Search found 2544 matches

by GAAP
Tue Mar 26, 2024 1:14 pm
Forum: Personal Finance (Not Investing)
Topic: California tax return lost in mail
Replies: 8
Views: 949

Re: California tax return lost in mail

I would call them to get an estimate of any penalties and/or interest that might apply. Get that estimate for a future date that you can reliably be certain is past the date when you can the money there -- it's better to get a tiny refund check later than yet another penalties/interest notice.
by GAAP
Tue Mar 26, 2024 1:10 pm
Forum: Investing - Theory, News & General
Topic: Viewing your portfolio vs viewing them as separate components
Replies: 14
Views: 1142

Re: Viewing your portfolio vs viewing them as separate components

Do you feel that in retirement, people may end up with multiple portfolio or different buckets? I was thinking that perhaps the total return will still work out where in retirement, you rebalance and use the rebalance amount for income. My mom's FA basically had her divert her dividend from her retirement portfolio to her bank so she can spend it. I think the original idea was to see if this would be enough to fund her income needs. We ended up setting back to reinvest since we realize she wan't really drawing from it. We ended up using the RMD to pay taxes. I wouldn't necessarily use the term "buckets", preferring "functions". Fundamentally, in accumulation your portfolio is attempting to do one major thing -- get bigg...
by GAAP
Mon Mar 25, 2024 2:15 pm
Forum: Personal Investments
Topic: Retired but low income
Replies: 11
Views: 2506

Re: Retired but low income

Not sure I'm reading this correctly, so here's what I think you have:

Assets:
  • Rollover IRA (TIRA/Tax-deferred): $88K
  • Brokerage acct (MM): $439K
  • Roth IRA: $13k
Liabilities:
  • No debt?
Income:
  • Pension: $490/month (COLA?)
  • SSI: $0 (permanently)
  • SSI replacement income: $235@age 62 (COLA?, any benefit from deferring to later age?)
Expense:
  • Rent: $350/month
  • Other expenses not clear
Knowing the parameters will help people give you better answers.
by GAAP
Mon Mar 25, 2024 1:58 pm
Forum: Personal Investments
Topic: Trying to determine cost basis of account without any records
Replies: 13
Views: 784

Re: Trying to determine cost basis of account without any records

canderson wrote: Mon Mar 25, 2024 1:52 pm Update: Vanguard on the phone was fast and helpful - I want to point that out since we've seen a lot of negative posts about their service recently!

The original transaction for VGHCX was a small buy on 7/24/2020 and the share price was $117.96. A larger buy on 1/16/2003 was done and the share price was $98.40.
Reinvested dividend or capital gains? All of that would affect the basis, not just the original purchase unless you use specific ID. Either way, you'll need to know that information eventually.

The good news is that you only need 4 years of information, not 22.
by GAAP
Mon Mar 25, 2024 1:46 pm
Forum: Personal Investments
Topic: Some reasons to help me avoid the US/exUS debate
Replies: 42
Views: 3095

Re: Some reasons to help me avoid the US/exUS debate

My starting point would be to use the global allocation to both stocks and bonds, and then deviate from that allocation only if you can articulate a rational reason to do so. It sounds like you're happy with leaving out international bonds -- can you articulate why? If so, you're good with that change. It sounds like you just need to better articulate what you chose for stocks. Diversification is the clearest reason you give -- which explains why you keep international. What's not as clear to me is why you choose a particular split between domestic and international. IOW, how much diversification is enough? Are there other factors involved? If so, define them. Incidentally, rational reasons do not need to be predictions. Recognition of your...
by GAAP
Mon Mar 25, 2024 1:34 pm
Forum: Personal Investments
Topic: Those complimentary dinners for retirees by investment advisors
Replies: 139
Views: 10260

Re: Those complimentary dinners for retirees by investment advisors

HipCoyote wrote: Mon Mar 25, 2024 11:49 am Although not a dinner, I had a friend whose wife worked at a "faith-based" local AUM place. I met with them and they wanted to not only manage our funds but also buy some private REITs. I knew nothing about them, went home and learned a bit....hard pass. Went back and they had a mound of docs waiting for me to transfer funds...when that was never even discussed. Hard pass. But I learned a little bit. So time not totally wasted.
Ready to transfer funds without discussing that? You are much more charitable than I am -- I would categorize that person as an ex-friend.
by GAAP
Mon Mar 25, 2024 1:25 pm
Forum: Personal Investments
Topic: Trying to determine cost basis of account without any records
Replies: 13
Views: 784

Re: Trying to determine cost basis of account without any records

Selling in taxable, buying in IRA? You can't just add that money to the IRA -- that is limited to the lesser of earned income (salary, wages, etc.) and the annual IRA contribution limit ($7,000 or $8,000 depending on age). If there is no earned income, then no contribution is allowed. The cost per share in the IRA will only reflect the actual purchases and reinvested dividend transactions made within that IRA. It has no relationship to the transactions made in the taxable account. I would call Vanguard and ask them if they have the cost-basis information -- long shot, but possible. They may be able to give you the initial purchase date and quantity. That would let you figure out the details if there were no other purchases (just reinvestmen...
by GAAP
Mon Mar 25, 2024 12:51 pm
Forum: Personal Investments
Topic: Considering a TIPS ladder. Is this the right approach?
Replies: 26
Views: 2746

Re: Considering a TIPS ladder. Is this the right approach?

They offer normal constant duration bond funds, like BND AND they offer ladder ETF's or target maturity date bond funds, which are bond ladders. Not sure about your terminology, they can be ladder components maybe, but a single target maturity fund is not a bond ladder. A single ETF instead of a bunch of individual bond purchases. To make a ladder you would have to buy a bunch of target maturity bond ETFs. Perhaps you have misunderstood what these ETFs are? If you buy the one for 2030 TIPS, it holds only the TIPS that mature in 2030 (all two of them). For someone trying to build a ladder over time, these allow the purchase of smaller incremental amounts each month. It's hard to build a TIPS ladder if all you can afford is $200/month. Someo...
by GAAP
Wed Mar 13, 2024 7:20 pm
Forum: Investing - Theory, News & General
Topic: Inherited IRA optimal investment
Replies: 12
Views: 1219

Re: Inherited IRA optimal investment

I would invest according to your plan -- but I would try to think about account placement of assets if they will eventually appear in a taxable account. I would make any adjustments in tax-favored accounts so that when that 10-period expires, I could transfer a mix of assets to be invested in taxable, and cash to pay the taxes.
by GAAP
Wed Mar 13, 2024 7:13 pm
Forum: Personal Investments
Topic: Anyone buying a portfolio of corporate bonds instead of Treasuries?
Replies: 10
Views: 1071

Re: Anyone buying a portfolio of corporate bonds instead of Treasuries?

My experience is that they are difficult to sell -- may take weeks depending upon demand. The higher the interest rate, the more likely they are to be called.

If I were buying corporate bonds, I would only do so in a fund -- let the fund deal with hassles.
by GAAP
Tue Mar 12, 2024 4:45 pm
Forum: Personal Finance (Not Investing)
Topic: Letter to heir - what would you include?
Replies: 90
Views: 7799

Re: Letter to heir - what would you include?

The specific definition of "Fee Only" is something that I have only seen or heard of on bogleheads.org, and does not seem to be generally used or understood outside this community. Fee-based and fee-only mean the same thing, that the advisor is paid a fee (AUM or other) rather than a commission on trades. Almost all AUM advisors will call themselves fee-only. If you want to suggest to them to pay a one-time fee, or an hourly fee for advice only, you can use that kind of phrasing. From NAPFA (The National Association of Personal Financial Advisers https://www.napfa.org/financial-planning/what-is-fee-only-advising ): The way in which your financial planner is compensated can make all the difference in the recommendations they make ...
by GAAP
Tue Mar 12, 2024 12:36 pm
Forum: Investing - Theory, News & General
Topic: Age 60+ AND retired? What's your asset allocation? What type of bonds/Fixed Inc instruments do you use?
Replies: 63
Views: 10081

Re: Age 60+ AND retired? What's your asset allocation? What type of bonds/Fixed Inc instruments do you use?

I know the AA question has been asked before. But I'm asking again to focus on those who are ages 60+ and retired. If you'd like to comment on any or all the bullets below.. What are your / spouse age(s) and what is your target stock/bond asset allocation? What types of instruments do you hold within your bond allocation and why? (eg. bond funds, TIPs, treasuries, MYGA, etc) For each type of instrument, what % does it make up of your bond allocation? (such that their total % should be 100) 60+ for both of us. Duration-matched bond funds. Duration is determined by various investment horizons. Some of those horizons are specific and ongoing (e.g., deferred SS claiming). Some are specific at a specific point in time (potential annuity purchas...
by GAAP
Mon Mar 11, 2024 12:35 pm
Forum: Personal Consumer Issues
Topic: Ooma Phone Service
Replies: 40
Views: 3570

Re: Ooma Phone Service

I always ask people what their use case is for keeping a landline versus shutting it down and simply using Mobile all the time. - If the use case is a second number to give out so you aren't giving out your mobile - you can get a free Google number. - For my Dad, he didn't want to give up all his handsets that he had throughout the house that he was accustomed to using. He had a set of 5 wireless Panasonic handsets - wanted to answer from various rooms without having to carry his cell phone around with him. I looked at the set and noticed it supported blue-tooth so we connected his mobile to the system and he was able to answer both landline calls AND mobile calls from anywhere in the house on his existing phone handsets. Once he got used ...
by GAAP
Mon Mar 11, 2024 12:22 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2950
Views: 623226

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

Today I sold out of all my TIPS. I had been thinking about this for a while. I don't think they are a good product *for me* since the way inflation is measured doesn't seem to have any correlation to my spending. Curious to understand more how you evaluated your inflation vs TIPS measurement, can you please elaborate on your thinking? I have been thinking about this too but I do not see a better (safer) alternative to guaranteed real income in years X, y, z than using TIPS ladder maturing in years x, y, z...and that too at almost 2% real! I have a TIPS from 5 years ago that is about to mature. The total principal appreciation has been < 20%. Compared to 5 years ago, my spend is up at least 50% if not more. And I have not upgraded my lifest...
by GAAP
Sun Mar 10, 2024 2:00 pm
Forum: Personal Consumer Issues
Topic: Home phone (copper) solution for parents
Replies: 26
Views: 2672

Re: Home phone (copper) solution for parents

OOMA works fine for fax. I've been using it for years.

It is important to use the *99 prefix with the fax number to ensure success.
by GAAP
Sat Mar 09, 2024 11:26 am
Forum: Personal Consumer Issues
Topic: Is Calif Really That Expensive - Or Am I Missing Something?
Replies: 133
Views: 15848

Re: Is Calif Really That Expensive - Or Am I Missing Something?

I suggest you look at the BLS statistics to see which categories affect people in each location.

Another thing to consider might be the quality of the local produce. Having moved from California, the biggest thing I miss is the access to, and selection of quality local produce. I have no idea what Nevada is like, but most of that produce has to come over the mountains.

I don't think you can get a realistic answer without looking at the details down to at least the regional level.
by GAAP
Fri Mar 08, 2024 7:31 pm
Forum: Personal Finance (Not Investing)
Topic: University California reducing pension payout for contingent annuitants
Replies: 19
Views: 3797

Re: University California reducing pension payout for contingent annuitants

Thanks for the post. I wasn't aware of this. It doesn't seem like they should be able to move the goal post like that. My wife was all set to start retirement on July 1, 2024 and take one of the payment options. Now we will go back and possibly go for the lump sum. She might want to just push the retirement date up by a month. The lump sum is tempting but it’s a huge tax hit, plus you forfeit Medicare supplements and some flexibility in choosing Medicare plans. For example, with UC retiree medical coverage you can move more easily between Medicare Advantage plans and regular Medicare supplemental plans without worrying about underwriting (preexisting conditions). Again, if they would just give a hint about the degree of reduction it would ...
by GAAP
Fri Mar 08, 2024 5:59 pm
Forum: Investing - Theory, News & General
Topic: "When" do you sell equities during Retirement?
Replies: 29
Views: 4524

Re: "When" do you sell equities during Retirement?

When I need cash, and equities are the over-allocated asset. I also buy equities when new cash arrives and equities are the under-allocated asset. Don't overthink this.
by GAAP
Fri Mar 08, 2024 5:57 pm
Forum: Personal Finance (Not Investing)
Topic: University California reducing pension payout for contingent annuitants
Replies: 19
Views: 3797

Re: University California reducing pension payout for contingent annuitants

From the linked announcement:
These changes will not impact the calculation of Basic Retirement Income. However, for retirements on or after July 1, 2024, changes will be implemented in the calculations of the UCRP lump sum cashout and UCRP monthly retirement income for members and contingent annuitants under Payment Options A-D.
by GAAP
Fri Mar 08, 2024 4:30 pm
Forum: Personal Finance (Not Investing)
Topic: University California reducing pension payout for contingent annuitants
Replies: 19
Views: 3797

Re: University California reducing pension payout for contingent annuitants

Not particularly surprising, there are inherent issues with pension plans in general -- one reason my wife went the cashout route: State Street Corporation (UC Investments’ single biggest partner) Chairman and CEO Ron O’Hanley: “I agree that pension plans were already endangered, and with the crisis, they’re even more at risk. This is particularly true with public plans, which have been chronically underfunded. Here’s why: Germany’s Iron Chancellor from the 19th century, Otto von Bismarck, designed the first pension plan to start paying off at 65 at a time when the average life expectancy was somewhere between 59 and 60 years. A pretty good deal for the plan sponsor, right? The problem is we haven’t adjusted plans for dramatic increases in ...
by GAAP
Fri Mar 08, 2024 4:15 pm
Forum: Personal Investments
Topic: 16 yr old - how can I best take on high risk?
Replies: 65
Views: 5611

Re: 16 yr old - how can I best take on high risk?

Recency bias has little correlation with experience. Rebalancing as defined by Harry Markowitz in the early 1950’s in his magazine article Modern Portfolio Theory is a disciplined way to consistently buy low and sell high. The financial benefits are common sense albeit hard to measure without personal experience. Return variations are relative, can show up anytime, and can be put to good use through a little planned application and discipline. There’s no reason to assume an individual’s inability simply because of age or inexperience. It’s a simple matter to compare personal returns against market returns. And after two or three years a young investor will see the benefits of rebalancing for their self. To be more clear, I don't change my ...
by GAAP
Fri Mar 08, 2024 2:03 pm
Forum: Personal Investments
Topic: 16 yr old - how can I best take on high risk?
Replies: 65
Views: 5611

Re: 16 yr old - how can I best take on high risk?

IF this money is truly not going to be touched for 50 years, then it probably doesn't make sense to buy any form of fixed income, and therefore can make sense to use a 100% equity allocation. This is an idea that we see pop up when times are good like they have been for more than ten years now—recency bias. There’s good reason why at least 20% or so should be put into bonds, to increase long term returns by smoothing out volatility and allowing the benefit of rebalancing. The benefit of rebalancing is especially important when factors like small and value are included. Recency Bias? I'm retired now, and have been investing for decades. Rebalancing works as a tool to control behavioral issues from the inability to handle volatility -- the f...
by GAAP
Fri Mar 08, 2024 1:06 pm
Forum: Personal Investments
Topic: 16 yr old - how can I best take on high risk?
Replies: 65
Views: 5611

Re: 16 yr old - how can I best take on high risk?

IF this money is truly not going to be touched for 50 years, then it probably doesn't make sense to buy any form of fixed income, and therefore can make sense to use a 100% equity allocation. I would start with the assumption of the global equity allocation (something like VT), and then change from there only if I could explain a rational reason for the difference -- whether that difference was small-cap, growth, value, emerging markets, overweighting domestic, overweighting international, etc. If you can't express a rational reason, then you shouldn't deviate until you can. The biggest issue in my mind is the certainty that you won't need the money for 50 years. IF this is money that you won't want for buying a large asset (vehicle, house...
by GAAP
Fri Mar 08, 2024 12:55 pm
Forum: Investing - Theory, News & General
Topic: Total Portfolio Allocation and Withdrawal (TPAW)
Replies: 690
Views: 172376

Re: Total Portfolio Allocation and Withdrawal (TPAW)

The TPAW Planner says this: “In the case of bonds, it's easier to see why the interest rate for planning purposes should be the interest rate you are currently getting for the bonds in your portfolio, not the interest rates that prevailed historically. For one, changes in interest rates are hard to predict. So the best guess for future interest rates would usually be the current interest rate. Even if interest rates rise in the future, bond prices would fall to compensate. So current interest rates applied to the current portfolio balance may still lead to more accurate estimates, especially if the bonds have been duration matched to reduce or eliminate interest rate risk.” Is my interpretation correct: Let’s say that all my bonds are TIPS...
by GAAP
Thu Mar 07, 2024 3:38 pm
Forum: Personal Investments
Topic: IRA Conversion Question
Replies: 10
Views: 1183

Re: IRA Conversion Question

If I do this this year (age 67), does this mean I have initiated the RMD process and will be required to take distributions going forward, even though I am not required to do so until age 73? There are many people doing conversions at much younger ages so if that somehow trigger rmds I think it would be pretty well known. People doing conversions at much younger ages aren't subject to RMDs at all. Once you are subject to RMDs, the specified rate is applied to the starting balance of the IRA to determine the amount of the RMD. It A conversion is a rollover of existing funds. Adding money that has already been taxed to a Roth IRA is subject to the new contribution rules including the requirement for earned income, and the contribution limit....
by GAAP
Thu Mar 07, 2024 3:24 pm
Forum: Personal Investments
Topic: Retirement Planning - Target Date Funds
Replies: 18
Views: 1926

Re: Retirement Planning - Target Date Funds

Do you like the concept of an AA glidepath that reduces equity exposure over time? If yes, then matching the starting AA of a TDF to your desired starting AA can make sense. Beyond that, the question becomes whether or not that glidepath matches with your desired glidepath. If you're not fond of the concept, then you won't really be happy with any TDF.
by GAAP
Tue Mar 05, 2024 12:44 pm
Forum: Personal Consumer Issues
Topic: Undersizing whole house generator?
Replies: 62
Views: 4932

Re: Undersizing whole house generator?

I'm still doubtful of the 2000A service. A 240V panel rated for 2000A is approximately $35-55,000, and the main breaker alone is over $20k. One of the standard ways to feed such a box would be seven parallel runs of this wire per phase (21 conductors total for 240V split phase): ... It's good to be skeptical but that is the service. I have verified it myself and had a team of 3 electricians out to work on it including one specifically selected for his industrial experience. I wish it were smaller, believe me! So that's the service -- what are you actually using? Is anybody else also fed from this service? How many different sub-panels have your critical needs on them might be the biggest issue. If they're all on one panel, then you have a ...
by GAAP
Mon Mar 04, 2024 12:41 pm
Forum: Personal Consumer Issues
Topic: Cloud based backup options for sensitive files
Replies: 93
Views: 7923

Re: Cloud based backup options for sensitive files

Use a cloud backup service that is encrypted for everything. Add your own layer of encryption to protect critical files. That way, even if the bad actor is at the cloud service, they still have no access to your data.

Veracrypt can work for local encryption and is cross-platform.
by GAAP
Mon Mar 04, 2024 12:35 pm
Forum: Personal Consumer Issues
Topic: Undersizing whole house generator?
Replies: 62
Views: 4932

Re: Undersizing whole house generator?

How are you calculating peak load? If you have a 200A service at 240V, you have 200*240=48000VA or 48KW total power available from the utility. If you have a 400A service, you have double that -- still under 100KW. If you add up the maximum draw of every item in the house, you likely have quite a bit more than the service capacity from the utility. However, the maximum draw includes things like startup for electrical motors. It also could include worst case for both heating and cooling simultaneously. Your garage door opener(s) would be running, you would be using all of the appliances in the house, all the lights would be on etc. IOW, maximum draw is not a likely scenario. It far more likely that you will run at less than half the maximum ...
by GAAP
Sun Mar 03, 2024 1:13 pm
Forum: Personal Finance (Not Investing)
Topic: Open Social Security Question: When It Says to Take Benefits
Replies: 22
Views: 2429

Re: Open Social Security Question: When It Says to Take Benefits

David Jay wrote: Sat Mar 02, 2024 4:31 pm It would be a lot easier decision if the expiration date was printed on the container… :wink:
https://www.youtube.com/watch?v=USADM5Gk9Gs
by GAAP
Wed Feb 28, 2024 3:57 pm
Forum: Personal Finance (Not Investing)
Topic: Land vs Improvement Property Value
Replies: 7
Views: 611

Re: Land vs Improvement Property Value

When is the last time you saw home values depreciate? It happens -- but generally after rising too fast. After 40 years, my parent's house sold for 30 times what they paid for it.

Where I live, the county maintains historical valuations for both land and improvements. You might be able to get an idea of how those are doing in your area (all real estate is local).
by GAAP
Wed Feb 28, 2024 3:40 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

I'm not McQ (obviously!) but it would seem that the biggest pitfall is that in this approach the observations would not be truly independent. Yearly returns and subsequent standard deviations from yearly observations will be largely independent of one another. 30 year rolling returns will not. 30 year returns for a given year will be be calculated using data that is 29/30 identical to the surrounding years. Start dates 15 years apart will have 50% overlap. This will be compounded by the relatively low volatility of bond returns, I'm not sure this approach will yield meaningful differences. Further if you wanted to do this using data from funds like BND, the fund is only a few decades old, I'm not sure how many 30 year periods you would hav...
by GAAP
Tue Feb 27, 2024 1:38 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

Investment horizon Here is my first problem with what I believe Kevin is urging me to do: I do not know my investment horizon. I can tell you my hoped-for horizon: thirty years is about the joint life expectancy of me and younger DW. So I generally plan on 30 years plus a cushion for heredity (my line includes peasant ancestors who were living to 80+ even three hundred years ago). On the other hand, dear departed Dad suffered the first of his dementia-inducing strokes when he was just eight years older than me today. So what is my investment horizon? Dementia care can be very expensive… General point: a human investor saving for the long term, as in a 401(k) or IRA, cannot know their investment horizon. An economic theorist on the other ha...
by GAAP
Sun Feb 25, 2024 1:59 pm
Forum: Personal Investments
Topic: Roth Conversion: Mine vs. Spouse - Does it Matter?
Replies: 19
Views: 1464

Re: Roth Conversion: Mine vs. Spouse - Does it Matter?

Where I live (Washington), there are State Estate Tax reasons to convert the higher balance account first in order to reduce the total amount subject to those Estate Taxes. In some states, there may be inheritance tax reasons that would apply for the heirs. At present, my pre-tax account is larger than spouses. But in time, their balance will surpass mine as they are able to contribute more (and they plan to work longer than me). So should I consider current balance or future balance? Either could be reasonable. Converting yours first reduces the exposure sooner. Converting spouses first reduces the likely end result. You could also just choose to convert whichever has the higher value each year. Alternatively, you could manage the AA diff...
by GAAP
Sun Feb 25, 2024 1:22 pm
Forum: Personal Consumer Issues
Topic: Has anyone ripped out a deck and replaced it with a patio?
Replies: 26
Views: 3562

Re: Has anyone ripped out a deck and replaced it with a patio?

Another thing to consider is whether or not you have to deal with invasive roots. Those can crack even well-done concrete, disrupt pavers, etc. Of course, they also can send up volunteer shoots through your deck. Keep that in mind when choosing trees to plant in the area also.
by GAAP
Sun Feb 25, 2024 1:12 pm
Forum: Personal Investments
Topic: Roth Conversion: Mine vs. Spouse - Does it Matter?
Replies: 19
Views: 1464

Re: Roth Conversion: Mine vs. Spouse - Does it Matter?

Where I live (Washington), there are State Estate Tax reasons to convert the higher balance account first in order to reduce the total amount subject to those Estate Taxes. In some states, there may be inheritance tax reasons that would apply for the heirs.
by GAAP
Sun Feb 25, 2024 12:30 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

This all seems sensible to me. I'm a little confused about having a TIPS ladder for the LMP, but not having an income floor. Do the liabilities you're matching with the TIPS ladder not include all of your necessary, residual expenses? I'm not using ladders, just duration-matched funds. I am matching specific liabilities that are income-related streams like Social Security, expense-related streams like Roth conversion taxes, and point-in-time expenses like deferred annuity purchases. I'm not defining an income floor beyond defined benefits and associated bridging. In fact, I actually discount Social Security to match the funding levels stated in the Trustee's Report. Basically, I'm identifying known specific needs in order to decouple the a...
by GAAP
Sat Feb 24, 2024 7:57 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

I've pretty much concluded that the value of Markowitz is more in the concept than the practice. I pretty much agree with you. I find that portfolio theory and CAPM are useful ways for me to think about risk and return, but probably not so much in the nitty gritty of constructing a portfolio. Part of thinking about risk and return is thinking about analyses like the ones in this thread, and trying to determine if they are a valid way to analyze the risk/return tradeoff, and whether or not they are useful in making portfolio construction decisions. I've mostly concluded that they are not, for all the reasons I've stated in my replies in this thread. I've now worked myself into the corner where I like the efficient frontier of assorted combi...
by GAAP
Sat Feb 24, 2024 4:21 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

For context, ever since I learned from my investing textbooks, which all reference Markowitz of course, that it was the standard deviation of returns for a given holding period that is the standard measure of risk, I've bristled at the widespread use of SD of annual returns as a risk measure for long holding periods. And I'm not the only one. Many here frequently criticize "volatility" as a valid risk measure for the long term. My problem with those posts is that in doing so they throw the baby out with the bath water, not understanding that portfolio construction theory doesn't specify "volatility", by which I'm quite certain that most people mean short-term volatility, as the risk measure, but rather the uncertainty o...
by GAAP
Fri Feb 23, 2024 1:27 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

You're still not addressing one of my main points, which applies to Markowitz. For a 30y holding period, the SD of interest is the SD of 30y returns, not the SD of one-year returns. I don't know if there are even a handful of Bogleheads who understand this. If they do, they're certainly not posting in this thread. The closest I recall seeing is folks challenging "volatility" as an appropriate risk measure, with which I heartily agree, since I'm pretty sure when folks say "volatility" they're talking about short-term volatility, not the volatility of long-term returns. So although it's pervasive, even though a perversion of Markowitz IMO, I question the value of analyses that use the SD of annual returns as the risk meas...
by GAAP
Wed Feb 21, 2024 2:01 pm
Forum: Personal Finance (Not Investing)
Topic: Schwab Bill pay
Replies: 9
Views: 1188

Re: Schwab Bill pay

What's the use case for bill pay these days? All of my bills can be paid with CC now and an autopay through the service/vendor, most of them with no fee, the rest with fees that are about the same as the cash back reward I do manually pay the CC each month via ACH, but only because I like to review the statement If you're allowing autopay from a vendor, you're trusting that vendor to never take money that isn't correct, and to cancel the autopay when you cancel the service. You have a lot more control if you use ACH push from your checking account than if you use ACH pull from each vendor. And yes, CC is a good first choice if you don't carry a balance, especially if there is a cash-back feature on the card, a grace period (float time actu...
by GAAP
Tue Feb 20, 2024 7:34 pm
Forum: Investing - Theory, News & General
Topic: Should I exclude LMP/TIPS ladder from portfolio tracking?
Replies: 43
Views: 2641

Re: Should I exclude LMP/TIPS ladder from portfolio tracking?

I guess I am trying to avoid having the LMP/TIPS ladder's affect on my total portfolio return influence how I allocate my Risk Portfolio. This right here is what I also struggle with. I cannot understand how folks determine an AA for their RP in isolation of the size of their LMP. It must influence need/willingness/ability to take RP risk. If you use the entire portfolio as an RP, you would choose an asset allocation that meets your needs for withdrawals, including any minimum requirements. If you split that portfolio into LMP and RP, then the LMP can provide some or all of the minimum needs, which allows the now-smaller RP to only be concerned with withdrawals above the minimum. To use an SWR illustration, you could have a $1m total portf...
by GAAP
Tue Feb 20, 2024 6:11 pm
Forum: Investing - Theory, News & General
Topic: Should I exclude LMP/TIPS ladder from portfolio tracking?
Replies: 43
Views: 2641

Re: Should I exclude LMP/TIPS ladder from portfolio tracking?

I guess I am trying to avoid having the LMP/TIPS ladder's affect on my total portfolio return influence how I allocate my Risk Portfolio. This right here is what I also struggle with. I cannot understand how folks determine an AA for their RP in isolation of the size of their LMP. It must influence need/willingness/ability to take RP risk. If you use the entire portfolio as an RP, you would choose an asset allocation that meets your needs for withdrawals, including any minimum requirements. If you split that portfolio into LMP and RP, then the LMP can provide some or all of the minimum needs, which allows the now-smaller RP to only be concerned with withdrawals above the minimum. To use an SWR illustration, you could have a $1m total portf...
by GAAP
Tue Feb 20, 2024 5:45 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

"All I want from the fixed income allocation is to keep up with inflation, with little or no volatility. I don't care if it never makes a dime beyond that." I've tried asking this question several different ways here. TIPS and TIPS ladders are the usual answer, but the actual products on the internet seem to come with a lot of volatility. The best example is an annual returns chart on page three of the Schwab Treasury Inflation Protected Securities Index Fund prospectus, which shows annual returns from 2013 to 2022 ranging from down 11.99% to up 11.88%. https://connect.rightprospectus.com/Schwab/TADF/808517817/SP?site=Funds Schwab's TIPS Fund has a duration of 6.8 years, making it an intermediate-term fund -- which implies some v...
by GAAP
Tue Feb 20, 2024 12:53 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

Nor should you expect any investment whatsoever to have a lower standard deviation than T-bills. Therefore, if you are strict about taking all risk, any risk, every risk, on the equity side, then T-bills must be what you own in the risk-reduction part of the portfolio. Right? What part of “take your risk on the equity side” am I not understanding? I think the part you are missing is that people who actually do this don't care as much about overall standard deviation of the portfolio as they care about downside deviation in the bond values. IOW, they hate to see the bonds lose value in nominal terms. They are choosing to overweight one risk versus the other. Might take a bit for the next post to appear, while I decide where to take the thre...
by GAAP
Mon Feb 19, 2024 2:04 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

GaryA505 wrote: Mon Feb 19, 2024 1:53 pm Everything I've seen in this thread seems complicated. How about just a short-term TIPS fund like VTAPX/VTIP? I believe that's what Rick Ferri said he holds. Does it need to ne any more complicated than that?
Tradeoffs -- you're increasing reinvestment risk to get other benefits like reduced volatility.
by GAAP
Mon Feb 19, 2024 2:02 pm
Forum: Investing - Theory, News & General
Topic: Should I exclude LMP/TIPS ladder from portfolio tracking?
Replies: 43
Views: 2641

Re: Should I exclude LMP/TIPS ladder from portfolio tracking?

You have a plan that treats your LMP and RP as completely separate entities. Do you get any value from combining them?

Until and unless the LMP needs change, I don't see any benefit. Even then, the net effect is either an increase or decrease in the RP, and wouldn't be expressed as a combined number.
by GAAP
Mon Feb 19, 2024 1:07 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

In reality, you are down long bonds within the BND and ITT portfolios, as they have 20% to 25% in long bonds, you just don't see it since you don't hold it separate. Conversely, you also do not see the 20% to 25% short bonds/t-bill side of a BND portfolio. If you did you will be happy it is not so much down as overall BND portfolio. BND is not a fund that invests in all intermediate term bonds, it is a collection of long, medium, short, and bills, they just get the average duration to intermediate by mixing them up. All you are doing is splitting BND or ITT into 2 or 3 components in about similar proportions and holding them individually so you aren't stuck with one duration. You match the duration and credit quality, you get same overall ...
by GAAP
Mon Feb 19, 2024 12:58 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35831

Re: Can you do better than BND?

So, what I am hoping to get out of this thread is which bond fund is the best product for managing an overall portfolio? Is it BND? My money is literally on ITT. That is a different question than which product is best for LMP -- which is clearly individually owned TIPs (or iBonds). "Which fund is the best" puts the solution ahead of problem definition, and assumes a lot of other solutions. Before asking that question (if at all), we should be asking other questions to determine the needs we are attempting to meet with an investment. TIPS may be appropriate for LMP if the need is measured in real terms that at least approximate the method used for TIPS. That means the needs are tied to the USA inflation rate that is measured by CP...
by GAAP
Sun Feb 18, 2024 12:06 pm
Forum: Personal Finance (Not Investing)
Topic: ACH pull vs paper check from online bill pay?
Replies: 40
Views: 2310

Re: ACH pull vs paper check from online bill pay?

I used to do ACH billing for a small business. Fundamentally, if you give someone the ability to do an ACH pull for one bill, you give them the ability to do an ACH pull for the entire balance of the account unless the bank allows you to set an ACH limit.

We literally printed checks with customer's account information on it, there was no control beyond honesty for the amount printed.

As you might have guessed, I don't allow ACH pulls except for credit card balances -- and won't do business with companies that require it.