Search found 573 matches

by rmelvey
Thu May 05, 2016 1:28 pm
Forum: Investing - Theory, News & General
Topic: Better Portfolio than Buffett's Recommended S&P 500?
Replies: 4
Views: 414

Re: Better Portfolio than Buffett's Recommended S&P 500?

Pretty confident that 90% Vanguard Total Stock Market and 10% in TBM will beat Buffet's portfolio. The S&P500 suffers from front running and I am not sure why someone would hold t-bills over TBM unless they had extreme volatility sensitivity and a very short time horizon.
by rmelvey
Thu May 05, 2016 11:01 am
Forum: Personal Finance (Not Investing)
Topic: Leasing and renting vs buying cash
Replies: 14
Views: 1081

Re: Leasing and renting vs buying cash

For housing I like renting because it allows me to max out my 401k, Roth, and HSA. I couldn't do that if I purchased a home. I also like that if I need to relocate due to a new job I can go almost anywhere without a huge financial impact.
by rmelvey
Thu May 05, 2016 8:25 am
Forum: Investing - Theory, News & General
Topic: Backtesting David Swensen Lazy Porfolio against Three Fund
Replies: 29
Views: 1464

Re: Backtesting David Swensen Lazy Porfolio against Three Fund

The three fund portfolio is not about chasing performance. The three fund portfolio's goal is to capture the aggregate returns of the three major asset classes (local stocks, foreign stocks, and fixed income). Most other portfolios offer more targeted to exposure to assets that are already held as p...
by rmelvey
Wed May 04, 2016 7:31 am
Forum: Investing - Help with Personal Investments
Topic: Fidelity or Vanguard
Replies: 75
Views: 4079

Re: Fidelity or Vanguard

I use fidelity for taxable and vanguard for iras. This allows me to tax loss harvest very easily between itot and Vti. The fidelity brokerage is also great for checking account features built in.
by rmelvey
Wed May 04, 2016 7:26 am
Forum: Investing - Help with Personal Investments
Topic: Family member asks my advice about Employee Stock Purchase Plan
Replies: 18
Views: 1236

Re: Family member asks my advice about Employee Stock Purchase Plan

If the plan allows you to buy stock at a discount it can be smart. Typically they don't allow you to sell for a year, but if you are getting it at a 10% discount and selling exactly a year later then you are getting a 10% risk premium for the single stock risk. I would participate as much as possibl...
by rmelvey
Sun May 01, 2016 11:06 am
Forum: Personal Finance (Not Investing)
Topic: Is It Time to Ditch Ibonds?
Replies: 10
Views: 1943

Re: Is It Time to Ditch Ibonds?

You are borrowing at a higher rate than you are lending. Unless you really need the liquidity you should pay down the heloc. Since you have the taxable account I would argue that you have plenty of liquidity.
by rmelvey
Fri Apr 29, 2016 4:59 pm
Forum: Personal Finance (Not Investing)
Topic: If not Children - Who/What Leave Estate To?
Replies: 27
Views: 2537

Re: If not Children - Who/What Leave Estate To?

Do you have a strong desire to leave an estate? If not you could use SPIAs to have a very secure and high income retirement.
by rmelvey
Fri Apr 29, 2016 3:16 pm
Forum: Investing - Help with Personal Investments
Topic: Is 7% in cash too much?
Replies: 13
Views: 1779

Re: Is 7% in cash too much?

If it's in an ally account earning 1% it's not a bad thing. I would just fold it into your fixed income allocation, don't count it as separate. Keep in mind that 1% is way better than you could get on a short term treasury. One option to take advantage of this is to hold half of your FI in high yiel...
by rmelvey
Fri Apr 29, 2016 2:48 pm
Forum: Investing - Theory, News & General
Topic: CD effective APY greater than shorter term APY -- why?
Replies: 3
Views: 212

Re: CD effective APY greater than shorter term APY -- why?

Being able to cash out the 5 year CD early is not guaranteed. In times of stress the bank has the ability to remove that feature. So if you really need access to your money in 18 months there is a small risk that you won't get it with the 5 year CD.
by rmelvey
Fri Apr 29, 2016 2:45 pm
Forum: Personal Finance (Not Investing)
Topic: Saving Too Much in Retirement Accounts?
Replies: 35
Views: 4545

Re: Saving Too Much in Retirement Accounts?

I am doing the same thing as you (maxing out 401k, HSA, and Roth) and I currently live in NYC. The tax benefits from maxing out retirement accounts are nice, and equities will likely outpace RE over the long term and with far less headaches. Also, if you are moving to NYC your 401k becomes your best...
by rmelvey
Fri Apr 29, 2016 2:33 pm
Forum: Investing - Theory, News & General
Topic: Almost bought an individual stock today...
Replies: 44
Views: 3436

Re: Almost bought an individual stock today...

Amazon is my only individual stock holding, but not by choice! Half of my pay is in RSUs. If it were up to me I would be 100% bogle, but after the last couple of years I can't complain :beer
by rmelvey
Tue Apr 26, 2016 4:57 pm
Forum: Investing - Help with Personal Investments
Topic: How do bond funds REALLY work?
Replies: 16
Views: 1812

Re: How do bond funds REALLY work?

The Fed only explicitly controls short term rates. The rest of the yield curve has expectations about that path of short term rates already baked into it. If everyone knows that the Fed is going to raise short term rates, the longer maturities have already priced that in. Bond markets are just as di...
by rmelvey
Tue Apr 26, 2016 4:42 pm
Forum: Personal Finance (Not Investing)
Topic: Why have a formal budget?
Replies: 82
Views: 4920

Re: Why have a formal budget?

I don't budget by line item, but I know what my monthly expenses need to be each month to hit my plan. I use mint to track the spending in aggregate. Budgeting is important for me because half of my compensation is in stock. I have projected cash balances for different stock prices of my employer an...
by rmelvey
Tue Apr 12, 2016 2:08 pm
Forum: Investing - Theory, News & General
Topic: considering a broad-index commodity fund in my portfolio
Replies: 14
Views: 979

Re: considering a broad-index commodity fund in my portfolio

What is your bond duration going to be? Commodity exposure can make sense if you have exposure to very long duration bonds because it can help mitigate the inflationary risk. But if you are pairing this with TBM than 15-20% in commodities is WAY too much.
by rmelvey
Mon Apr 11, 2016 6:08 pm
Forum: Investing - Help with Personal Investments
Topic: Experience with Fidelity?
Replies: 51
Views: 3607

Re: Experience with Fidelity?

One advantage of having taxable with fidelity and tax deferred with vanguard is that you can use the ishares funds at Fidelity so that you can TLH between the different fund families (sell stocks in fidelity at a loss and buy vanguard funds in tax deferred to give you the same exposure). Technically...
by rmelvey
Fri Apr 08, 2016 1:31 pm
Forum: Personal Consumer Issues
Topic: Possible Move to Manhattan....
Replies: 20
Views: 1615

Re: Possible Move to Manhattan....

I live in Manhattan and absolutely love it. When I first moved out here I moved to Hoboken which is one train stop away from the city and instantly regretted it. Jersey is not a substitute for Manhattan. If you decide to live in Manhattan and not an outer borough I strongly recommend getting rid of ...
by rmelvey
Thu Apr 07, 2016 7:20 am
Forum: Personal Finance (Not Investing)
Topic: Transferring large sums to Indian NRI account for Fixed Deposit
Replies: 26
Views: 1580

Re: Transferring large sums to Indian NRI account for Fixed Deposit

Are you planning on converting the money back into dollars for the down payment on your home? Just remember that the higher interest rate isn't a free lunch due to the currency risk. If you were to hedge this back into dollars your yield would be roughly equivalent to a US bond. Basically the market...
by rmelvey
Mon Apr 04, 2016 4:15 pm
Forum: Investing - Theory, News & General
Topic: To Buy or Rent a Home? Weighing Which Is the Better Choice
Replies: 16
Views: 2658

Re: To Buy or Rent a Home? Weighing Which Is the Better Choice

I like renting. But then again I live in Manhattan. Buying isn't really an option for me! :oops:
by rmelvey
Mon Apr 04, 2016 3:58 pm
Forum: Investing - Theory, News & General
Topic: Easy "alpha" in your portfolio
Replies: 33
Views: 3268

Re: Easy "alpha" in your portfolio

This is a real small one, but using netspend accounts for 5% interest. Each account is capped at $5K but I believe individuals can open up to 5 accounts. So that is $25K earning 5% risk free with daily liquidity. I only have one right now but am toying with the idea of opening more.
by rmelvey
Thu Mar 17, 2016 4:29 pm
Forum: Investing - Help with Personal Investments
Topic: Living off dividend income
Replies: 44
Views: 6687

Re: Living off dividend income

The desire for dividend income confuses me. Doesn't the share price/NAV drop after a dividend? Now you have shares worth less and a taxable event. If one invests in high dividend stocks, doesn't that result in low diversification? Doesn't the Market know about the dividend and raise the original sh...
by rmelvey
Thu Mar 17, 2016 3:52 pm
Forum: Investing - Theory, News & General
Topic: Looking for clarification on Foreign Tax Credit
Replies: 13
Views: 1005

Re: Looking for clarification on Foreign Tax Credit

Not sure why I'm having such a hard time grasping this. These examples still seem to always result in a higher net when the TISM's are in tax-advantaged accounts, so I'm not seeing why it's better to have them in taxable accounts. Sorry, I've read these responses over and over and still not getting...
by rmelvey
Thu Mar 17, 2016 3:47 pm
Forum: Investing - Help with Personal Investments
Topic: Living off dividend income
Replies: 44
Views: 6687

Re: Living off dividend income

Depressing, right? That's why people are so glum about the current environment. Yes the gains have been nice, but at the expense of future returns. The consensus is that we are entering a low return environment for the next decade or two. Hopefully that turns out to be wrong, but it looks highly lik...
by rmelvey
Thu Mar 17, 2016 11:35 am
Forum: Investing - Theory, News & General
Topic: Is the market sentiment always in "bubble mode"?
Replies: 12
Views: 821

Re: Is the market sentiment always in "bubble mode"?

There is truth in the statement that "markets climb a wall of worry."
by rmelvey
Thu Mar 17, 2016 11:11 am
Forum: Investing - Theory, News & General
Topic: Looking for clarification on Foreign Tax Credit
Replies: 13
Views: 1005

Re: Looking for clarification on Foreign Tax Credit

One thing that has always confused about this recommendation of holding international over domestic in taxable is the qualified dividend status of US equities. Is the foreign tax credit bigger than the savings from US dividends being qualified? Also, international indices yield 100 bps more which is...
by rmelvey
Wed Mar 16, 2016 5:18 pm
Forum: Investing - Theory, News & General
Topic: high yield returns - a bit strange?
Replies: 8
Views: 707

Re: high yield returns - a bit strange?

I think you are on the right track Wasabi. Bonds are like selling a put on the company's assets and equities are like buying a call on the company's assets.
by rmelvey
Wed Mar 16, 2016 3:59 pm
Forum: Investing - Theory, News & General
Topic: high yield returns - a bit strange?
Replies: 8
Views: 707

Re: high yield returns - a bit strange?

Part of it might be a behavioral bias of investors to prefer cash flow over total return. Lot's of people like to consume their distributions and leave the principal alone. HY gives the illusion of allowing you to spend more. Also lots of people rigidly use the definitions of "stocks" and ...
by rmelvey
Wed Mar 16, 2016 11:33 am
Forum: Investing - Theory, News & General
Topic: characterizing restricted stock for asset allocation
Replies: 13
Views: 781

Re: characterizing restricted stock for asset allocation

If you will get the stock even if you leave/get fired then yes I would count it as part of your AA. For me, I only get my RSUs if I stay employed at the vest date, so I don't count it until it vests. I suppose if I wanted to be fancy I would partially count it weighted off of the probability of me s...
by rmelvey
Tue Mar 15, 2016 4:56 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to decide between Vanguard and Betterment for long term holdings
Replies: 18
Views: 1394

Re: Trying to decide between Vanguard and Betterment for long term holdings

Go with vanguard. Even if you like Betterment's allocations today they could change the mix to something you don't agree with later and it will be a tax nightmare trying to unwind it.
by rmelvey
Tue Mar 15, 2016 3:11 pm
Forum: Investing - Help with Personal Investments
Topic: bond funds
Replies: 16
Views: 1631

Re: bond funds

The long term treasury bond fund is kind of like a bond fund on steroids. It will have huge moves up and down, of similar magnitude to the stock market, but corresponding to interest rates rather than corporate earnings. This is good when bonds are doing well, and bad when things turn south. Since m...
by rmelvey
Tue Mar 15, 2016 2:25 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 846
Views: 147385

Re: Should I use margin to buy a balanced fund?

What are the thoughts on the tax efficiency of this? Do you have money in retirement accounts? Are those seen as part of this strategy or are they not factored into this asset allocation? I like that rolling futures of a bond position allows you to book part of it as capital gains, but better yet is...
by rmelvey
Tue Mar 15, 2016 12:55 pm
Forum: Investing - Help with Personal Investments
Topic: How do I avoid the temptation to backtest/overfit?
Replies: 16
Views: 1081

Re: How do I avoid the temptation to backtest/overfit?

The wider the net you cast with your indexing the less you have to fiddle with. That's why I like the three fund portfolio. I don't have any decisions to make within the US equities space because I own them all, same with international. I only have to choose the split between the two. I wasn't sure ...
by rmelvey
Mon Mar 14, 2016 4:49 pm
Forum: Investing - Help with Personal Investments
Topic: House Down Payment Cash - Where to Put? (CA Resident)
Replies: 8
Views: 835

Re: House Down Payment Cash - Where to Put? (CA Resident)

If you want to play it safe and follow basic financial theory I would consider a blend of total bond market and a high yield savings account. The duration of TBM is around six years and the duration of a high yield savings account is zero.Then just match the duration of the portfolio to when you wil...
by rmelvey
Fri Mar 11, 2016 3:10 pm
Forum: Investing - Help with Personal Investments
Topic: 5M Windfall, all in VTMFX? [Vanguard Tax-Managed Balanced Fund]
Replies: 40
Views: 5580

Re: 5M Windfall, all in VTMFX?

You could probably be more tax efficient managing it yourself as a 3 fund portfolio + muni bonds, but there is something to said for simplicity. There is great value in having the portfolio run itself without your input 8-)
by rmelvey
Fri Mar 11, 2016 11:28 am
Forum: Investing - Theory, News & General
Topic: ETF arbitrage with Vanguard's low volume ETFs
Replies: 7
Views: 421

Re: ETF arbitrage with Vanguard's low volume ETFs

Nice!

Yeah as long as you have some other stock exposure that is in a liquid instrument than I don't see a problem with having a little bit in a less liquid security if you get compensated for buying it. I just wouldn't want most of my exposure to be in the less liquid version.
by rmelvey
Fri Mar 11, 2016 11:16 am
Forum: Investing - Help with Personal Investments
Topic: Sequence of return risk
Replies: 13
Views: 898

Re: Sequence of return risk

What % of your portfolio is in bonds? They are a great tool for mitigating this kind of risk.
by rmelvey
Thu Mar 10, 2016 5:28 pm
Forum: Investing - Theory, News & General
Topic: [Vanguard Core Bond Fund opens to investors]
Replies: 107
Views: 13086

Re: [Vanguard Core Bond Fund opens to investors]

I am a passive investor not because of efficient market hypothesis but because of the cost matters hypothesis. So active funds with low expenses are worthy of a look for me. I do like that the fund allows for some movement into high yield, because I always though it was strange to have a "total...
by rmelvey
Thu Mar 10, 2016 11:43 am
Forum: Investing - Theory, News & General
Topic: [Vanguard Core Bond Fund opens to investors]
Replies: 107
Views: 13086

[Vanguard Core Bond Fund opens to investors]

The fund is opening for subscription today: https://personal.vanguard.com/us/insights/article/fund-announcement-C2-032016 Anyone going to nibble? The fees are extremely low, 0.15% for $50K Admiral shares. It's still unclear to me where they will place their bets vs. the benchmark, but there is room ...
by rmelvey
Wed Mar 09, 2016 4:45 pm
Forum: Investing - Help with Personal Investments
Topic: Transferring out of company stock
Replies: 25
Views: 1743

Re: Transferring out of company stock

Not so simple. You may be trying to maximize best expected outcome or best average outcome, but others may value minimizing worst outcomes. Simply doing 2 transactions some time apart give you lowered maximum best outcome and lower average outcome, but also better worst case situation. There are tr...
by rmelvey
Wed Mar 09, 2016 4:06 pm
Forum: Personal Finance (Not Investing)
Topic: When does borrowing not make sense?
Replies: 18
Views: 1204

Re: When does borrowing not make sense?

You are on the right path. Most people do not know anything about stocks/bonds and for them a buy & hold RE investment strategy is their best bet because their other option is getting swindled by brokers. Bogleheads are different because they know how to invest in stocks/bonds very efficiently. ...
by rmelvey
Wed Mar 09, 2016 3:55 pm
Forum: Investing - Theory, News & General
Topic: What are disadvantages of maxing our retirement accounts?
Replies: 29
Views: 3705

Re: What are disadvantages of maxing our retirement accounts?

It's pretty rare for someone to feel like they have too much in there retirement accounts versus taxable. There are so many different strategies for getting the money out.

The more common issue is not having enough in them. There are no loopholes for getting more money in...
by rmelvey
Wed Mar 09, 2016 3:34 pm
Forum: Investing - Help with Personal Investments
Topic: Transferring out of company stock
Replies: 25
Views: 1743

Re: Transferring out of company stock

There are plenty of emotional reasons to do the transition slowly, but the cold hard logical approach is to sell immediately and invest according to your asset allocation.
by rmelvey
Wed Mar 09, 2016 3:23 pm
Forum: Personal Consumer Issues
Topic: What are you frugal with, what are you not, but still buy?
Replies: 53
Views: 4767

Re: What are you frugal with, what are you not but still buy?

I am frugal with housing. I split a 2BR in NYC instead of renting my own 1BR. It has its drawbacks, but it allows me to eat out every day and travel while still hitting my savings goals.
by rmelvey
Wed Mar 09, 2016 3:18 pm
Forum: Investing - Theory, News & General
Topic: HSA investment options
Replies: 16
Views: 1484

Re: HSA investment options

Does this allow you to escape the $35 annual fee? HSA Bank tells me they will still levy it. $35 of annual fees divided by $5000 is 60bps per year. HSA Bank pays basically no interest. It doesn't make sense to keep money in the account just to avoid the fee. I keep the money at TDAmeritrade in TBM ...
by rmelvey
Wed Mar 09, 2016 3:00 pm
Forum: Investing - Theory, News & General
Topic: HSA investment options
Replies: 16
Views: 1484

Re: HSA investment options

$30 of annual fees divided by $5000 is 60bps per year. HSA Bank pays basically no interest. It doesn't make sense to keep money in the account just to avoid the fee. I keep the money at TDAmeritrade in TBM earning 2%.
by rmelvey
Wed Mar 09, 2016 1:25 pm
Forum: Investing - Theory, News & General
Topic: 100% US Equities argument: "We spend in Dollars"
Replies: 49
Views: 4454

Re: 100% US Equities argument: "We spend in Dollars"

Maybe this is blasphemous but I don't think Warren Buffet has spent much time thinking about retirement planning for the average Joe so his opinions on the subject don't hold much weight for me :? Investing billions with a withdrawl rate of 0.0001% t is very different from investing $2M with a 4% wi...
by rmelvey
Tue Mar 08, 2016 1:11 pm
Forum: Investing - Help with Personal Investments
Topic: Joel Greenblatt's Magic Formula Investing
Replies: 8
Views: 1125

Re: Joel Greenblatt's Magic Formula Investing

I have read his book and used his screener before but never religiously followed it or did a formal tracking of the recommendations. The theory behind what makes a company great is largely correct, but I don't think it necessarily follows that the companies' securities are mispriced to offer abnorma...
by rmelvey
Mon Mar 07, 2016 12:48 pm
Forum: Investing - Theory, News & General
Topic: "Are Nondeductible IRAs Suitable for the Long Haul? "
Replies: 2
Views: 437

Re: "Are Nondeductible IRAs Suitable for the Long Haul? "

I really hope they don't close the back door. If they do I think I would use the Traditional IRA space for direct CD purchases each year. I don't think I would place equities into a Traditional IRA.
by rmelvey
Mon Mar 07, 2016 11:43 am
Forum: Personal Consumer Issues
Topic: Cities good for living abroad?
Replies: 98
Views: 7038

Re: Cities good for living abroad?

I only have spent a couple of days in Hong Kong but I would love to live/work there. It has the perfect mix of glamour / grit. Singapore lacks the grittiness / culture that makes city life so wonderful. The food was also incredible and it's not too difficult for English speakers to get around 8-)
by rmelvey
Sat Mar 05, 2016 8:31 pm
Forum: Investing - Help with Personal Investments
Topic: Worried about father....
Replies: 35
Views: 2708

Re: Worried about father....

I'm glad to hear that he genuinely wants your help! If you go with an all in one fund it makes it so that you don't see all of the equity losses because they get partially offset by the bond appreciation that often occurs in an equity panic. This has psychological benefits. Have you considered going...
by rmelvey
Sat Mar 05, 2016 12:37 pm
Forum: Investing - Help with Personal Investments
Topic: Worried about father....
Replies: 35
Views: 2708

Re: Worried about father....

His portfolio is far from a disaster. Maybe you could explore moving some the cash to short term CDs at the vanguard bond desk but pushing someone to take more equity risk than they want is being a bad advisor. If you want to be his advisor you need to listen to your client. This is his hard earned ...

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