Search found 642 matches

by rmelvey
Wed Aug 24, 2016 9:34 am
Forum: Personal Finance (Not Investing)
Topic: NYC Living Options
Replies: 37
Views: 2445

Re: NYC Living Options

Don't buy a car. If you really hate the subway just use Uber or yellow cabs. You can certainly find something much cheaper than $3.5-$4K. I live in a 2BR apartment in chinatown for $2,500 and have a roommate so I pay $1,275. Try to keep in mind that you will be meeting and hanging out with people ou...
by rmelvey
Tue Aug 23, 2016 2:23 pm
Forum: Personal Consumer Issues
Topic: Get rich quick?
Replies: 52
Views: 8786

Re: Get rich quick?

Putting up a small amount of margin for S&P futures should do the trick. You will likely lose everything if you keep at it though.
by rmelvey
Fri Aug 12, 2016 7:06 pm
Forum: Investing - Theory, News & General
Topic: Anyone else noticing the economy improving?
Replies: 78
Views: 4158

Re: Anyone else noticing the economy improving?

I live in NYC which is in boom mode right now. I also work in the e-commerce field which is seeing huge growth. If anything, people in NYC are worried about the economy being too hot and pricing out longer term residents.
by rmelvey
Wed Aug 10, 2016 11:43 am
Forum: Investing - Theory, News & General
Topic: Why are bonds taxed more than stocks?
Replies: 29
Views: 3403

Re: Why are bonds taxed more than stocks?

Because the wealthy earn more of their income from stocks :twisted:
by rmelvey
Wed Aug 10, 2016 6:13 am
Forum: Investing - Help with Personal Investments
Topic: Going short to negate going long [socially responsible investing]
Replies: 59
Views: 2982

Re: Going short to negate going long

It might be cheaper and more effective to just buy index funds and donate a little extra each year to an environmentally focused charity.You will drive yourself crazy trying to fit your morals into the markets. I don't like the idea of going short a sector because shorting has extra expenses associa...
by rmelvey
Tue Aug 09, 2016 11:32 am
Forum: Investing - Theory, News & General
Topic: Vanguard - why don't I 'feel' good about them?
Replies: 36
Views: 3447

Re: Vanguard - why don't I 'feel' good about them?

I really enjoy using Fidelity for my taxable account. It's nice to have a different ETF provider for taxable than tax advantaged because it makes it easier to harvest losses while avoiding the wash sale rule. I also like that my taxable account has all of the features of a checking account!
by rmelvey
Sat Aug 06, 2016 7:50 am
Forum: Investing - Theory, News & General
Topic: Margin investing - how risky is it really?
Replies: 33
Views: 2206

Re: Margin investing - how risky is it really?

I don't know how you would correctly calculate the percentages but using margin would really mess up your asset allocation especially if you count the margin loan as a negative bond. I hold derivatives in my retirement account and calculate my asset allocation using notional values (for futures con...
by rmelvey
Fri Aug 05, 2016 10:21 am
Forum: Investing - Theory, News & General
Topic: Margin investing - how risky is it really?
Replies: 33
Views: 2206

Re: Margin investing - how risky is it really?

Another thing to consider is that if you open a margin account your shares can be lent to other investor's and your dividends will no longer be qualified ... Are you saying that merely having a margin account (without borrowing on it) means that dividends paid in that account are not qualified divi...
by rmelvey
Thu Aug 04, 2016 11:44 am
Forum: Investing - Theory, News & General
Topic: Margin investing - how risky is it really?
Replies: 33
Views: 2206

Re: Margin investing - how risky is it really?

Another thing to consider is that if you open a margin account your shares can be lent to other investor's and your dividends will no longer be qualified...
by rmelvey
Wed Aug 03, 2016 11:11 am
Forum: Investing - Help with Personal Investments
Topic: Any renters just focused on maxing out retirement accounts?
Replies: 13
Views: 1936

Re: Any renters just focused on maxing out retirement accounts?

Same boat.

Live in NYC and am maxing out 401k, roth, hsa. I couldn't max out these account if I purchased an apartment, and the tax savings from the 401k are so huge because taxes here are high.

I don't plan on buying property in NYC...
by rmelvey
Wed Jul 27, 2016 11:25 am
Forum: Personal Finance (Not Investing)
Topic: Any retirees here who have been life-long renters?
Replies: 140
Views: 9881

Re: Any retirees here who have been life-long renters?

I am renting right now and I am able to max out my 401k, roth ira, and HSA accounts. If I wanted to purchase a home I would no longer be able to do that because of the down payment as well as higher monthly payments. Since I am in NYC the tax savings from that are substantial. I also like that I can...
by rmelvey
Wed Jul 20, 2016 12:55 pm
Forum: Investing - Theory, News & General
Topic: Why does a massive company like Coca Cola or Johnson Johnson need money from investors?
Replies: 25
Views: 2619

Re: Why does a massive company like Coca Cola or Johnson Johnson need money from investors?

They don't need it and they don't take it. Both of those companies distribute cash to their stockholders in the form of dividends and stock buy backs.
by rmelvey
Tue Jul 12, 2016 4:10 pm
Forum: Investing - Theory, News & General
Topic: Just as hard to lose to the market as to beat it?
Replies: 53
Views: 3687

Re: Just as hard to lose to the market as to beat it?

Buy 100 different funds with 2% expense ratios. That's an easy way to underperform.

As far as selecting securities, that is a lot more difficult. Because if you could easily find what would underperform then you could earn a free lunch as a short seller. That is not very likely...
by rmelvey
Sun Jul 03, 2016 10:04 am
Forum: Investing - Help with Personal Investments
Topic: Long term investing for grandkids
Replies: 10
Views: 394

Re: Long term investing for grandkids

I think equities make sense for a perpetual time horizon, because they are a (risky) perpetuity. However, I think if you want a portfolio that will stand up to the test of time, nothing is more timeless than a Total Market index.
by rmelvey
Fri Jul 01, 2016 10:59 am
Forum: Investing - Help with Personal Investments
Topic: how to reflect paying off mortgage in AA?
Replies: 38
Views: 1775

Re: how to reflect paying off mortgage in AA?

I think including the mortgage AND the home value can make sense. Ignoring the mortgage can lead to some less than rational behavior such as borrowing at 3.5% on your mortgage and buying Treasuries at 1.5%. Outside of liquidity requirements this is a money losing trade! This example omits the value...
by rmelvey
Fri Jul 01, 2016 10:25 am
Forum: Investing - Help with Personal Investments
Topic: how to reflect paying off mortgage in AA?
Replies: 38
Views: 1775

Re: how to reflect paying off mortgage in AA?

I think including the mortgage AND the home value can make sense. Ignoring the mortgage can lead to some less than rational behavior such as borrowing at 3.5% on your mortgage and buying Treasuries at 1.5%. Outside of liquidity requirements this is a money losing trade!
by rmelvey
Thu Jun 30, 2016 4:58 pm
Forum: Investing - Help with Personal Investments
Topic: Getting rid of international funds
Replies: 83
Views: 6687

Re: Getting rid of international funds

US investors can get away with just holding US equities and CDs. It really is that simple. I wouldn't recommend the same for investor's in smaller countries.
by rmelvey
Thu Jun 30, 2016 4:12 pm
Forum: Investing - Theory, News & General
Topic: Equities = musical chairs?
Replies: 93
Views: 3953

Re: Equities = musical chairs?

Equities have no maturity date, so yes there is no guarantee that you will get all of your principal back at a certain date. They are a perpetuity. It is the stream of dividends that give them their value. If you are only spending the dividends the musical chair aspect of them goes away.
by rmelvey
Wed Jun 29, 2016 3:57 pm
Forum: Investing - Theory, News & General
Topic: I think Buffett got this wrong
Replies: 87
Views: 4989

Re: I think Buffett got this wrong

I'm sitting here trying to make a decision. Do I go with the original poster's ideas or do I go with Buffet's ideas? H-m-m-m. Allowing for the fact that past performance is no guarantee of future results, I still think I'm sticking with Warren. Can't blame anyone for going with Buffett over me. Obv...
by rmelvey
Wed Jun 29, 2016 3:32 pm
Forum: Investing - Theory, News & General
Topic: I think Buffett got this wrong
Replies: 87
Views: 4989

Re: I think Buffett got this wrong

Run your data for 30 year treasuries. If you get the same result than something with your analysis is probably off. When bond prices drop their expected return goes up. That is a mathematical fact. Buffett is making a similar comparison with equities. Keep in mind that equities have a duration of ar...
by rmelvey
Wed Jun 29, 2016 3:15 pm
Forum: Investing - Theory, News & General
Topic: I think Buffett got this wrong
Replies: 87
Views: 4989

Re: I think Buffett got this wrong

While this might not be exactly what Buffet is referring to, volatility is the friend of an accumulator and the enemy of someone in distribution mode. They are two sides of the same coin.
by rmelvey
Wed Jun 22, 2016 10:14 am
Forum: Investing - Help with Personal Investments
Topic: 100k+ with 2 year window, how to invest?
Replies: 16
Views: 997

Re: 100k+ with 2 year window, how to invest?

Personally, I would do 80% bonds and 20% stocks. Yes, there is a risk of losing money but it is a very conservative allocation. I am not a fan of cash except for month to month living expenses. CDs are good too, but I don't like the lack of liquidity for taxable accounts. They make more sense for me...
by rmelvey
Tue Jun 21, 2016 8:02 pm
Forum: Investing - Theory, News & General
Topic: Buying the style box in columns, not rows
Replies: 7
Views: 667

Re: Buying the style box in columns, not rows

A major reason to bucket by rows instead of columns is due to bid/ask spreads. If you are an active trader you want to stick mostly with large cap stocks due to lower costs of trading. While not important to a buy and hold boglehead, this factor is very important for other investors.
by rmelvey
Tue Jun 21, 2016 2:21 pm
Forum: Investing - Theory, News & General
Topic: Pfau: Why Bond Funds Don't Belong in Retirement Portfolios
Replies: 138
Views: 18218

Re: Pfau: Why Bond Funds Don't Belong in Retirement Portfolios

This just replaces higher yielding parts of TBM (corporates and GNMAs) with a SPIA. Such a change is consistent with the findings by Pfau in the article referenced at the start of this thread. I would guess this change reduces both market risk and longevity risk, with no increase in inflation risk....
by rmelvey
Tue Jun 21, 2016 11:05 am
Forum: Investing - Theory, News & General
Topic: Dividend and Buyback Yields, S&P 500, 1982-2015
Replies: 86
Views: 5241

Re: Dividend and Buyback Yields, S&P 500, 1982-2015

Technically the buy back yield is part of the dividend per share growth rate. So, even if earnings never grew again, the dividend per share would grow at the rate of the buy back yield.

I found the chart encouraging. Thanks for posting! 8-)
by rmelvey
Fri Jun 17, 2016 10:10 am
Forum: Investing - Theory, News & General
Topic: What's the ideal safe retirement net worth target?
Replies: 162
Views: 17005

Re: What's the ideal safe retirement net worth target?

Of course it all depends on expenses, but if retiring at 60 I would say that $2M is a good target. You can live an above average life style with limited risk of running out of money.
by rmelvey
Thu Jun 16, 2016 4:44 pm
Forum: Investing - Theory, News & General
Topic: Bogle says "You don't need bonds ?"
Replies: 68
Views: 8519

Re: Bogle says "You don't need bonds ?"

Why stop at 100% stocks. Why not 110% (or any other number > 100%) by borrowing to invest in equities? By going to 100%, you have already posited that you have the intestinal fortitude of steel, so why not even higher? *this post brought to you tongue-in-cheek, but I don't think it is a straw man's...
by rmelvey
Wed Jun 15, 2016 9:24 am
Forum: Investing - Theory, News & General
Topic: How do we know that some with 100% stocks will act differently than someone with 50% stocks in a bear market?
Replies: 41
Views: 2252

Re: How do we know that some with 100% stocks will act differently than someone with 50% stocks in a bear market?

A lot of the 100% stock advocates are too focused on the behavioral aspect. Sometimes you HAVE to sell, even if you know it is at depressed prices. If you lose your job and need to dip into your portfolio during a recession then you will be happy to have the bonds.
by rmelvey
Tue Jun 14, 2016 4:31 pm
Forum: Investing - Theory, News & General
Topic: Why am I so intrigued with the All Weather Portfolio
Replies: 6
Views: 1431

Re: Why am I so intrigued with the All Weather Portfolio

All Weather Portfolios typically have a larger than normal allocation to commodities/gold. Dramatic rate increases are usually spurred by inflationary pressures, where the commodities gold position would skyrocket mitigating the capital loss from the long bonds. Holding a large position in long dura...
by rmelvey
Mon Jun 13, 2016 4:52 pm
Forum: Investing - Help with Personal Investments
Topic: Choosing a bond fund and expanding international exposure
Replies: 14
Views: 1270

Re: Choosing a bond fund and expanding international exposure

All, I've done a good deal more reading on asset allocation, so I'd like to bounce this proposed allocation off of you good folks: 40% domestic equity blend (VTI) 15% small cap blend (VB) 20% ex-US blend (VXUS) 10% EM blend (VVO) 15% BND Admittedly, this is a good deal more complicated than the thr...
by rmelvey
Mon Jun 13, 2016 3:49 pm
Forum: Investing - Help with Personal Investments
Topic: I need some help to understand why I should invest in bonds at such a young age
Replies: 235
Views: 13850

Re: I need some help to understand why I should invest in bonds at such a young age

I have about 2 years of emergency fund which I do not count in my AA but maybe I should. This happens way too often on these "100%" stock threads. We usually find out towards the end that no one is actually proposing 100% stock, but a mixture of stocks and cash. Cash is just short duratio...
by rmelvey
Mon Jun 13, 2016 2:07 pm
Forum: Investing - Help with Personal Investments
Topic: I need some help to understand why I should invest in bonds at such a young age
Replies: 235
Views: 13850

Re: I need some help to understand why I should invest in bonds at such a young age

hmmm I am 13% in the Total Bond and now this thread makes me want to go 100% stock. I am 31 years old. I agree with what Kevin M laid out, there's no practical difference between 87/13 and 100/0 if the market drops 50% you'd lose 43.5% instead of 50%. Is that really going to make the difference bet...
by rmelvey
Mon Jun 13, 2016 12:58 pm
Forum: Investing - Theory, News & General
Topic: What is the lower bound for 10 year government bond yields?
Replies: 19
Views: 1536

Re: What is the lower bound for 10 year government bond yields?

The floor is the cost of hoarding physical bank notes. I suspect this should limit negative rates to around -0.75%. If governments did away with physical currency than there would be no limit to how negative they could go :twisted:
by rmelvey
Mon Jun 13, 2016 8:31 am
Forum: Personal Finance (Not Investing)
Topic: Live the Good Life Today vs Save For a Better Life Tomorrow
Replies: 84
Views: 7631

Re: Live the Good Life Today vs Save For a Better Life Tomorrow

You are assuming that the paycheck to paycheck person gets to consume more in their life. That may be true in the example you laid out, but I personally invest so that I can consume more in the future. You can also buy a SPIA when you retire in order to die penniless but consume the most amount.
by rmelvey
Thu Jun 09, 2016 1:32 pm
Forum: Investing - Help with Personal Investments
Topic: I need some help to understand why I should invest in bonds at such a young age
Replies: 235
Views: 13850

Re: I need some help to understand why I should invest in bonds at such a young age

You never truly know what your time horizon is. Stuff happens. I am 25 and hold 25% in bonds. Then again, I also don't keep a separate cash emergency fund. My portfolio is built to handle both short term and long term needs. Some people hold a lot of stock and a lot of cash/CDs and say they are 100%...
by rmelvey
Wed Jun 08, 2016 3:44 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond vs Intermediate Treasuries?
Replies: 22
Views: 2339

Re: Total Bond vs Intermediate Treasuries?

Treasuries look really good historically due to the declining inflation rate. If inflation has small surprises to the upside you could see credit outperform.

Gun to my head if I had to choose only treasuries or only credit I would choose Treasuries, but I sleep better owning both through TBM!
by rmelvey
Wed Jun 08, 2016 12:56 pm
Forum: Personal Finance (Not Investing)
Topic: Are Rentals As Bad As Some Make Them Out To Be?
Replies: 66
Views: 5722

Re: Are Rentals As Bad As Some Make Them Out To Be?

If you can rent a place out for $800 a month that you purchased for $75K then you are in a good position to make money. Are you sure about those numbers?
by rmelvey
Wed Jun 08, 2016 12:45 pm
Forum: Personal Finance (Not Investing)
Topic: Any NYC Bogleheads here?
Replies: 2
Views: 316

Re: Any NYC Bogleheads here?

I'm 25 and live in Manhattan (Chinatown). #1 thing to save yourself financially in the city is to contribute as much as possible to the 401k because taxes here are so high!
by rmelvey
Wed Jun 08, 2016 8:28 am
Forum: Investing - Help with Personal Investments
Topic: Opinion on 35% International / 65% Domestic?
Replies: 17
Views: 1281

Re: Opinion on 35% International / 65% Domestic?

I'm 1/3 international and 2/3 domestic. This split feels right for me.
by rmelvey
Wed Jun 08, 2016 8:14 am
Forum: Investing - Theory, News & General
Topic: Unnecessary risk for the sake of unnecessary diversification
Replies: 54
Views: 3967

Re: Unnecessary risk for the sake of unnecessary diversification

Even if you want to minimize risk, 0% equities is not the way to do it.

20% stocks and 80% bonds is less risky than 100% bonds because you get some inflation protection.
by rmelvey
Tue Jun 07, 2016 8:44 pm
Forum: Investing - Theory, News & General
Topic: Int'l Bonds - "A Key Asset Class Most Investors Completely Ignore"
Replies: 76
Views: 6125

Re: Int'l Bonds - "A Key Asset Class Most Investors Completely Ignore"

I don't see a good reason to allocate money away from US bonds to hedged foreign bonds. The Vanguard International bond fund is yielding less than half that of a similar duration US government bond fund, the currency is hedged, so there is no benefit to investors from a rise in foreign currency aga...
by rmelvey
Fri Jun 03, 2016 4:46 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Advice - Challenge CFP Recommended Allocation?
Replies: 19
Views: 1391

Re: Asset Allocation Advice - Challenge CFP Recommended Allocation?

Almost all of the securities in her allocation are already reflected in the three fund portfolio. So while her solution has more funds, I would argue that it is more concentrated (due to value and reit tilts). If all of this is going to be in one account I think a vanguard retirement/lifecycle fund ...
by rmelvey
Fri Jun 03, 2016 9:50 am
Forum: Investing - Theory, News & General
Topic: Protecting wealth in automation world
Replies: 12
Views: 1594

Re: Protecting wealth in automation world

Automation enriches society in aggregate, but the capitalists take a larger share of the growing pie than the laborers. Automation also results in lower costs, which is deflationary. The best way to benefit from automation is to be long a stock/bond portfolio and try to learn skills that are hard fo...
by rmelvey
Sun May 29, 2016 6:20 am
Forum: Personal Finance (Not Investing)
Topic: What % of salary should be allocated to rent for college grad?
Replies: 13
Views: 1162

Re: What % of salary should be allocated to rent for college grad?

What city are you working in? I'm in the NYC area and spending less than $2000 per month requires roommates. I have done the roommate thing for awhile now but am about to start spending closer to 30% of my income on rent to live on my own. Some areas are tougher than others.
by rmelvey
Sun May 29, 2016 5:27 am
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable if Taxable Needs the Safety?
Replies: 17
Views: 1770

Re: Bonds in Taxable if Taxable Needs the Safety?

Maybe I am wrong, but I just don't see the benefit. Yes but the process of contributing to the 401k reduces my taxable income. So it's different that value came from contributions vs. appreciation. I think the portfolio values are only the same if you exclude the tax deduction related savings from ...
by rmelvey
Sat May 28, 2016 11:26 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable if Taxable Needs the Safety?
Replies: 17
Views: 1770

Re: Bonds in Taxable if Taxable Needs the Safety?

If I put this money into equities I could face a double whammy during a bear market because my taxable portfolio and income would drop at the same time. However, if I held my cash/bonds in taxable I could draw down on that to max out my accounts If bonds are in the 401(k) and stocks in taxable when...
by rmelvey
Sat May 28, 2016 11:11 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable if Taxable Needs the Safety?
Replies: 17
Views: 1770

Re: Bonds in Taxable if Taxable Needs the Safety?

If I put this money into equities I could face a double whammy during a bear market because my taxable portfolio and income would drop at the same time. However, if I held my cash/bonds in taxable I could draw down on that to max out my accounts If bonds are in the 401(k) and stocks in taxable when...
by rmelvey
Sat May 28, 2016 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable if Taxable Needs the Safety?
Replies: 17
Views: 1770

Bonds in Taxable if Taxable Needs the Safety?

The standard advice to put bonds in tax deferred makes sense to me from a tax perspective, but could personal circumstances override that? I am maxing out my 401k, Roth, and HSA accounts. Maxing out the 401k is especially important to me because I live in NYC which has some of the highest tax rates ...
by rmelvey
Wed May 25, 2016 8:17 pm
Forum: Investing - Theory, News & General
Topic: This Bull Seems to be Getting Pretty Long In the Tooth
Replies: 76
Views: 7360

Re: This Bull Seems to be Getting Pretty Long In the Tooth

One of my favorite features of stockcharts.com is that if you use the ":" character you can view one stock price divided by another. The following chart shows Vanguard Total Stock Market divided by the 30 Year Treasury Fund TLT. Both equities and long term treasury bonds are long duration ...
by rmelvey
Wed May 25, 2016 8:00 pm
Forum: Investing - Theory, News & General
Topic: Self Employed 911 fund & short vs longer term investments
Replies: 5
Views: 366

Re: Self Employed 911 fund & short vs longer term investments

I think doing different buckets for different things gets REALLY confusing. You can easily fall into the trap of "mental accounting" which is bad. It is much easier to develop an overall asset allocation that meets both your long term and short term goals. So when you get new money it gets...

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