stage of the game??
Replies: 10
Views: 555

Re: Traditional 401K or Roth 401K at this stage of the game??

mevans154 wrote:
Thu Dec 14, 2017 10:31 am

2. My current marginal tax rate is approximately 22.5%
That looks more like an average tax rate, rather than a marginal rate. Marginal rate is related to how much your taxes would go up if you added one more dollar to your income.
by rkhusky
Thu Dec 14, 2017 10:34 am
Forum: Investing - Theory, News & General
Topic: Vanguard VBMFX/VBTLX Bond Fund performance
Replies: 17
Views: 2166

Re: Vanguard VBMFX/VBTLX Bond Fund performance

Don't even bother to click on the expanded view, just scroll down to "Trailing Total Returns VBTLX" and see that VBTLX performed less well than the category average in every time period from YTD thru 15 yrs. Interesting that the expanded view chart shows VBTLX performing better than category averag...
by rkhusky
Thu Dec 14, 2017 10:23 am
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K or Roth 401K at this stage of the game??
Replies: 10
Views: 555

Re: Traditional 401K or Roth 401K at this stage of the game??

What SS benefit do you expect at age 70?

$2M in Traditional accounts would have an RMD of $73K in the first year.

Add in SS and what do you get as far as your marginal tax rate at age 70?

What is your current marginal tax rate?
by rkhusky
Wed Dec 13, 2017 1:18 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Gain Harvesting
Replies: 20
Views: 894

Re: Tax Gain Harvesting

On the other hand, people shouldn't be stressed out if a small fraction of their portfolio is out of the market for a day. I agree, but I think the point here is the risk probably isn't worth trying to avoid a dividend. A back of the envelope calculation shows that the average daily return of the S...
by rkhusky
Wed Dec 13, 2017 1:07 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Gain Harvesting
Replies: 20
Views: 894

Re: Tax Gain Harvesting

If I estimated the math right, if the market is up 1% while you're out, it will cost you something like 4 times as much in final value over an investing lifetime if you're young. And if the market drops 1%, you've gained an equivalent amount. Sure, but the market goes (has gone) up on average--you'...
by rkhusky
Wed Dec 13, 2017 1:03 pm
Forum: Investing - Help with Personal Investments
Topic: How to get some taxable income out of a 401k quickly
Replies: 18
Views: 992

Re: How to get some taxable income out of a 401k quickly

If you can't withdraw from IRA without incurring 10% penalty, how could you withdraw from 401k without incurring the penalty (re #2)? As Ace1 says, rolling over to Roth seems like the best bet. rkhusky, OP could because there is a special exemption for 401K when a person retired at 55 years old tha...
by rkhusky
Wed Dec 13, 2017 12:59 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes on Crypto Currency Short-Term Profit
Replies: 8
Views: 1094

Re: Taxes on Crypto Currency Short-Term Profit

I invested $1K in Ethereum a week ago and sold it last night at $1400 using Coinbase. Two questions: 1. Am I obligated to report the gain? (I'm presuming so) 2. If so, what should I set aside for taxes on this gain? Yes, you need to report the gain. You don't need to set aside money for taxes, but ...
by rkhusky
Wed Dec 13, 2017 11:46 am
Forum: Investing - Help with Personal Investments
Topic: How to get some taxable income out of a 401k quickly
Replies: 18
Views: 992

Re: How to get some taxable income out of a 401k quickly

If you can't withdraw from IRA without incurring 10% penalty, how could you withdraw from 401k without incurring the penalty (re #2)? As Ace1 says, rolling over to Roth seems like the best bet.
by rkhusky
Wed Dec 13, 2017 11:41 am
Forum: Investing - Help with Personal Investments
Topic: Tax Gain Harvesting
Replies: 20
Views: 894

Re: Tax Gain Harvesting

mega317 wrote:
Wed Dec 13, 2017 11:14 am
If I estimated the math right, if the market is up 1% while you're out, it will cost you something like 4 times as much in final value over an investing lifetime if you're young.
And if the market drops 1%, you've gained an equivalent amount.
by rkhusky
Wed Dec 13, 2017 9:08 am
Forum: Personal Finance (Not Investing)
Topic: Expenses, cash flow in retirement
Replies: 11
Views: 1184

Re: Expenses, cash flow in retirement

Income/expense analysis is different from cash flow analysis if one has loans and payment on principal is not considered an expense. In that case, cash flow considerations are more important.
by rkhusky
Wed Dec 13, 2017 7:59 am
Forum: Investing - Theory, News & General
Topic: Vanguard vs Fidelity -- views on Target Date funds
Replies: 5
Views: 889

Re: Vanguard vs Fidelity -- views on Target Date funds

There is a wide band in what is considered reasonable. Vanguard and Fidelity are not really that far apart. Which one has the better glide path will only be known in hindsight.
by rkhusky
Wed Dec 13, 2017 7:53 am
Forum: Investing - Help with Personal Investments
Topic: Re-balance IRA Question - Need Help!
Replies: 3
Views: 348

Re: Re-balance IRA Question - Need Help!

As much as I don't want to do bonds given high probability of interest rate rise/risk, is this what I should invest in? Bond rates have been predicted to go up for years and, even though they have gone up a little the past year or so, we've not seen any catastrophic results. In fact, I love getting...
by rkhusky
Wed Dec 13, 2017 7:43 am
Forum: Investing - Help with Personal Investments
Topic: Sell to lock in 0% cap gains?
Replies: 10
Views: 1304

Re: Sell to lock in 0% cap gains?

I'm not sure how fast you can sell and then buy. I am planning to do this in the near future, but currently I plan to sell one day and then buy back the next day. But I have mutual funds, not ETF's. I recently sold some shares of VTSAX held at Vanguard, and received a warning that I would be restri...
by rkhusky
Wed Dec 13, 2017 7:36 am
Forum: Investing - Theory, News & General
Topic: Vanguard will use blockchain to share index data
Replies: 29
Views: 2738

Re: Vanguard will use blockchain to share index data

This is probably the reason (bold mine): "There are so many things that happen in the market that rely on this index data," Mr. Pennington said. Currently, this data must travel through multiple parties and distribution channels before it reaches investment professionals. With the blockchain, any up...
by rkhusky
Tue Dec 12, 2017 5:37 pm
Forum: Investing - Help with Personal Investments
Topic: Which 529K
Replies: 2
Views: 251

Re: Which 529K

Most, but not all, states have a clawback provision that requires repayment of the tax deduction if funds are transferred. You don't have to move the funds from the existing plan just because you move out of state. If you are happy with the plan (has good choices and low expenses), I wouldn't move i...
by rkhusky
Tue Dec 12, 2017 5:25 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA-Vanguard
Replies: 6
Views: 533

Re: Roth IRA-Vanguard

Note that within your Roth account you can have a number of funds - you could have a money market fund, a US stock fund, an International fund, a bond fund, etc. You can transfer between these at will with no cost via Vanguard's web site, subject only to Vanguard's frequent trading policy - after yo...
by rkhusky
Tue Dec 12, 2017 5:15 pm
Forum: Investing - Theory, News & General
Topic: Does any indicator not predict a 2000/2007'ish crash?
Replies: 47
Views: 2405

Re: Does any indicator not predict a 2000/2007'ish crash?

Not to mention the Bitcoin bubble, which is the craziest bubble in history. At least tulips had some inherent value, they looked good, and at least tech stocks had some (albeit highly unlikely) case for continued increases. Bitcoin has zero value (except to the black market) yet people keep buying ...
by rkhusky
Tue Dec 12, 2017 3:04 pm
Forum: Personal Consumer Issues
Topic: Wind damage to home
Replies: 4
Views: 330

Re: Wind damage to home

When there is no separate deductible for wind/hail damage on the home owner’s policy and there is damage to roof from windstorm, do insurance companies like Amica and Statefarm cover anything at all? Is anyone familiar with exclusions for wind? Thanks! The policy should state whether or not wind da...
by rkhusky
Tue Dec 12, 2017 9:22 am
Forum: Investing - Theory, News & General
Topic: Vanguard VBMFX/VBTLX Bond Fund performance
Replies: 17
Views: 2166

Re: Vanguard VBMFX/VBTLX Bond Fund performance

http://performance.morningstar.com/fund/performance-return.action?t=VBTLX®ion=usa&culture=en_US Click on expanded view. Total Bond looks better over the last 10 years. Total Bond did better in 2007/2008, but was worse after. Total Bond appears safer during difficult economic periods, but lags du...