Search found 206 matches

by Riley15
Fri Aug 11, 2023 2:47 pm
Forum: Investing - Theory, News & General
Topic: What do we call ourselves ? [as DIY "Do It Yourself" Investors]
Replies: 43
Views: 3770

Re: What do we call ourselves ? [as DIY "Do It Yourself" Investors]

Kumsajack wrote: Wed Aug 09, 2023 7:25 pm DIY personal finance management is an odd hobby that, for me, is awkward to summarize. If I did woodworking I could say I was a carpenter or woodworker, photography to photographer, gardening to gardener, portfolio management to ... ?

99% of my friends and associates have either a financial manager or are happy to fly blind over the forbidden topic.

Eager to hear your experience.

Since 99% of the people are also Investors just like you but through TDF funds that they are automatically enrolled in. So you can call yourself a fund manager of your own TDF fund. The other 99% just don't spend as much time on it.
by Riley15
Thu Mar 23, 2023 10:09 pm
Forum: Personal Investments
Topic: Disappointed in Bonds...
Replies: 227
Views: 22729

Re: Disappointed in Bonds...

The previous poster didn't say anything about the prevailing interest rates going up, His claim was that total bond dividends would go up only because old bonds are being replaced by new bonds in the fund as they mature. It was implied. You do have to look at the context of the moment in which comments are made. I mean, you don't have to. But it does help to understand what people were trying to say at the time they were trying to say it. Dividends go up when new yields are higher than old yields. They go down when new yields are lower than old yields. Perhaps that clarifies? I think what you are trying to say is dividends go up when the price of the bond fund goes down, hence the higher yields. If the NAV remains the same there should be ...
by Riley15
Thu Mar 23, 2023 9:51 pm
Forum: Personal Investments
Topic: Disappointed in Bonds...
Replies: 227
Views: 22729

Re: Disappointed in Bonds...

I don't know if that's true or not... SEC yield on risk-free bonds is up to 4.5%. So corporate bonds are paying more, and the Total Bond dividends will continue to go up as older bonds are replaced with newer bonds. I can certainly see them hitting them 5.5% or 6% this year. Maybe not 7.8%, but you may end up fairly close to 2.5% over the 7 years, and probably by 8 years. It's not exactly perfect. Can you please explain how Total Bond dividends will continue to go up to 5.5%- 6%? How do older bonds being replaced by new bonds raise the dividends? Why wouldn't Total Bond dividends continue to go up if prevailing interest rates went up? Whether they'll be 5.5% to 6% exactly at some particular point in the future isn't something anyone can pr...
by Riley15
Thu Mar 23, 2023 9:22 pm
Forum: Personal Investments
Topic: Disappointed in Bonds...
Replies: 227
Views: 22729

Re: Disappointed in Bonds...

HomerJ wrote: Wed Mar 08, 2023 10:33 am
I don't know if that's true or not... SEC yield on risk-free bonds is up to 4.5%. So corporate bonds are paying more, and the Total Bond dividends will continue to go up as older bonds are replaced with newer bonds. I can certainly see them hitting them 5.5% or 6% this year. Maybe not 7.8%, but you may end up fairly close to 2.5% over the 7 years, and probably by 8 years. It's not exactly perfect.

Can you please explain how Total Bond dividends will continue to go up to 5.5%- 6%? How do older bonds being replaced by new bonds raise the dividends?
by Riley15
Thu Mar 18, 2021 5:37 pm
Forum: Investing - Theory, News & General
Topic: My (general) contacts with Treasury Direct re loss & liability
Replies: 51
Views: 14719

Re: My (general) contacts with Treasury Direct re loss & liability

From the Code of Federal Regulations on TD: "You are solely responsible for the confidentiality and use of your account number, password, and any other form(s) of authentication we may require. We will treat any transactions conducted using your password as having been authorized by you. We are not liable for any loss, liability, cost, or expense that you may incur as a result of transactions made using your password." https://tinyurl.com/yc68wpqk Edit: This was previously posted here: https://www.bogleheads.org/forum/viewtopic.php?t=87934#p1262620 This issue with Treasury Direct security and Liability comes up from time to time and has discouraged some from using them. But I think the issue may be way overblown out of proportion...
by Riley15
Thu Mar 18, 2021 12:31 pm
Forum: Investing - Theory, News & General
Topic: My (general) contacts with Treasury Direct re loss & liability
Replies: 51
Views: 14719

Re: My (general) contacts with Treasury Direct re loss & liability

From the Code of Federal Regulations on TD: "You are solely responsible for the confidentiality and use of your account number, password, and any other form(s) of authentication we may require. We will treat any transactions conducted using your password as having been authorized by you. We are not liable for any loss, liability, cost, or expense that you may incur as a result of transactions made using your password." https://tinyurl.com/yc68wpqk Edit: This was previously posted here: https://www.bogleheads.org/forum/viewtopic.php?t=87934#p1262620 This issue with Treasury Direct security and Liability comes up from time to time and has discouraged some from using them. But I think the issue may be way overblown out of proportion...
by Riley15
Fri Jun 19, 2020 5:52 pm
Forum: Investing - Theory, News & General
Topic: Economy vs Markets
Replies: 25
Views: 1703

Re: Economy vs Markets

How long can this disconnect go on for? There hasn't been a strong connection between the stock market and the economy in the first place. Only 17% of American workers are employed by a firm in the S&P 500, which represents the lion's share of the stock market. Do you think America brings back the gold standard? Economic issues existed when America was on the gold standard. Contrary to what some seem to believe, the gold standard did not prevent macro financial problems. In many cases, it exacerbated them. If the S&P500 only employs 17% of the workforce why is the Federal Reserve hell bent on supporting the stock market in any way possible from buying corporate bonds and providing nearly unlimited liquidity to corporations. This wo...
by Riley15
Fri Jun 19, 2020 5:51 pm
Forum: Investing - Theory, News & General
Topic: Economy vs Markets
Replies: 25
Views: 1703

Re: Economy vs Markets

-duplicate-
by Riley15
Sun Mar 22, 2020 6:47 pm
Forum: US Chapters
Topic: [Archived] Bogleheads community discussion - Coronavirus
Replies: 4963
Views: 298408

Re: Bogleheads community discussion - Coronavirus

No one currently living has experienced anything like this before. We really have been spoiled for a very long time and this will be a wake up call to society and business. ... There was a 2017 book by noted epidemiologist Michael Osterholm and co-author Mark Olshaker in which they wrote of the potential of infectious agents to wreak havoc on public health and world economies. A Q&A interview with Osterholm in the "Star Tribune" of Minneapolis said: The book’s chapter on MERS and SARS is particularly prescient. These diseases are caused by coronaviruses, the same viral family now fueling the COVID-19 pandemic. Three years before this current crisis, Osterholm sounded the alarm on coronavirus diseases’ disturbing combination —...
by Riley15
Sun Mar 22, 2020 6:18 pm
Forum: US Chapters
Topic: [Archived] Bogleheads community discussion - Coronavirus
Replies: 4963
Views: 298408

Re: Bogleheads community discussion - Coronavirus

No one currently living has experienced anything like this before. We really have been spoiled for a very long time and this will be a wake up call to society and business. This is a "frog boiling" situation in where every day and every week things are getting worse and worse yet people tend to build "immunity" to the past bad news and keep thinking it won't get worse than this. Many parts of the world were unaffected by the Spanish Flu because there was no air travel. This is gonna truly effect every part of the world. Most countries still have no clue of what's to come, if developed countries are on their knees I can't imagine what's gonna happen in developing countries. The Spanish Flu https://en.wikipedia.org/wiki/Sp...
by Riley15
Sun Mar 22, 2020 6:05 pm
Forum: Personal Investments
Topic: Guys I Rebalanced (Moved Monies Out Of S&P 500)
Replies: 301
Views: 23895

Re: Guys I Rebalanced (Moved Monies Out Of S&P 500)

The best strategy is to not time the market and I will preach that until the end of day. But we have a different problem here. The issue here is that we are now in a crisis that the world has never seen before with The Great Shutdown. I'm reading report after report after report, that The Great Shutdown will go beyond April. It will go until the month of June in some capacity. So this Great Shutdown isn't a temporary situation, it's going to be here for a number of months. You have entire States that are shut down, completely SHUT DOWN. You have sectors shut down. This can turn into a modern day version of The Great Depression. - As a result, stocks are going to roller coaster ride all the way to DOW 15,000 in my opinion (or lower). - I ha...
by Riley15
Wed Aug 28, 2019 3:47 pm
Forum: Investing - Theory, News & General
Topic: A theory of one's general investing mindset: 'Good enough' or 'Optimize'
Replies: 297
Views: 19736

Re: A theory of one's general investing mindset: 'Good enough' or 'Optimize'

Any type of momentum strategy won't have any positive returns as well if the markets don't provide a positive return. That's demonstrably false. A 10 month moving average strategy (~210 day moving average, which is at least 60 years old) returned over 8% nominal from 2000-2009, while buy-and-hold of TSM returned -.27%. Protection from a large drawdown is only beneficial when you already have significant assets but when you're in the accumulation phase you want the help of the market to make up for what you can't save yourself. That's demonstrably false as well. Using the same strategy as above, if an investor started with $10k and contributed $1k annually, the money-weighted return of the timing strategy was slightly higher than that of bu...
by Riley15
Wed Aug 28, 2019 3:22 pm
Forum: Investing - Theory, News & General
Topic: A theory of one's general investing mindset: 'Good enough' or 'Optimize'
Replies: 297
Views: 19736

Re: A theory of one's general investing mindset: 'Good enough' or 'Optimize'

Let me make sure I am perfectly clear about your goal. If the stock markets tank and stay down you will still be saying "Mission accomplished!" if you match that awful market return while eating your dog food during your retirement. I'm not really worried about things getting quite that bad, but that's part of my own personal problem with the mindset of 'I'll take what the market gives." None of us know what the market's returns will be going forward, so we cannot know whether those unknown returns will be sufficient to meet our needs And yet there seems to be a very common belief that those returns somehow will be adequate. I really don't understand why this belief exists. The belief is not that those market returns will be...
by Riley15
Tue Aug 27, 2019 12:14 pm
Forum: Investing - Theory, News & General
Topic: A theory of one's general investing mindset: 'Good enough' or 'Optimize'
Replies: 297
Views: 19736

Re: A theory of one's general investing mindset: 'Good enough' or 'Optimize'

How likely is it that an individual can “optimize” by tinkering with their 401k’s? Actually, retail investors can potentially have a significant advantage over institutional investors: patience. And 'optimization' does not necessarily mean that someone is trying to beat 'the market'. I don't really follow that logic. Can you really call that 'optimization' then? Maybe it's the wrong terminology. The only way that 'beat the market' might characterize optimization is if absolute returns were what you were trying to optimize, although you could simply take on more risk than the market and be expected to achieve higher absolute returns (e.g. through using leverage). But there are any number of other variables that an investor could seek to opt...
by Riley15
Tue Aug 27, 2019 10:39 am
Forum: Investing - Theory, News & General
Topic: A theory of one's general investing mindset: 'Good enough' or 'Optimize'
Replies: 297
Views: 19736

Re: A theory of one's general investing mindset: 'Good enough' or 'Optimize'

willthrill81 wrote: Tue Aug 27, 2019 10:00 am
Riley15 wrote: Tue Aug 27, 2019 9:55 am How likely is it that an individual can “optimize” by tinkering with their 401k’s?
Actually, retail investors can potentially have a significant advantage over institutional investors: patience.

And 'optimization' does not necessarily mean that someone is trying to beat 'the market'.
I don't really follow that logic. Can you really call that 'optimization' then? Maybe it's the wrong terminology.
by Riley15
Tue Aug 27, 2019 9:55 am
Forum: Investing - Theory, News & General
Topic: A theory of one's general investing mindset: 'Good enough' or 'Optimize'
Replies: 297
Views: 19736

Re: A theory of one's general investing mindset: 'Good enough' or 'Optimize'

The thing is that the boglehead “strategy” if you can call it that is that it guarantees you will get the market return no matter what with 100% certainty. It doesn’t promise this return will be positive but it will be what the market returns all the time. You won’t get better returns and you won’t get worse returns whether it’s a bull market or a bear market, it’s a sure thing which is a rarity in investing. Any type of optimization “strategy” must be able to improve on this average which is what active management attempts to do. If you can guarantee to beat the average return by even 50 basis points you can have your own hedge fund because people will line up to hand over their money. It is well known active management generally outperfor...
by Riley15
Mon Aug 26, 2019 3:22 pm
Forum: Investing - Theory, News & General
Topic: A theory of one's general investing mindset: 'Good enough' or 'Optimize'
Replies: 297
Views: 19736

Re: A theory of one's general investing mindset: 'Good enough' or 'Optimize'

willthrill81 wrote: Mon Aug 26, 2019 10:24 am
Riley15 wrote: Mon Aug 26, 2019 9:34 am Since you're a trend follower which takes considerable "optimizing" to enter/exit at the appropriate times while in the long run still underperforming the buy-holder.
Not to derail the thread, but that is far from certain.

It's not a certainty but based on backtesting that's been the case as you've pointed out earlier I think. And it seems like you were okay with that.

There is essentially no difference whether you optimize to increase returns or optimize to reduce risk. Risk and return are directly related that's just the way life works.
by Riley15
Mon Aug 26, 2019 9:34 am
Forum: Investing - Theory, News & General
Topic: A theory of one's general investing mindset: 'Good enough' or 'Optimize'
Replies: 297
Views: 19736

Re: A theory of one's general investing mindset: 'Good enough' or 'Optimize'

In general, those with the 'good enough' mindset seem to be more likely to use the 3-fund portfolio or something very much akin to it, find total bond market to be the only fixed income component they desire, they eschew factors, lean toward 'pure' buy-and-hold, strongly favor simplicity, etc. Those with the 'optimize' mindset seem to be more likely to use 'alternative' fixed income instruments (e.g. CDs, long-term Treasuries), factor funds, use some form of 'timing' in their strategy, etc. Thoughts? I don't think the 3-fund portfolio is the most simplest form on the simple/optimize scale because you still have to decide US/International/Bond allocation and also rebalance as needed which could actually be very complex for some people. I gu...
by Riley15
Thu Aug 15, 2019 7:01 pm
Forum: Investing - Theory, News & General
Topic: Treasury 2-10 year yield curve has inverted!
Replies: 116
Views: 14363

Re: Treasury 2-10 year yield curve has inverted!

J G Bankerton wrote: Thu Aug 15, 2019 6:55 pm
Riley15 wrote: Thu Aug 15, 2019 6:10 pm
J G Bankerton wrote: Thu Aug 15, 2019 6:01 pm
Riley15 wrote: Thu Aug 15, 2019 5:59 pm These spreads are determined by what the competition is doing.
The treasury yield is determined at auction; the bond goes to the lowest bidder.
Yes when it comes to raising money (borrowing) but lending rates (mortgage, auto, etc..) are directly controlled by the market (banks).
OIC you were talking about banks. What spread were you referring to?
I was referring to the rate spread between borrowing and lending for banks. This will never be flat or inverted such as the treasury yield curve.
by Riley15
Thu Aug 15, 2019 6:10 pm
Forum: Investing - Theory, News & General
Topic: Treasury 2-10 year yield curve has inverted!
Replies: 116
Views: 14363

Re: Treasury 2-10 year yield curve has inverted!

J G Bankerton wrote: Thu Aug 15, 2019 6:01 pm
Riley15 wrote: Thu Aug 15, 2019 5:59 pm These spreads are determined by what the competition is doing.
The treasury yield is determined at auction; the bond goes to the lowest bidder.
Yes when it comes to raising money (borrowing) but lending rates (mortgage, auto, etc..) are directly controlled by the market (banks).
by Riley15
Thu Aug 15, 2019 5:59 pm
Forum: Investing - Theory, News & General
Topic: Treasury 2-10 year yield curve has inverted!
Replies: 116
Views: 14363

Re: Treasury 2-10 year yield curve has inverted!

willthrill81 wrote: Thu Aug 15, 2019 4:02 pm
Northern Flicker wrote: Thu Aug 15, 2019 3:20 pm An inverted yield curve is not only indicative of increased risk of a recession, but can be another driver of a recession. Banks borrow short and lend long. A flattened or inverted yield curve makes it less profitable and potentially even unprofitable to lend. A falloff in credit can lead to a recession.
Good point. I'd not thought of that before.

While this is true Banks are not under any obligation to follow the treasury yield curve in any way. Banks are not competing with the Treasury on loans but they are competing with each other. They will never borrow at a higher rate then they lend or vice-versa. These spreads are determined by what the competition is doing.
by Riley15
Wed Jul 31, 2019 5:33 pm
Forum: Personal Finance (Not Investing)
Topic: Another NFCU CD deal [Navy Federal Credit Union]
Replies: 34
Views: 5750

Re: Another NFCU CD deal

Once your family member joins Navy Federal, you'll be eligible as well. If they can't or don't want to become a member right now, you can still join. You may need one of the following documents from your family member: Driver's License with Veteran's designation State-issued Veteran ID Card Military orders Leave orders Earning statement (LES) Enlistment papers Proof of direct deposit from DoD Pension papers from DoD DD 214 NGB 22 I was able to join PenFed on the basis on my deceased father having been in the Navy during WW2. They did n to ask for any proof. Source: Navy Fed website After getting a definite maybe drilling down the qualification criteria on their website I simply called as they suggested and told them my father who died 30 y...
by Riley15
Wed Jul 31, 2019 4:47 pm
Forum: Investing - Theory, News & General
Topic: [Wiki] Taxable Equivalent Yield (TEY)
Replies: 72
Views: 15272

Re: Taxable Equivalent Yield (TEY)

Kevin, Thanks for the great explanation. But to expand on this to other types investments except bonds, I am trying to determine the comparable TEY between say a Dividend/REIT Funds which are taxed at the Federal Dividend Rate for Qualified Dividends which is less than the income tax rate on Bonds. So how would be go about calculating a equivalent TEY for a given qualified Dividend yield compared to a Bond or a CD that is fully taxable? I'm not sure that would be a meaningful comparison, since a significant component of your expected return on stock fund is the capital return. A money market fund or individual fixed-income security held to maturity has no capital return component, so as long as you're comparing fixed income of similar risk...
by Riley15
Sun Jul 07, 2019 10:17 pm
Forum: Investing - Theory, News & General
Topic: [Wiki] Taxable Equivalent Yield (TEY)
Replies: 72
Views: 15272

Re: Taxable Equivalent Yield (TEY)

I thought there would be a Wiki article on this, but couldn't find one, and I'm too lazy to write one myself--posting is easier. Rather than repeat this in various threads where it's relevant, I thought I'd put my thoughts on it in one post. When buying fixed-income securities (Treasuries, in-state municipal bonds, out-of-state munis, corporate bonds, CDs, etc) or bond or money market funds in taxable accounts, you want to compare yields on an taxable-equivalent basis, since each of these may be taxed differently. What matters is the yield you have left to spend after you pay income taxes. Of course inflation is a factor too, but here I'll just discuss the tax equivalence aspect. You can compare either after tax yield, I'll call that TFY f...
by Riley15
Thu May 02, 2019 12:57 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off a 30 year mortgage in 15 years? The cost of flexibility
Replies: 100
Views: 17708

Re: Pay off a 30 year mortgage in 15 years? The cost of flexibility

This post does not address the value in paying off a mortgage early but rather the choice to specifically take out a 30 year mortgage when one intends to pay it off in 15 years. I've heard people say many times that they were paying off their 30 year mortgage in 15 years, and I've also heard this specifically recommended to others. The reason offered for doing so is flexibility, namely, that if one needs to, they can pay the lower 30 year mortgage payment instead of a higher 15 year mortgage payment. However, what I seldom see discussed when this strategy is offered is the quantifiable cost of doing so in the form of a higher interest rate for a 30 year mortgage rather than a 15 year. According to Bankrate.com, the 30 year mortgage interes...
by Riley15
Tue Apr 23, 2019 1:52 pm
Forum: Personal Finance (Not Investing)
Topic: Housing: "Super Savers" vs. the "Rest"...
Replies: 85
Views: 11206

Re: Housing: "Super Savers" vs. the "Rest"...

For us, it simply made sense on multiple levels, financial not being the least of them, to have a small home. Ours is 3/2 with 1,200 sq. ft., and it's great for our family of three. We've had moderately big, moderate, and small, and we like small. Smaller homes tend to result in: 1. less mortgage interest 2. less property tax 3. smaller utility bills 4. less maintenance expense 5. smaller homeowner's insurance premiums 6. less space to fill with unnecessary stuff Once our mortgage is paid off next year, all of our housing-related expenses (i.e. taxes, insurance, maintenance, utilities) will total about 6% of our gross income. That will make saving even easier. We'll be 'super-duper-savers'. :D Agree on the smaller side homes. We are actual...
by Riley15
Tue Mar 26, 2019 12:52 pm
Forum: Personal Finance (Not Investing)
Topic: Paper I Bonds
Replies: 50
Views: 5761

Re: Paper I Bonds

I closed my TD account. I prefer paper. With TD, if someone hacks your account, you won't be made whole. On the other hand, lost, stolen or even fraudulently redeemed paper I Bonds can and will be replaced. Also, your heirs can find the paper I Bonds but they may never discover your TD account, since you don't get any mailed paper statements, including your 1099 (you have to go online and download and print it yourself if you remember). And if your heirs are named as a co-owner, they can go right to their local bank and redeem them; no hoops to jump through proving death, etc. Whatever works for you. For me, that's paper. Where does it say that TD won't make you whole for fraudulent redeemed electronic bonds? Even banks have clauses which ...
by Riley15
Thu Mar 07, 2019 3:27 pm
Forum: Investing - Theory, News & General
Topic: Why isn't tax gain harvesting suggested more often?
Replies: 33
Views: 3159

Re: Why isn't tax gain harvesting suggested more often?

In the debate of whether to pay off mortgage early, why isn't after tax investing, with tax gain harvesting, suggested more often (instead of paying off mortgage early)? Do most people just make too much money for TGH? It seems it would give you three benefits: 1. Mortgage interest deduction 2. Higher returns (over the long run, if you can hold for 5+ years) 3. Not paying income tax on the TGH amount For 2018, a couple can have up to $77,200 in taxable income (add on the $24,000 standard deduction, and it's over $100,000) to snag the zero-percent capital gains rate. If the couple is maxing: 401Ks, 457, 403bs, defined contributions, HSA, etc., this is quite possible. I am not following how TGH would help into getting a Mortgage Interest Ded...
by Riley15
Mon Feb 25, 2019 6:06 pm
Forum: Investing - Theory, News & General
Topic: "Warren Buffett says if you invested $10,000 in the S&P 500 in 1942, you'd have $51 million today"
Replies: 110
Views: 9904

Re: "Warren Buffett says if you invested $10,000 in the S&P 500 in 1942, you'd have $51 million today"

fortyofforty wrote: Mon Feb 25, 2019 6:00 pm What if you had invested in the Nifty Fifty in 1960? I do agree that, in hindsight, investing in a broad index with carefully chosen stocks like the S&P 500 would have been a brilliant investing idea. However, I don't agree that it would have been easy to predict the future success thereof, way back in 1942.

Agreed, In 1942 you were probably worried more about more important things and future was pretty uncertain with WWII. If Germany would have won the war, would there have ever been a Warren Buffett as we know him today?
by Riley15
Mon Feb 25, 2019 5:55 pm
Forum: Investing - Theory, News & General
Topic: "Warren Buffett says if you invested $10,000 in the S&P 500 in 1942, you'd have $51 million today"
Replies: 110
Views: 9904

Re: "Warren Buffett says if you invested $10,000 in the S&P 500 in 1942, you'd have $51 million today"

Nicolas wrote: Mon Feb 25, 2019 5:44 pm
DB2 wrote: Mon Feb 25, 2019 4:42 pm
Abe wrote: Mon Feb 25, 2019 4:38 pm I believe Mr. Buffett was using that example to make the point that passive investing in American business over that period of time would have been extremely successful, not that anyone should literally have invested $10k back then.
Agreed. It's rather obvious a much smaller amount of money would have made someone a millionaire with no problem.
So if you invested one tenth of that amount, $1K, in 1942, you’d have $5 million today, a tidy sum. How hard would it’ve been to scrape up $1K in 1942, assuming you were alive then?

$1K in 1942 is equal to inflation adjusted 16K today so that gives us a good estimation.
by Riley15
Mon Feb 25, 2019 5:39 pm
Forum: Investing - Theory, News & General
Topic: "Warren Buffett says if you invested $10,000 in the S&P 500 in 1942, you'd have $51 million today"
Replies: 110
Views: 9904

Re: "Warren Buffett says if you invested $10,000 in the S&P 500 in 1942, you'd have $51 million today"

Vulcan wrote: Mon Feb 25, 2019 4:25 pm
knpstr wrote: Mon Feb 25, 2019 4:13 pm “My wealth has come from a combination of living in America, some lucky genes, and compound interest.” – Warren Buffett

It's more likely the lucky genes. No one has a realistic 76 year investing timeframe, unless they are born with a silver spoon. What he is really saying is if you were born into wealth, you're likely to be lot wealthier 76 years later. The irony!

He also doesn't mention that for compounding you need consistent returns, not what you actually get with stocks. A couple of positive years followed by a few negative ones, compounding goes nowhere. Another thing that compounds just as well is Inflation!
by Riley15
Fri Feb 22, 2019 11:05 am
Forum: Personal Finance (Not Investing)
Topic: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?
Replies: 95
Views: 8334

Re: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?

Olemiss540, No, I recommend saving 100% of annual expense every year. It may or may not equal to 50% of post-tax income. For example, I can spend up to 6+K of medical expense via HSA. HSA is pre-tax. Pre-tax, post-tax and whatever income is subjected to manipulation. And, it is meaningless in the context of FI. The goal is to reach the FI portfolio of 25X current annual expense. Quoting your saving rate in term of annual expense makes the most sense. KlangFool Taxes have to be taken into account depending on if you're saving Pre-tax or Post-tax money. If you're saving Post-tax money that will never be taxed again then you are correct. But if you're saving pre-tax money, then you have to consider taxes as part of the expenses. So it will ha...
by Riley15
Thu Feb 21, 2019 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?
Replies: 95
Views: 8334

Re: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?

Olemiss540, No, I recommend saving 100% of annual expense every year. It may or may not equal to 50% of post-tax income. For example, I can spend up to 6+K of medical expense via HSA. HSA is pre-tax. Pre-tax, post-tax and whatever income is subjected to manipulation. And, it is meaningless in the context of FI. The goal is to reach the FI portfolio of 25X current annual expense. Quoting your saving rate in term of annual expense makes the most sense. KlangFool Taxes have to be taken into account depending on if you're saving Pre-tax or Post-tax money. If you're saving Post-tax money that will never be taxed again then you are correct. But if you're saving pre-tax money, then you have to consider taxes as part of the expenses. So it will ha...
by Riley15
Thu Feb 21, 2019 7:13 pm
Forum: Personal Finance (Not Investing)
Topic: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?
Replies: 95
Views: 8334

Re: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?

Olemiss540, No. I do not consider taxes as an expense. Gross income = taxes (Federal + State+ FICA+ Medicare) + annual expense + savings I use this saving rate because my financial goal is Financially Independence. KlangFool Got it. So you recommend saving 50% of post tax income. :D Olemiss540, No, I recommend saving 100% of annual expense every year. It may or may not equal to 50% of post-tax income. For example, I can spend up to 6+K of medical expense via HSA. HSA is pre-tax. Pre-tax, post-tax and whatever income is subjected to manipulation. And, it is meaningless in the context of FI. The goal is to reach the FI portfolio of 25X current annual expense. Quoting your saving rate in term of annual expense makes the most sense. KlangFool ...
by Riley15
Thu Feb 21, 2019 6:35 pm
Forum: Personal Finance (Not Investing)
Topic: Side gig ideas with minimal requirements?
Replies: 124
Views: 12419

Re: Side gig ideas with minimal requirements?

My lucrative hobby is bank bonuses. About $5,500 last year. Another $2,500 in cc sign up bonuses. In the first 45 days of this calendar year I've made about $700. Nothing to sneeze at. Not making me rich either, just hitting some goals faster as you stated in your original post. Bank bonuses, brokerage bonuses, and credit card bonuses have been very good to me. Even though I've been at it a while I can still net 5k with a modest effort, and more if I push a bit. Beginners have the most fertile bonus soil, although they may not know how to work the land. I've always been curious about people who are able to do this. How do you do it?? Are you constantly opening new credit cards and bank accounts for bonuses and then closing them when you ge...
by Riley15
Thu Feb 21, 2019 5:24 pm
Forum: Personal Finance (Not Investing)
Topic: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?
Replies: 95
Views: 8334

Re: On this Forum, is X% of Income Saved Pre-Tax or Post-Tax?

OP, I save 1 year of my current annual expense every year. I do not save based on X% of income. KlangFool Wouldn't that be saving 50% of pretax income? So wouldn't you recommend saving 50% of pretax income every year? Olemiss540, No. I do not consider taxes as an expense. Gross income = taxes (Federal + State+ FICA+ Medicare) + annual expense + savings I use this saving rate because my financial goal is Financially Independence. KlangFool Got it. So you recommend saving 50% of post tax income. :D Olemiss540, No, I recommend saving 100% of annual expense every year. It may or may not equal to 50% of post-tax income. For example, I can spend up to 6+K of medical expense via HSA. HSA is pre-tax. Pre-tax, post-tax and whatever income is subjec...
by Riley15
Wed Feb 20, 2019 12:03 pm
Forum: US Chapters
Topic: How many bogleheads do you know in real life?
Replies: 165
Views: 20886

Re: How many bogleheads do you know in real life?

I do generally follow Boglehead investment strategy. But I've found that focusing too heavily on any one thing in life is not a recipe that maximizes my happiness. Enjoying the present, and the journey (especially while relatively young) is important too. I try to think of things in terms of minimizing regret. If I never invested at all, I'd regret it. If I lived extremely frugally in order to retire 5-10 years younger, I'd regret it I think. tldr; Balance is key. From my experience in the real world, people overweight present enjoyment (instant gratification). From my experience on this forum, people overweight delayed gratification. But that is just my opinion. +1, I think this is a very sensible comment. I also feel many on the forum li...
by Riley15
Wed Feb 13, 2019 4:23 pm
Forum: Personal Investments
Topic: CDs: 1 yr vs 3yr
Replies: 46
Views: 5791

Re: CDs: 1 yr vs 3yr

Decided I am going to put 100k in my local bank at 3% for 18 months. Yes its FIDC insured. No extra fee's Whatsover and .53 basis points over VMMXX currently right now which is 2.47. I'd like to do something with another 100k if I could get more than 3% and also protected. That still leaves me enough cash to buy in if we have a significant dip. Just looking to be a little more diversified and not all under one roof even though I love Vanguard. At my age I really need to try not to make the old man errors either. As I posted previously, NASA FCU is still offering a 15, 25 and 49 month CD at 3.2%, 3.25% and 3.35% respectively. I think the 15 month is best for my needs, you may like one of the other terms better. Federally insured by the NCUA...
by Riley15
Tue Feb 12, 2019 9:11 am
Forum: Investing - Theory, News & General
Topic: How "Safe" is Your Bond Fund?
Replies: 43
Views: 5262

Re: How "Safe" is Your Bond Fund?

While everyone is well aware of Term and Credit risks with Bonds and that's what is used to make investment decisions. The hidden but one of the most important but overlooked risk is Liquidity, I think this is the critical factor that can break the bond fund in times of distress. Term risks are well understood and can be handled accordingly and having a diverse set of bonds reduces default risks in any one or several bonds in fund. But there is no answer to Liquidity, if everyone wants to sell their Intermediate bond funds in a crunch, the fund manager will be forced to sell longer term bonds to meet required redemptions at big losses permanently reducing NAV that will never recover when the crunch is over. Treasury/government bonds always ...
by Riley15
Sun Feb 10, 2019 8:34 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market yield over 2.5%
Replies: 232
Views: 57682

Re: Vanguard Prime Money Market yield over 2.5%

Doc wrote: Sat Feb 09, 2019 2:50 pm [

I had $14000 "invested" when I got out and lost $14.76 on the sale. Of course at the end I was getting dividends of some $60 a month. (I saw the writing on the wall and got out before the end.) :D
So what was so apparent when the NAV dipped that you decided to sell? Bonds always fluctuate in NAV depending on what the latest news is, even short term bonds but it's understood that over time the downs and ups cancel out and most of your return is from dividends. But that didn't end up being the case for this fund.
by Riley15
Sat Feb 09, 2019 12:08 pm
Forum: Investing - Theory, News & General
Topic: How "Safe" is Your Bond Fund?
Replies: 43
Views: 5262

How "Safe" is Your Bond Fund?

Recently in another thread Kevin M brought to my attention the case of the Schwab Yield-Plus Ultrashort Term Bond Fund (SWYPX). This was supposedly a ultrashort bond fund but marketed as a "high-yield" type money market fund with duration of less than 1 year and a "safe" place to keep cash. It went on to lose 42% of it's value in 2008. There were many reasons for this some obvious and others not so much. The articles below talk about there were some unethical practical going on when reporting the duration and risks of the fund. On top of the debt debacle when it started losing value a liquidity crunch began deepening the losses further. https://www.nytimes.com/2011/01/14/business/14norris.html https://www.vernonlitigatio...
by Riley15
Thu Feb 07, 2019 8:38 pm
Forum: Investing - Theory, News & General
Topic: Corporate stock buybacks
Replies: 19
Views: 1388

Re: Corporate stock buybacks

garlandwhizzer wrote: Thu Feb 07, 2019 8:31 pm
Corporate buyback shares are usually retired, decreasing total share number and therefore increasing earnings per share even if earnings do not increase. Better PEs typically result in better stock prices, hence the payoff for investors comes from stock price appreciation. D

Garland Whizzer

By better PE's do you mean lower PE's? Because in fact if the earnings stay the same and the price remains unchanged initially, the PE should be lower after a buyback. So you believe it's the more attractive lower PE ratio that lead to the stock price increase until the PE levels off to before buyback levels?
by Riley15
Thu Feb 07, 2019 5:18 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market yield over 2.5%
Replies: 232
Views: 57682

Re: Vanguard Prime Money Market yield over 2.5%

Kevin M wrote: Thu Feb 07, 2019 4:29 pm
I'm pretty sure that this is the one that Doc and I owned, and both got out of before it got too bad (as I recall, I got out after losing about 1%).

Kevin

Having been there what made you realize to sell when it was down 1% and go against the "stay the course" mantra?
by Riley15
Thu Feb 07, 2019 4:49 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market yield over 2.5%
Replies: 232
Views: 57682

Re: Vanguard Prime Money Market yield over 2.5%

Looking at the 1-year return of the Schwab ultra-short bond fund before it tanked in 2008 probably made it look good compared to money market funds too. Sometimes you are rewarded for credit risk, and sometimes the risk shows up. Kevin Can you share what the Ticker of the this Ultra-short term bond fund is? I am curious to see how is behaved compared to Total Bond in a period like 2008. Do a web search on: schwab ultra short bond fund 2007 I'm reviewing now ... Kevin Interesting article: Schwab YieldPlus Fund Was NOT An Ultra Short-Term Bond Fund . I'm pretty sure that this is the one that Doc and I owned, and both got out of before it got too bad (as I recall, I got out after losing about 1%). And another: Fund Times: Schwab Bond Fund Suf...
by Riley15
Thu Feb 07, 2019 4:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market yield over 2.5%
Replies: 232
Views: 57682

Re: Vanguard Prime Money Market yield over 2.5%

Kevin M wrote: Thu Feb 07, 2019 3:35 pm
Looking at the 1-year return of the Schwab ultra-short bond fund before it tanked in 2008 probably made it look good compared to money market funds too. Sometimes you are rewarded for credit risk, and sometimes the risk shows up.

Kevin

Can you share what the Ticker of the this Ultra-short term bond fund is? I am curious to see how is behaved compared to Total Bond in a period like 2008.
by Riley15
Thu Feb 07, 2019 3:51 pm
Forum: Investing - Theory, News & General
Topic: Corporate stock buybacks
Replies: 19
Views: 1388

Re: Corporate stock buybacks

alex_686 wrote: Thu Feb 07, 2019 3:10 pm
jharkin wrote: Thu Feb 07, 2019 3:05 pm Isn't the buyback a bigger benefit to the executives than dividends, because of the fact it inflates per share price and thus the potential market value of their unvested options?
In theory no - the price of a stock would be unchanged.

Yes, in theory the price of the stock would remain unchanged since the company is now poorer by the equivalent amount of cash it used to buyback the shares. But earnings per share would definitely go up. If the price should be unchanged, P/E would go down. How do we explain that?
by Riley15
Tue Feb 05, 2019 11:02 pm
Forum: Investing - Theory, News & General
Topic: VMMXX - Why so popular? [Vanguard Prime Money Market Fund]
Replies: 23
Views: 6266

Re: VMMXX - Why so popular? [Vanguard Prime Money Market Fund]

Hello all, I have been reading up on the many articles here and many people refer to VMMXX as a great place to put cash or emergency fund ... I was looking into it, and it seems it only yields 2.48% but has a 0.16% expense ratio, which would make the net yield 2.32% Ally no penalty CD offers 2.3% CIT offers 2.45%, and they have no load or sell fees to withdraw and no minimum balance. I can't figure out what makes VMMXX so popular, maybe I am missing something? It's seems most people on this site are financially intelligent so I'm sure there is some reason I am not aware of. Thanks! Please understand that VMMXX while still conservative is not the same as Bank CD or Savings account in terms of credit risk. You're comparing apples and oranges...
by Riley15
Tue Feb 05, 2019 2:34 pm
Forum: Investing - Theory, News & General
Topic: Understanding T-Bill Rates
Replies: 5
Views: 1125

Understanding T-Bill Rates

I am trying to get a good hold on the different notations to indicate T-Bill rates and how to simply compare them to CD rates? At Vaguad auction page a Indicate Yield is shown for 1-month T-Bill as 2.379% https://personal.vanguard.com/us/funds/bonds/bonddesk?lang=en At Treasury Direct the most recent auction page shows a 1-month T-Bill High Rate of 2.39% and Investment Rate of 2.428% https://www.treasurydirect.gov/instit/annceresult/annceresult.htm The Dept of Treasury page shows a 1-month T-Bill Bank Discount Rate of 2.37 and a Coupon Equivalent Rate of 2.41% https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=billrates Is the High-Rate and Bank Discount Rate the same thing? And is the Investm...
by Riley15
Thu Jan 31, 2019 12:45 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market yield over 2.5%
Replies: 232
Views: 57682

Re: Vanguard Prime Money Market yield over 2.5%

However, my taxable-equivalent SEC yield (TEY) for Vanguard Treasury MM fund is even higher at 2.61% (2.64% on an APY basis); that's at an SEC yield of 2.32%, and marginal tax rates of 27% fed and 8% state (it's mainly the state tax exemption that boosts the TEY of Treasury MM). And Treasury MM is even safer than Prime MM--I think it's probably about as safe as an FDIC-insured bank account, given that its holdings are 100% Treasury Bills. One downside is that the initial investment is $50K, but once the fund is open, your balance can drop below that and the fund will remain open (I've had less than $1K in the fund at times). How did you end up with 2.61% taxable-equivalent SEC yield (TEY) for the Vanguard Treasury MM fund? Was it a typo fo...
by Riley15
Fri Jan 18, 2019 12:56 pm
Forum: Investing - Theory, News & General
Topic: My trend following strategy and experience
Replies: 1522
Views: 151725

Re: My trend following strategy and experience

Last year, the first full year of my implementation of this strategy, my overall portfolio performance was -4.38%. This was slightly better than Vanguard's Total Stock Market index fund, VTSAX, which returned -5.17%, and much better than Vanguard's Total International Stock index fund, VTIAX, which returned -14.43%. But as Paul Merriman has said, "A year in the market is just noise," and I put very little weight on one year's performance in this context. Thanks for sharing about your experience and how you're moving ahead with your strategy. Great to hear you're sticking to the plan. Even though it's market timing, it seems like it's actually a much more conservative approach to investing than buy and hold. So did you maintain an...