Search found 1934 matches

by patrick013
Tue Jan 16, 2018 12:10 pm
Forum: Investing - Theory, News & General
Topic: How to build a bond ladder?
Replies: 11
Views: 388

Re: How to build a bond ladder?

Is there an advantage of building a muni-bond ladder, holding all bonds to maturity, and reinvesting when they mature? The interest rates would average out over time and the dividends could be collected and turn into new bonds to build in the ladder over time. Is this a good strategy or does everyo...
by patrick013
Sat Jan 13, 2018 4:39 pm
Forum: Investing - Help with Personal Investments
Topic: A few questions on taxable fund bond fund investments....
Replies: 18
Views: 1077

Re: A few questions on taxable fund bond fund investments....

...and placing the money in a mixture of CD's and cash (Vanguard Prime Money Market Fund). Why? Because of predicted interest rate hikes in 2018 that may further lower the price/share of this fund. People often say "baked into the prices" but it's amazing how the prices jump the week before the rat...
by patrick013
Fri Jan 12, 2018 10:04 pm
Forum: Investing - Theory, News & General
Topic: Shares Are Wildly Overpriced. But Bonds May Be Even Worse
Replies: 34
Views: 5184

Re: Shares Are Wildly Overpriced. But Bonds May Be Even Worse

From yesterday’s WSJ.. The essence of the article in quotations. Well bull or bear that's the morning paper, shock journalism either way. Rising rates are bad for bonds and high prices are bad for stocks. Reading one analyst - he sees the FFR at 3 but then retreating to 2 in the next few years. He ...
by patrick013
Wed Jan 10, 2018 7:40 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4124

Re: Corporate bonds vs. Treasuries

Our combined portfolios consist of a 50/50 mix of equities and high quality corporate bonds (primarily Vanguard Intermediate-Term Investment Grade Fund). As the equity bull market gets longer in the tooth we have been contemplating switching our fixed income allocation to Treasuries. Between a TRSY...
by patrick013
Wed Jan 10, 2018 3:57 pm
Forum: Investing - Theory, News & General
Topic: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?
Replies: 16
Views: 767

Re: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?

Can anyone explain to me whether it makes sense to hold bond funds over treasuries + high stock AA? https://fred.stlouisfed.org/graph/fredgraph.png?g=hsnc It's easy to see the credit or risk premium between TRSY and Baa. These are all 15-20 year yields with the Prime starting to rise, and corporate...
by patrick013
Sun Jan 07, 2018 4:22 pm
Forum: Investing - Theory, News & General
Topic: CAPE Fear: Why CAPE Naysayers Are Wrong
Replies: 81
Views: 5841

Re: CAPE Fear: Why CAPE Naysayers Are Wrong

This isn't exactly CAPE but assuming that from inflationary growth in profits and increased earnings from the new tax laws the 500 earnings may touch 125 this year or shortly thereafter using the most reasonable estimates. As interest rates rise but PE's stay high as they usually do for some time be...
by patrick013
Sat Jan 06, 2018 12:55 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Guidance
Replies: 8
Views: 640

Re: Portfolio Guidance

Patrick 013 - Thank you for your response. I will do the sort by ER and see where that takes us. By online tax program, do you mean something like TurboTax? I apologize for not getting back to you earlier - I didn't understand that the topic had been approved and that you all were responding. Yes T...
by patrick013
Thu Jan 04, 2018 10:34 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me with VG Advisory's Recommendaitons
Replies: 27
Views: 2153

Re: Please help me with VG Advisory's Recommendaitons

My first advised portfolio was the 500 and a 5 year cd ladder. I might add 10-15% for emerging markets stocks only. Most VG funds have several billion dollars in them so advising individual investors to buy a bunch of funds, especially initial investors can be confusing. Have you read the new Bogleh...
by patrick013
Thu Jan 04, 2018 10:09 pm
Forum: Investing - Theory, News & General
Topic: REGISTRATION FOR 2018 BOGLEHEAD CONTEST
Replies: 141
Views: 7843

Re: REGISTRATION FOR 2018 BOGLEHEAD CONTEST

3000.00



not a penny more
by patrick013
Thu Jan 04, 2018 10:03 pm
Forum: Investing - Help with Personal Investments
Topic: Advice needed: Savings & investment strategy
Replies: 7
Views: 681

Re: Advice needed: Savings & investment strategy

Thanks patrick013. I didn't know about backdoor and mega backdoor Roths! I am looking into them to see if I can convert some of my funds that way! I really appreciate the tip and the links. You're still young so use them links if you can. Future investments at least. Roth conversions are good if do...
by patrick013
Thu Jan 04, 2018 8:57 pm
Forum: Investing - Theory, News & General
Topic: Conceptually: *Why* does the Yield Curve invert?
Replies: 27
Views: 2525

Re: Conceptually: *Why* does the Yield Curve invert?

If the yield on 2 consecutive 2 year bonds (estimated) was
higher than the yield on a 5 year bond we'd have an invert
for awhile.
by patrick013
Thu Jan 04, 2018 7:00 pm
Forum: Investing - Theory, News & General
Topic: How Many Stocks Are Really Needed in Index Funds?
Replies: 52
Views: 3027

Re: How Many Stocks Are Really Needed in Index Funds?

You could have 500 stocks per general market index. Large, medium, and small cap. The S&P 1500 composite index is pretty close to that. I like having a separate index investment for each, large, medium, and small caps. The risk of letting in less than excellent companies is greater when over 500 sto...
by patrick013
Thu Jan 04, 2018 6:11 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio review - need help prioritizing rebalancing targets on mostly taxable accts
Replies: 1
Views: 137

Re: Portfolio review - need help prioritizing rebalancing targets on mostly taxable accts

Tax loss harvesting - Bogleheads Read the above. There are good chances of a market correction in 2018. You could TLH and pay minimal if any taxes and just limit your accounts to 3-5 funds. Pick the 5 general index funds you want the most and sell and buy at the market correction low. Barron's usua...
by patrick013
Thu Jan 04, 2018 12:05 am
Forum: Investing - Theory, News & General
Topic: Diversification: Is there any way to produce the same returns with less risk?
Replies: 52
Views: 5090

Re: Diversification: Is there any way to produce the same returns with less risk?

Like all first year Finance students we have to sit thru CAPM and learn concepts that aren't really that pragmatic except as concepts. The price beta can be used to limit volatility. This program, within constraints, was set to limit beta to .60 and max return. This is what it returned. Utilities mi...
by patrick013
Wed Jan 03, 2018 3:56 pm
Forum: Investing - Help with Personal Investments
Topic: Standard Deviation
Replies: 11
Views: 772

Re: Standard Deviation

Most standard deviations I've seen, Investopedia for example,
come from annual total return, for at least 5 years. Beta is
calc'd for 5 year daily price movement. It really should be
standardized but apparently isn't.
by patrick013
Tue Jan 02, 2018 5:11 pm
Forum: Investing - Help with Personal Investments
Topic: Short Term Fund for 2018: Vanguard Prime Money Market or Short Term Investment Grade
Replies: 6
Views: 672

Re: Short Term Fund for 2018: Vanguard Prime Money Market or Short Term Investment Grade

Interest rates are poised to rise in 2018, so am trying to decided between these. Vanguard Short Term Bond performed worse than both of the other funds in 2017. Seeing that rates are rising with a 3% FFR more likely than not it is very possible two 3 year bonds would yield more than one 6 year bond...
by patrick013
Sun Dec 31, 2017 10:30 pm
Forum: Personal Consumer Issues
Topic: Ever drink Chartreuse?
Replies: 16
Views: 1509

Re: Ever drink Chartreuse?

I never had a drink but it reminds me of Vermouth
for some reason.
by patrick013
Sun Dec 31, 2017 10:08 pm
Forum: Investing - Theory, News & General
Topic: Is Beta a distinct factor or a summation of other factors
Replies: 42
Views: 1937

Re: Is Beta a distinct factor or a summation of other factors

. The Capital Asset Pricing Model (CAPM) says that the only measure of risk that matters in explaining average returns of any equity portfolio is its sensitivity to market volatility i.e. Beta. However, as research has shown, sensitivity to market volatility (beta) is not the only risk that matters...
by patrick013
Sun Dec 31, 2017 9:57 pm
Forum: Personal Consumer Issues
Topic: Ever drink Chartreuse?
Replies: 16
Views: 1509

Re: Ever drink Chartreuse?

The last I heard it was the invention of Benedictine monks or nuns.

What end result don't know.
by patrick013
Sun Dec 31, 2017 3:42 pm
Forum: Investing - Theory, News & General
Topic: Is Beta a distinct factor or a summation of other factors
Replies: 42
Views: 1937

Re: Is Beta a distinct factor or a summation of other factors

If I had a separate SCV fund and put it into a model of 6 index factors: LCG, LCV, MCG, MCV, SCG, SCV plus their multi-decade returns on the side for reference the SCV fund should have the highest statistical significance with the SCV index factor. Putting the SCV fund into a single factor model wit...
by patrick013
Sun Dec 31, 2017 2:22 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion - Break Even Calculation - How do you do it?
Replies: 27
Views: 2013

Re: Roth Conversion - Break Even Calculation - How do you do it?

with so many moving parts and not clear how much a future marginal tax rate might differ from the current (no clear tax benefit) it seems to me more prudent maybe to take a more hands off approach. Maybe better to wait another year and do some more tax research than trying to micromanage?? My two c...
by patrick013
Sun Dec 31, 2017 1:53 pm
Forum: Investing - Help with Personal Investments
Topic: Predictions for 2018 Investments
Replies: 9
Views: 1010

Re: Predictions for 2018 Investments

I know nobody has a crystal ball and can predict the future, but what are your thoughts for 2018? From what I've been reading my thoughts are: - Domestic equities up some, but much less than 2017 and with more volatility. Bear market unlikely to be called in 2017, but a market peak & correction may...
by patrick013
Sat Dec 30, 2017 9:21 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion - Break Even Calculation - How do you do it?
Replies: 27
Views: 2013

Re: Roth Conversion - Break Even Calculation - How do you do it?

When looking at pre and post retirement tax rates the decision is fairly easy. On that basis the problems arise that are related to actually estimating the tax rate, the 5 year rule, and whether the tax on conversion is paid from the tIRA, the Roth, or from a taxable MMF. The general concept is stil...
by patrick013
Sat Dec 30, 2017 4:27 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion - Break Even Calculation - How do you do it?
Replies: 27
Views: 2013

Re: Roth Conversion - Break Even Calculation - How do you do it?

Is this a good starting point for an estimate? What other factors do folks use to evaluate that proposition? By the time we reach retirement (12 years) our mortage will be paid off so we could probably live fine of the RMDs (~50K) plus social security (~30K) minus federal & state taxes. Taxes will ...
by patrick013
Sat Dec 30, 2017 3:35 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion - Break Even Calculation - How do you do it?
Replies: 27
Views: 2013

Re: Roth Conversion - Break Even Calculation - How do you do it?

Is this a good starting point for an estimate? What other factors do folks use to evaluate that proposition? By the time we reach retirement (12 years) our mortage will be paid off so we could probably live fine of the RMDs (~50K) plus social security (~30K) minus federal & state taxes. Taxes will ...
by patrick013
Fri Dec 29, 2017 6:51 pm
Forum: Investing - Theory, News & General
Topic: Will PE ratios decrease due to lower taxes?
Replies: 20
Views: 2242

Re: Will PE ratios decrease due to lower taxes?

Optimism due to higher EPS due to lower taxes could increase PE or at least keep index PE high perhaps even 30. Rising interest rates could put pressure on PE perhaps 1 point per year so PE of 20 in several or more years is somewhat possible. The optimists that see EPS of 145 coming I just don't add...
by patrick013
Thu Dec 28, 2017 8:30 pm
Forum: Investing - Theory, News & General
Topic: Conceptually: *Why* does the Yield Curve invert?
Replies: 27
Views: 2525

Re: Conceptually: *Why* does the Yield Curve invert?

This graph shows 3 recessions preceded by yield curve inversion. Note this is clearly not the only variable but is it coincidence that recessions followed some months later? Yield curve inversion preceded the 1930 depression. https://s9.postimg.org/mky7akwkf/spread_and_fed_funds_rate.jpg . Lower gr...
by patrick013
Thu Dec 28, 2017 4:31 pm
Forum: Investing - Theory, News & General
Topic: Conceptually: *Why* does the Yield Curve invert?
Replies: 27
Views: 2525

Re: Conceptually: *Why* does the Yield Curve invert?

A: The yield curve inverts when bond investors expect short-term interest rates to fall. They are willing to hold long-term bonds, despite the lower current yield, because they are locking in the yield.[/i] That's the value of perfect information. Are they certain. No guessing allowed. So the inter...
by patrick013
Wed Dec 27, 2017 3:00 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 12919

Re: One answer to the Dividend stocks puzzle from behavioral finance

They're worth a tilt, they look good in the total return column. Research - High Dividend They talk about low volatility index, but i see that the top holding stock is IRON MOUNTAIN. It seems to be a high volatile stock.. Well the 3 year beta for SPHD is .81, the 5 year beta for IRM is .87 so it mu...
by patrick013
Tue Dec 26, 2017 6:24 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 12919

Re: One answer to the Dividend stocks puzzle from behavioral finance

They're worth a tilt, they look good in the total return column. Research - High Dividend They talk about low volatility index, but i see that the top holding stock is IRON MOUNTAIN. It seems to be a high volatile stock.. Well the 3 year beta for SPHD is .81, the 5 year beta for IRM is .87 so it mu...
by patrick013
Mon Dec 25, 2017 2:47 pm
Forum: Investing - Help with Personal Investments
Topic: Corporate Bonds with high interest rates
Replies: 9
Views: 649

Re: Corporate Bonds with high interest rates

triceratop wrote:
Mon Dec 25, 2017 2:08 pm


You mean like this?

Image

Comparing the Prime to Baa yields shows some wide variations.
Right now Baa looks like it's dived lower than the Prime. Better to
have something to look at than not.
Image
by patrick013
Mon Dec 25, 2017 1:47 pm
Forum: Investing - Help with Personal Investments
Topic: Corporate Bonds with high interest rates
Replies: 9
Views: 649

Re: Corporate Bonds with high interest rates

Yes, bond prices change every day, although usually less dramatically than stock prices do. To step back and take a broader look, corporate credit spreads (the additional yield you get for taking the risk of investing in corporate bonds vs. treasuries) is quite low right now: https://fred.stlouisfe...
by patrick013
Sat Dec 23, 2017 5:40 pm
Forum: Investing - Help with Personal Investments
Topic: Quitting while ahead? Need help properly diversifying.
Replies: 17
Views: 1297

Re: Quitting while ahead? Need help properly diversifying.

Why have stocks at all, especially international. There's alot of risk in Intl which cannot be quantified. Currency, smallish economies, negative correlations and offsetting returns within the index, etc.. Perhaps 1 year of income in Total Stock Market to keep invested and some hedge on inflation an...
by patrick013
Fri Dec 22, 2017 4:47 pm
Forum: Investing - Help with Personal Investments
Topic: Please Delete
Replies: 4
Views: 893

Re: Looking for Advice

Self employed - have you looked into the options in various plans ?

Designated Roth401k, SEP IRA, Simple IRA, or Solo401k.

Outline of employer provided retirement plans

Should be an additional plan to use which much higher contributions.
by patrick013
Fri Dec 22, 2017 2:18 pm
Forum: Investing - Theory, News & General
Topic: Do risk measurements cause major flaws in financial models?
Replies: 9
Views: 585

Re: Do risk measurements cause major flaws in financial models?

Using stat figures only is bound to result in an incomplete model. Some concern needs to be given for macro, fundamental, and technical analysis. So how one does that is up to one's own creativity. Estimating the 500 isn't that hard as info is plentiful. But saying EM is great there's so much negat...
by patrick013
Thu Dec 21, 2017 6:08 pm
Forum: Investing - Theory, News & General
Topic: Do risk measurements cause major flaws in financial models?
Replies: 9
Views: 585

Re: Do risk measurements cause major flaws in financial models?

Using stat figures only is bound to result in an incomplete model. Some concern needs to be given for macro, fundamental, and technical analysis. So how one does that is up to one's own creativity. Estimating the 500 isn't that hard as info is plentiful. But saying EM is great there's so much negati...
by patrick013
Thu Dec 21, 2017 5:26 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 4803

Re: Geometric Average vs. Arithmetic Average

((1.12*.92*1.02)(1/3) -1 is 1.67%, which is correct for the CAGR. This is the geometric mean of the growth ratios with a return extracted by subtracting one and expressing the result as a percent. Well it's the one to use for Finance whatever you want to call it. It was simply called geometric mean...
by patrick013
Thu Dec 21, 2017 5:00 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 4803

Re: Geometric Average vs. Arithmetic Average

((1.12*.92*1.02)(1/3) -1 is 1.67%, which is correct for the CAGR. This is the geometric mean of the growth ratios with a return extracted by subtracting one and expressing the result as a percent. Well it's the one to use for Finance whatever you want to call it. It was simply called geometric mean...
by patrick013
Thu Dec 21, 2017 4:36 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 4803

Re: Geometric Average vs. Arithmetic Average

So it looks like IRR=CAGR=geometric mean when dealing with full geometric mean of annual returns of +12%, -8%, and +2% =((1.12*.92*1.02)^1/n)-1 The geometric mean of the numbers 12,-8, and 2 is (12*(-8)*2)^(1/3) which is -5.769 (to three places) plus two answers that are complex numbers. ((1.12*.92...
by patrick013
Thu Dec 21, 2017 3:48 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 4803

Re: Geometric Average vs. Arithmetic Average

So it looks like IRR=CAGR=geometric mean when dealing with full annual periods, the IRR being more flexible if not. PortfolioVisualizer appears to be calcing CAGR correctly when using full annual periods. Within those limits the geometric mean is a nice math trick to get a compound annual return for...
by patrick013
Wed Dec 20, 2017 9:21 pm
Forum: Investing - Help with Personal Investments
Topic: Please review my personal portfolio and questions
Replies: 6
Views: 696

Re: Please review my personal portfolio and questions

It was mentioned that bonds don't belong in a Roth IRA. Why is that? If I were to follow that advice, that means transferring my VG Intl Bond Index to probably the VG Total Stock Market Index or some other fixed income fund? If you have room in tax-deferred it is a better place for bonds because th...
by patrick013
Wed Dec 20, 2017 6:21 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 4803

Re: Geometric Average vs. Arithmetic Average

CAGR vs. IRR: Understanding investment growth measures Points made : CAGR = IRR (lump sum investment and constant returns) CAGR = IRR (lump sum investment and variable returns) CAGR = IRR (periodic investment and constant returns) CAGR does not = IRR (periodic investments and variable returns) So f...
by patrick013
Wed Dec 20, 2017 4:56 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 4803

Re: Geometric Average vs. Arithmetic Average

The geo mean is supposed to be the same as the IRR or effective compound yield between time periods. IRR has many names - annualized return, annual percentage yield, compound return, effective yield, yield to maturity, etc., probably even more. It should equal the IRR if it's a true compound rate ca...
by patrick013
Wed Dec 20, 2017 4:23 pm
Forum: Investing - Help with Personal Investments
Topic: bond portfolio
Replies: 8
Views: 725

Re: bond portfolio

One of the best things for a rising interest rate cycle is a 5 year CD ladder. Each year a CD matures and you have the option to withdraw some or all, add to a new CD, or just renew the CD again at the higher 5 year rate. No capital loss or liquidity loss if budgeted correctly. Question always comes...
by patrick013
Tue Dec 19, 2017 3:33 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to model my portfolio--but I think I "broke" i-ORP and RPM!
Replies: 8
Views: 832

Re: Trying to model my portfolio--but I think I "broke" i-ORP and RPM!

Thanks. Great advice for the starting point. I will for sure be in the (current) 25% bracket at age 70. Where I get into the weeds, for example, is then trying to model whether it's worthwhile to maybe even pay for some ROTH conversions now into the (current) 25% bracket--because of the value of th...
by patrick013
Mon Dec 18, 2017 6:08 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to model my portfolio--but I think I "broke" i-ORP and RPM!
Replies: 8
Views: 832

Re: Trying to model my portfolio--but I think I "broke" i-ORP and RPM!

First thing I'd do is estimate taxes at age 70. By then all pensions, SS, annuities, RMD's, etc. would be payable, taxable, and available for annual expenses. I'd make Roth conversions before that if the marginal tax result was less than the marginal tax rate at age 70 before conversions, to start w...
by patrick013
Mon Dec 18, 2017 3:27 pm
Forum: Investing - Theory, News & General
Topic: Diversification: Is there any way to produce the same returns with less risk?
Replies: 52
Views: 5090

Re: Diversification: Is there any way to produce the same returns with less risk?

Suppose you invest in a bunch of stock (doesn't have to all be stock, but whatever), each of which you adjudge to have the same risk and return. That is, each has an expected annual growth rate equal to r and, say, a yearly standard deviation (a measure of volatility, though not the only one, and m...