Search found 1176 matches

by aj76er
Fri Mar 22, 2024 1:34 pm
Forum: Personal Finance (Not Investing)
Topic: Dedicated Financial Computer Master Thread
Replies: 203
Views: 9231

Re: Dedicated Financial Computer Master Thread

We do this, more or less. My personal computer is only used for financial sites and yearly taxes. I do sometimes visit a site that is known and/or trusted (e.g. Amazon, insurance company, Bogleheads, etc), and will always log out afterwards. But never for general “browsing” and I don’t install any 3rd part apps, except for google’s Chrome browser. All personal reading and browsing happens on an iPad. I do not use apps for any financial sites (e.g. brokerages). However, I do use phone apps for credit cards and a checking account that we use to pay some bills that only contains a small amount of cash, on average. Furthermore all brokerages have Symantec VIP enabled with money lockdown and strong passwords (that are “not” kept in an online pas...
by aj76er
Thu Mar 14, 2024 1:27 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

As a compromise, perhaps use TIPS to only match expenses that do a decent job of tracking CPI-U (e.g. food staples, property taxes, gas, utilities, etc). If you are over exposed to other areas that aren’t represented well in CPI-U (e.g. health care, college education, etc), then you need to do something else, but for most of those expenses folks tend to hedge with their human capital (e.g. wages and employer subsidized health insurance). TIPS are great, but they do seem to be “calibrated” for the older retiree with launched kids, a paid off house , and Medicare. But isn't housing a large percentage of the CPI measure? Yeah but the way they calculate it (using owner’s imputed rent) is a bit wonky. The actual price of houses is considered an...
by aj76er
Thu Mar 14, 2024 9:16 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

For now just individual t-bills in taxable and money market in tax advantage account. What makes you think these will do any better than TIPS at keeping up with inflation? The expected return of Tbills and money market funds is about the same as TIPS, but the uncertainty of those returns is much larger over longer periods due to reinvestment risk. So not only are you no more likely to keep up with inflation, but the risk of you not doing so is much higher. As I've shared, I also have lots of short-term Treasuries in taxable, but I acknowledge the long-term riskiness of them, and my longer-term TIPS contribute to my ability to take that risk. Fifty percent inflation over 5 years is about 8.5% per year. There simply is no investment with an ...
by aj76er
Thu Mar 14, 2024 8:49 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

If you don’t use tips are you deciding no fixed income and going 100% stocks to better keep up with inflation? Or are you using tbills or savings accounts/cds? If you are going to have some fixed income, tips seem like the better deal than total bond but I’m interested in other ideas. For now just individual t-bills in taxable and money market in tax advantage account. What makes you think these will do any better than TIPS at keeping up with inflation? The expected return of Tbills and money market funds is about the same as TIPS, but the uncertainty of those returns is much larger over longer periods due to reinvestment risk. So not only are you no more likely to keep up with inflation, but the risk of you not doing so is much higher. As...
by aj76er
Wed Mar 13, 2024 8:52 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Thread on Speed of 2023 Tax Refunds
Replies: 52
Views: 6125

Re: Mega Thread on Speed of 2023 Tax Refunds

E-Filed and accepted by IRS on 2/25/2024
Just received direct deposit of refund today, 3/13/2024
by aj76er
Wed Mar 13, 2024 1:30 pm
Forum: Investing - Theory, News & General
Topic: Just for fun, what single stock do you think will see huge growth
Replies: 174
Views: 27728

Re: Just for fun, what single stock do you think will see huge growth

valleyrock wrote: Wed Mar 13, 2024 12:37 pm The last time I bought a single security, I was checking it all day long. It was a major distraction.

Back to Bill Bernstein's sage advice. Never buy an individual security because you can never know anywhere near as much about it as the people on the other side of the trade. It's a fool's errand
Maybe you missed the first part of the thread title: “Just for fun …”
by aj76er
Sun Mar 10, 2024 2:30 pm
Forum: Personal Finance (Not Investing)
Topic: Fidelity as a one stop shop
Replies: 6053
Views: 1035858

Re: Fidelity as a one stop shop

… How do you setup daily? What if it fails due to insufficient amount? Does it stop all recurring or continues with next? I think you missed a step. At Fidelity there is an option to transfer the distributions from your holdings which go to the settlement fund to a different account. Including a linked bank account. This process can be set up to run daily. It’s not a fixed dollar amount but what ever distributions hit the settlement fund. All of this is set up through the normal transfer interface to move money between accounts. That is brilliant Yes, this can be very useful in setting up retirement spending. In our case, we know how much we want to to spend regularly (normal spending) and we also know we will have some lumpy discretional ...
by aj76er
Fri Mar 08, 2024 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Fidelity as a one stop shop
Replies: 6053
Views: 1035858

Re: Fidelity as a one stop shop

If “Money Lockdown” is enabled, can dividends still be directed to another account (e.g. the CMA account, or external checking)?
by aj76er
Fri Mar 01, 2024 3:11 pm
Forum: Personal Finance (Not Investing)
Topic: Complain About Bad Boss?
Replies: 56
Views: 5975

Re: Complain About Bad Boss?

Don't do it. Your manager's manger will not care. They only care if work is getting done. Individual contributors, for the most part, are completely expendable. The managers and HR are really there to protect the company - to make sure work is getting done and everything is within compliance.

I learned a long time ago that you can't change corporate culture or the opinions of those "above" you in the hierarchy. The only reasonable option is to get another job (preferably at another company) with a manager/team/culture that is a better fit.

Also, getting to minimal state of financial independence makes it much easier to deal with (and/or ignore) B.S. in the workplace :sharebeer .
by aj76er
Thu Feb 29, 2024 1:59 pm
Forum: Personal Consumer Issues
Topic: Post your favorite websites
Replies: 6
Views: 1213

Re: Post your favorite websites

Rakuten (as a cash back portal)
by aj76er
Wed Feb 28, 2024 2:32 pm
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

Putting statistics and empirical support aside, I'd like to propose an intuitive/conceptual reason for holding Sharpe's Market Portfolio (i.e., all USD-denominated equities and investment grade bonds in proportion to their global market capitalizations) and ask for comments on where my rationale is wrong. Here we go...One should hold the Market because there is a finite amount of cash in the world to be invested. That cash has to be invested somewhere. If it flows out of any particular equity or bond, as long as it remains invested, it flows into some other equity or bond and the Market capitalization is maintained. It seems if you hold the Market, the only way your portfolio value can go down is if funds flow out of the Market entirely, f...
by aj76er
Sat Feb 24, 2024 10:55 am
Forum: Personal Finance (Not Investing)
Topic: High Salary (>$500,000) careers
Replies: 244
Views: 29136

Re: High Salary (>$500,000) careers

I’ve been doing software (CAD) development in the semiconductor industry for close to 25yrs. Had the misfortune of graduating in 2001 just after the dotcom bust, originally as a circuit designer, and shifted over to the software side (to avoid layoffs at the time). Turns out that I have some talent on the software side and continued on and had the opportunity to leverage some of my domain knowledge to move into a pure development role (C/C++) at an EDA company. That company got bought, and the environment turned toxic, so in looking for other opportunities, I found a CAD position at a FAANG company where I am today. When I started at FAANG, I worked close to 100hrs a week, and in a few years single-handedly developed about 50% of the infras...
by aj76er
Thu Feb 22, 2024 2:48 pm
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS = 2.2% real!
Replies: 26
Views: 4770

Re: 30 yr TIPS = 2.2% real!

arcturus wrote: Thu Feb 22, 2024 2:23 pm
ScubaHogg wrote: Thu Feb 22, 2024 2:21 pm In 10 or 20 years we better not have a “how are 2024 retirees doing” due to bad sequence risk. Someone could guarantee a 4% 30 year retirement for well less than 25x expenses with these tips yields
How? The yield is only 2.2% after inflation, right?
Because that withdrawal rate assumes you are consuming the principal + the yield. For example, spending over 30 years at 0% real allows for a 3.33% safe withdrawal rate.
by aj76er
Thu Feb 22, 2024 3:39 am
Forum: Investing - Theory, News & General
Topic: The One-Fund Portfolio as a default suggestion
Replies: 904
Views: 241878

Re: The One-Fund Portfolio as a default suggestion

Fascinating thread! Thanks for all of the great discussion. (For the record I'm 100% VT in the Roth, HSA and Brokerage. The 401k is, unfortunately, a 100% mix of BlackRock International Equity Index Trust, BlackRock Russell 1000 Index Trust & BlackRock Russell 2000 Index Trust in an attempt to try to recreate VT. My fondest wish is to find employment that I actually enjoy, rollover the 401k to an IRA and drop it all into VT.) (It's fantastic to look across and see one dividend date. I moved almost everything to one brokerage so it simplifies it even more.) You could check if your employer 401k has a brokerage link option. Then you could buy VT in that. I suppose if you can amass a portfolio size of at least 35X during your working year...
by aj76er
Wed Feb 21, 2024 9:07 am
Forum: Personal Consumer Issues
Topic: Full solar ECLIPSE April 2024!
Replies: 80
Views: 9589

Re: Full solar ECLIPSE April 2024!

It appears Delta is offering a special-purpose flight just for viewing the eclipse:

https://news.delta.com/eclipse-viewing- ... dium=email

:D
by aj76er
Sun Feb 18, 2024 11:39 am
Forum: Personal Investments
Topic: Turning 50. Would love your thoughts on reallocation
Replies: 22
Views: 3673

Re: Turning 50. Would love your thoughts on reallocation

You could think about starting a TIPS ladder in your 401k. Right now, TIPS are at very attractive real yields (historically). You could also buy Treasuries in either your 401k or taxable (as they are exempt from state tax). Perhaps set aside 2 or 3 years of expenses in a ladder. Tbills are also paying really good rates right now. I’ve started thinking less about percentages of bonds (which is arbitrary) and more about matching liabilities. So Tbills for expenses within 2 or 3 years, and then TIPS for years beyond that. Once you do that for X years of expenses based on your comfort level (5yrs, 10yrs, etc), then the rest of your portfolio could be anything reasonable (e.g. 60/40, or even 100% VTI, if you want). Optionally, you can use IBonds...
by aj76er
Sat Feb 17, 2024 5:15 pm
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

And/or that the LMP is too big/conservative vs. optimal. I don't understand why one's LMP would be too big/conservative vs optimal? You can fine-tune the LMP to match your core living expenses, which should be fairly predictable. For example, say you have a paid-off residence with predictable HOA, Property Taxes, and Insurance costs; and you have predictable grocery bills (i.e. you know what you like to cook/eat). This part of a person's budge is both highly personal, and highly correlated to inflation. Thus, right-sizing a TIPS/Ibonds LMP (at least for U.S.-based investors) makes a lot of sense. After you setup an LMP with a decent sized portion of the portfolio, it makes sense to go for maximum return with the RP - hence, 100% VT. Using ...
by aj76er
Mon Feb 12, 2024 9:13 am
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

But I'm struggling with defining the right WBS, specifically the fixed income portion. I am giving strong consideration to watchnerd's approach as a middle ground between too much gov't fixed income (therefore too conservative, given the LMP) and just going all stock for the WBS. Even if you drop government bonds, I support watchnerd's middle ground of including corporate bonds in your implementation of WBS. Opinions are divided on government bonds with reasonable arguments both ways. But the case for including corporate bonds in WBS is more clear cut. Some portion of earnings goes toward paying corporate bond interest. So you need to be a bondholder as well as a shareholder in order to receive the full public claim on corporate earnings. ...
by aj76er
Fri Feb 09, 2024 2:06 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage Lender Asking for Full Account Numbers
Replies: 1
Views: 340

Mortgage Lender Asking for Full Account Numbers

I’m applying for a mortgage and going through the loan process with a few lenders (with hopes of going with the best rate/closing cost). One of the lenders is a small, local lender that would sell my loan if I went with them. The other is a large, national lender that would not sell the loan. Anyway, after supplying account statements, I blacked out the account numbers (using the redact tool in Mac Preview software) to just show the last 4 digits. The small, local lender is saying that they need full account numbers of all my accounts. I’m jittery about supplying this due to fraud (e.g. ACATS transfer fraud, etc). I realize they have a lot of info on me, but account numbers and passwords seem to be the last line of defense I would have agai...
by aj76er
Wed Feb 07, 2024 3:08 pm
Forum: Investing - Theory, News & General
Topic: The new Capital Market Line series of Target Date funds
Replies: 9
Views: 1471

Re: The new Capital Market Line series of Target Date funds

The market capitalization of TIPS relative to Treasuries is small. In order for TIPS to gain widespread popularity within target date funds, real yields would likely get pushed downward, and possibly go negative. I believe this is one reason large fund providers stick with nominal government+investment-grade bonds: because the market is large enough to absorb the inflows/outflows (without perturbation).

Having said that, DFA provides target date funds that employ LDI methodology using TIPS funds. I am not sure what the AUM is for these funds, however.
by aj76er
Sat Feb 03, 2024 6:43 pm
Forum: Personal Investments
Topic: i-bonds - how much is too much?
Replies: 27
Views: 3417

Re: i-bonds - how much is too much?

Before you decide to load up on IBonds (e.g. in gift boxes, trust accounts, and even personal TD accounts), make sure that you read through the following thread:

viewtopic.php?p=7693395#p7693395

I think there is real illiquidity risk with assets held in TD accounts. If anything should happen to you or your SO, accessing those accounts may take a very, very long time. Even accessing the bonds held in a spouse’s account could take a while. Some of the timeframes reported in that thread are just shocking (e.g. up to a year to transfer assets).
by aj76er
Fri Jan 26, 2024 2:39 pm
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

In practice, one should worry at least a little about Treasury default risk. One way to mitigate this, at least somewhat, is to hold the market weight in gold and/or other precious metals. In our risk port, we hold around 5% in gold ETFs, which approximates world cap weight (rounded up a bit). So our risk port is essentially global equities and gold. For bonds, as I mentioned up-thread, I now treat them as non-risky assets that are duration matched to our personal planning horizon. I agree that the sizing of the risk and non-risk portions of the portfolio are a little arbitrary and are based on personal preference for how much opportunity cost one is willing to sacrifice for (near) certainty of matching one’s liabilities, how certain one i...
by aj76er
Thu Jan 25, 2024 10:34 am
Forum: Personal Investments
Topic: Treasury Direct - The Eternal Wait and No Way To Track Transfer
Replies: 82
Views: 14097

Re: Treasury Direct - The Eternal Wait and No Way To Track Transfer

This thread has me second-guessing having accounts at TD. For those with spouses, if anything happens to them, how easy is it to get the assets transferred from their TD account to yours? For example, in the case of one spouse passing away, would the other spouse have to go through the beneficiary process and wait up to 6 months to get the bonds transferred to their account? Is there another way to configure spousal accounts so the assets are more readily accessible by either spouse in the event of one or other passing away?
by aj76er
Thu Jan 25, 2024 10:17 am
Forum: Personal Investments
Topic: How much is owned real estate (primary/secondary homes) as a percent of your net worth?
Replies: 113
Views: 9016

Re: How much is owned real estate (primary/secondary homes) as a percent of your net worth?

We are outliers, so I’ll play along just to throw off your averages :twisted:

RE Assets: 0%
Other Assets: 100%
Total Assets: 100%

At this point, we will probably early retire as renters.
by aj76er
Thu Jan 25, 2024 10:00 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

C'mon baby--just 7 more bp and I'll buy me some. https://i.postimg.cc/6qWh9VrP/TIPS-on-january-24.png [1/24/2023 closing prices on the WSJ site] Being an academic, what is your rationale for waiting for 2.25%? Does it follow your investment plan, or is that number just a psychological line in the sand? RM Not an academic in this thread particularly (quite liberating). I have consistently followed a market timing path here, trying to buy when TIPS prices are depressed, otherwise not (I never sell; LTPZ is a holding vessel for my ultimate ladder, which will start about 2040, when I am in my upper 80s and DW is in her lower 80s. The ladder will salve the ever-increasing loss to inflation of the TIAA Traditional funds that I will serially annu...
by aj76er
Wed Jan 24, 2024 1:32 am
Forum: Investing - Theory, News & General
Topic: What goes up most often goes up higher
Replies: 23
Views: 5166

Re: What goes up most often goes up higher

A good article by Ben Carlson, What Happens After a 20% Up Year in the Stock Market? . Time and time again on this forum, we see people hesitate to invest because the market is up. He points out that since 1928, there have been 34 calendar years1 where the S&P 500 has finished up 20% or more (not counting 2023, he wrote this before the year ended. He points out: The stock market was up 22 out of the 34 years following a 20% gain (65% of the time). The average return following a 20% up year was 8.9%. There were 19 double-digit up years. There were just two double-digit down years (1936 and 2022). There's other good discussion in the short article, again making it clear that when it comes to predicting stocks for the coming year, nobody ...
by aj76er
Mon Jan 22, 2024 3:19 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

3. Almost all of the 1.7% annualized over 120+ years occurred during the 4 or so decades between the early 1980s and early 2020s...an anomalous period when the interest rates on 10 year Treasuries plummeted from over 15% (record high) to close to zero (record low). Doesn't it make sense that if interest rates were steady over the past 120 years, inflation would also likely be pretty flat, and real bond returns would be very close to zero? Thus, unless you can predict a rise or fall in interest rates over long periods of time, the expected long term real return on nominal bonds is about zero? 5. If I am right re: #4 above, if you have no idea whether interest rates will be higher or lower in the future (defined by the maturity date of the b...
by aj76er
Mon Jan 22, 2024 3:08 pm
Forum: Personal Consumer Issues
Topic: Return My New Apple Watch?
Replies: 83
Views: 6486

Re: Return My New Apple Watch?

I mostly just use my IPad and Apple Watch these days. I use my Mac for financial stuff mostly (spreadsheet trackers, taxes, etc). I only use my phone sparingly- phone app, authentication, camera, etc. I use the watch mostly for: Health and activity tracking Timers for cooking and workouts Heart rate monitor- both resting and workouts Checking of temperature and UV levels multiple times daily just before walking dog Extra feedback (gentle vibration) for turn by turn directions when driving with maps Reading alerts, notifications, and texts without needing to get out phone Finding phone if misplaced Responding to texts with short messages (like thumbs up) Telling the time Telling the date Remote control of apps on phone - like camera, podcast...
by aj76er
Sun Jan 21, 2024 10:39 am
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

Far more important is the fact that this calls into serious question the ability of a significant proportion of investors to use (1) Ibonds and/or TIPS for a safe security and (2) a world bond/stock portfolio for a risky, higher-return portfolio . But that is a subject for another time and place. I think Sharpe is highlighting this as a problem for large institutional investors and/or retail funds (e.g. target date funds). If these investors replaced their nominal bond holdings with TIPS, it would distort the market and push up the price of TIPS, thereby creating large premiums. However, as a small-time, individual investor, if I can buy TIPS at a discount and IBonds at a positive fixed rate, then why not? The global aggregate bond market ...
by aj76er
Sun Jan 21, 2024 9:59 am
Forum: Personal Investments
Topic: Suggestions for 100x moonshots
Replies: 108
Views: 21663

Re: Suggestions for 100x moonshots

Eventually OP may see that the closest resemblance between speculative impulses and moonshots is the giant crater. Then OP may be ready to outgrow the gambling phase of thinking it's possible to outguess the collective wisdom of the market more often than random chance. At that point, Bogleheads will be here with our boring but effective advice to buy the whole market and bet on private enterprise in general, not wild speculations. I don’t think anyone is suggesting putting the majority of one’s money in a moonshot. But having 5% or less could be a reasonable thing to do. Market cap weighting is great, but it’ll drown out lots of opportunities in the small and micro-cap space. For example, if a company goes from 0.5B to 50B over a number o...
by aj76er
Sat Jan 20, 2024 6:25 pm
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

longinvest wrote: Sat Jan 20, 2024 4:26 pm You seem quite confident in your belief that global bond holders must be, as a group, stupid.
Not at all. Collectively they are smarter than you and I, surely, but they are not smart enough to price in unexpected inflation, as can be seen from backtesting the period from 1/2021 to 1/2024.

In contrast, the government guarantees that TIPS and IBonds get inflation adjustments such that holders of these bonds do not need to guess at this collectively through (stupid/smart) trading.

An individual bond holder with future liabilities affected by inflation should naturally prefer inflation-linked bonds over nominal ones with a duration that matches those liabilities.
by aj76er
Sat Jan 20, 2024 2:29 pm
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

60/40 VT/BNDW portfolio, rebalanced monthly, from 1/2021 to 1/2024 returned an inflation-adjusted CAGR of -3.05%, and thus has not recovered in terms of purchase power. 100% VT over the same period returned an inflation-adjusted CAGR of 0.16%, so it is now back to even. Aj76er, this thread isn't about investing into the highest-returning asset class. It's about the Global Stock-and-Bond Market Portfolio. If you think that investing into a subset of the (stock-and-bond) market will allow you to beat the market on a risk-adjusted basis, or maybe on an absolute basis without taking into account risk , you're free do it. But it might be more useful to discuss your preferred portfolio on its own "Aj76er's preferred portfolio" thread. ...
by aj76er
Sat Jan 20, 2024 10:59 am
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 683
Views: 158215

Re: Bill Sharpe's preferred portfolio

This post documents the monthly return and asset-class weights as of December 31, 2023 of the (free-float) Global Stock-and-Bond Portfolio or, if you prefer, William Sharpe's Market Portfolio . Here's a link to the previous entry . The December 2023 return was: Global Stock-and-Bond Portfolio: ((60.87% X 5.15% (global stocks)) + (39.13% X 3.39% (global bonds))) = 4.46% (USD) Global stocks: Vanguard Total World Stock ETF (VT) NAV return Global bonds: Vanguard Total World Bond ETF (BNDW) NAV return [/size] As of December 31, 2023 the weights were: Global stocks: $75,268,432 million USD Market cap -- 60.92% FTSE Global All Cap Index ( GEISLMS ) -- Net MCap [/size] Global bonds: $48,277,040 million USD Market cap -- 39.08% FTSE World Broad Inv...
by aj76er
Thu Jan 18, 2024 3:09 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

watchnerd wrote: Thu Jan 18, 2024 12:29 pm Notable:

The 10 YR yield is now higher than the 5 YR yield, which hadn't been true a while ago with the inverted yield curve.

https://tradingeconomics.com/united-sta ... tips-yield
I noticed this today as well. The TIPS yield curve is now positively sloping, while the nominal yield curve is still inverted. Why is this so? And in the spirit of this thread, does it imply anything for market timing of future purchases :wink: ?
by aj76er
Mon Jan 15, 2024 12:00 pm
Forum: Investing - Theory, News & General
Topic: How big a portfolio is okay for 100% stock?
Replies: 115
Views: 21776

Re: How big a portfolio is okay for 100% stock?

snowday2022 wrote: Mon Jan 15, 2024 11:23 am
watchnerd wrote: Mon Jan 15, 2024 9:34 am
Carguy85 wrote: Mon Jan 15, 2024 8:58 am Maybe 6000+ sq ft is now considered small for a home too?
I can't imagine the utility bills for 6000 sq ft.
Less expensive than many think if the home is newish and well insulated.

I have almost that large of home in MCOL. 150-200 per month for gas and electric. Internet 50. Water, sewer, recycling 80. I do lawn and snow removal, but that would run 50 per week (lawn) or per snow.

Property taxes are a different matter.
On a large, new construction home, I would guess both property taxes and insurance would be the biggest carrying costs.
by aj76er
Sun Jan 14, 2024 10:44 am
Forum: Personal Investments
Topic: When should I start changing my stock and bond ratios?
Replies: 40
Views: 6256

Re: When should I start changing my stock and bond ratios?

I’ve started thinking of bonds as providing an income stream that matches a portion of our liabilities. We are similar ages to you with similar situation (no kids, would like to early retire by 55), and our overall AA is about 75/25, but I’m not really targeting a specific AA anymore. So, in the future I hope to have our fixed income be all TIPS, IBonds, and cash, that covers maybe 60-70% of our base liabilities for 15 to 20 years. Our risk portfolio would then be all in global equity index funds, with 70% of the dividends covering the other 30% of our base liabilities. I was never really comfortable with the traditional nominal bond fund glide path, as it felt arbitrary and nominal bond funds have a lot of inflation risk. More importantly...
by aj76er
Sat Jan 13, 2024 11:01 am
Forum: Investing - Theory, News & General
Topic: How big a portfolio is okay for 100% stock?
Replies: 115
Views: 21776

Re: How big a portfolio is okay for 100% stock?

Dr Bernstein has said that a 2% withdrawal rate is bullet proof. So, to your original question, 100% stocks portfolio should be relatively safe at a 2% starting withdrawal rate. Interestingly, a global stock portfolio (e.g. VT) currently has an SEC yield of about 2.2%, so with a 2% starting withdrawal rate you are essentially living off the dividends.
by aj76er
Sat Jan 13, 2024 9:26 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

Thanks for confirming the above, Professor. So just for fun, I did some very quick calculations to see how often real US stock returns exceeded your TIPS Yield thresholds of 0%, 1% and 2% over 20 year durations: US stocks > 0% CAGR over 20 years, 99.9% of time. US stocks > 1% CAGR over 20 years, 98% of time. US stocks > 2% CAGR over 20 years, 93% of time. US Stocks Average CAGR = 6.5% Punchline: 1. Unless someone is extremely risk averse, there is little historical rationale to buy 20 yr TIPS at under 1% YTM. 2. For those who really really want to lock in a minimum return of 2%, US stocks failed to deliver 7% of the time, historically. Yes, but what are the historical probabilities of stocks outperforming given today’s valuations? That’s w...
by aj76er
Thu Jan 11, 2024 2:10 pm
Forum: Personal Investments
Topic: When should I start changing my stock and bond ratios?
Replies: 40
Views: 6256

Re: When should I start changing my stock and bond ratios?

I’ve started thinking of bonds as providing an income stream that matches a portion of our liabilities. We are similar ages to you with similar situation (no kids, would like to early retire by 55), and our overall AA is about 75/25, but I’m not really targeting a specific AA anymore. So, in the future I hope to have our fixed income be all TIPS, IBonds, and cash, that covers maybe 60-70% of our base liabilities for 15 to 20 years. Our risk portfolio would then be all in global equity index funds, with 70% of the dividends covering the other 30% of our base liabilities. I was never really comfortable with the traditional nominal bond fund glide path, as it felt arbitrary and nominal bond funds have a lot of inflation risk. More importantly,...
by aj76er
Mon Jan 08, 2024 11:00 am
Forum: Personal Investments
Topic: TIPS:Individual bonds vs. bond fund
Replies: 41
Views: 5939

Re: TIPS:Individual bonds vs. bond fund

One thing to be mindful of when using funds is to match the duration to one’s planning horizon. You say that you are 76 now, so if you are planning out to age 90, then this implies a duration of about 7 ((90 - 76)/2). In this case, your existing fund is perfect. When you turn 80, perhaps think about adding a short term fund (e.g. VTIP) to get duration closer to 5 (so perhaps 50% SCHP and 50% VTIP). Then sell from the intermediate fund (e.g. SCHP) until turn 85, at which point perhaps just go to VTIP and stay there. For reference, here’s a post that discusses the above strategy in a bit more detail: https://www.bogleheads.org/forum/viewtopic.php?p=7488926#p7488926 And if you want to get more precise and emulate a ladder with funds, you can ...
by aj76er
Mon Jan 08, 2024 10:52 am
Forum: Investing - Theory, News & General
Topic: Ronald Read the Janitor who amassed 8 million
Replies: 104
Views: 25666

Re: Ronald Reed the Janitor who amassed 8 million

Lots of posts wondering why he didn’t spend more, but keep in mind that compounding is exponential. His portfolio may have not been outrageously large during his younger, go-go years.
by aj76er
Mon Jan 08, 2024 8:42 am
Forum: Investing - Theory, News & General
Topic: Worst. Bond. Market. Ever. [2023 update]
Replies: 253
Views: 51737

Re: Worst. Bond. Market. Ever. [2023 update]

Over the past few years, it feels to us as if reasons for including bonds have shifted at least somewhat. Historically, we have included them for risk protection, but their returns more recently seem to have increased that focus for many who have sought more complicated bond investing than a Total Bond Fund. We have stayed the course for the most part, and the TB fund has met our goals, including in 2023. Tim I think what has opened many people’s eyes about nominal bond funds is the fact that they are exposed to inflation risk and can lose significant value in “real terms” that they never recover from. I, for one, am changing how I use bonds in my portfolio. Instead of using them as a volatility dampener, I am transitioning my nominal bond...
by aj76er
Sun Jan 07, 2024 4:53 pm
Forum: Personal Investments
Topic: TIPS:Individual bonds vs. bond fund
Replies: 41
Views: 5939

Re: TIPS:Individual bonds vs. bond fund

I would be interested to hear how to use TIPS funds for the following scenario: The ability to withdraw $X in real terms each year starting in 2025 until 2030 (six years). This would be in an IRA. Perhaps the 2025 money would be best in a 1-year T-bill? But how to handle the other 5 years? What if I wanted to do it for 9 years? Anyone want to take a crack at it? Take a look at this post: https://www.bogleheads.org/forum/viewtopic.php?p=7488926#p7488926 Specifically the the information from forum member dcabler is what you are looking for. Yeah, I'd like to see someone post the solution for these particular numbers. Let's say X = $50000. I can scale it as needed. As an example, here's a spreadsheet that calculates withdrawals from 2031 to 2...
by aj76er
Sun Jan 07, 2024 1:52 pm
Forum: Personal Investments
Topic: What Makes the USA Stock Market So Amazingly Successful
Replies: 39
Views: 3436

Re: What Makes the USA Stock Market So Amazingly Successful

One reason the Boglehead strategy is so successful is that the USA Stock market is a power house. Just invest in SPY and you are pretty much guaranteed well above returns on inflation. Heck since 2000 SPY has more than tripled and is up over 220%! The argument for this would be our companies are international powerhouses. But take two similar economic power house countries like the UK and Germany and their corresponding index funds don't tell a similar tale. The FTSE 100 (the biggest 100 UK companies) is up just 20% since 2000 so barely inflation. The German ETF EWG (biggest large and mid caps) I bought in 2000 for $22 and today it's $29! Amazingly it's NEVER traded above $35 So what makes the USA stock company so amazing or put another wa...
by aj76er
Sun Jan 07, 2024 1:07 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

watchnerd wrote: Sun Jan 07, 2024 11:30 am
Bill Bernstein wrote: Sun Jan 07, 2024 10:34 am Only on this forum will one find folks awaiting the next TIPS auction with as much anticipation as a new Taylor Swift album. :wink:

The announcement for the 1/15/34 is this Thursday, 1/11, look for it then at better brokerages everywhere.
Interesting thought experiment:

Which will have a better real yield over the next 10 years, the 2034 TIPS or Taylor Swift memorabilia?
Maybe hold some of both: TIPS in the Liability Matched Portfolio, and some Swiftie memorabilia in the Risk Portfolio :wink:
by aj76er
Sat Jan 06, 2024 2:05 pm
Forum: Personal Investments
Topic: TIPS:Individual bonds vs. bond fund
Replies: 41
Views: 5939

Re: TIPS:Individual bonds vs. bond fund

RyeBourbon wrote: Sat Jan 06, 2024 11:35 am I would be interested to hear how to use TIPS funds for the following scenario:

The ability to withdraw $X in real terms each year starting in 2025 until 2030 (six years). This would be in an IRA.

Perhaps the 2025 money would be best in a 1-year T-bill? But how to handle the other 5 years? What if I wanted to do it for 9 years?

Anyone want to take a crack at it?
Take a look at this post:
viewtopic.php?p=7488926#p7488926

Specifically the the information from forum member dcabler is what you are looking for.
by aj76er
Sat Jan 06, 2024 2:03 pm
Forum: Personal Investments
Topic: TIPS:Individual bonds vs. bond fund
Replies: 41
Views: 5939

Re: TIPS:Individual bonds vs. bond fund

One thing to be mindful of when using funds is to match the duration to one’s planning horizon. You say that you are 76 now, so if you are planning out to age 90, then this implies a duration of about 7 ((90 - 76)/2). In this case, your existing fund is perfect. When you turn 80, perhaps think about adding a short term fund (e.g. VTIP) to get duration closer to 5 (so perhaps 50% SCHP and 50% VTIP). Then sell from the intermediate fund (e.g. SCHP) until turn 85, at which point perhaps just go to VTIP and stay there. For reference, here’s a post that discusses the above strategy in a bit more detail: https://www.bogleheads.org/forum/viewtopic.php?p=7488926#p7488926 And if you want to get more precise and emulate a ladder with funds, you can r...
by aj76er
Sat Jan 06, 2024 11:57 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

Are you talking the expected yield the brokers publish? The expected yield published on Fidelity's website related to the auction. I recall seeing it in the past. I have no idea how they get that, or if it is vaguely accurate. I will probably just do what you are doing. Have you ever tracked those numbers versus the actual auction results to see how accurate they are? I have not. My vague recollecion of expected yields via Fidelity in recent auctions is that they were not very accurate. I have always just bought on the secondary market. Is there any significant benefit to purchasing at the auction instead of secondary market? Advantages to auction purchasing: * No bid/ask spreads or commissions * Ability to schedule a future purchase once ...
by aj76er
Sat Jan 06, 2024 11:33 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

Please explain how reinvesting dividends at some future presently unknowable interest rate avoids reinvestment risk while reinvesting coupons at some future presently unknowable interest rate doesn't. Theoretically it’s the same issue. But in practice, if you have a 25yr ladder of individual bonds that are all paying coupons, how do you reinvest them effectively before you start withdrawing (which in my case would be >7yrs away)? Do you distribute across the maturities? Buy the last bond? Extend the ladder? Or leave it in cash or some other short term fund like VTIP? My guess is that most folks do the latter out of simplicity, which adds some reinvestment risk. Without something like a zero coupon TIPS available, no method is perfect - the...
by aj76er
Fri Jan 05, 2024 7:29 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2949
Views: 622524

Re: Now that long TIPS yields are 60 bp off their highs I will…

With a fund, you're locked into the fund's investment strategy, which for a long-term fund is to sell TIPS when they hit the minimum maturity for the fund and buy more longer-term TIPS, and for a 0-5 year fund to roll proceeds of matured TIPS into the long end of the ladder. And when you sell shares, you're selling some of all the TIPS, including the ones at the long end of the ladder, which may not be optimal at all. Ditto for when you rebalance from long to short--you're subject to the vagaries of the market as to whether this is beneficial or not. None of these points are issues in practice. The reason is that you are rebalancing such that the same TIPS sold from the longer duration fund are then re-bought in the next shorter duration f...