Search found 609 matches

by venkman
Wed Jul 18, 2018 9:51 pm
Forum: Investing - Help with Personal Investments
Topic: The future for long term bond index funds? i.e. VWALX
Replies: 5
Views: 635

Re: The future for long term bond index funds? i.e. VWALX

I assume that these older (higher rate) bonds are probably propping up the current distributions and compensating for the newer (lower yield) bonds. But as these long term older (higher rate) bonds are replaced with long term lower rate bonds, I would assume that the overall distributions are going...
by venkman
Sun Jul 15, 2018 8:42 pm
Forum: Investing - Help with Personal Investments
Topic: want to improve returns by 1%/year on a portfolio
Replies: 6
Views: 789

Re: want to improve returns by 1%/year on a portfolio

The only way to get higher expected return is to take more risk (i.e. more money in stocks). And it looks like she already has plenty of equity risk for someone who wants to retire in 7 years. Under normal circumstances, it would be entirely reasonable to expect at least a 5% return from a 65/35-ish...
by venkman
Sat Jul 14, 2018 10:35 pm
Forum: Investing - Theory, News & General
Topic: Getting antsy with indexing? Reporter doing story.
Replies: 12
Views: 2841

Re: Getting antsy with indexing? Reporter doing story.

A reporter for a well-known publication is looking to talk to investors who are getting antsy with passive investing, and who may have even pulled out of ETFs these past six months. There's "passive investing,' and then there's "active investing using index ETF's." It almost sounds like the reporte...
by venkman
Fri Jul 13, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: M* vs Fool.com Charts
Replies: 9
Views: 891

Re: M* vs Fool.com Charts

It looks like the Fool chart is only showing price growth, while the M* chart is showing total growth, including reinvested dividends.
by venkman
Thu Jul 12, 2018 10:36 pm
Forum: Investing - Theory, News & General
Topic: what is the historical real return of total bond?
Replies: 15
Views: 1294

Re: what is the historical real return of total bond?

According to Portfolio Visualizer: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2018&lastMonth=12&endDate=07%2F12%2F2018&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&reb...
by venkman
Thu Jul 12, 2018 10:28 pm
Forum: Investing - Theory, News & General
Topic: Bonds in rising interest rate environment
Replies: 12
Views: 1046

Re: Bonds in rising interest rate environment

Interest rates had been close to zero since the end of 2008. There were quite few years when it was predictable that they would rise, but never did.
by venkman
Thu Jul 12, 2018 10:19 pm
Forum: Personal Finance (Not Investing)
Topic: Shifting from Intermediate to Short-term Bonds
Replies: 11
Views: 1595

Re: Shifting from Intermediate to Short-term Bonds

If a 1-2% loss over 6 months is enough to make you consider selling off those assets, then your 60% allocation to stocks is FAR too high...
by venkman
Wed Jul 11, 2018 10:55 pm
Forum: Investing - Help with Personal Investments
Topic: Buying CDs from Vanguard
Replies: 20
Views: 2542

Re: Buying CDs from Vanguard

Note that Vanguard has a $10k minimum for each new-issue CD you purchase. You may be able to find secondary CD's that have a lower minimum. How do I know if I’m getting a good deal? For secondary CD's, It will list the yield to maturity you'd get. Just make sure that number is at least slightly hig...
by venkman
Wed Jul 11, 2018 10:44 pm
Forum: Investing - Help with Personal Investments
Topic: Best way to automatically invest in Vanguard ETFs
Replies: 6
Views: 725

Re: Best way to automatically invest in Vanguard ETFs

If this is a case where the ER is higher because you have Investor shares instead of Admiral shares, I wouldn't even bother with the ETF's. The actual extra dollar amount you pay for Investor shares doesn't become significant until you're well past the point where you qualify for Admiral shares. If ...
by venkman
Wed Jul 11, 2018 10:16 pm
Forum: Investing - Theory, News & General
Topic: Does tilting towards shorter-term bonds make sense?
Replies: 15
Views: 1728

Re: Does tilting towards shorter-term bonds make sense?

This may be borderline anti-boglehead philosophy, but has anyone here similarly adjusted their bond duration? And if you don't, what's the rationale for maintaining longer duration bonds when, as I understand it, you're getting less risk-adjusted-return compared to short-term bonds as the yield cur...
by venkman
Wed Jul 11, 2018 2:48 am
Forum: Investing - Help with Personal Investments
Topic: 401(k) Asset Allocation for 23 Year Old
Replies: 10
Views: 562

Re: 401(k) Asset Allocation for 23 Year Old

Assuming she has the risk tolerance for it, she should be fine to be 100% equities right now. For the first few years, the contributions she's making will add to the account far more than the returns.

And, she can always open an IRA and put the bonds there, in funds with lower expense ratios.
by venkman
Sun Jul 08, 2018 11:47 pm
Forum: Investing - Theory, News & General
Topic: Is it contradictory to be a Boglehead and have substantial allocation towards SCV?
Replies: 30
Views: 2233

Re: Is it contradictory to be a Boglehead and have substantial allocation towards SCV?

How do those who invest in SCV reconcile with those foundational principles? Jack Bogle himself has noted that SCV has underperformed the S&P 500 for vast periods of time. The foundational principle underlying ALL financial markets is that risk and reward are positively correlated. Investors will d...
by venkman
Fri Jul 06, 2018 9:26 pm
Forum: Investing - Theory, News & General
Topic: Active Management Justification
Replies: 33
Views: 1828

Re: Active Management Justification

This paragraph, buried at the very end of the MGIAX prospectus, is why your broker is pushing it on you: Payments to Broker/Dealers and Other Financial Intermediaries If you purchase shares of the fund through a broker/dealer or other financial intermediary (such as a bank), the fund, MFS, and/or MF...
by venkman
Thu Jul 05, 2018 10:04 pm
Forum: Investing - Theory, News & General
Topic: Fundrise vs. Vanguard REIT ETF
Replies: 10
Views: 1107

Re: Fundrise vs. Vanguard REIT ETF

On the surface, Vanguard charges no brokerage commissions and carries only a low investment advisory fee of 0.30%, which it reports to be lower than the industry standard of 1.02%. In addition to the advisory fee, Vanguard charges its REIT ETF investors an asset management fee of 0.11% as well as r...
by venkman
Thu Jul 05, 2018 9:48 pm
Forum: Investing - Theory, News & General
Topic: Comparing bonds with different maturities
Replies: 6
Views: 493

Re: Comparing bonds with different maturities

An easy example might be a 10 year bond yielding 3.00% vs. a 5 year bond yielding 2.99%. Seemingly very few retail investors would prefer the 10 year bond risk at those rates. But how do you calculate the 'tipping point' at which the 10 year bond does become more compelling? By definition, quite a ...
by venkman
Wed Jul 04, 2018 10:29 pm
Forum: Investing - Theory, News & General
Topic: Switch to LT bonds in this falling rate environment?
Replies: 43
Views: 2716

Re: Switch to LT bonds in this falling rate environment?

Kevin M wrote:
Wed Jul 04, 2018 10:08 pm
This is not rational, but purely a form of anchoring.
Anchoring when stocks are very highly valued seems pretty rational to me. :happy
by venkman
Wed Jul 04, 2018 10:13 pm
Forum: Investing - Theory, News & General
Topic: Index Fund vs. ETF for Long Term Investment
Replies: 21
Views: 1702

Re: Index Fund vs. ETF for Long Term Investment

I can meet the $3000 balance for the Investor Share. I am just trying to understand the trade-off since the expense ratio for ETF (0.04%) is lower than Investor Share (0.14%) and ETF has no requirements. I can see that it is simpler to start off with index fund. Thank you for the advice! :happy At ...
by venkman
Wed Jul 04, 2018 9:42 pm
Forum: Investing - Theory, News & General
Topic: Switch to LT bonds in this falling rate environment?
Replies: 43
Views: 2716

Re: Switch to LT bonds in this falling rate environment?

BLV (Vanguard Long Term Bond Index ETF) has an SEC yield just shy of 4% right now. 4% is what Jack Bogle is predicting for stock returns over the next decade. From that perspective, LT bonds look pretty good in terms of risk/reward. Obviously, not everyone is predicting stock returns as low as 4%, b...
by venkman
Tue Jul 03, 2018 10:50 pm
Forum: Investing - Help with Personal Investments
Topic: Buying CDs from Vanguard
Replies: 20
Views: 2542

Re: Buying CDs from Vanguard

Note that Vanguard has a $10k minimum for each new-issue CD you purchase. You may be able to find secondary CD's that have a lower minimum.
by venkman
Sat Jun 30, 2018 9:05 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Total Investment Strategy - Windfall
Replies: 30
Views: 2348

Re: Help with Total Investment Strategy - Windfall

To be honest I am really struggling with the bond aspect given where we’re at with interest rates as well as the amount that I should be investing in bonds; I know that bonds in a taxable account is not tax efficient but I have no choice if I want to diversify with bonds. I really don’t want to go ...
by venkman
Fri Jun 29, 2018 9:20 pm
Forum: Investing - Help with Personal Investments
Topic: Starting the "Three Fund Portfolio"
Replies: 13
Views: 2064

Re: Starting the "Three Fund Portfolio"

So with all that said the question I have is does it make sense to initially open the account with $10,000 dollars in each to get to the admiral share status or should I just stick with my allocation strategy when I first open the account? The investor shares will cost you less than $20 extra per y...
by venkman
Fri Jun 29, 2018 9:06 pm
Forum: Investing - Theory, News & General
Topic: Does Bogle’s Reversion to Mean tenet have practical utility?
Replies: 4
Views: 496

Re: Does Bogle’s Reversion to Mean tenet have practical utility?

Does this hold any practical utility for someone who is entering retirement in your view If so, what? I think it suggests you might want to be more in bonds than you would be if equity valuations were lower. Assuming the reversion happens over the next 10 years, it will be in the form of: 1. A cras...
by venkman
Thu Jun 28, 2018 9:46 pm
Forum: Investing - Theory, News & General
Topic: Dave Ramsey against index funds?
Replies: 57
Views: 5707

Re: Dave Ramsey against index funds?

I don't agree with the 12% returns he uses as an example, not saying those funds he owns did or did not produce those returns, they very well may have, but the average listener may think that past is prologue and that is where the disagreement comes, you can buy any fund you like, or as many as the...
by venkman
Wed Jun 27, 2018 9:35 pm
Forum: Personal Finance (Not Investing)
Topic: "Who's John Bogle?"
Replies: 17
Views: 2362

Re: "Who's John Bogle?"

I would think EJ wants people who don't know anything (other than the bare minimum needed to pass the relevant industry exams). It's much easier for a salesperson to sell a lousy product when the salesperson doesn't realize it's a lousy product. They'll be a lot more genuine than someone who knows h...
by venkman
Wed Jun 27, 2018 9:25 pm
Forum: Investing - Theory, News & General
Topic: feedback on portfolio created by Vanguard PAS
Replies: 16
Views: 1707

Re: feedback on portfolio created by Vanguard PAS

VTMFX is essentially just 48% VTSAX and 52% VWITX. I don't believe that's actually the case, per my read of the M* Analyst report. Can you provide a source or more info on why you think that is? It is essentially 48% vtclx and 52% vwitx Fair enough. The stock part of VTMFX is probably closer to VTC...
by venkman
Tue Jun 26, 2018 11:02 pm
Forum: Investing - Theory, News & General
Topic: feedback on portfolio created by Vanguard PAS
Replies: 16
Views: 1707

Re: feedback on portfolio created by Vanguard PAS

50% - Vanguard Tax Managed Balanced Fund - VTMFX (this would involve me selling about $50K of my current holding with a about $2K of cap gains) 4% - Vanguard Tax-Managed Capital Appreciation Fund - VTCLX (keeps all my current holdings - no material unrealized gains here) 27% - Total International S...
by venkman
Tue Jun 26, 2018 10:15 pm
Forum: Investing - Theory, News & General
Topic: Expected reward for risk of Corp bond over CD?
Replies: 8
Views: 620

Re: Expected reward for risk of Corp bond over CD?

29 basis points might not be an entirely unreasonable spread for a 1-year maturity. Credit risk goes up significantly with time. Looking at Vanguard's CD & Bond offerings: A 1-year brokered CD is yielding 2.4%, while a 1-year upper-medium grade corporate bond is yielding 2.89%. A 10-year CD is yield...
by venkman
Sun Jun 24, 2018 10:06 pm
Forum: Investing - Help with Personal Investments
Topic: Caps Gains Tax Strategy
Replies: 12
Views: 1101

Re: Caps Gains Tax Strategy

For example, if I bought options and lost 80k, I would really only lose 40K after taxes. Is there a good way to take 40k of risk this year in exchange for a gain in 2019? How would making a speculative bet be different if I didn’t have cap gains? But what if the worst-case scenario happened and you...
by venkman
Sun Jun 24, 2018 9:57 pm
Forum: Investing - Theory, News & General
Topic: VWALX up over VWLUX - why?
Replies: 3
Views: 494

Re: VWALX up over VWLUX - why?

john_nh wrote:
Sun Jun 24, 2018 4:54 pm
Is this more a factor of investors "chasing yield" and driving up VWALX?
I think that's it. The same thing happened with high yield corporate bonds. People chasing yield drove down the credit spread.
by venkman
Sun Jun 24, 2018 9:37 pm
Forum: Investing - Theory, News & General
Topic: S&P P/E Ratio
Replies: 50
Views: 3256

Re: S&P P/E Ratio

I have read that the S&P P/E ratio is at about 25 right now and the historic average is about 16. What am I missing?? Is it reasonable to sell knowing that the market will likely return to a P/E of 16??? Is the general belief that earnings will rise enough to return this ratio to a historic average...
by venkman
Thu Jun 21, 2018 11:24 pm
Forum: Investing - Theory, News & General
Topic: Real Estate vs. Equity - Market Cap Weighted
Replies: 10
Views: 872

Re: Real Estate vs. Equity - Market Cap Weighted

Are these figures true? And assuming they are, from a risk-adjusted return, assuming it were feasible and one is willing to do the work, would an optimal portfolio own 3x the physical real estate as the amount invested in stocks? If one is willing to do the work, one can forgo a passive investment ...
by venkman
Thu Jun 21, 2018 9:50 pm
Forum: Investing - Theory, News & General
Topic: Understanding AA in Vanguard Target Date Funds
Replies: 6
Views: 559

Re: Understanding AA in Vanguard Target Date Funds

It sounds like you've already figured out their rule of thumb. 90/10 until 25-ish years before retirement, then a straight slope down to 60/40 over the next 20 years. I don't think there's any way to reduce that formula to something simpler.
by venkman
Wed Jun 20, 2018 10:28 pm
Forum: Investing - Help with Personal Investments
Topic: What should be my stock/bond allocation?
Replies: 21
Views: 1595

Re: What should be my stock/bond allocation?

My husband and I just sold our business (we are 52 years old and still have 3 kids to put through college). We would need to live on 5-6% from our investments a year for the next 6 years then hopefully our cost of living will go down. Given the current market, would a 40/60 allocation be appropriat...
by venkman
Wed Jun 20, 2018 9:56 pm
Forum: Investing - Help with Personal Investments
Topic: Target Date Fund in Taxable / Large Unrealized Gain Question
Replies: 13
Views: 906

Re: Target Date Fund in Taxable / Large Unrealized Gain Question

2. Sell bits and pieces (mainly on down days) to limit tax bill over the course of a couple of years If you do this, make sure you put in an order to exchange your current fund for VTSAX, so both transactions go through on the same day. Selling on down days is generally a bad idea. Exchanging one t...
by venkman
Wed Jun 20, 2018 9:10 pm
Forum: Investing - Theory, News & General
Topic: To bond barbell or not to barbell, that is the question
Replies: 6
Views: 1360

Re: To bond barbell or not to barbell, that is the question

This is what I fail to understand. If long term bonds yield less, then why would this increase your selling price? I guess I need to do some more reading on bond yield/price relationships... Bond prices and yields move inversely. When price goes up, yield goes down, and vice-versa. A $1,000 par val...
by venkman
Wed Jun 20, 2018 8:48 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard posts wrong amount purchased
Replies: 6
Views: 909

Re: Vanguard posts wrong amount purchased

I have the same issue. Mine is off by about $20. But I don't know how "official" the P&W number is. Vanguard always has my account balances right, which is the main thing I care about. As long as you have records of your transactions, I wouldn't worry if just that P&W number is wrong.
by venkman
Tue Jun 19, 2018 10:35 pm
Forum: Investing - Help with Personal Investments
Topic: Financial Engines Financial Advisor Question
Replies: 7
Views: 809

Re: Financial Engines Financial Advisor Question

If you had posted your retirement funds and ER's here, you could've gotten the same advice. Also for free, except that it continues to be free after 3 months. :happy
by venkman
Mon Jun 18, 2018 10:19 pm
Forum: Investing - Theory, News & General
Topic: Mutual Fund Dividends
Replies: 12
Views: 1092

Re: Mutual Fund Dividends

If not, why would they not have a measurable cash drag? If you say dividends are 2% annual, 0.5% quarterly and returns over the past five years were well over 10%, you'd be losing over say 0.05% a year in this continuously rising market. I don't see that happening in the Morningstar S&P 500 Total R...
by venkman
Mon Jun 18, 2018 2:05 am
Forum: Investing - Help with Personal Investments
Topic: Tax implications of holding Wellesley Emergency in taxable
Replies: 8
Views: 896

Re: Tax implications of holding Wellesley Emergency in taxable

Hey guys I have currently have my Emergency fund in the Wellesley fund at 33k (30k + 3k if it drops 10 percent). What would be the tax complications if I don't add anymore more to it and let it sit for like 10 -20 years and don't sell it. I also currently contribute 30k a year (2500k a month) to vt...
by venkman
Mon Jun 18, 2018 1:17 am
Forum: Investing - Theory, News & General
Topic: Indiv. REITs in taxable because of new tax law? Aargh!
Replies: 15
Views: 2174

Re: Indiv. REITs in taxable because of new tax law? Aargh!

+1 on running the numbers.

Does this change suddenly make REIT's tax-efficient, or just less tax-inefficient than they used to be?
by venkman
Mon Jun 18, 2018 12:57 am
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8735

Re: Very confused with the current market

capcase wrote:
Sun Jun 17, 2018 9:57 pm
I remember Warren buffet once said: buy the dips and value investing.
You could just put all your investable money into Berkshire-Hathaway, and let Warren Buffet worry about buying the dips for you. He's sitting on a HUGE pile of cash right now, so he should be ready when the dip happens...
by venkman
Mon Jun 18, 2018 12:44 am
Forum: Personal Finance (Not Investing)
Topic: Using donor advised fund to diversify stock with large capital gains
Replies: 38
Views: 2369

Re: Using donor advised fund to diversify stock with large capital gains

It's a good plan, but know that deductions for charitable contributions of appreciated stock are limited to a maximum of 30% of your AGI in a given tax year. Any amount above that can be carried over for 5 years. I just ran into this issue while making a DAF plan for a relative. Not a deal breaker ...
by venkman
Sat Jun 16, 2018 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Using donor advised fund to diversify stock with large capital gains
Replies: 38
Views: 2369

Re: Using donor advised fund to diversify stock with large capital gains

I'm curious what people think about this strategy. Given the risk of a single stock, it seems preferable to holding this individiual stock for years and donating small chunks. And if we do find a worthy cause to donate all of it at once, we can still do that with the donor advised fund. Are there a...
by venkman
Fri Jun 15, 2018 10:52 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2635

Re: Factor-based strategy is better (winer), OK. then who are the losers?

The individual stock picker does frequently choose been an individual large company and an individual small company. That's not what we're talking about here. We're comparing many thousands of small companies vs. a relatively few number of large companies. But those individual active stock pickers ...
by venkman
Fri Jun 15, 2018 10:17 pm
Forum: Investing - Theory, News & General
Topic: Am I "market timing"?
Replies: 37
Views: 1981

Re: Am I "market timing"?

If I pulled the trigger today, instead, the buy order would execute next Tuesday morning, right when trading opens. It probably doesn't matter for the sake of this conversation, but I use SWTSX (Schwab Total Stock Market Index) as a stand-in for VTSAX within my recently opened Solo 401k at eTrade. ...
by venkman
Fri Jun 15, 2018 9:32 pm
Forum: Personal Finance (Not Investing)
Topic: Savings rate to achieve retirement goals?
Replies: 10
Views: 1147

Re: Savings rate to achieve retirement goals?

One statistic that I read recently (paraphrased) -- For individuals retiring with a nest egg of at least $500K -- after 19 years the average person still had 88% of their original nest egg value. That is a statistic I would take with a big grain of salt. Some outliers (e.g. people whose pension/SS ...
by venkman
Thu Jun 14, 2018 9:54 pm
Forum: Investing - Theory, News & General
Topic: Rate hikes vs - Muni, Corp, Total Bond funds
Replies: 14
Views: 1851

Re: Rate hikes vs - Muni, Corp, Total Bond funds

With the recent rate hike, and more anticipated, how does that affect the Vanguard bond funds - such as the Intermediate Muni, LT Investment Grade, or Total US Bond I can see how some of these types might be directly impacted by rising rates - but what about the Vanguard Intermediate Muni fund I th...
by venkman
Thu Jun 14, 2018 9:39 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2635

Re: Factor-based strategy is better (winer), OK. then who are the losers?

Lastly, and most importantly, what makes you think people have not? The small and value premiums have fallen. They may not exist anymore. I think investors have figured out this aberration and have now fully exploited it. That is what I am thinking. After more investors find out this, more will loa...
by venkman
Tue Jun 12, 2018 10:25 pm
Forum: Investing - Theory, News & General
Topic: Why is long bonds yielding less than short bonds?
Replies: 7
Views: 1133

Re: Why is long bonds yielding less than short bonds?

EDV invests in long-term zero-coupon bonds. The bonds themselves pay out no regular interest, but the fund pays out some dividends as it gets money from bonds that mature. In terms of income, I don't know how close a match you can expect to get, compared to regular long-term Treasuries. I've always ...
by venkman
Tue Jun 12, 2018 1:23 am
Forum: Investing - Theory, News & General
Topic: WSJ-- Next Stop for Mutual-Fund Fees: Zero
Replies: 40
Views: 4316

Re: WSJ-- Next Stop for Mutual-Fund Fees: Zero

I don't disagree with the sentiment that paying nothing in fees is better than paying something in fees; but the choice of which day to make a transaction will likely affect your return far more than 0.035%. Transactions?? I’m buy and hold. I don’t need no stinken’ transactions. Yeah, but presumabl...