Bogleheads.org

snackdog wrote: ↑Mon Mar 20, 2023 8:42 pm

Grt2bOutdoors wrote: ↑Mon Mar 20, 2023 8:39 pm

muffins14 wrote: ↑Mon Mar 20, 2023 8:38 pm I honestly think any thread titled “should we panic” should be locked, or at least re-titled to something more mature and measured

Should we be “concerned” would be appropriate.

Were SVB customers who pulled their deposits just "concerned"?

They seemed to have been panicked, and made a bank run that destroyed their bank.

I honestly think any thread titled “should we panic” should be locked, or at least re-titled to something more mature and measured

The convention here at BH - if you have time to look through the entire thread, is to have both a CMA and separate brokerage account. CMA for cash management and brokerage for taxable long term funds like total stock. From a cash flow standpoint, the CMA or multiple CMA (below) accounts take care of the day to day income/expenses. I use a separate second CMA as an ATM cash only account and keep only a couple hundred at most in there and NOT linked to the other CMA or brokerage account. That isolates my debit card I use only for ATM withdrawal, from my main CMA that is attached to bill pay, and the brokerage. Others on this thread advocate for ability to link CMA/brokerage accounts . . . I'm in the keep; them separate in case one gets hacke...

The convention here at BH - if you have time to look through the entire thread, is to have both a CMA and separate brokerage account. CMA for cash management and brokerage for taxable long term funds like total stock. From a cash flow standpoint, the CMA or multiple CMA (below) accounts take care of the day to day income/expenses. I use a separate second CMA as an ATM cash only account and keep only a couple hundred at most in there and NOT linked to the other CMA or brokerage account. That isolates my debit card I use only for ATM withdrawal, from my main CMA that is attached to bill pay, and the brokerage. Others on this thread advocate for ability to link CMA/brokerage accounts . . . I'm in the keep; them separate in case one gets hacke...

As a final check on any investments I intend to make, I look and see how much money is invested in a fund to understand how other hopefully rational investors have decided. Any VG fund that has a significant amount invested ($50B?) passes this final test. Regarding one of the forum’s favorite topics, dividend irrelevance, after reading about every thread I could find here, I thought I would see how investors were voting with their feet. Just by reading the product summaries, there are at least seven (probably more) VG funds that have a dividend focus: High Dividend (VHYAX/VYM), Dividend Appreciation (VDADX/VIG), Dividend Growth (VDIGX), Equity Income (VEIRX), Wellesley Income (VWIAX), International High Dividend (VIHAX/VYMI), and Internati...

boglebrook wrote: ↑Mon Mar 20, 2023 2:53 pm Thanks all for the insights - the discounts are described only on the mortgage commitment letter. The loan disclosure document has the fully discounted rate of 3.3%.

I ended up calling my First Republic mortgage officer, and he said that the loan rate of 3.3% would stay the same, whether or not First Republic Bank was still in business, or if the loan was bought/serviced to another bank.

Yep, it’s just a “gentleman’s agreement” that you’re agreeing to move $ into the bank

OK, that seems like a reasonable analogy to me, and yes, many of us do think ex-US is worthwhile, though I also understand the difference might not be significant. I think I'm ready to call truce now. :sharebeer I've been reasonable all along; it's actually the international camp who made unreasonable claims. Such examples include counting US as one country out of 200 (given VT is 60% US, that's understating the size of US) or suggesting that US-only is like buying stocks starting with letter "A." Betting on numbers 1~4 out of 6 numbers *is* a good approximation of the size of being US-only as you finally acknowledged. To be fair to others, people have been trying to use increasingly simple examples in an effort to explain risks ...

You need to ignore fomo and ignore their “advice”. Renting can be an excellent financial decision because it can be cheaper than owning, even long-term, when considering opportunity costs Just do the math. If rent is really the same cost as a mortgage, taxes, and maintenance, though, I’d argue it’s quite reasonable to buy. Rent will likely increase more than maintenance and taxes on an absolute dollar basis, and your mortgage is fixed. I’d even argue that if you breakeven in 5 years ( mortgage > rent now, but mortgage < rent in year 5-6,) then that’s a pretty good timeline. Just obviously be aware that owning a home means you have less liquidity, and an obstacle to moving for a new job, and you have maintenance that takes more than just a p...

Mike Scott wrote: ↑Mon Mar 20, 2023 1:23 pm Don't forget that it's the same complexity which people complain about that also gives us the deductions and tax planning opportunities that we all love so much and use.

You can simplify your own taxes by reporting your income and paying the taxes. You don't have to take deductions and credits.

Sure, but why make me look up multiple pdfs instead of precalculating those quantities for their customers? I’m not asking for a lot of work to be done

Yes it has. Betting on multiple hands is less risky than betting on 1. While AA might be the best starting hand, for any given hand the likelihood of it winning is lower than the combined likelihood of say KK, J10, 88, 1010, 89, 66, QJ, and A2 winning. The less diversified a portfolio is the wider the dispersion of possible outcomes. A globally diverse portfolio has a narrower range of possible outcomes, both good and bad, than a US-only portfolio. No one's telling you not to, just that some people don't think it's worthwhile. And that is fine, that’s your prerogative. I think it’s hard to argue that the expected cumulative returns distribution is likely tighter when mixing multiple investments with similar expectation values and non-perfe...

I personally think it’s frustrating that we have to look up amounts or countries for foreign dividends, and that we have to look up what fraction of income is from US government bonds, and what fraction is tax exempt per what state for munis. The brokerages have all this info and it would be helpful if they, knowing my state, would just adjust the 1099s to include this info and populate TurboTax on my behalf.

It feels silly that this isn’t automated in 2023, but hey, I guess the tax industry has got mouths to feed, so they need complexity

Say there is a 1% chance in any given year that a country’s stock market is entirely wiped out, and when that happens, you flip a coin to pick which country. If you are unlucky and the US comes up, your entire portfolio is eradicated. That may be worse for your 100% US portfolio than if my diversified portfolio lost Australia and Mexico and the UK and Japan I reject the premise of your thesis. Stock markets do not have 1% chance of getting wiped every year per country. I could try to counter your absurd premise but my response will also be absurd because of that. I’m just trying to give you a simple straw man example of why someone might think it’s more risky to invest in a single country instead of a mix of countries. You seem to reject t...

If the US is hit harder than the rest of the world, then the US is likely to be more adversely affected. Just like if India is hit harder than the rest of the world it will probably be suffer more than the rest. At any particular time or time period the likelihood of all investable markets being hit equally hard is lower than an single market being hit disproportionately hard. I agree if I could only invest in one market it would be the US, but the US is still only one market, so riskier than investing in all of them. :oops: You still don't get it. This has little to do with equally hard or disproportionately hard. It is about your risk exposure on aggregate . Suppose you invest US / India / Europe 33% each. Sure, you reduced US risk; but ...

This thread clearly has no further value and should be locked, sorry guys.

Margin interest paid is tax deductible though, so your 5.5% is more like 4.125%.

I chose to get off margin because I needed to make a down payment on a condo when rates were around 4%

I think just doing one single fidelity brokerage account will suffice for your needs.

If you have specific concerns, could you write them out into a numbered list or some bullet points that people could help with?

I think someone could easily say that it’s a skewed assumption to assume that all future crises will affect ex-US the same or worse than the US rather than to allow that some crises may be worse in the US than ex-US. No one know who is right until it’s too late to be actionable No one is going to change their mind because of this thread, so I’m just here to comment on the $50 vs 1/6 * $300 example ;) That example is on point because that's what happens. We can't really reduce the risk itself, just the magnitude of risk. If you find it worthwhile to do, by all means. I'm not telling anyone not to do that. The example is not on point because $50 guaranteed per roll is zero risk. $300 for one number has 5/6 cases of $0. It’s obvious that in a...

60% of risk vs 100% seems like more than nothing, at least. To each their own, I think No it is big, but remember we're talking about left-tail risk only striking the US here, which is a skewed assumption in the first place. If you believe ex-US countries also carry left-tail risks of their own, then the reality is likely a wash, not US suffering and nowhere else. I think someone could easily say that it’s a skewed assumption to assume that all future crises will affect ex-US the same or worse than the US rather than to allow that some crises may be worse in the US than ex-US. No one know who is right until it’s too late to be actionable No one is going to change their mind because of this thread, so I’m just here to comment on the $50 vs ...

kangtheconquerer wrote: ↑Sun Mar 19, 2023 6:09 pm Actually, since I posted, I decided, for now, I will only stick to tilting to US small-cap value. So 56% US TSM, 14% AVUV, 30% International TSM.

muffins14 wrote: ↑Sun Mar 19, 2023 3:31 pm I try to hold international and international SCV in my tax-as any accounts because of the higher dividends, but that optimization depends completely on your tax rates

Do you mean US and international SCV in tax-as any accounts? Just to clarify. I am leaning towards putting AVUV in both taxable and tax advantaged.

I think AVUV is pretty tax efficient, so, fine for taxable. I keep more of my IXUS/VXUS, VWO, and AVDV in tax-deferred. I keep some additional IXUS in taxable to meet my target allocation

Well for VT, the US is like 60% of the portfolio and China is probably like 3-4%? all of China could be wiped out for investing and it would have the same impact as if Microsoft disappeared. So maybe not that the US has higher geopolitical risk, but just there is nonzero risk, and so spreading some risk to other countries is reasonable. I don’t feel like I’m “loaded up” on China risk at just 3.4% of my portfolio Right, so VT being 60% US means it doesn't hedge all that well should the US face left-tail risk. You're correct that the China impact is smaller than I described, but whatever make up the 40% (Japan, Europe, Canada, UK etc etc) have left-tail risks of their own that you now carry by diversifying. 60% of risk vs 100% seems like mor...

Well for VT, the US is like 60% of the portfolio and China is probably like 3-4%? all of China could be wiped out for investing and it would have the same impact as if Microsoft disappeared. So maybe not that the US has higher geopolitical risk, but just there is nonzero risk, and so spreading some risk to other countries is reasonable. I don’t feel like I’m “loaded up” on China risk at just 3.4% of my portfolio Right, so VT being 60% US means it doesn't hedge all that well should the US face left-tail risk. You're correct that the China impact is smaller than I described, but whatever make up the 40% (Japan, Europe, Canada, UK etc etc) have left-tail risks of their own that you now carry by diversifying. If you calculate the total amount ...

Isn’t your example obvious? In one case you get a guaranteed $50 every time. In the other case, you get $0 5 times out of 6. Yes, in expectation the two are the same, but I don’t see how you can just say “if I ignore left rail risk then there is no risk”, because left tail risk is exactly the risk that is the content of the discussion. If you are withdrawing money, likely you have less sequence risk with the former case than the latter case It kind of is obvious and it isn't obvious. I purposely excluded left-tail risk from the dice rolls example (and I didn't say there's no risk - all I said was betting on all 6 faces doesn't *reduce* risk), but let's just quickly talk about the left-tail risk. Do you think the US carries higher geo-polit...

We know historically that being globally diversified has resulted in more reliable SWRs than single country investors. That doesn't mean it will have the highest SWR. One of the only free lunches in investing is diversification. The fact that it "may not matter" is besides the point. It may also "matter". And I'd rather diversify to protect me in case it "does matter" rather than HOPE it doesn't. I still haven't heard what exactly you're getting protected by betting $50 on all 6 faces of dice rolls as opposed to betting $300 on face 5. As I said, the only protection is if face 5 stops showing up for a long time (left-tail risk). Isn’t your example obvious? In one case you get a guaranteed $50 every time. In th...

I am pro-SCV for long horizons. I am not fond of REITs and just accept whatever amount of REITs are in the total market or SCV fund that I am buying.

I think your 80/20 market cap vs SCV mix is fine. Maybe a little too much tracking error for some folks (but that’s sort of the point of having an SCV tilt anyway)

I try to hold international and international SCV in my tax-as any accounts because of the higher dividends, but that optimization depends completely on your tax rates

I don't want to lose what I have (billpay and direct deposit) but I am willing to change things for the better if a better option is out there. I enjoy the use of the BoA billpay capability which is a super nice feature they offer and I hate to lose that although it's not a deal breaker if I do. Plus, I have social security, military pension, federal pensions and state pensions all being direct deposited into the checking account. Regards As others said, you can do all this through Fidelity. You can even have FDIC-insured cash. Fidelity offers the same features you want: direct deposit, check writing, bill pay, ACH, wire transfers, reimbursement of ATM fees, and you can invest in money markets that yield over 4%, which can be automatically...

They could already be retired and 59+

I’m your OP you said that
1) it would cost $3500 to upgrade the electrical
2) your state gives a $3500 cash bonus to people who buy EV

It sounds like it is effectively free, so I don’t think it will be a barrier to adoption, especially if, as people mentioned, you can charge the car successfully with older systems anyway

I would not incur the taxes until you are certain you will close on the house

TomatoTomahto wrote: ↑Sat Mar 18, 2023 1:43 pm NYS according to Google: The 2023 standard deduction for taxes filed in 2024 will increase to $13,850 for single filers and those married filing separately, $27,700 for joint filers, and $20,800 for heads of household.

I believe those are the federal values.

The state values may be below:
https://www.tax.ny.gov/pit/file/standard_deductions.htm

chinchin wrote: ↑Fri Mar 17, 2023 6:39 pm Wow, this is really a desperate move by T-Mobile. Not happy at all about this. Are they really trying to save on credit card fees?

I imagine so, I see it happening at more and more stores now, especially small local restaurants. Fees seem to be anywhere from 2-5% and are expressed as an extra percentage on your bill, or as a discount for using cash

Surprisingly for me, FDLXX at 4.27% is 2.528% after all taxes, but the NY muni FSNXX is only 1.98% right now (7 day SEC yields)

I’m at 37% fed plus 3.8%, and 10.7% state plus local

I agree. I think you did a conversion from After-tax 401k dollars to Roth 401k dollars. Then you did a rollover from your 401k to IRA.

That’s why for the mega Roth, people say you need to make sure your plan can do “in-plan conversions”

When I am on the page for my CMA, I can click on “account services” and “cash manager tool”, and then set up the overdraft protection there.

If you can’t find that, call a different person at fidelity

All of this is just situation-specific. I currently pay 10.7% marginal tax for NY state and local NYC. My property tax for my condo is 0.8%. No sales tax on groceries and some other services By living in NYC I don’t need a car, so what I pay more for in housing and taxes, I save some on car, gasoline, etc. I also just enjoy where I live, so I’m willing to pay for it. It’s also worth noting that things can be very different when working vs when retired. For example in NYC, your property taxes drop when you’re a senior citizen, and there are further abatements when income is lower. Furthermore, social security is not taxed, and something like the first 20k of retirement account withdrawal are also tax free. That means your expenses drop in re...

Lawrence of Suburbia wrote: ↑Thu Mar 16, 2023 11:54 am

Apathizer wrote: ↑Thu Mar 16, 2023 11:43 am Yeah, as someone who has been buzzing my scalp for about 20 years, I like it when Ben is a baldness brother, though I'm at the age not being bald isn't an option.

As long as he doesn't grow a beard. That's a confidence-killer, in my world.

You don’t trust people that have beards?

I've heard the phrase that goes something like "don't let the tax tail wag the dog" but there is something very appealing about living somewhere with no state or city taxes. There are eight states with no personal income tax: Wyoming, Washington, Texas, Tennessee, South Dakota, Nevada, Florida, and Alaska. I could see myself living in any of those places except Wyoming. My income is $465,000 per year working 100% remote from home so it doesn't matter where I reside for my work. According to some income tax calculators I could expect to save about $25,000 per year in state and local taxes just sitting in another state. The problem is I've grown up in Ohio and my family/friends are here. So the logical/rational side of my brain tri...

TrustTheMarket wrote: ↑Thu Mar 16, 2023 12:58 am We hold a Target Date Retirement Fund, so we do not see the ups and downs of individual indexes (by design.)

With all of the recent news in the US (interest rates, inflation, etc,) and all of the movement in US stock and bond markets, I am curious how the international stocks and bonds are performing in comparison? Has diversification in Boglehead portfolios been helpful during these times? Or are international stocks and bonds performing similarly to the US?

Can someone provide a summary?

Thank you!

If you have an app or look at a website like portfoliovisualizer.com, you can type in VXUS and VTI and show a time series of the total returns

RANkiDEr wrote: ↑Thu Mar 16, 2023 8:16 am Hi,

This headline caught my attention this morning.

Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’
https://www.cnbc.com/2023/03/14/moodys- ... nment.html

Do you have a question related to the article and how it may or may not impact your decisions?

I was planning to place a limit order while the marked is closed, and just wandered what happens if the price is higher then expect when the markets open. I asked: will a limit order sell at market price if the limit price is lower than the market price? And chatgpt replied: No, a limit order to sell will only be executed at or above the specified limit price. If the limit price is lower than the current market price, the order will not be executed immediately and will be placed on the order book until the market price reaches or exceeds the specified limit price. For example, if the current market price for a stock is $50 and you set a limit order to sell at $45, the order will not be executed until the market price reaches $45 or higher....

I kept all of mine in a money market, specifically a NY money market, because yield.

I initiated a wire transfer to my attorney the day before closing, and it was auto-liquidated and the funds left my account and arrived there

Another day, another “well at least my future contributions are coming in soon” vibe.

Rejoice

I have never liked debt and have never felt comfortable with the idea of having a 30 year payment obligation. One thing on this just for a different point of view: You're not *obligated* to pay for 30 years, you're just obligated to pay off the loan in less than or equal to 30 years. Note that one way to do that includes selling your house and moving. Most people don't live in the same house for 30 years anyway, they move in like 7-10, I believe. You may fall into this camp with an expanding family with changing needs/wants. So, you can save money in a taxable account (sometimes in bonds with yields that exceed your mortgage, or in stocks), and then whenever you want to, you can pay off a chunk of the mortgage. It's only a 30-year obligati...

I feel like the obvious answer here is to wait this 1-2 years until your income to go up as much as you think it will. Don’t rush just so that you are forced to spend a lot of otherwise-for-retirement money on your house. It seems odd that you are fixated on keeping your mortgage payment low *so you can save for retirement*, but then your path to doing so is to *spend retirement money* by putting it into a down payment. Either: 1) wait 2 years, do 20% down 2) do 20% down now, and reduce monthly savings for 2 years, filling any gap with your 200k you’re sitting on I think you should do 1), and invest more of your taxable money rather than keeping it as cash. Or do as KlangFool suggests, and live off that while increasing your 401k/IRA/TSP t...

A year feels incredibly long, but interesting that you can just override it

I feel like the obvious answer here is to wait this 1-2 years until your income to go up as much as you think it will. Don’t rush just so that you are forced to spend a lot of otherwise-for-retirement money on your house. It seems odd that you are fixated on keeping your mortgage payment low *so you can save for retirement*, but then your path to doing so is to *spend retirement money* by putting it into a down payment. Either: 1) wait 2 years, do 20% down 2) do 20% down now, and reduce monthly savings for 2 years, filling any gap with your 200k you’re sitting on I think you should do 1), and invest more of your taxable money rather than keeping it as cash. Or do as KlangFool suggests, and live off that while increasing your 401k/IRA/TSP to...

Using bank assets to cover depositors first is required by law, I believe

So there's no way to use the cash manager while having your cash in a money market fund? that's disappointing. I started this question. But I think it's theoretically possible by having both regular and CMA. CMA: no investment (only cash) and have cash manager linked to regular acct regular: stocks + MMF Shouldn't this work? The cash in the CMA only has the option of sweeping in a FDIC account. There is no money market option for a sweep in the CMA. I'm going to set $0 limit in cash manager. So when I withdraw from CMA, it will liquidate MMF in my regular acct. Shouldn't it work? edited: muffin just confirmed this works. I'll probably just use 1 regular acct (no CMA) to avoid this hassle. I used to use just one regular account too, but ope...

tj wrote: ↑Tue Mar 14, 2023 3:14 pm

acegolfer wrote: ↑Tue Mar 14, 2023 3:11 pm

tj wrote: ↑Tue Mar 14, 2023 3:06 pm So there's no way to use the cash manager while having your cash in a money market fund? that's disappointing.

I started this question. But I think it's theoretically possible by having both regular and CMA.

CMA: no investment (only cash) and have cash manager linked to regular acct
regular: stocks + MMF

Shouldn't this work?

The cash in the CMA only has the option of sweeping in a FDIC account. There is no money market option for a sweep in the CMA.

right, but you can buy a money market fund in the CMA as desired

So there's no way to use the cash manager while having your cash in a money market fund? that's disappointing. It depends what exactly you mean by "use the cash manager" I use the cash manager and keep $0 in the CMA, period. I pull from the brokerage whenever bills/debits hit the CMA. I keep the brokerage money only in a money market fund. I don't use the feature to set a minimum dollar amount in the CMA, because it doesn't really matter. There's no difference to me if there is $0 in the CMA and $5000 in the brokerage that can be autoliquidated and auto-transferred vs having $1000 in the CMA and $4000 in the brokerage. You could also keep the CMA money in a money-market fund if you wanted to, and the auto-debiting would still wor...

you can call it whatever you want, traditional bailout, non-traditional bailout, progressive bailout, (never heard of any of these btw :D ) the fed gave all banks the option to increase market value of a certain type of security on their balance sheet and borrow cash against it. not sure what kind of a bailout that is maybe we can come up with a name if we put our heads together. The Fed didn't give them the option to "increase" the market value of any securities on their balance sheet- if you think they did, can you provide a source? The par value is only used to determine how much can be borrowed. huh? The Fed isn't changing the regulations on how these securities should be valued on their balance sheets. It's offering them loa...