Search found 591 matches

by Johnnie
Mon Mar 25, 2024 10:12 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

What's your total return on the fund? You're in a short-term bond fund. Yields are high enough that doesn't matter if rates keep going up now. The bad bit for short-term bonds is over... Sit tight ...you're probably not in a hole at all anymore - or just barely, if you are. If you've been in VFIRX since the beginning of 2022 and haven't touched it and have reinvested your dividends, then you're down less than 1% of the initial balance. If you've held it since 2020 with dividends reinvested, you're up less than 1% of the initial balance. Very helpful, much obliged. Going forward I will probably buy an actual TIPS bond or bonds, and be done with bond funds. (VG does not appear to provide a cumulative total return on this, only that "Cos...
by Johnnie
Mon Mar 25, 2024 6:16 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

rkhusky wrote: Mon Mar 25, 2024 6:04 pm Do you own stocks? Stocks have dropped 50% 3 times in the last 50 years. They drop 10% every year or two.
Right, and no-sweat: That's just what I expect with stocks - the "risky" part of my portfolio.
rkhusky wrote: Mon Mar 25, 2024 6:04 pm If you had bought a bond 2 or 3 years ago, you would have locked in a very low rate.
Right again, and if I had bought a bond with a fixed end-date, vs. a bond-fund without one, I wouldn't have any decisions to make now and would take my lumps with no complaint.
by Johnnie
Mon Mar 25, 2024 5:53 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

VG reports my "Cost basis – Unrealized gains/losses" is down 7.08% on this fund. If I owned a bond with a fixed term I would be indifferent to interim volatility. It appears my big bad mistake was to buy a bond fund not a bond. Yeah I should have read the fine print. No-Excuse-Sir, but rates were near-zero then no one was talking about high-4%/low 5% within two or three years. Many seem to assume that rates will be heading down from here. I really didn't want to be investing on the basis of "opinion," but when I look at the current political and geopolitical backdrop the picture I see is if anything "higher for longer." The question is what should I do now, given that no one can predict rates, and if they are h...
by Johnnie
Mon Mar 25, 2024 2:05 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

...If interim volatility is something you can't handle, then you can buy i-bonds, however, there are limits to what you can buy per year, per person... I can handle interim volatility with a fixed end-date just fine. But I'm thinking the real problem may be that I bought a bond fund , not a bond. I read that as, there is no end-date, because the rate and maturity of the constituent holdings change constantly, so there is no fixed "2 x n -1"; instead there's a never-ending treadmill of changing ones. Hopefully I'm drastically wrong in that interpretation, but I haven't discovered the error on my own. And if I'm not wrong, then I'm even more tempted to bail and eat the loss, because I have no confidence that rates (and bond fund-de...
by Johnnie
Mon Mar 25, 2024 1:03 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

PS, back to "Looking for advice..."

Virtually my entire fixed-income position is in this VG Short Term Bond fund, which has been underwater since 2022.

The 2x duration - 1 is useful, but what happens if rates make a run higher while waiting for the formula to bring you back to even?

If I change horses now I lock-in the current losses, and if I stand-pat waiting for the formula to work I may compound it.

Is eat-the-loss-and-move-on still the only sure-fire way escape this dilemma? This is the core of my ongoing unhappiness with this investment.
by Johnnie
Mon Mar 25, 2024 12:06 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

Well, that is a rather long period of time, and you were discussing a fairly short period of time. Portfolio Visualizer uses 3-month Treasury Bills for cash, and the "Portfolio Growth" graph has a checkbox to display "Inflation adjusted" information. When the inflation adjustment setting is turned on, lines increasing are gaining after-inflation value, and lines decreasing are losing after-inflation value. I would describe cash returns compared to inflation as period dependent, especially across short periods of time, like 0-5 years... Thank you Alluring, this paints a terrifically useful picture of the pros and cons. It suggests that I'm not completely nuts to consider the all-cash alternative, while also illustrating ...
by Johnnie
Sat Mar 23, 2024 7:51 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

UpperNwGuy wrote: Sat Mar 23, 2024 6:21 pm OP, when do you need the money? What the fund does between now and then is not relevant.
While Social Security will cover most expenses, my savings are mostly in a rollover IRA - and RMDs start in two years. My thoughts are to initially distribute after-inflation gains on the stocks, if any, and take the rest from fixed-income.

I'm quite healthy, so likely have about 15 years and some change remaining, but of course the proverbial Mack truck could strike anytime. I'll have survivors, who l like to imagine having something to smile about at the funeral.

I mentioned the trauma of the decade-plus 1970s inflation, and don't dismiss the possibility of a repeat.

https://www.usinflationcalculator.com/i ... ion-rates/
by Johnnie
Sat Mar 23, 2024 5:58 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

Remember that money market funds will start having lower interest rates as the FED lowers interest rates... MM funds are doing quite nicely now, but will not keep up with inflation in the long run. As for whether MMFs keep up with inflation: Morningstar's chart for VMFXX, Vanguard's convenient, good-yielding settlement fund, goes back to 1981. It shows that $10,000 invested in 1981 has increased to $51,086 today. Of course, that's without considering taxes. https://www.morningstar.com/funds/xnas/vmfxx/chart The tool below shows that you would have needed only $33,096 to keep up with inflation. https://tools.carboncollective.co/inflation/us/1981/10000/ I think Tib has answered my question. I understand that returns from MMFs will fall rapid...
by Johnnie
Sat Mar 23, 2024 11:49 am
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Re: Looking for advice on unhappy experience in VG short term bond fund

PS. Apologies, I thought I had raised this question recently on a related thread, but wasn't finding it.

Now I just did find it. Thanks again to Kevin M, Elysium, loukycpa, and a couple others who weighed-in with substantive responses then. Obviously I'm still not comfortable with the product, and nervous about TIPS too.
by Johnnie
Sat Mar 23, 2024 10:56 am
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5584

Looking for advice on unhappy experience in VG short term bond fund

I asked about this in 2022, and Addy also asked about it then: Question: What happens to short term bond funds if rates keep rising for years? https://www.bogleheads.org/forum/viewtopic.php?t=388322 Is Vanguard Short-Term Treasury Index a good choice? https://www.bogleheads.org/forum/viewtopic.php?t=373507 The responses provided the 2 x duration – 1 formula, which I thought I understood but probably did not. Having just reviewed them again I am more confused than ever. In simple terms, what should I do now? I’m just a regular retirement investor who thought he understood the basics, but feels burned by this investment. All I want from my fixed income allocation is for it to keep up with inflation, period. I now get the impression that even ...
by Johnnie
Tue Feb 20, 2024 6:38 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35813

Re: Can you do better than BND?

Thank you Kevin M. That is a helpful response.
by Johnnie
Tue Feb 20, 2024 5:11 pm
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35813

Re: Can you do better than BND?

My portfolio is 50/50 stock index funds/short-term bond fund. With not more than about 20 years left, my plan is to live off the fixed income plus Social Security, and leave the stocks to survivors. I also have a tiny state pension that comes with gold-plated health insurance. 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. So my question is, why should I hold any bonds at all, versus putting the whole fixed-income allocation into a money-market fund and/or an online savings account? If this is your goal, a TIPs ladder will certainly give you this with reasonable certainty. ETA: The plan is to take distributions every six months from ...
by Johnnie
Tue Feb 20, 2024 9:52 am
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35813

Re: Can you do better than BND?

My portfolio is 50/50 stock index funds/short-term bond fund. With not more than about 20 years left, my plan is to live off the fixed income plus Social Security, and leave the stocks to survivors. I also have a tiny state pension that comes with gold-plated health insurance. 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. So my question is, why should I hold any bonds at all, versus putting the whole fixed-income allocation into a money-market fund and/or an online savings account? If this is your goal, a TIPs ladder will certainly give you this with reasonable certainty. ETA: The plan is to take distributions every six months from ...
by Johnnie
Tue Feb 20, 2024 9:34 am
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35813

Re: Can you do better than BND?

duped
by Johnnie
Tue Feb 20, 2024 9:27 am
Forum: Investing - Theory, News & General
Topic: Can you do better than BND?
Replies: 278
Views: 35813

Re: Can you do better than BND?

I know I was scarred by the Great Inflation of the late '70s and 1980s. Now in retirement, the greatest threat to my financial future is rising rates and persistent inflation. And when I look at the current fiscal and geopolitical backdrop, I see nothing to suggest those fears are not valid. My fixed income has been in the VG short term bond fund, duration 2-3 years, which right now is painfully underwater. Sure, if rates remain steady-to-lower that decline will "come out in the wash." But what if rates start wobbling their way in a modest but persistent upwards direction for an extended period? Say, for the rest of this decade, and perhaps beyond. My portfolio is 50/50 stock index funds/short-term bond fund. With not more than ab...
by Johnnie
Sun Feb 18, 2024 7:47 am
Forum: Personal Finance (Not Investing)
Topic: Estimating Cash Flow Needs for Retirement
Replies: 25
Views: 3854

Re: Estimating Cash Flow Needs for Retirement

doobiedoo wrote: Sun Feb 18, 2024 2:51 am
What you can't do is ignore it, think you're doing great for 10 years in retirement,
then need a new roof and a new car in the same year and uh-oh, there's no money for it!
I could afford it. The tax bill on the necessary distributions? That would be harder.
:wink:
by Johnnie
Mon Feb 12, 2024 4:26 pm
Forum: Investing - Theory, News & General
Topic: Who is buying bonds?
Replies: 69
Views: 8957

Re: Who is buying bonds?

adave wrote: Sun Feb 11, 2024 4:52 pm Rates have likely peaked however for this cycle. BND on sale.
Famous last words?

Not predicting, just wondering.
by Johnnie
Sat Feb 10, 2024 7:42 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Portfolio? Why...I am so confused
Replies: 388
Views: 89826

Re: Bonds in Portfolio? Why...I am so confused

Best to hold a year or two of expenses in bonds that could be sold in a downturn. I’ve switched to thinking of bonds in years of expenses now . Helps me think more clearly about them. That's exactly how I think about fixed-income. Specifically, I am now retired in a low-COLA area, with "more than enough" to see me to the end. So I'm 50/50 stocks/bonds - but plan to never touch the equities and only spend-down the fixed-income side. Bonds (plus SS and a couple other minor income streams) are for expenses, stocks are for the survivors wearing smiles at the funeral. Which means, all I need from my annual fixed-income distributions is to keep up with inflation until The End, with minimal volatility, and assuming a very generous "...
by Johnnie
Fri Feb 09, 2024 11:48 am
Forum: Investing - Theory, News & General
Topic: Bonds in Portfolio? Why...I am so confused
Replies: 388
Views: 89826

Re: Bonds in Portfolio? Why...I am so confused

Excerpt: ...Pros for Cash: don't go down in value. Right now, you can get pretty good yield in CDs or short term treasuries. Can deploy in rebalancing or when other type of buying opportunities arise. Downsides for Cash: over the long haul, inflation will eat you up.... Does this mean: The real value of holdings in a money market fund will decline during a period of higher inflation (vs. earn little or nothing). Or: Given periods of higher and lower inflation, MMFs will earn less over time than other fixed-income alternatives (bonds). If MMFs do lose money during periods of inflation, is the difference evened out over time? Related, for people just entering their '70s, "long term" is a lot shorter than for someone in their 40s or...
by Johnnie
Wed Feb 07, 2024 2:11 pm
Forum: Personal Finance (Not Investing)
Topic: Can I afford this house? (Update 3/2/24)
Replies: 68
Views: 8423

Re: Can I afford this house?

Question for KlangFool: Context: I have two relatives who recently sold the big waterfront house they shared, for an amount that allows them to each buy their own nice non-waterfront with cash. They want to remain in the same area, but prices have risen very high there. One has already bought an expensive house, the other got a good deal on a rental, but isn't sure if she should keep it instead of buying something now. You appear to be stating a general formula: "If it's cheaper to rent than buy, then you should rent until a recession makes it cheaper to buy." Other things being equal, is that correct? You seem to be saying that when (not if) a recession strikes, home prices will (generally) fall to where it's cheaper to buy than ...
by Johnnie
Mon Feb 05, 2024 8:23 pm
Forum: Investing - Theory, News & General
Topic: Stupid bond/bond fund question
Replies: 15
Views: 1987

Re: Stupid bond/bond fund question

"Over time (years), it should even out." I have a question. In 2020 I bought a substantial amount of the Vanguard Short Term Treasury Fund, VFIRX. It seemed like a safe, conservative, low-volatility vehicle to hold the fixed-income portion of my portfolio. Obviously the timing was awful, as it got body-slammed in the 2022-23 bond rout. I learned the hard way that even an average maturity of about 2.5 years was no protection in such a massive bond bear. My hope has been that "over time it should even out," but I don't know if that applies to a short term fund. Naturally I've hoped for bond rally (rate decline) ever since, to at least get back some of my losses, but I don't know if even that can save a short-term fund. My...
by Johnnie
Sun Feb 04, 2024 5:39 pm
Forum: Investing - Theory, News & General
Topic: Stupid bond/bond fund question
Replies: 15
Views: 1987

Re: Stupid bond/bond fund question

"Over time (years), it should even out." I have a question. In 2020 I bought a substantial amount of the Vanguard Short Term Treasury Fund, VFIRX. It seemed like a safe, conservative, low-volatility vehicle to hold the fixed-income portion of my portfolio. Obviously the timing was awful, as it got body-slammed in the 2022-23 bond rout. I learned the hard way that even an average maturity of about 2.5 years was no protection in such a massive bond bear. My hope has been that "over time it should even out," but I don't know if that applies to a short term fund. Naturally I've hoped for bond rally (rate decline) ever since, to at least get back some of my losses, but I don't know if even that can save a short-term fund. My...
by Johnnie
Sun Feb 04, 2024 8:58 am
Forum: Investing - Theory, News & General
Topic: Do Bond Funds Really Make Sense for the Long Run?
Replies: 399
Views: 39296

Re: Do Bond Funds Really Make Sense for the Long Run?

Kevin K wrote: Sat Jan 20, 2024 10:17 am ...A rolling ladder where maturing bonds are not spent but reinvested in another, later rung would be a wealth-maintenance tool; and to maintain is not to build.
Presumably that applies to a short-term bond fund as well: A wealth maintenance tool, with less volatility due to the shorter durations.
by Johnnie
Fri Feb 02, 2024 4:24 pm
Forum: Personal Investments
Topic: Retirement portfolio allocation discussion
Replies: 30
Views: 2831

Re: Retirement portfolio allocation discussion

(Greetings. Back after retiring for good with a new email. ;-) )

I'm of an age and net worth where I can keep in my VG Short Term Bond Fund an amount large enough to cover expenses to The End with no worries - and still have a healthy balance on the equities-side.

That assumes Social Security doesn't melt-down in the next couple decades or less. If things did get that bad, the equities side of the portfolio probably wouldn't be much help either, alas. <shrug>
by Johnnie
Mon Oct 17, 2022 4:39 pm
Forum: Investing - Theory, News & General
Topic: Question: What happens to short term bond funds if rates keep rising for years?
Replies: 34
Views: 5449

Re: Question: What happens to short term bond funds if rates keep rising for years?

Indeed, rates going up for five years would be very bad. That doesn't mean it can't happen though, as it did in the 1970s and early '80s:

https://www.govinfo.gov/content/pkg/ERP ... able73.pdf
by Johnnie
Mon Oct 17, 2022 4:08 pm
Forum: Investing - Theory, News & General
Topic: Question: What happens to short term bond funds if rates keep rising for years?
Replies: 34
Views: 5449

Question: What happens to short term bond funds if rates keep rising for years?

If rates keep rising for several years, will holders of short-term bond funds (like vfirx) just keep getting beaten down? Can these investors ever get back to even? I'm talking funds that hold 2-year or 3-year treasuries. Specifically, is owning this fund in such an environment a recipe for years of steady erosion, with the higher interest payments never catching up with the fall in prices? And never any "bounce-back," because the bonds the fund owned when you bought it are long-expired after several years? A concrete example, what if two-year rates keep wandering north for five years or more? The notes it owned when you invested have all expired at a loss, as have the notes that replaced them, etc. How can this ever turn around? ...
by Johnnie
Fri Jul 23, 2021 10:16 am
Forum: Investing - Theory, News & General
Topic: Emerging Market Stocks Funds too exposed to China
Replies: 43
Views: 5688

Re: Emerging Market Stocks Funds too exposed to China

My (former) Schwab Emerging Markets Index Fund is 50% China. That made me uncomfortable on several counts, so earlier this year I dumped it for XCEM, no direct PRC exposure (but still 15% Taiwan).

Since then it has been fascinating to watch the two funds' daily price movements. Not useful, just fascinating.


https://www.columbiathreadneedleus.com/ ... =19762B202
by Johnnie
Sat Jan 23, 2021 8:31 am
Forum: Investing - Theory, News & General
Topic: 'The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble' - GMO
Replies: 235
Views: 35898

Re: 'The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble' - GMO

From Ben Carson: November 13, 2020: Legendary investor is certain we’re in a bubble (Business Insider) December 27, 2019: U.S. stock market is a bubble (Forbes) April 5, 2018: ‘Epic’ market bubble is ready to burst (CNBC) August 9, 2017: Is the stock market a bubble? (USA Today) June 23, 2016: Uh-oh. Is the stock market in a bubble again? (CNN Money) September 13, 2015: Fears grow over US stock market bubble (Financial Times) May 6, 2014: Time to worry about stock market bubbles (New York Times) December 2, 2013: Nobel prize winner warns of US stock market bubble (CNBC) March 27, 2012: Robert Shiller eyes another tech bubble (Yahoo! Finance) May 3, 2011: Why this stock market looks like the tech bubble of 2000 all over again (Business Insid...
by Johnnie
Mon Mar 23, 2020 8:16 pm
Forum: Investing - Theory, News & General
Topic: Who here is buying stocks today and how much?
Replies: 315
Views: 34418

Re: Who here is buying stocks today and how much?

I'm not doing anything because my plan says rebalance in January, plus I'm close to retirement. If this this thing goes to 50% I may nibble a tiny bit. Just so in years hence I can say I did if it works, and never say a word if it doesn't. :wink:
by Johnnie
Thu Mar 12, 2020 5:56 pm
Forum: Investing - Theory, News & General
Topic: Time to sell bond funds and go to a money market fund?
Replies: 11
Views: 1279

Re: Time to sell bond funds and go to a money market fund?

Lee_WSP wrote: Thu Mar 12, 2020 4:49 pm I rebalanced downwards yesterday, but it's a good question. I have no idea. It sure feels like riding a 50 ft wave that can come crashing down on my head.
Being long long-bonds like a 50 foot tidal wave - exactly. Medium durations too. Sitting in a money market fund at 0.05% would feel pretty sweet if that thing reverses, even to just the already-low pre-panic levels.

Maybe a quant could model what a reversion to the mean of the past century and/or other periods would look like for owners of 10 year treasuries.
by Johnnie
Thu Mar 12, 2020 3:27 pm
Forum: Investing - Theory, News & General
Topic: Time to sell bond funds and go to a money market fund?
Replies: 11
Views: 1279

Re: Time to sell bond funds and go to a money market fund?

Thesaints wrote: Thu Mar 12, 2020 2:33 pm How did he accumulate losses on a 2-year treasuries ETF ?
And even I held 10-years I'd be locking in big bond price gains, not losses. And would be avoiding big losses if/when rates recover.

The foregone yield by going from two-year bonds to an MMF for six months or a year is pretty minimal at these levels. But if there's a big bounce-back in rates - and concomitant decline in bond prices - the losses on longer term issues could be substantial.

Thanks
by Johnnie
Thu Mar 12, 2020 2:17 pm
Forum: Investing - Theory, News & General
Topic: Time to sell bond funds and go to a money market fund?
Replies: 11
Views: 1279

Time to sell bond funds and go to a money market fund?

I raise the question with an eye toward what happens when the bond market eventually returns to normal. Isn't that another way of saying, "When the temporary exogenous panic-driven gains in bond prices reverse and crush those who piled in at the highs?"

I'm in a two-year treasury ETF so the downside is limited, but it would cost nothing to go an MMF until there's a return to normalcy, including effectively no foregone-yield opportunity cost.
by Johnnie
Thu Jan 30, 2020 2:09 pm
Forum: Investing - Theory, News & General
Topic: "If Value Stocks Are Toxic, Why Aren’t Junk Bonds?"
Replies: 6
Views: 1131

"If Value Stocks Are Toxic, Why Aren’t Junk Bonds?"

Bloomberg article posted on Yahoo asks the question in the thread title. https://finance.yahoo.com/news/value-stocks-toxic-why-aren-100037924.html "...By the summer of 2019, investors began wailing about the death of value investing even as their faith in junk bonds remained unshaken. It’s a striking contrast because value stocks and junk bonds are essentially the same investment in different parts of the capital structure. Bond investors buy junk because they expect to be better compensated for lending to troubled companies than they do for stable ones, as do stock investors when choosing beaten-down value companies over those with highflying growth. Both expectations are supported by decades of data. Junk bonds have historically paid...
by Johnnie
Sun Jan 19, 2020 8:28 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 1177
Views: 205653

Re: Year 2000 retirees using the '4% rule' - Where are they now?

Just a couple years from retirement, I've been thinking about this: Use the 4% SWR as a benchmark, and in the first few years distribute 5% of the then-current portfolio value in good years, and 4% of it in bad years, a form of the Taylor "a little more, a little less" method. Until age 70 that's on top of a flat annual distribution from a social security bridge fund, which is in short term treasuries and not part of the portfolio. Reassess at 70 when SS checks start arriving and SOR risk is starting to fall off. You might want to take a look at the retirement spending chart at Portfolio Charts. Using data since 1970, you can see the impact of different withdrawal rates and schemes, including withdrawing 5% of your initial portfo...
by Johnnie
Sat Jan 18, 2020 9:27 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 1177
Views: 205653

Re: Year 2000 retirees using the '4% rule' - Where are they now?

Just a couple years from retirement, I've been thinking about this:

Use the 4% SWR as a benchmark, and in the first few years distribute 5% of the then-current portfolio value in good years, and 4% of it in bad years, a form of the Taylor "a little more, a little less" method. Until age 70 that's on top of a flat annual distribution from a social security bridge fund, which is in short term treasuries and not part of the portfolio.

Reassess at 70 when SS checks start arriving and SOR risk is starting to fall off.
by Johnnie
Thu Jan 09, 2020 1:36 pm
Forum: Investing - Theory, News & General
Topic: Wall of Worry
Replies: 21
Views: 3416

Re: Wall of Worry

willthrill81 wrote: Wed Jan 08, 2020 10:10 pm 'Uncertainty in the markets' is as evergreen as 'There's a crisis in the Middle East.'
Uh-oh: Has yet another Roman general gone off glory-hounding against the Parthians?

(Crassus you dummy, Bogleheads could have told you to skip the desert and mind your lucrative REITs!)
by Johnnie
Thu Jan 09, 2020 1:24 pm
Forum: Investing - Theory, News & General
Topic: Net Worth ??
Replies: 129
Views: 14341

Re: Net Worth ??

305pelusa wrote: Thu Jan 09, 2020 12:56 pm
Phil B wrote: Thu Jan 09, 2020 12:38 pm When determining my net worth..... I include my 401K balance in the ASSETS. Do I include the tax liability for the 401k in the LIABILITIES? :?:
Yes, of course. Make an educated guess. If you don’t add it, you’re just stating the tax rate will be zero in the future for you.
Right, that's what good business accounting requires with "known unknowns" - make a best-guess and adjust as more information comes in, documenting all of it.

I do it mentally with my tax deferred accounts; when I look at the balances there's a little asterix in my mind.
by Johnnie
Mon Jan 06, 2020 10:13 pm
Forum: Investing - Theory, News & General
Topic: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.
Replies: 90
Views: 8644

Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

I have a question for Paul Merriman: Paul, a Boglehead member asks: He has heard you say half your investment money is in 50/50 UBH, and half in a "mechanical" momentum-triggered market timing system managed by a professional. You report the latter keeps you out at the worst times and also at the best. It's a SWAN. He also has seen articles suggesting that the firm Paul founded used the timing thing a lot with clients. Which to be clear, is empirical and rules based, not the "evil" market timing discussed elsewhere on BH (and by Paul Merriman, Dalbar, etc.). Also, Paul's been around a while and the same good data and info that's commonplace now was not widespread earlier in his career. But at some point he saw something ...
by Johnnie
Tue Dec 31, 2019 12:10 pm
Forum: Investing - Theory, News & General
Topic: Do you prefer etfs or mutual funds?
Replies: 271
Views: 18931

Re: Vanguard phasing out regular mutual fund shares?

Yes, I had noticed, along with other indications of an emphasis on ETFs. It seems as if they've constantly had something about ETFs in their home page highlights or rotating adlets or whatever you'd call 'em for some time now... And since I personally like mutual funds and dislike ETFs, it doesn't thrill me, but I don't view it with much alarm, either. May I ask, why do you prefer the mutual fund over the ETF? I started with the mutual funds in my account and very hesitant to convert them to ETFs, but I do not have a very good reason for my resistance. I pay an extra basis point for VTSAX, 2 basis points for VTIAX, and 1.5 basis points for VBTLX. Why am I spending a few hundred bucks a year to stay in the mutual funds? If I may ask, why ar...
by Johnnie
Tue Dec 31, 2019 11:16 am
Forum: Investing - Theory, News & General
Topic: "Stealth Wealth: I’m Just an Ordinary Average Guy"
Replies: 445
Views: 127466

Re: "Stealth Wealth: I’m Just an Ordinary Average Guy"

Fairly late I discovered the career I was meant to have and began to thrive. I saved big-time out of habit. I lived frugally out of necessity, and then habit. Now I am on the threshold of retiring and relocating to a nice lakefront home in a scenic LCOLA area, with an income and assets several times higher than all but one of modest network I have there (he a born entrepreneur and inventor who hit the jackpot his fourth attempt). Just an ordinary guy? Kind of a weirdo, actually, but content and with many blessings to count. Mainly, I'm stunned to find myself months from a retirement that is all on my own terms. The "stealth" I'm experiencing right now is the startling arrival of that long-awaited and planned for moment. ETA - One ...
by Johnnie
Sun Dec 29, 2019 9:00 pm
Forum: Personal Consumer Issues
Topic: Shopping for used: 2017 Toyota Camry vs 2017 Nissan Altima
Replies: 22
Views: 1919

Re: Shopping for used: 2017 Toyota Camry vs 2017 Nissan Altima

It sounds like Klang got what he needed, but I just wanted to say how we do it:

When you find what you want go to cars.com advanced search, dial that exact car in for a national or a 500 mile search , and you'll see right away what it's worth, subject to the usual qualifications.

I have a Venza btw, a Camry with a wagony body, and with a V-6 it goes like heck!

A camry with 30k for $16k sounded good to me but I haven't looked.
by Johnnie
Mon Dec 23, 2019 9:27 am
Forum: Investing - Theory, News & General
Topic: Peter Lynch on Barron's Roundtable Tonight
Replies: 61
Views: 6170

Re: Peter Lynch on Barron's Roundtable Tonight

Paul Merriman dissected Lynch's performance at Magellan on a podcast one time and ascribed it primarily to the luck of being at the helm during a particularly good time to be in the market; as I recall the analysis included something about massive style drift over that time.

He was dissing hype not Lynch, but the numbers seemed persuasive to me.

Sorry, I can't find the podcast it appeared on, and I'm not seeing a text version on his website.
by Johnnie
Wed Dec 11, 2019 6:58 pm
Forum: Investing - Theory, News & General
Topic: Transferring 403b from fidelity to vanguard roth ira
Replies: 6
Views: 493

Re: Transferring 403b from fidelity to vanguard roth ira

I've done this, with one difference - both my 403b and my rollover IRA are at Vanguard. At age 60 (a non-taxable "qualifying event") I rolled the former into the latter. I still contribute to the 403b and just leave that in there for now. Most of the portfolio is in the IRA. As far as I know nothing prohibits DW from rolling some or all of that 403b into a regular IRA at VG or wherever. The receiving company in my experience is ever so helpful. At that point it should be easy (below). Question to Bogleheads: Are there any tax or other advantages to keeping money in a 403b or 401k as opposed to rolling it into your own IRA after reaching 60? ~~~~~~~~~~ At age 60 I rolled everything into two IRAs at VG and Schwab, and now am slowly ...
by Johnnie
Fri Dec 06, 2019 8:46 pm
Forum: Investing - Theory, News & General
Topic: US vs Intl Total Stock Market
Replies: 102
Views: 10877

Re: US vs Intl Total Stock Market

This one stuck in my mind, and I think it applies in other areas too:
shess wrote: Wed Oct 02, 2019 7:32 pm Here's the thing - I didn't invest in US and INTL because I thought they both were going to give me great returns, I did it because I figured ONE OF THEM would give good returns, and the other one would hopefully not do too badly. Unfortunately, I didn't know which one it would be.
by Johnnie
Sun Nov 24, 2019 10:16 am
Forum: Personal Finance (Not Investing)
Topic: Some guidance please
Replies: 12
Views: 1071

Re: Some guidance please

Over-tip.

Pick up the checks if others at the table haven't "arrived" yet.

Those are two little things that give me an inordinate amount of satisfaction. :) They don't "give back" much though (not that I "took" anything in the first place), so I am also funding a partially disabled young relative's ABLE account.

It's a start. Having achieved FI is new for me, I'm still feeling it out. :beer
by Johnnie
Sun Nov 24, 2019 8:49 am
Forum: Personal Investments
Topic: Retirement planning book
Replies: 15
Views: 1883

Re: Retirement planning book

I used to no know I know nothing about retirement investing, and the guy who straightened was Paul Merriman, whose stuff I began reading on Marketwatch about 5 years ago. His "Ultimate Buy and Hold" portfolio is discussed here occasionally, but the real value for me was all the basic "how to" articles on retirement savings, distributions and much more. Despite knowing now that I know nothing (about the market) I have learned a little bit about the process, thanks to Paul. https://paulmerriman.com/marketwatch-articles/ https://paulmerriman.com/top-20-marketwatch-articles/ https://paulmerriman.com/performance-series-articles/ He also has some e-books that presumably sum it all up. https://paulmerriman.com/books/ Your note ...
by Johnnie
Fri Nov 22, 2019 4:48 pm
Forum: Investing - Theory, News & General
Topic: Vanguard’s chief economist says [elevated risk of stock drawdowns]
Replies: 54
Views: 7297

Re: Vanguard’s chief economist says [elevated risk of stock drawdowns]

Why Vanguard’s chief economist says there is an elevated risk of a ‘large drawdown’ in stocks.
I can't stand it when they talk that way.

Mainly it reminds me of certain bureaucratic boards and commissions whose statements are so filled with jargon and terms of art that a standard jibe holds, "You can rearrange the phrases randomly and the statement will not make any more or less sense."
by Johnnie
Wed Nov 20, 2019 6:35 pm
Forum: Investing - Theory, News & General
Topic: Wheres best place park emergency funds these days?
Replies: 47
Views: 6781

Re: Wheres best place park emergency funds these days?

Someone once said here, "My portfolio IS my emergency fund."

Maybe not for younger people, but as a pre-retiree that rang true for me.
(Pay no attention to that excessive balance in a local checking account. :oops: )
by Johnnie
Wed Nov 20, 2019 10:29 am
Forum: Investing - Theory, News & General
Topic: Bill Gates' backed Heliogen may revolutionize energy industry
Replies: 65
Views: 7680

Re: Bill Gates' backed Heliogen may revolutionize energy industry

One word: Magnitudes. Also, beware the hype. The potential contribution of any suggested alternative cannot be assessed without setting it alongside the magnitude of energy required to sustain the industrial civilization that sustains a world population of 8 billion. Efficiency improvements could potentially reduce the energy needed for that by about half, at which point diminishing marginal returns impose a limit. But even half the current output is still a heck of a lot more BTUs that all the non-fossil alternatives (except nukes) are capable of producing without creating even bigger problems (a' la' ethanol). If you want to reduce worldwide energy use more than 50% - and simultaneously raise world-wide living standards to a basic middle ...
by Johnnie
Sun Nov 17, 2019 4:42 pm
Forum: Investing - Theory, News & General
Topic: Preparing for a down market
Replies: 81
Views: 9414

Re: Preparing for a down market

I'm slightly puzzled by the extent many here distinguish between 'cash' and bonds in the current environment. The devil's in the details, but there doesn't seem to be much difference in bond returns long or short, except long comes with a lot more risk if inflation returns. The plan for this part of my portfolio is still a work in progress, unlike stocks (mostly). I have Vanguard Short-Term Treasury, VFIRX, duration 2.38 years current yield 1.82 (IRA). I'm open to attractive 2 or 3 year CDs with minimal hoops to jump. I also have an online savings account at a "dodgy internet bank" (it's not really) that has trended down from about 1.8 to 1.7 yield the past 18 month (taxable). That would be my emergency fund except I don't think o...