Search found 147 matches

by johnsmithsf
Fri Sep 29, 2023 3:06 pm
Forum: Personal Investments
Topic: iShares Defined-Maturity Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?
Replies: 14
Views: 2356

Re: iSHARES DEFINED MATURITY Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?

Also note that these are niche ETFs that have been released very recently. As such, they are not (yet) popular and have exceedingly low volume. The IBIJ ETF was traded only 66 times yesterday (Sep 28), and only 1 and 0 times the previous two days. Compare this to ETFs like VTIP or SCHP which both traded over 1 million times on those days. Usually this means that the niche ETFs could have wide bid-ask spreads (i.e., a one-time cost to purchase or sell the shares) and that one may have trouble filling orders for large quantities. I suspect iShares will try to keep the market liquid by for the first few months to encourage participation, but none of that is guaranteed. The problem is that there is no other alternative to these ETFs if you wan...
by johnsmithsf
Fri Sep 29, 2023 2:30 pm
Forum: Personal Investments
Topic: iShares Defined-Maturity Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?
Replies: 14
Views: 2356

Re: iSHARES DEFINED MATURITY Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?

Also note that these are niche ETFs that have been released very recently. As such, they are not (yet) popular and have exceedingly low volume. The IBIJ ETF was traded only 66 times yesterday (Sep 28), and only 1 and 0 times the previous two days. Compare this to ETFs like VTIP or SCHP which both traded over 1 million times on those days. Usually this means that the niche ETFs could have wide bid-ask spreads (i.e., a one-time cost to purchase or sell the shares) and that one may have trouble filling orders for large quantities. I suspect iShares will try to keep the market liquid by for the first few months to encourage participation, but none of that is guaranteed. The problem is that there is no other alternative to these ETFs if you wan...
by johnsmithsf
Fri Sep 29, 2023 2:26 pm
Forum: Personal Investments
Topic: iShares Defined-Maturity Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?
Replies: 14
Views: 2356

Re: iSHARES DEFINED MATURITY Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?

Unlike traditional bond ETFs, a Defined-maturity ETFs price sensitivity to changes in interest rates declines gradually over time, approaching zero near its target end date. I do not like to buy individual Treasury Inflation-Protected Securities (TIPS) in taxable accounts due to phantom income issues (Increases in principal are taxable for the year in which they occur, even if your TIPS hasn’t matured, so you haven’t yet received that payment of principal). Looks like iShares has now introduced Defined-maturity ETFs for TIPS as well. For example IBIJ is iShares® iBonds® Oct 2033 Term TIPS ETF, which tracks the investment results of an index composed of U.S. Treasury Inflation-Protected Securities (TIPS) maturing in 2033. Do they suffer fro...
by johnsmithsf
Fri Sep 29, 2023 3:05 am
Forum: Personal Investments
Topic: iShares Defined-Maturity Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?
Replies: 14
Views: 2356

iShares Defined-Maturity Treasury Inflation-Protected Securities (TIPS) ETFs. Any Phantom Income Issues?

Unlike traditional bond ETFs, a Defined-maturity ETFs price sensitivity to changes in interest rates declines gradually over time, approaching zero near its target end date. I do not like to buy individual Treasury Inflation-Protected Securities (TIPS) in taxable accounts due to phantom income issues (Increases in principal are taxable for the year in which they occur, even if your TIPS hasn’t matured, so you haven’t yet received that payment of principal). Looks like iShares has now introduced Defined-maturity ETFs for TIPS as well. For example IBIJ is iShares® iBonds® Oct 2033 Term TIPS ETF, which tracks the investment results of an index composed of U.S. Treasury Inflation-Protected Securities (TIPS) maturing in 2033. Do they suffer from...
by johnsmithsf
Sun Jul 09, 2023 9:44 am
Forum: Personal Investments
Topic: Feeling dissatisfied with Fidelity cash yield compared to VG?
Replies: 51
Views: 5975

Re: Feeling dissatisfied with Fidelity cash yield compared to VG?

I have been "test driving" my Fidelity CMA and this is what I have figured out: 1. In addition to a Cash Management Account (CMA), set up a regular taxable brokerage account just for use with the CMA. This provides isolation between these accounts that are used to pay bills and any brokerage accounts used to hold investments. 2. The CMA provides a Debit card that refunds ATM fees. Note, if you qualify for Fidelity's Private Client Group then you can get a debit card that refunds ATM fees in a regular brokerage account. In this case all you don't even need a CMA, just pay bills from the brokerage account. 3. Designate SPAXX as the core account in the regular brokerage account. This way direct deposits sent to that account end up i...
by johnsmithsf
Sun Jul 09, 2023 9:31 am
Forum: Personal Investments
Topic: Feeling dissatisfied with Fidelity cash yield compared to VG?
Replies: 51
Views: 5975

Re: Feeling dissatisfied with Fidelity cash yield compared to VG?

Vanguard sweep account yield is higher but does not give you checks or ATM card. Fidelity CMA has lower yield but debits will automatically be pulled from your money market fund which is competitive with Vanguard. All you have to do is purchase the money market fund when you have inflows into the account and then the CMA becomes for all intents and purposes competitive with Vanguard but with banking services. It is the best all in one option on the market as long as you don't leave cash inflows sitting in the default sweep account. What you said was probably the best solution for this issue. Fidelity does have certain money market funds that will auto liquidate when there is an ACH withdrawal or Debit Card use. I think the core position fu...
by johnsmithsf
Sun Jul 09, 2023 9:28 am
Forum: Personal Investments
Topic: Feeling dissatisfied with Fidelity cash yield compared to VG?
Replies: 51
Views: 5975

Re: Feeling dissatisfied with Fidelity cash yield compared to VG?

Vanguard sweep account yield is higher but does not give you checks or ATM card. Fidelity CMA has lower yield but debits will automatically be pulled from your money market fund which is competitive with Vanguard. All you have to do is purchase the money market fund when you have inflows into the account and then the CMA becomes for all intents and purposes competitive with Vanguard but with banking services. It is the best all in one option on the market as long as you don't leave cash inflows sitting in the default sweep account. What you said was probably the best solution for this issue. Fidelity does have certain money market funds that will auto liquidate when there is an ACH withdrawal or Debit Card use. I think the core position fu...
by johnsmithsf
Sun Jul 09, 2023 9:25 am
Forum: Personal Investments
Topic: Feeling dissatisfied with Fidelity cash yield compared to VG?
Replies: 51
Views: 5975

Re: Feeling dissatisfied with Fidelity cash yield compared to VG?

Vanguard sweep account yield is higher but does not give you checks or ATM card. Fidelity CMA has lower yield but debits will automatically be pulled from your money market fund which is competitive with Vanguard. All you have to do is purchase the money market fund when you have inflows into the account and then the CMA becomes for all intents and purposes competitive with Vanguard but with banking services. It is the best all in one option on the market as long as you don't leave cash inflows sitting in the default sweep account. What you said was probably the best solution for this issue. Fidelity does have certain money market funds that will auto liquidate when there is an ACH withdrawal or Debit Card use. I think the core position fu...
by johnsmithsf
Sun Jul 09, 2023 9:18 am
Forum: Personal Investments
Topic: Feeling dissatisfied with Fidelity cash yield compared to VG?
Replies: 51
Views: 5975

Re: Feeling dissatisfied with Fidelity cash yield compared to VG?

IMHO I would not use a Fidelity brokerage account as a checking account. You want to isolate your investments from fraud/hacking of checks and debit cards. A separate CMA, even 2 work as an intermediate step in cash management, e.g. if you need to replace a major appliance, HVAC, etc. sell funds in the brokerage, transfer to the CMA account. Use CMA for bill pay. I have the second CMA that I used with the debit card for the rare event I need cash from the ATM. I keep treasury bills in the first CMA account as short term (less than 1 year) cash reserves. Getting a little over 5% now. Yes this is a bit more complex but with a little extra work, better return on cash instruments and more secure cash flow proceses. Who tells you that you canno...
by johnsmithsf
Sun Jul 09, 2023 8:25 am
Forum: Personal Investments
Topic: Feeling dissatisfied with Fidelity cash yield compared to VG?
Replies: 51
Views: 5975

Re: Feeling dissatisfied with Fidelity cash yield compared to VG?

Hi there, I will be keeping some cash in case of emergency at Fidelity since I use it as a checking account. However, the yield, albeit much better than Schwab or Merrill at 2.57% is still way lower than Vanguard default sweep VMFXX's 5%. Yet I can't keep this small emergency fund cash in Vanguard because you have to ACH the money out from VG to Fidelity in order to use it in a checking account or spend it on the debit card. If money is in the Fido you wouldn't have to wait for the ACH and can just use it as a checking account. Basically, Fidelity has good checking account features, bill pay, Debit Card, but less yield. Vanguard has no checking account conveniences, but the best cash sweep program there is. How do I mitigate this issue? I ...
by johnsmithsf
Thu Jul 06, 2023 8:26 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

Feds have been warning about rate hikes at least since Jan 2022 https://www.federalreserve.gov/newsevents/testimony/powell20220302a.htm Jerome Powell testified before Congress on March 3, 2022 I’m sure, but this smacks of survivorship bias. Imagine this statement you linked in January and then, to be extreme, another pandemic bug or major terrorist attack in feb. Do you think the fed would still have raised rates? I’ll concede that if everything proceeds as the fed expects they’ll make announcements they will likely stick to. But things rarely proceed as “expected.” You're missing the point. It is okay to hold PSLDX if the rates are stable or going down. So for the example you quoted, if there were another pandemic in February 2022, PSLDX ...
by johnsmithsf
Thu Jul 06, 2023 8:20 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

You're missing the point. It is okay to hold PSLDX if the rates are stable or going down. So for the example you quoted, if there were another pandemic in February 2022, PSLDX performance would have been similar to or better than S&P 500. So you do not need clairvoyance abilities. The ONLY time where you do not want to hold PSLDX is when the rates are going up (and the feds warn you months in advance when they're planning to start the cycle of raising rates). So when they warn about starting a rate increase cycle as in January 2022, sell PSLDX and go into S&P 500. If they change their mind and do not raise the rates, sell S&P 500 and go back into PSLDX immediately. No harm done. if they do increase rates, wait and when the cycl...
by johnsmithsf
Wed Jul 05, 2023 4:19 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

Feds have been warning about rate hikes at least since Jan 2022 https://www.federalreserve.gov/newsevents/testimony/powell20220302a.htm Jerome Powell testified before Congress on March 3, 2022 I’m sure, but this smacks of survivorship bias. Imagine this statement you linked in January and then, to be extreme, another pandemic bug or major terrorist attack in feb. Do you think the fed would still have raised rates? I’ll concede that if everything proceeds as the fed expects they’ll make announcements they will likely stick to. But things rarely proceed as “expected.” You're missing the point. It is okay to hold PSLDX if the rates are stable or going down. So for the example you quoted, if there were another pandemic in February 2022, PSLDX ...
by johnsmithsf
Tue Jul 04, 2023 5:20 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

You don't need a crystal ball here. Just basic understanding that one should get out of long duration bonds (and PSLDX) when Feds are increasing rates. Now a days, Feds always warn before they start to increase rates. To think you can predict interest rates is…misguided I believe. I promise in 2019 the fed wasn’t talking about slashing interest rates dramatically just a few months later. And the fed famously referred to inflation as “transitory” (ie, they wouldn’t raise interest rates) in early 2021 And yet here we are Feds have been warning about rate hikes at least since Jan 2022 https://www.federalreserve.gov/newsevents/testimony/powell20220302a.htm Jerome Powell testified before Congress on March 3, 2022 Quoting The process of removing...
by johnsmithsf
Mon Jul 03, 2023 5:26 pm
Forum: Investing - Theory, News & General
Topic: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]
Replies: 152
Views: 34689

Re: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]

JEPI's inception date is 5/20/20. Morningstar classifies it in the "US Fund Derivative Income" category. Here's how Morningstar's category average for this category has compared with a plain old 60/40 fund, the Vanguard Balanced Index Fund. Among other things, this gives us thirteen years of history instead of only three. https://imgur.com/ERZVYHt.png There are all kinds of sophisticated ways of reducing stock risk--at the cost of reducing return. There's also the simple way, which is just to reduce stock allocation--at the cost of reducing return. It's not at all clear that the sophisticated ways are better. 100% Agree. Some investors seem to assume that as money from JEPI is coming from dividends, they have discovered a money m...
by johnsmithsf
Mon Jul 03, 2023 5:22 pm
Forum: Investing - Theory, News & General
Topic: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]
Replies: 152
Views: 34689

Re: What’s wrong with this etf yielding 11% (JEPI)?

Except that this year JEPI has suffered less than half the losses of VTI You would massively underperform S&P500 and QQQ on a long term basis if you invest in JEPI and QQQX etc https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2011&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&...
by johnsmithsf
Mon Jul 03, 2023 5:11 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

Why would it be return of VOO + “yield” of BLV, instead of return of VOO + return of BLV? The total return of BLV, including capital appreciation, when rates drop will be a lot more than the yield. It could be the inverse of the blood bath we just saw. If somebody has a crystal ball to determine the future of interest rates on long duration corporate bonds, he or she could make a lot of money. It is not as easy as reading the newspaper and seeing that Powell wants to hike short term treasury rates. Of course it would be return of VOO + return of BLV..... Which is equivalent to VOO + “yield” of BLV + effect of change in the interest rates (as I noted earlier) You don't need a crystal ball here. Just basic understanding that one should get o...
by johnsmithsf
Sat Jul 01, 2023 3:57 pm
Forum: Investing - Theory, News & General
Topic: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]
Replies: 152
Views: 34689

Re: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]

billfromct wrote: Tue Feb 07, 2023 2:09 pm According to Portfolio Visualizer, below are the average annual returns of JEPI (which started June 2020), Vanguard Dividend Growth Fund & Vanguard S&P 500 Index from June 2020 through January 2023:

-JEPI: 12.85%
-Vanguard Dividend Growth: 14.18%
-Vanguard S&P 500 Index: 13.28%

Maybe the Vanguard Dividend Growth Fund ain’t so bad after all.

bill


use JEPIX (rather than JEPI) in portfolio visualizer to look up older data
by johnsmithsf
Sat Jul 01, 2023 3:55 pm
Forum: Investing - Theory, News & General
Topic: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]
Replies: 152
Views: 34689

Re: What’s wrong with this etf yielding 11% (JEPI)?

They sell call options. So you are going to miss all the big run ups and take all the crushing losses. It’s never a good idea to mindlessly sell call options. Except that this year JEPI has suffered less than half the losses of VTI You would massively underperform S&P500 and QQQ on a long term basis if you invest in JEPI and QQQX etc https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2011&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&lev...
by johnsmithsf
Sat Jul 01, 2023 3:54 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, i...
by johnsmithsf
Sat Jul 01, 2023 3:48 pm
Forum: Personal Investments
Topic: 18 to 100 percent annual return fund
Replies: 223
Views: 42023

Re: 18 to 100 percent annual return fund

CuriousIndexer wrote: Wed May 24, 2023 11:21 pm
johnsmithsf wrote: Fri Feb 12, 2021 1:07 am This acquaintance has been telling me that I am missing out on an opportunity of a life time which can lead to early retirement. He has already invested in this.
I don't know much about options and he is claiming 18 to more than 100% annual returns with options with his technique with no risk to the principle.
That's why it has piqued my interest.
So did your friends end up losing a bunch of money? Or just not get the returns advertised?
Well, their "no risk to the principle" promise didn't work out in 2022 :oops:
by johnsmithsf
Tue Dec 06, 2022 6:36 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

What is the minimum purchase requirements for PSLDX at TD Ameritrade?

I only see 1,000,000 on this link

https://research.tdameritrade.com/grid/ ... mbol=PSLDX
by johnsmithsf
Sat Nov 19, 2022 9:51 am
Forum: Investing - Theory, News & General
Topic: Simulating Returns of Leveraged ETFs
Replies: 414
Views: 91539

Re: Simulating Returns of Leveraged ETFs

Measured on a half in 2x, half in bonds, rebalanced frequently, compared to 100% in the 1x and the two might be expected to track relatively closely. However looking at 50/50 2x/bonds rebalanced monthly compared to rebalanced yearly and yearly rebalanced tracked more closely. It would seem that trend following, deferring rebalancing served to add-value. You didn't do it right, that's why your monthly balanced leveraged portfolio of 50% 2x S&P500 + 50% Bonds is underperforming S&P500. You have to use ETFs like SSO (2X S&P500), UPRO/ SPXL (3x S&P500), as they are more efficient and less costly than mutual funds for this leveraged strategy. A monthly balancing portfolio of 50% 2x S&P500 + 50% Total Bond Index , or 34% 3x S...
by johnsmithsf
Sat Nov 19, 2022 9:42 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, i...
by johnsmithsf
Sat Nov 19, 2022 8:57 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

its just that easy huh? If a federal rate hike train is coming at you, thus making the interest rates go up, one should let go of his/her white knuckle grip on the long duration bonds. Otherwise the train of long term bond price crash will hit you hard. Happens every-time when you backtest PSLDX. It's very simple. When rates go up, bond prices drop ... Every 1% rise in rates crashes PSLDX by 7-8% . You can imagine PSLDX as a combination of S&P 500 + Vanguard Long-Term Bond Index Fund Institutional Shares (VBLLX) Expected approximate annual PSLDX returns are Returns of S&P 500 + Yield of VBLLX (current SEC yield is 5%) - 8X percentage rise in Federal interest rates. (or if you want to make it more accurate, use Expected approximate ...
by johnsmithsf
Sat Nov 19, 2022 8:53 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, i...
by johnsmithsf
Sat Nov 19, 2022 8:46 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, i...
by johnsmithsf
Sat Nov 19, 2022 8:37 am
Forum: Investing - Theory, News & General
Topic: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]
Replies: 152
Views: 34689

Re: What’s wrong with this etf yielding 11% (JEPI)?

They sell call options. So you are going to miss all the big run ups and take all the crushing losses. It’s never a good idea to mindlessly sell call options. Except that this year JEPI has suffered less than half the losses of VTI You would massively underperform S&P500 and QQQ on a long term basis if you invest in JEPI and QQQX etc https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2011&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&lev...
by johnsmithsf
Sat Nov 19, 2022 8:35 am
Forum: Investing - Theory, News & General
Topic: What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income]
Replies: 152
Views: 34689

Re: What’s wrong with this etf yielding 11% (JEPI)?

They sell call options. So you are going to miss all the big run ups and take all the crushing losses. It’s never a good idea to mindlessly sell call options. Except that this year JEPI has suffered less than half the losses of VTI You would massively underperform S&P500 and QQQ on a long term basis if you invest in JEPI and QQQX etc https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2011&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&lev...
by johnsmithsf
Tue Nov 08, 2022 6:08 pm
Forum: Investing - Theory, News & General
Topic: Simulating Returns of Leveraged ETFs
Replies: 414
Views: 91539

Re: Simulating Returns of Leveraged ETFs

Measured on a half in 2x, half in bonds, rebalanced frequently, compared to 100% in the 1x and the two might be expected to track relatively closely. However looking at 50/50 2x/bonds rebalanced monthly compared to rebalanced yearly and yearly rebalanced tracked more closely. It would seem that trend following, deferring rebalancing served to add-value. You didn't do it right, that's why your monthly balanced leveraged portfolio of 50% 2x S&P500 + 50% Bonds is underperforming S&P500. You have to use ETFs like SSO (2X S&P500), UPRO/ SPXL (3x S&P500), as they are more efficient and less costly than mutual funds for this leveraged strategy. A monthly balancing portfolio of 50% 2x S&P500 + 50% Total Bond Index , or 34% 3x S...
by johnsmithsf
Thu Oct 20, 2022 12:08 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, i...
by johnsmithsf
Tue Oct 18, 2022 7:58 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, i...
by johnsmithsf
Tue Oct 18, 2022 10:35 am
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, i...
by johnsmithsf
Mon Oct 17, 2022 11:56 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]
Replies: 2109
Views: 394810

Re: Why not 100% PSLDX? [PIMCO StocksPLUS Long Duration Fund]

I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. Feds don't increase the rates without warning you. So whenever the federal government says that rates are going to go up, it is time to get out of long duration bonds and then buy short duration bonds or stay in cash. And whenever the federal government says that they are pausing the rate hike( may happen in 2023), that probably would be the time to go in to psldx. :beer I believe Psldx is a good instrument and I'm sure as soon as feds pause the hike in interest rates, it...
by johnsmithsf
Mon Oct 17, 2022 10:27 am
Forum: Investing - Theory, News & General
Topic: PSLDX is testing my resolve
Replies: 53
Views: 8471

Re: PSLDX is testing my resolve

While not a significant portion of my net worth, monies I have put in PSLDX are really testing my resolve. I didn't ride the train up, but I'm now riding the train down. It almost seems like the excess return was coming from the bond portion of the fund and now that the bond bubble is bursting, things will continue to get worse. Anyone else holding on to PSLDX? I suppose I can throw in more money at 40% discount to the beginning of the year, but I'm jolted. I think before buying it one needs to understand how these instruments work. When feds said they are going to increase the rates, obviously it was the time to get out of the long duration bonds. As when rates go up, bonds fall in price. And longer duration bonds fall more. And feds don'...
by johnsmithsf
Fri Jul 29, 2022 2:42 pm
Forum: Investing - Theory, News & General
Topic: My Morningstar grievance - comparing funds to etf's
Replies: 5
Views: 628

Re: My Morningstar grievance - comparing funds to etf's

I would also like to know if any alternative exists for the lost Morning star functionality. It seems like that M* doesn't want common men poking around their website.
by johnsmithsf
Fri Jul 29, 2022 2:14 pm
Forum: Personal Finance (Not Investing)
Topic: Help me buy (but not over-buy) disability insurance
Replies: 11
Views: 1277

Re: Help me buy (but not over-buy) disability insurance

Also use an independent agent who can quote the rates from all of the big 5. Agent does not have to be from your state.
by johnsmithsf
Fri Jul 29, 2022 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: Help me buy (but not over-buy) disability insurance
Replies: 11
Views: 1277

Re: Help me buy (but not over-buy) disability insurance

Regarding disability insurance companies financial health, best 3 are Guardian, MassMutual and Principal. Followed by Standard and Ameritas Age 65 is best cutoff for disability insurance (not 67 as would need higher premiums and we would retire by 65 anyway or able to access retirement accounts) Most disability claims are for partial disability Look for the following riders in disability insurance : - Non-Cancelable and Guaranteed Renewable Rider - Partial/Residual Disability (called Extended partial disability rider by massmatual) - Specialty specific/True own occupation (better) - Cost of Living Rider (Compounded and NOT SIMPLE) - Future Purchase Option - Catastrophic Coverage (if cheap). COL rider is Simple with ameritas so 3% will alway...
by johnsmithsf
Mon Jan 31, 2022 7:02 pm
Forum: Personal Investments
Topic: Pros and cons of investing in SPXL to reduce at risk funds invested
Replies: 9
Views: 1571

Re: Pros and cons of investing in SPXL to reduce at risk funds invested

1) You may not understand how a "leveraged ETF" like SPXL works. I can't tell whether or not you do, since you haven't talked about it. Forgive me for asking a probing question. In addition to SPXL, there is also SPXS, the Direxion Daily S&P 500 Bear 3X ETF, which "seeks daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the S&P 500® Index." On a daily basis, SPXL and SPXS move in opposite directions. Generally, SPXS is a bet that the market will go down, hence the name "bear." And yet here is a period of time over which SPXL (red line) and SPXS (blue line) both lost money , and not a small amount. It didn't matter whether you were b...
by johnsmithsf
Tue Dec 28, 2021 8:26 pm
Forum: Personal Investments
Topic: My portfolio trailed the S&P 500 by more than 10%
Replies: 79
Views: 10705

Re: My portfolio trailed the S&P 500 by more than 10%

I've got about 30% international in my portfolio. The 70% domestic is allocated between big cap, mid cap, and small cap. I've had many people tell me to just do a 100% S&P allocation. I'm really kicking myself this year for not doing that. Does a diversified portfolio like the one I have outperform the S&P index over time? The other posts here miss two simple but poorly known concepts: 1) Developed international stock performs like "Value" stock. Europe and Japan don't have that many growth companies. So 5 year returns and morningstar plots from iShares Core MSCI EAFE ETF IEFA closely mirror the returns of iShares S&P 500 "Value" ETF IVE 2) All things equal, Developed USD Hedged ETF DBEF will outperform Deve...
by johnsmithsf
Thu Nov 11, 2021 3:08 pm
Forum: Personal Investments
Topic: Split dollar life insurance as retirement strategy
Replies: 10
Views: 948

Re: Split dollar life insurance as retirement strategy

Did you end up getting this policy? I am also very confused about the pros and cons of this type of policy. I doubt that you’ll hear back from OP. I don’t believe he’s been back to this Forum since he posted this question in early 2020. I read more about this policies. Looks like they are a bad idea unless your employer is paying most of the premium. For a universal life policy the cost of insurance increases each year as you age. If you've borrowed a bunch of money against the policy, the cost of the insurance can eat up the entire cash value and you may have to either start paying huge premiums to keep the policy in force or surrender the policy, lose the insurance you were counting on, and maybe even be stuck with a huge tax bill. If yo...
by johnsmithsf
Fri Nov 05, 2021 7:50 am
Forum: Personal Investments
Topic: Split dollar life insurance as retirement strategy
Replies: 10
Views: 948

Re: Split dollar life insurance as retirement strategy

Curious to hear thoughts on a new retirement plan offered by my employer. It’s what I believe would be considered a split-dollar life insurance plan. It’s set up so that contributions are pre-tax, and withdrawals are tax-free if taken out as a policy loan against the death benefit. Essentially, my employer would contribute a certain amount of money “on my behalf” to the plan, 85% of this would go into a permanent life insurance policy that I would own, and 15% would go into a policy that my employer would own. My salary would be reduced by the amount I ask to have contributed. My employer would then contribute an extra 15% in order to offset the fees inherent to a permanent life insurance policy. Can choose a fixed interest plan (4.6% this...
by johnsmithsf
Tue Aug 31, 2021 3:22 pm
Forum: Personal Investments
Topic: 18 to 100 percent annual return fund
Replies: 223
Views: 42023

Re: 18 to 100 percent annual return fund

Omg! This guys has checked all checkboxes for a shady ponzi like scheme. I took some time to do some research, they complicate an iron condor on SPY or QQQ to generate premiums. This can be done without the extra complications and lesser steps. If they are real pro (which they claim), they will trade $SPX/$NDX with a better tax treatment than SPY/QQQ. Few things: 1. Shared it with real prop/wall st traders with decades of wall st, experience, they laugh at these guys. 2. The 3 founders of this company have no background or experience in finance/trading. In their webinars, they sound like amateurs at the best. 3. The free tips this company gives are over complicated. 4. These strategies are not scalable, they might work for smaller accounts...
by johnsmithsf
Sat Jul 24, 2021 3:14 am
Forum: Personal Finance (Not Investing)
Topic: Term life Vs. whole life
Replies: 64
Views: 6874

Re: Term life Vs. whole life

If you are buying for your family in case something happens, just get a 30 year 2 million, cheapest, level-premium, term life insurance policy from a reasonably-reputable company that you can find.

Never ever buy any cash value insurance like whole life, index universal life, variable universal life, infinite banking etc. Run away from anyone selling these like plague. :twisted:
by johnsmithsf
Tue Jun 22, 2021 8:17 pm
Forum: Personal Finance (Not Investing)
Topic: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion
Replies: 12
Views: 1069

Re: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion

Duckie wrote: Tue Jun 22, 2021 4:10 pm
johnsmithsf wrote: Tue Jun 22, 2021 1:02 am In calendar year 2020, I moved $100,000 from 401k (all pretax) to IRA (preexisting value of IRA $0), then few days later converted $100,000 to Roth IRA. money had grown to $100,010 in the IRA in the mean time, thus $10 remained in the IRA after converting $100,000 to Roth IRA
You should have converted the $10 at the same time. Convert 100% of the TIRA to avoid having anything other than "0" on line 6.
Yeah. Learned my lesson the hard way.
by johnsmithsf
Tue Jun 22, 2021 12:31 pm
Forum: Personal Finance (Not Investing)
Topic: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion
Replies: 12
Views: 1069

Re: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion

nolesrule wrote: Tue Jun 22, 2021 12:16 pm Yes, that is correct. Are you using tax software or filling out the forms manually? With tax software, entering the 1099s and answering the questions correctly will get everything in the right place.
Trying to file a paper amendment to undo prior mistakes in tax software :D
by johnsmithsf
Tue Jun 22, 2021 12:03 pm
Forum: Personal Finance (Not Investing)
Topic: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion
Replies: 12
Views: 1069

Re: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion

401k to Traditional IRA is just a rollover. Traditional IRA to Roth IRA is an IRA to IRA Roth conversion, and will need to be part of Form 8606. If you had taken the check from the 401k and put it directly in a Roth IRA then it would not have been part of Form 8606 and instead would have been handled directly on line 5b of the 1040. Hmm. I will have to check what I have done on 1040. Always knew that 100k conversion would be taxable. But didn't know where to put it. I thought line 5b of the 1040 is for either pensions/annuities (2020) or social security (2019) :?: 401k to Traditional IRA is just a rollover. Traditional IRA to Roth IRA is an IRA to IRA Roth conversion, and will need to be part of Form 8606. So how do you report both of thes...
by johnsmithsf
Tue Jun 22, 2021 9:18 am
Forum: Personal Finance (Not Investing)
Topic: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion
Replies: 12
Views: 1069

Re: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion

401k to Traditional IRA is just a rollover. Traditional IRA to Roth IRA is an IRA to IRA Roth conversion, and will need to be part of Form 8606. If you had taken the check from the 401k and put it directly in a Roth IRA then it would not have been part of Form 8606 and instead would have been handled directly on line 5b of the 1040. Hmm. I will have to check what I have done on 1040. Always knew that 100k conversion would be taxable. But didn't know where to put it. I thought line 5b of the 1040 is for either pensions/annuities (2020) or social security (2019) :?: 401k to Traditional IRA is just a rollover. Traditional IRA to Roth IRA is an IRA to IRA Roth conversion, and will need to be part of Form 8606. So how do you report both of thes...
by johnsmithsf
Tue Jun 22, 2021 1:02 am
Forum: Personal Finance (Not Investing)
Topic: Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion
Replies: 12
Views: 1069

Form 8606. Did both Backdoor Roth and also additionally did 401k to IRA and then to Roth conversion

In calendar year 2020, I moved $100,000 from 401k (all pretax) to IRA (preexisting value of IRA $0), then few days later converted $100,000 to Roth IRA. money had grown to $100,010 in the IRA in the mean time, thus $10 remained in the IRA after converting $100,000 to Roth IRA Later that calendar year 2020, I contributed non-deductible $6,000 to IRA, then next day converted $6,000 to Roth IRA Thus $10 remained in the IRA on December 31st 2020. Rest $106,000 IN TOTAL was converted to Roth IRA. I am now confused about line 8 on form 8606. "Enter the net amount you converted from traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2020. Also enter this amount on line 16" Is it $6000 or $106,000? I am confused as I thought 401k to IRA to...
by johnsmithsf
Sat Jun 12, 2021 2:00 am
Forum: Personal Consumer Issues
Topic: Move from Chicago to Phoenix?
Replies: 43
Views: 4660

Re: Move from Chicago to Phoenix?

Hi all, wanted to get the opinion of the greater group, as I feel most locale forums are very biased. Mid/late 30s, have lived in Chicago my whole life, and feel the need to make a change. I LOVE the city of Chicago, and consider it a great value compared to other cities. However the cold dreary winter months get to me, and I would like to have a more active life outdoors. My SO could take a job in scottsdale, and I in Chandler (in addition to some WFH for me), both with our current companies. Both jobs would likely be a downgrade in both responsibility and pay, but similar to what we do now. I know tons of midwesterners (and now Californians) have flocked to AZ for several reasons. I’ve visited several times (including during the summer),...