Search found 592 matches

by rmelvey
Mon May 23, 2016 1:13 pm
Forum: Investing - Theory, News & General
Topic: Bernstein says emergency fund part of your "asset allocation?"
Replies: 40
Views: 2868

Re: Bernstein says emergency fund part of your "asset allocation?"

There are pros and cons to both. I like keeping it as part of my AA because when I save up for short term liquidity events in taxable, I can go heavier into equities in my retirement account. This means that I maintain a constant risk profile even while taking care of all of the small bumps along th...
by rmelvey
Sun May 22, 2016 7:51 am
Forum: Investing - Theory, News & General
Topic: safe alternative to stock market
Replies: 56
Views: 4943

Re: safe alternative to stock market

Go to ETF replay and plug in 80% SPY (S&P 500) and 20% IEI (intermediate treasuries), and then compare it with 100% IEI. Adding a little bit of stocks actually reduces the volatility of the portfolio. This portfolio did lose 5% in the crisis, but I think taking a little bit of volatility risk i...
by rmelvey
Fri May 20, 2016 7:06 am
Forum: Investing - Theory, News & General
Topic: Burton Malkiel: "I think [commodities] should be in every portfolio."
Replies: 35
Views: 2649

Re: Burton Malkiel: "I think [commodities] should be in every portfolio."

IMO Owning gold directly through GLD makes more sense than tilting towards the producers. Producers are still part of the equity index and get hit with the waves of selling just like any other stock does during a panic. However, I only think gold makes sense if you have very long duration bonds (ala...
by rmelvey
Thu May 19, 2016 3:12 pm
Forum: Investing - Help with Personal Investments
Topic: Why Vanguard added Int'l Bonds to the Target funds?
Replies: 23
Views: 2325

Re: Why Vanguard added Int'l Bonds to the Target funds?

Let's say a 1 year Japanese bond is yielding 1% (in Yen) and 1 year Treasury bond is Yielding 2% (in Dollars). There is no free lunch in choosing to buy the dollar bond over the Yen bond because the cost of hedging makes the bonds yield exactly the same amount if you hedge everything back to dollar...
by rmelvey
Thu May 19, 2016 1:48 pm
Forum: Investing - Help with Personal Investments
Topic: Why Vanguard added Int'l Bonds to the Target funds?
Replies: 23
Views: 2325

Re: Why Vanguard added Int'l Bonds to the Target funds?

thank you. I confess in my ignorance that I thought we were saying about the same thing? Ie the product of the interest rate and the forward currency rate is going to equal the product of the currency exchange (now) and the interest rate (in that other currency)? Covered Interest Parity? Maybe I ju...
by rmelvey
Wed May 18, 2016 8:37 am
Forum: Investing - Help with Personal Investments
Topic: Why Vanguard added Int'l Bonds to the Target funds?
Replies: 23
Views: 2325

Re: Why Vanguard added Int'l Bonds to the Target funds?

I see that a lot of people do not like having these in their portfolio, I don't know why specifically. What makes the international stocks "Ok" to be added, while the bonds are not (I know the difference between stocks and bonds, just not sure why people are OK with intl stocks but not in...
by rmelvey
Wed May 18, 2016 7:58 am
Forum: Investing - Theory, News & General
Topic: safe alternative to stock market
Replies: 56
Views: 4943

Re: safe alternative to stock market

Go to ETF replay and plug in 80% SPY (S&P 500) and 20% IEI (intermediate treasuries), and then compare it with 100% IEI. Adding a little bit of stocks actually reduces the volatility of the portfolio. This portfolio did lose 5% in the crisis, but I think taking a little bit of volatility risk is...
by rmelvey
Tue May 17, 2016 6:45 am
Forum: Personal Finance (Not Investing)
Topic: Destination, Not Journey?
Replies: 20
Views: 2271

Re: Destination, Not Journey?

I can sympathize. Right now I have a roommate to help save money so that I can invest more. But I really don't NEED a roommate. The idea of spending double on rent makes me feel guilty because I could be saving so much more. The thing is, roommates drive me crazy. There comes a time in your life whe...
by rmelvey
Sun May 15, 2016 1:43 pm
Forum: Personal Finance (Not Investing)
Topic: Rich But Middle Class
Replies: 233
Views: 20735

Re: Rich But Middle Class

This is not even close to middle class :?

You can do anything you want but not everything you want.
by rmelvey
Sat May 14, 2016 8:41 am
Forum: Personal Finance (Not Investing)
Topic: Renting vs owning
Replies: 140
Views: 14300

Re: Renting vs owning

One of my favorite things about renting is that I can adjust my largest expense (housing) depending on my income. Lately my income has gone up a lot, so at the end of my lease I can start looking for a nicer place if I want. Similarly, if I lost my job or had to take a much lower paying job, I could...
by rmelvey
Fri May 13, 2016 10:32 am
Forum: Personal Finance (Not Investing)
Topic: Mango prepaid card - 4.8% (effective) APY
Replies: 478
Views: 272595

Re: Mango prepaid card - 4.8% (effective) APY

Anyone here just eat the fee for simplicity and take a lower implied interest rate? Thinking of just leaving a years worth of fee expense in the debit card account...
by rmelvey
Fri May 13, 2016 9:21 am
Forum: Investing - Theory, News & General
Topic: Combining GDX and PICK
Replies: 2
Views: 132

Re: Combining GDX and PICK

Why do you want to make sure you own every miner? What's the thought process?
by rmelvey
Thu May 12, 2016 11:25 am
Forum: Investing - Help with Personal Investments
Topic: Quick G Fund Gut Check
Replies: 8
Views: 1763

Re: Quick G Fund Gut Check

If I had access to the G-Fund it would be 100% of my fixed income allocation. You get to earn the term premium with no volatility.
by rmelvey
Thu May 12, 2016 10:29 am
Forum: Personal Finance (Not Investing)
Topic: Credit Card Picture...too many?
Replies: 15
Views: 2024

Re: Credit Card Picture...too many?

Go for it. I get as many no annual fee credit cards with signing bonuses as I can. Score is around 760 right now. Getting these cards will help my score in the long term by increasing available credit (therefore reducing my utilization), increasing the number of accounts, and creating a large amount...
by rmelvey
Tue May 10, 2016 3:10 pm
Forum: Personal Finance (Not Investing)
Topic: Checking/Savings/Credit Card
Replies: 16
Views: 1118

Re: Checking/Savings/Credit Card

QuietWealth wrote:
lee71959 wrote:
Call it 10 minutes a month to pay off the 2 cards from our checking and were looking at an extra $1,000+ a year for 2 hours of work.

Seems worth it.


You can also set them up for auto-pay and it is no work :D
by rmelvey
Mon May 09, 2016 8:30 pm
Forum: Investing - Help with Personal Investments
Topic: How to capture Indian real estate growth from US through stocks
Replies: 4
Views: 425

Re: How to capture Indian real estate growth from US through stocks

Do you have any Indian stocks and bonds? Realistically that is the closest thing you could get without a lot of hassle.
by rmelvey
Mon May 09, 2016 4:17 pm
Forum: Investing - Help with Personal Investments
Topic: Value vs Blend vs Growth
Replies: 9
Views: 1076

Re: Value vs Blend vs Growth

Factors come and go, but TSM is timeless. I think SCV is often used because people get bored... Buy some TSM and move on with your life 8-)
by rmelvey
Mon May 09, 2016 4:08 pm
Forum: Investing - Help with Personal Investments
Topic: What should I do w/ 150k lump sum while averaging into VTI - bond funds?
Replies: 11
Views: 803

Re: What should I do w/ 150k lump sum while averaging into VTI - bond funds?

If you are afraid to buy at current valuations, what will you do if the market keeps climbing? Wait longer? think doing DCA for a lump sum introduces a lot of ambiguity. If you have a well thought out asset allocation you should always know where to put more money. If 100% stocks is too risky for yo...
by rmelvey
Fri May 06, 2016 11:05 am
Forum: Investing - Help with Personal Investments
Topic: Best all-in-one fund for taxable?
Replies: 9
Views: 1725

Re: Best all-in-one fund for taxable?

What about a robo advisor like betterment or wealthfront?
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: 6
Views: 1166

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: 1317

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: 57
Views: 8380

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: 89
Views: 6636

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: 1388

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: 2014

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: 2789

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: 1874

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: 246

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: 4808

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: 3983

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: 1951

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: 5704

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: 1038

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: 3800

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: 1709

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: 1640

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: 2749

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: 3344

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: 6831

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: 1027

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: 6831

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: 848

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: 1027

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: 732

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: 732

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: 809

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: 1478

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: 1662

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: 148263

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: 1102

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 ...

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