Search found 492 matches

by rmelvey
Thu Feb 04, 2016 4:57 pm
Forum: Investing - Help with Personal Investments
Topic: 55 Single Divorced Female Looking To Invest!
Replies: 9
Views: 884

Re: 55 Single Divorced Female Looking To Invest!

I think a 40/60 split would be very wise given your time horizon and assets. You could make it as simple as 30% US Stocks, 10% International Stocks, and 60% Vanguard total bond market. Try to keep funneling money into your 401ks and Roth (max them out each year) and try to put as much of your bond a...
by rmelvey
Wed Feb 03, 2016 4:08 pm
Forum: Investing - Help with Personal Investments
Topic: First Investment Outside of Retirement Account
Replies: 10
Views: 890

Re: First Investment Outside of Retirement Account

I keep a total AA that is balanced enough to meet both short term and long term needs. When I have taxable money to invest I buy equities and increase the bond % in my tax advantaged accounts. I like this approach because I always know what to do when I have a windfall / withdrawal. Lots of people d...
by rmelvey
Wed Feb 03, 2016 12:52 pm
Forum: Investing - Help with Personal Investments
Topic: Best Way To Do Target Maturity Bonds
Replies: 5
Views: 322

Re: Best Way To Do Target Maturity Bonds

I wouldn't bother picking individual bonds outside of Treasuries/CDs. You need to diversify credit risk across thousands of issues and the average bond desk rips off the retail investors for most corporate issues.
by rmelvey
Wed Feb 03, 2016 10:47 am
Forum: Investing - Help with Personal Investments
Topic: Is This An Acceptable Tax Loss Harvest?
Replies: 24
Views: 1396

Re: Is This An Acceptable Tax Loss Harvest?

The roboadvisors very openly trade pairs that are much more similar than what you are proposing. :wink: Can you give us some examples? Wealthfront pairs VWO with IEMG. Both offer exposure to emerging markets. OP is talking about pairing a fund that has EM with a fund that doesn't. That is a big dif...
by rmelvey
Wed Feb 03, 2016 10:00 am
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 104
Views: 9920

Re: How important is an international allocation?

My order of importance...

1. Stock / Bond Allocation
2. Fund Expense Ratios
3. Amount of International Exposure
by rmelvey
Wed Feb 03, 2016 9:48 am
Forum: Investing - Help with Personal Investments
Topic: Is This An Acceptable Tax Loss Harvest?
Replies: 24
Views: 1396

Re: Is This An Acceptable Tax Loss Harvest?

The roboadvisors very openly trade pairs that are much more similar than what you are proposing. :wink: Can you give us some examples? Wealthfront pairs VWO with IEMG. Both offer exposure to emerging markets. OP is talking about pairing a fund that has EM with a fund that doesn't. That is a big dif...
by rmelvey
Tue Feb 02, 2016 11:01 pm
Forum: Investing - Help with Personal Investments
Topic: Is This An Acceptable Tax Loss Harvest?
Replies: 24
Views: 1396

Re: Is This An Acceptable Tax Loss Harvest?

The roboadvisors very openly trade pairs that are much more similar than what you are proposing. :wink:
by rmelvey
Tue Feb 02, 2016 7:21 pm
Forum: Investing - Theory, News & General
Topic: "Why Simple Is Still a Hard Sell"
Replies: 24
Views: 4526

Re: "Why Simple Is Still a Hard Sell"

So have all the 3 fund portfolio fans moved to add international bonds? I like the 3 fund portfolio but its most vulnerable point is its fixed income choice. Total Stock and Total International Stock cover the equity world better than Total Bond covers the fixed income world. I don't think you need...
by rmelvey
Tue Feb 02, 2016 6:55 pm
Forum: Investing - Theory, News & General
Topic: Should I invest my emergency fund?
Replies: 78
Views: 11139

Re: Should I invest my emergency fund?

I only hold 3 months of expenses in a savings account. But I also hold my age in bonds which is more conservative than many people. I think going with a conservative stock/bond blend for your total AA makes more sense than holding years of expenses in cash.
by rmelvey
Sat Jan 30, 2016 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to create a permanent portfolio without gold [Canada]
Replies: 5
Views: 361

Re: Trying to create a permanent portfolio without gold [Canada]

Don't bother with materials stocks as a replacement for the underlying commodities, they are still dominated by their equity beta. In a an equities rout everything gets sold by the index funds so they will drop with the rest of the market. The simpler approach to hedge against inflation without owni...
by rmelvey
Fri Jan 29, 2016 5:10 pm
Forum: Personal Finance (Not Investing)
Topic: What age did you start maxing out your retirement contributions?
Replies: 63
Views: 4326

Re: What age did you start maxing out your retirement contributions?

Started maxing out my 401K + ROTH + HSA this year at age 24. I am able to do this because I rent and am not saving up a down payment for a home. Taxes are so high in NYC it's nice to know that I am doing everything in my power to get it lower.
by rmelvey
Fri Jan 29, 2016 5:05 pm
Forum: Investing - Theory, News & General
Topic: How safe are Bonds? Is cash a good substitute?
Replies: 18
Views: 1952

Re: How safe are Bonds? Is cash a good substitute?

Bonds are safer than cash if held to duration. With bonds you know what return you are going to get over the term of the bond, with cash it all depends on what the Fed does with short term rates. Risk is relative to horizon. For a short term horizon cash is safer than bonds, with a long term horizon...
by rmelvey
Fri Jan 29, 2016 11:30 am
Forum: Investing - Theory, News & General
Topic: "Why Simple Is Still a Hard Sell"
Replies: 24
Views: 4526

Re: "Why Simple Is Still a Hard Sell"

I am studying for CFA level 3 right now and everything I have read about portfolio management points me to the three fund portfolio. The more I learn the more I like it. It can make sense to alter the duration of the TBM by adding another fund on top (younger investors tilting more towards long dura...
by rmelvey
Fri Jan 29, 2016 10:02 am
Forum: Investing - Theory, News & General
Topic: Age in Bonds - Stock Exposure Peaks at 60
Replies: 12
Views: 1797

Re: Age in Bonds - Stock Exposure Peaks at 60

Just as an FYI to everyone I did not include withdrawals in the model because I wanted to isolate what effect age in bonds had on reducing equity exposure. Withdrawals obviously reduce equities and bonds, but I wanted to to highlight that apart from withdrawals age in bonds involves buying and holdi...
by rmelvey
Fri Jan 29, 2016 9:20 am
Forum: Investing - Theory, News & General
Topic: Age in Bonds - Stock Exposure Peaks at 60
Replies: 12
Views: 1797

Re: Age in Bonds - Stock Exposure Peaks at 60

I'm still puzzled. I too find the chart intriguing. But how do you get there? What if a person retires at 60 and begins to drawn down assets. Is it assumed that he/she will withdraw 60 percent from bonds at that point and 40% from equities, 50/50? Or does he/she withdraw so that post withdrawal he/...
by rmelvey
Wed Jan 27, 2016 7:17 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond Fund
Replies: 11
Views: 1550

Re: Total Bond Fund

Bond fund returns are inherently mean reverting because high quality bonds have a predictable return if held to maturity. If you hold total bond market the for length of it's duration right now (5.8 years) you will get a return very close to it's current yield (2.25%). You might be interested in CDs...
by rmelvey
Wed Jan 27, 2016 2:18 pm
Forum: Investing - Help with Personal Investments
Topic: Treasury Direct is a waste of time
Replies: 41
Views: 2691

Re: Treasury Direct is a waste of time

I am locked out of my account unless I go through a long process of finding someone at the bank with a special stamp and then I have to snail mail it to the Treasury. Luckily I cleared out my bonds before this happened. I don't plan on bothering with it again unless the fixed rate on I-Bonds goes up...
by rmelvey
Tue Jan 26, 2016 6:11 pm
Forum: Investing - Theory, News & General
Topic: Age in Bonds - Stock Exposure Peaks at 60
Replies: 12
Views: 1797

Age in Bonds - Stock Exposure Peaks at 60

Hi everyone, I put together a little chart that helped me think about age in bonds from another perspective. The model is very simple and assumes that starting at age 21 an investor contributes $20K to their portfolio each year (pretty common for many Bogleheads). They allocate this portfolio so tha...
by rmelvey
Tue Jan 26, 2016 8:52 am
Forum: Investing - Theory, News & General
Topic: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties
Replies: 48
Views: 3378

Re: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties

Before going to 0 for the bond allocation I would at least consider holding 10% in long term treasuries. Diversification is the only free lunch and I can't imagine totally skipping out on bonds.
by rmelvey
Mon Jan 25, 2016 3:05 pm
Forum: Investing - Help with Personal Investments
Topic: TD Ameritrade (In HSA) Investment options
Replies: 16
Views: 542

Re: TD Ameritrade (In HSA) Investment options

I use my TDA account to purchase bonds (BND) and so if money sits in cash for a little bit I don't get too worried because cash and bonds are part of the same FI spectrum in my mind.
by rmelvey
Fri Jan 22, 2016 2:00 pm
Forum: Investing - Theory, News & General
Topic: Jack's nuances. [Jack Bogle vs. fixed income, bonds]
Replies: 44
Views: 3298

Re: Jack's nuances.

Yes very confusing. Also, reducing spending has the same effect as increased SS. So does that mean that reducing your expenses is like buying a bond that pays real dividends? Just when you think you have it figured out :confused I think the SS as a bond only makes sense if you are doing a liability ...
by rmelvey
Fri Jan 22, 2016 1:53 pm
Forum: Investing - Theory, News & General
Topic: Jack's nuances. [Jack Bogle vs. fixed income, bonds]
Replies: 44
Views: 3298

Re: Jack's nuances.

Nuance One. Count Social Security as part of your fixed income allocation. I did a quick search and did not find anywhere where he fleshes this proposal out with numbers. So, I will guess how it's done. I guess you would have to take your current bond income and total value, and use that to reverse...
by rmelvey
Fri Jan 22, 2016 1:31 pm
Forum: Investing - Theory, News & General
Topic: How to figure reinvested dividend into ETF return?
Replies: 5
Views: 391

Re: How to figure reinvested dividend into ETF return?

I like using etfreplay.com because you can backtest different portfolios and it assumes dividend reinvestment.
by rmelvey
Fri Jan 22, 2016 11:22 am
Forum: Investing - Theory, News & General
Topic: Jack's nuances. [Jack Bogle vs. fixed income, bonds]
Replies: 44
Views: 3298

Re: Jack's nuances.

I am not tilting towards corporate bonds because I like the simplicity of TBM and I don't mind having a bias towards high quality FI. However, I do like the idea of counting the PV of defined benefits as a bond. I find this framework useful because I think many retirees could do well replacing some ...
by rmelvey
Thu Jan 21, 2016 7:10 pm
Forum: Investing - Theory, News & General
Topic: CC Purchase Accounting Disagreement: When Charged vs. When Paid
Replies: 31
Views: 839

Re: CC Purchase Accounting Disagreement: When Charged vs. When Paid

^ and ^^ Sure. I'm asking you whether we're getting toward the bottom, the fundamental underlying reason, for the strong disagreement? PJW Assets - Liabilities = Net Worth The moment you swipe the card your liabilities go up. If you are managing net worth (as most people planning for retirement are...
by rmelvey
Thu Jan 21, 2016 6:43 pm
Forum: Investing - Theory, News & General
Topic: CC Purchase Accounting Disagreement: When Charged vs. When Paid
Replies: 31
Views: 839

Re: CC Purchase Accounting Disagreement: When Charged vs. When Paid

The moment you swipe the card is when your net worth goes down. Your assets stay the same but your credit card liabilities go up. When I think about how much "cash" I have I net my checking + savings with my credit card liability. I like to think of my net worth rather than just my assets ...
by rmelvey
Thu Jan 21, 2016 6:02 pm
Forum: Investing - Theory, News & General
Topic: CC Purchase Accounting Disagreement: When Charged vs. When Paid
Replies: 31
Views: 839

Re: CC Purchase Accounting: When Charged vs. When Paid

Count the expense when you swipe the card. If you don't already have the money to have paid cash you shouldn't have bought it in the first place. I use CCs for the cash back and that's it.
by rmelvey
Wed Jan 20, 2016 6:32 pm
Forum: Investing - Help with Personal Investments
Topic: I have no more money to invest
Replies: 76
Views: 6289

Re: I have no more money to invest

Going 100% stock always felt wrong to me for the reasons OP is experiencing. I'm just surprised OP feels this way after only a moderate correction. Historically corrections can get MUCH worse.
by rmelvey
Wed Jan 20, 2016 10:07 am
Forum: Investing - Theory, News & General
Topic: Why are REITs not providing any benefit in this market?
Replies: 45
Views: 4904

Re: Why are REITs not providing any benefit in this market?

Who told you that? People used to write that before the financial crises, not so much anymore. REITS are a leveraged investment, and do poorly in a deflationary environment the same as any other equity. I think the idea that they are different comes from the fact that they didn't participate in the ...
by rmelvey
Tue Jan 19, 2016 9:58 pm
Forum: Investing - Theory, News & General
Topic: Dividend Growth Stock as Bond Substitutes?... Malkiel vs. Swedroe
Replies: 15
Views: 1561

Re: Dividend Growth Stock as Bond Substitutes?... Malkiel vs. Swedroe

I don't listen to him anymore because of this. It goes to show that you can't just follow a "guru" your whole life.
by rmelvey
Tue Jan 19, 2016 11:33 am
Forum: Investing - Help with Personal Investments
Topic: Timing of putting a 401k rollover into market?
Replies: 8
Views: 433

Re: Timing of putting a 401k rollover into market?

The problem is that your rule is $ amount and not % amount. If you received a $10M windfall you would still continue to put $1 into the market per month and leave the remainder of the $10M in cash? My rule is that after my emergency fund /liquidity is topped off then 100% of what is leftover goes in...
by rmelvey
Tue Jan 19, 2016 11:04 am
Forum: Investing - Help with Personal Investments
Topic: Timing of putting a 401k rollover into market?
Replies: 8
Views: 433

Re: Timing of putting a 401k rollover into market?

There is no logical reason to tip toe into an asset allocation that matches your risk tolerance. If lump summing feels too risky maybe your asset allocation isn't right for you. Just think about it, why should moving money from one account to another involve you changing the % of bonds versus stocks...
by rmelvey
Fri Jan 15, 2016 2:52 pm
Forum: Investing - Theory, News & General
Topic: Relationship between stock prices and economy (jobs)?
Replies: 7
Views: 580

Re: Relationship between stock prices and economy (jobs)?

If you want to read more about this Google George Soros and Reflexivity. He believes that financial markets predictions often become a self fulfilling prophecy. This helps explain the boom / bust cycle. I certainly feel wealthier when the market is up and poorer when the market is down so it does ch...
by rmelvey
Thu Jan 14, 2016 7:17 pm
Forum: Investing - Theory, News & General
Topic: Cash Buffer Instead of "Emergency Fund"
Replies: 52
Views: 4312

Re: Cash Buffer Instead of "Emergency Fund"

Sounds line a $10K emergency fund EXCEPT you make a statement about selling taxable stocks when the account is depleted which throws me. I never sell taxable except to TLH. Sounds line a $10K emergency fund isn't enough for you if you have to dip into taxable. I don't have the same restriction of n...
by rmelvey
Thu Jan 14, 2016 5:31 pm
Forum: Investing - Theory, News & General
Topic: Cash Buffer Instead of "Emergency Fund"
Replies: 52
Views: 4312

Re: Cash Buffer Instead of "Emergency Fund"

If I'm reading you correctly, it's a change of focus from using accounts for specific purposes, to focusing on liquidity. Once you have enough liquidity, you feel comfortable investing the rest. While I don't use the exact same mechanics you've described, a few years back I switched to a similar mi...
by rmelvey
Thu Jan 14, 2016 3:53 pm
Forum: Investing - Theory, News & General
Topic: Maxing HSA Early
Replies: 5
Views: 417

Re: Maxing HSA Early

Before lump summing also make sure that you still get any employer match that you are entitled to. For this reason I don't lump sum my 401k or HSA.
by rmelvey
Thu Jan 14, 2016 3:20 pm
Forum: Investing - Theory, News & General
Topic: Cash Buffer Instead of "Emergency Fund"
Replies: 52
Views: 4312

Re: Cash Buffer Instead of "Emergency Fund"

Usually an emergency fund is something dependable to fall back on in case of a major emergency that your regular budget cannot handle. For most people, such a major emergency would be job loss. How does your system work if you lose your job and it takes you a year or more to find another one. If yo...
by rmelvey
Thu Jan 14, 2016 1:34 pm
Forum: Investing - Theory, News & General
Topic: Cash Buffer Instead of "Emergency Fund"
Replies: 52
Views: 4312

Re: Cash Buffer Instead of "Emergency Fund"

Why $10k? What made you pick that number? How many months of expenses would that cover? For me that is three months. Keep in mind that this amount is based more off being a buffer for inflows/outflows rather than explicitly being set aside to cover a loss in employment.You set the size based off of...
by rmelvey
Thu Jan 14, 2016 1:20 pm
Forum: Investing - Theory, News & General
Topic: Cash Buffer Instead of "Emergency Fund"
Replies: 52
Views: 4312

Re: Cash Buffer Instead of "Emergency Fund"

Yes all income goes into that account, and all spending goes out of that account. You don't have to distinguish between "emergency" and "non-emergency" expenses with this approach, just have a total AA that is balanced enough to handle both growth and preservation. The buffer jus...
by rmelvey
Thu Jan 14, 2016 1:08 pm
Forum: Investing - Theory, News & General
Topic: Cash Buffer Instead of "Emergency Fund"
Replies: 52
Views: 4312

Cash Buffer Instead of "Emergency Fund"

I recently switched to a new way of handling my liquid savings that works very well for me and helps prevent "mental accounting" associated with bucketing money for different purposes (like an emergency fund). All of my paychecks and income (including dividends and interest from taxable in...
by rmelvey
Thu Jan 14, 2016 9:59 am
Forum: Investing - Help with Personal Investments
Topic: "Emergency Fund": MM, TIPS fund, CDs/bank acct, or IBonds
Replies: 11
Views: 448

Re: "Emergency Fund": MM, TIPS fund, CDs/bank acct, or IBonds

I agree that Treasury direct is not worth the hassle right now. I hate that website and their security is so over the top it almost makes bonds held in that account less liquid in my eyes (I am locked out right now and have to go through a lengthy process to get it open). I would go with TBM or the ...
by rmelvey
Thu Jan 14, 2016 12:06 am
Forum: Investing - Theory, News & General
Topic: TIPS As Bank Account?
Replies: 14
Views: 1015

Re: TIPS As Bank Account?

Vanguard offers check writing on almost all of their bond funds so yes you could. If you go with the mutual fund then the entire fund bears the cost of supplying liquidity at NAV so it's liquid from that point of view (no bid/ask spread).
by rmelvey
Wed Jan 13, 2016 3:33 pm
Forum: Investing - Theory, News & General
Topic: are we headed for a huge crash?
Replies: 24
Views: 1995

Re: are we headed for a huge crash?

I'm surprised how strongly people are reacting to this sell off. This is just noise. If this kind of movement is nerve wracking you should really have a lower equity allocation.
by rmelvey
Sat Jan 09, 2016 3:04 pm
Forum: Investing - Theory, News & General
Topic: NY Real Estate vs. The Stock Market
Replies: 38
Views: 2445

Re: NY Real Estate vs. The Stock Market

I live in Manhattan and NYC probably was a great investment for them. Going forward, yields on apartments are quite low because of foreign cash buyers looking for a place to park their cash in the US. You will probably do much better contributing the max to your 401(k) to save on the NYC tax and buy...
by rmelvey
Sat Jan 09, 2016 2:53 pm
Forum: Investing - Theory, News & General
Topic: Random walks and "on sale" stocks - confused
Replies: 97
Views: 4503

Re: Random walks and "on sale" stocks - confused

Markets are not entirely random. A simple example is a 10% flash crash. What are the chances of a stock dropping 10% and then very quickly getting an independently generated random return that offsets that crash intraday? Very low. This happens more frequently than pure chance would predict. Trying ...
by rmelvey
Sat Jan 09, 2016 11:56 am
Forum: Investing - Theory, News & General
Topic: Is BNDX (total international bond) and its utilization in target date funds terrible?
Replies: 35
Views: 1736

Re: Is BNDX (total international bond) and its utilization in target date funds terrible?

Although Vanguard hedges currency exposure that costs money and lowers yield. High quality bonds from developed markets already yield less than comparable US bonds even without these additional costs. When foreign bond yields are lower than domestic, that is precisely the time to hedge because you ...
by rmelvey
Fri Jan 08, 2016 12:44 pm
Forum: Investing - Theory, News & General
Topic: Is BNDX (total international bond) and its utilization in target date funds terrible?
Replies: 35
Views: 1736

Re: Is BNDX (total international bond) and its utilization in target date funds terrible?

I don't think the SEC yield includes the forward points that you get for hedging back to the dollar. So I don't think that SEC yield is as predictive for this fund as it would be for the domestic TBM.
by rmelvey
Fri Jan 08, 2016 10:05 am
Forum: Investing - Help with Personal Investments
Topic: DIY or Annuity? What should I choose for retirement income?
Replies: 13
Views: 1108

Re: DIY or Annuity? What should I choose for retirement income?

For a DIYer the biggest benefit of an annuity comes in the form of a single premium immediate annuity because it can function as a long term bond with higher cash flow than you could get elsewhere because of the mortality credits. But, I would probably only explore that once your retirement spending...

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