Search found 538 matches

by venkman
Wed May 23, 2018 10:50 pm
Forum: Personal Finance (Not Investing)
Topic: Need help with debt strategy
Replies: 43
Views: 1750

Re: Need help with debt strategy

No, OP is a young, single student who is graduating from college with a very reasonable amount of debt and a good salary, not someone with long-term problems due to a complete absence of money management skills and massive amounts of credit card debt who needs to follow bad advice.... The OP is 29 ...
by venkman
Mon May 21, 2018 9:21 pm
Forum: Investing - Theory, News & General
Topic: Typical interest rate earned by target date funds in retirement?
Replies: 28
Views: 1829

Re: Typical interest rate earned by target date funds in retirement?

Thank you Moto. Since 4% is frequently cited, what investment is that based on? I'm trying to determine my FI date and I would like to have a real solid idea of these numbers. Currently, I'm using a 4% draw down and 3% gain (during that period). That gets me through 44 years without going negative....
by venkman
Sun May 20, 2018 9:52 pm
Forum: Investing - Help with Personal Investments
Topic: Investments that are unique *and* sensible?
Replies: 12
Views: 1310

Re: Investments that are unique *and* sensible?

I quibble with you saying that expected return on SPIA is negative. There is no theoretical basis that says the expected return will be negative. Moreover quotes for today show a very slightly positive expected return. (payment * life expectancy is slightly greater than cost). Is that nominal or re...
by venkman
Sun May 20, 2018 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me rationalise this 401k investment choice
Replies: 23
Views: 1247

Re: Please help me rationalise this 401k investment choice

Does my colleague have a point? Should one be looking only at ER adjusted performance (current and past)? Am I not following the "simple 3-fund philosophy" correctly ? How can I convince him, and more importantly myself. VINIX is a large-cap blend fund. The only fair comparison would be to another ...
by venkman
Sun May 20, 2018 8:42 pm
Forum: Investing - Theory, News & General
Topic: Wow! Just discovered "Portfolio Visualizer".
Replies: 6
Views: 2353

Re: Wow! Just discovered "Portfolio Visualizer".

Does this mean that the 3FP isn't efficient? That the proxy for total international (Global ex-US Market) is not correct? That the available history of returns (from 1987) is inadequate, or that the efficient frontier is not meaningful? Other? Efficient frontier backtesting is kinda like asset clas...
by venkman
Sat May 19, 2018 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: Investments that are unique *and* sensible?
Replies: 12
Views: 1310

Re: Investments that are unique *and* sensible?

I would quibble slightly with the idea that SPIA's are "investments," since your expected return is negative.

That being said, there's nothing wrong with an SPIA; it's just an insurance product rather than an investment.
by venkman
Sat May 19, 2018 9:17 pm
Forum: Investing - Theory, News & General
Topic: Do I understand duration correctly?
Replies: 33
Views: 2414

Re: Do I understand duration correctly?

motorcyclesarecool wrote:
Sat May 19, 2018 9:04 pm
How would I go about reducing my average duration as my time horizon grows shorter?
Invest in individual bonds or CD's instead of bond funds.
by venkman
Fri May 18, 2018 9:01 pm
Forum: Personal Finance (Not Investing)
Topic: Dave Ramsey it or keep low interest debt
Replies: 132
Views: 7990

Re: Dave Ramsey it or keep low interest debt

Meaty wrote:
Fri May 18, 2018 4:12 pm
I know the wiki advises keeping all until normal payoff but Ramsey keeps stating millionaires are made following his methods.
Yeah, but he never mentions that the millionaires are him and the advisors who send him kickbacks for his endorsement. :happy
by venkman
Fri May 18, 2018 12:53 am
Forum: Investing - Help with Personal Investments
Topic: Cash instead of bonds for 3-fund
Replies: 22
Views: 2008

Re: Cash instead of bonds for 3-fund

I have no personal experience with CDs, never having owned one, but if you owned a three or five year CD purchased a year ago, wouldn’t its market value also be down right now? If so, why invest in cash? Exactly. CD's can seem safer, because their market value isn't constantly adjusted. But if inte...
by venkman
Fri May 18, 2018 12:45 am
Forum: Investing - Help with Personal Investments
Topic: VFITX For Entire Bond Allocation [Vanguard Intermediate Term Treasury]
Replies: 11
Views: 1220

Re: VFITX For Entire Bond Allocation [Vanguard Intermediate Term Treasury]

And Taylor, further to my other reply to you, would you say that VSIGX is just as negatively correlated to the stock market in a downturn as VFITX is? According to Portfolio Visualizer, US Market Correlation since Jan 2010: VSIGX: -0.41 VFITX: -0.40 And the difference in the 5-year annualized retur...
by venkman
Fri May 18, 2018 12:27 am
Forum: Investing - Help with Personal Investments
Topic: Cash instead of bonds for 3-fund
Replies: 22
Views: 2008

Re: Cash instead of bonds for 3-fund

If a 3% loss over 5 months is enough to make you consider getting out of a particular investment, that 60% allocation to stocks might be too high... Also, your bond fund is down 3% because it holds a bunch of bonds that were issued at lower interest rates, and would therefore command a lower price i...
by venkman
Wed May 16, 2018 9:51 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3624

Re: Vanguard Junk Bond fund

But OP just said volatility is not an issue. At least selling equities at a loss has a tax benefit. Interest payments on a bond that has dropped by 50% in value are still fully taxable. True but would not the income from the bond have risen 50% so mitigating the higher tax rate ? Assuming no defaul...
by venkman
Wed May 16, 2018 9:33 pm
Forum: Investing - Help with Personal Investments
Topic: VFITX For Entire Bond Allocation [Vanguard Intermediate Term Treasury]
Replies: 11
Views: 1220

Re: VFITX For Entire Bond Allocation [Vanguard Intermediate Term Treasury]

You'll still have some duration risk; but if you're willing to give up the extra yield in exchange for the reduced credit risk, I don't see anything wrong with that.
by venkman
Wed May 16, 2018 9:13 pm
Forum: Investing - Theory, News & General
Topic: M1 Finance - The Perfect Platform for Beginner Bogleheads
Replies: 6
Views: 770

Re: M1 Finance - The Perfect Platform for Beginner Bogleheads

Option 3: Save up $1,000 and invest in a Vanguard Target Retirement fund. Set up automatic subsequent investments. You've got a ready made 3-fund PF (technically 4-fund, but international bonds are a tiny percentage of the 90/10 TR funds) that will do all the rebalancing for you. Once you build that...
by venkman
Tue May 15, 2018 10:07 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3624

Re: Vanguard Junk Bond fund

But OP just said volatility is not an issue. At least selling equities at a loss has a tax benefit. Interest payments on a bond that has dropped by 50% in value are still fully taxable. True but would not the income from the bond have risen 50% so mitigating the higher tax rate ? Assuming no defaul...
by venkman
Tue May 15, 2018 9:37 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Customer Service Improvement Incentive?
Replies: 12
Views: 1225

Re: Vanguard Customer Service Improvement Incentive?

Most of the problems I've had with Vanguard have been with their automated systems, which is frustrating because it seems like those should be the easiest ones to fix. And their communication when you have an issue can be a problem (i.e. they might be working on fixing your issue, but they neglect t...
by venkman
Mon May 14, 2018 11:09 pm
Forum: Investing - Help with Personal Investments
Topic: Investing in Sports Betting Opportunities
Replies: 25
Views: 1996

Re: Investing in Sports Betting Opportunities

Note: I AM NOT speaking of a way to profit by placing such bets; rather I am looking for ways to invest in entities (aside from casino companies) that will cover bets from the public. So, basically, you aren't looking to make money by GAMBLING? You just want to invest money in individual stocks and...
by venkman
Mon May 14, 2018 10:49 pm
Forum: Investing - Help with Personal Investments
Topic: consumer staples
Replies: 10
Views: 1102

Re: consumer staples

The general rule here is to avoid individual stocks/sectors. Another general rule is that you're allowed to gamble a little bit, as long as you limit it to no more than 5% of your total portfolio. So, technically, you can put 5% of your portfolio into Consumer Staples and still be within BH guidelin...
by venkman
Mon May 14, 2018 9:46 pm
Forum: Personal Finance (Not Investing)
Topic: Can a <median household save 1 year of expenses every year?
Replies: 158
Views: 7497

Re: Can a <median household save 1 year of expenses every year?

An interesting question would be whether or not to count Social Security taxes as "saving." It's not something you have a choice in, but it IS money you're putting away now that you will (theoretically) get back in retirement. That's the same general idea as an IRA, 401k, etc. And 6.2% (plus employe...
by venkman
Sat May 12, 2018 9:18 pm
Forum: Investing - Help with Personal Investments
Topic: Question about Asset Allocation
Replies: 8
Views: 740

Re: Question about Asset Allocation

VINIX is the institutional version of Vanguard's S&P 500 fund. It is indeed heavily tilted toward large-caps, but so is VTSAX. In fact, the overall AA you listed looks very similar to the breakdown of VTSAX. The general consensus on this forum is that a Total Stock Market fund is preferred, but an S...
by venkman
Sat May 12, 2018 9:07 pm
Forum: Investing - Help with Personal Investments
Topic: Financial Income rates between Ally and Vanguard
Replies: 9
Views: 1092

Re: Financial Income rates between Ally and Vanguard

Vanguard's Federal MM (VMFXX) is currently at 1.62%. The 1.54% number you saw a few days ago might have been referring to that. The Prime MM (VMMXX) is currently at 1.85%. VMFXX is slightly less risky, though neither one is insured like a bank account is. I would trust Vanguard MM funds to always ha...
by venkman
Fri May 11, 2018 11:14 pm
Forum: Investing - Help with Personal Investments
Topic: Living off Dividends of Vanguard Total Stock
Replies: 49
Views: 6488

Re: Living off Dividends of Vanguard Total Stock

I ran a spreadsheet backtest on living off dividends, using PV and BH data for VTSMX, starting in 1993 (first full calendar year of VTSMX). I assumed that the required annual income in Year 1 was exactly equal to the size of the portfolio times the SEC yield of VTSMX on the first business day of Yea...
by venkman
Thu May 10, 2018 10:20 pm
Forum: Investing - Help with Personal Investments
Topic: Gifting ETFs down the road - Advice Requested
Replies: 5
Views: 247

Re: Gifting ETFs down the road - Advice Requested

I'm pretty sure you can do this. They would need their own brokerage account to transfer the shares to, and it would be subject to gift tax limitations (anything above $14k per year counts against your lifetime exemption). They would also inherit your cost basis, so make sure to keep careful track o...
by venkman
Thu May 10, 2018 10:12 pm
Forum: Investing - Help with Personal Investments
Topic: Using Vanguard Wellesley for Emergency Fund $30k, reinvest dividends in taxable???
Replies: 9
Views: 1385

Re: Using Vanguard Wellesley for Emergency Fund $30k, reinvest dividends in taxable???

I would consider sending the dividends into the sweep account indefinitely. If/when an emergency happens, draw from that cash first. If the cash balance starts to get TOO big, you can always reinvest some of it.
by venkman
Wed May 09, 2018 11:21 pm
Forum: Investing - Help with Personal Investments
Topic: Should I sell Small Cap Value Fund and move it into Roth?
Replies: 23
Views: 1901

Re: Should I sell Small Cap Value Fund and move it into Roth?

Very confused now, so I cannot hold it in both accounts?? What if one is a mutual fund and one is the ETF? Also isn’t it a wash sale only if you sell at a loss and buy shortly after? Correct. There is no wash sale rule on capital gains. And there's no wash sale rule that prevents you from buying an...
by venkman
Wed May 09, 2018 11:11 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4461

Re: Bond Fund Point of Indifference vs. Principle Recovery

Seems to me that if one buys a short term bond fund and holds the fund to its average portfolio duration, NAV losses will essentially recover to the same point as an individual bond with same maturity date of three years, or are there inefficiencies here which make buying ladders of individual bond...
by venkman
Tue May 08, 2018 10:42 pm
Forum: Investing - Help with Personal Investments
Topic: Interested in the Vanguard Wellington Fund Investor Shares (VWELX)
Replies: 7
Views: 1621

Re: Interested in the Vanguard Wellington Fund Investor Shares (VWELX)

Im interested in the Vanguard Wellington Fund Investor Shares (VWELX). But wanted to hear from others about this as I'm not that good with investments. I would like to open another similiar account elsewhere though. A lot of people here are fans of Wellington. But whether or not it's right for you ...
by venkman
Tue May 08, 2018 10:38 pm
Forum: Investing - Help with Personal Investments
Topic: Ideas for investing for a 6-10 year time horizon
Replies: 26
Views: 1459

Re: Ideas for investing for a 6-10 year time horizon

Looking at the chart yogesh posted, the 30/70 or even 20/80 (stock/bond) allocation maybe the way to go for the 6-10 year allocation? Are there any Vanguard / Fidelity funds / etf's that would fit that allocation? Something like the Vanguard 2015 target date fund that eventually and automatically b...
by venkman
Tue May 08, 2018 10:20 pm
Forum: Investing - Theory, News & General
Topic: Fixed dollar bond allocation
Replies: 6
Views: 846

Re: Fixed dollar bond allocation

The risk of a market downturn, as I understand it, determines assest allocation. However, there seems to be a wide consensus that risk increases with age and that everyone should increase their percent bonds as they get older. I’m not sure I agree. Is there some flaw in this logic that I’m missing....
by venkman
Mon May 07, 2018 10:05 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4461

Re: Bond Fund Point of Indifference vs. Principle Recovery

If you have a definite date when you know you will need the money, you might want to avoid bond funds altogether and use individual bonds/CD's instead. With an individual bond/CD, your duration risk gradually declines to zero as the maturity date approaches. Bond funds maintain a more or less const...
by venkman
Mon May 07, 2018 8:53 pm
Forum: Investing - Theory, News & General
Topic: Credit Card Piggybacking
Replies: 18
Views: 969

Re: Credit Card Piggybacking

Are there really that many people with bad credit who are willing/able to pay $400+ a month just to improve their credit? As a follow-up, why wouldn't they put the $400 a month toward paying off the debts that gave them bad credit in the first place; and/or put the money in the bank, so they can aff...
by venkman
Mon May 07, 2018 8:43 pm
Forum: Personal Finance (Not Investing)
Topic: Term life insurance that pays out monthly instead of a lump sum
Replies: 5
Views: 615

Re: Term life insurance that pays out monthly instead of a lump sum

I think the key question is: How much lower is the premium?

It seems like if there was an equal chance of death in any given year of the policy, the average payout for the insurance company would be 180k. So, I would expect it should cost roughly the same as a 180k lump sum policy.
by venkman
Sun May 06, 2018 11:02 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4461

Re: Bond Fund Point of Indifference vs. Principle Recovery

But it may not be a benefit if you are not a long term investor- as you said. In that case, you should not be in anything longer than a short-term investment- which means no intermediate bond funds. Is that correct? If you have a definite date when you know you will need the money, you might want t...
by venkman
Sat May 05, 2018 8:37 pm
Forum: Investing - Theory, News & General
Topic: Fees are higher than we think
Replies: 12
Views: 2304

Re: Fees are higher than we think

From an article in The Wall Street Journal, about the loss of tax deduction for investment fees: Gauge the fees’ effects. Fees typically are quoted as a percent of assets, which can make them seem smaller. Instead, think of them as a percent of annual return. If an investor’s annual fees are 2% of ...
by venkman
Sat May 05, 2018 8:27 pm
Forum: Investing - Theory, News & General
Topic: How do brokerages make $s on cheap index funds?
Replies: 57
Views: 4984

Re: How do brokerages make $s on cheap index funds?

The math looks worse at the individual account level, especially for small accounts. Schwab is grossing $3 on a $10,000 account. Surely it's losing money on those accounts, and hoping to make it up elsewhere (either on larger accounts or other products). An Vanguard isn't grossing much more. Do you...
by venkman
Fri May 04, 2018 8:06 pm
Forum: Investing - Theory, News & General
Topic: Online resource for current Boglehead 3 fund portfolio
Replies: 10
Views: 979

Re: Online resource for current Boglehead 3 fund portfolio

I’m looking for a source of standard data. Not a future prediction, just YTD returns or a rolling average of last 12 months returns. Do you just mean YTD returns for the funds that make up a 3-fund portfolio? Vanguard has YTD numbers on their web site (though they aren't always updated in as timely...
by venkman
Tue May 01, 2018 9:56 pm
Forum: Investing - Theory, News & General
Topic: Value tilted S&P 500 fund for dividend?
Replies: 45
Views: 2125

Re: Value tilted S&P 500 fund for dividend?

Thanks for the useful info. I did see that they SPYD has an equal weight and a 40% turnover rate. Guess that makes it pretty bad in comparison. Would create a lot of unwanted tax drag. Any idea why a so called index fund would have such a high rate of turnover? If it's equal weight, they need to do...
by venkman
Mon Apr 30, 2018 12:13 am
Forum: Investing - Help with Personal Investments
Topic: Taxable Accounts - What Rate to Use for Estimation?
Replies: 4
Views: 605

Re: Taxable Accounts - What Rate to Use for Estimation?

So can you use: [(.1 - .03) * .65] = .0455 *.85 = . 039 Is my math correct? .1 = S&P 500 average rate .03 = inflation .65 = what you'll earn after taxes (estimation) .85 what you'll keep after capital gains CG taxes are based on nominal gains, so you would leave inflation out of the equation until ...
by venkman
Sun Apr 29, 2018 11:54 pm
Forum: Investing - Theory, News & General
Topic: How does one optimally prepare for predictable, lumpy expenses while consistently investing?
Replies: 22
Views: 2051

Re: How does one optimally prepare for predictable, lumpy expenses while consistently investing?

If you invest as soon as possible, you will, on the average, maximize long term returns. If you withdraw the money after only a year, there won't BE any long term returns, only short term returns. :happy I get your point that, on average over the long term, the OP would probably gain more money tha...
by venkman
Sun Apr 29, 2018 12:57 am
Forum: Investing - Theory, News & General
Topic: How does one optimally prepare for predictable, lumpy expenses while consistently investing?
Replies: 22
Views: 2051

Re: How does one optimally prepare for predictable, lumpy expenses while consistently investing?

Let's suppose you know that you will need to pay a fairly large fixed cost every year on a specific date. However, you are inclined to invest all income in excess of your emergency savings and other necessary expenses as soon as possible to maximize long-term returns. [emphasis added] Long-term ret...
by venkman
Sun Apr 29, 2018 12:10 am
Forum: Investing - Theory, News & General
Topic: What are the questions you would ask a Financial Advisor ?
Replies: 59
Views: 3848

Re: What are the questions you would ask a Financial Advisor ?

1. How are you compensated for your advice--by a yearly percentage of AUM, or strictly on an hourly basis?

That should tell you everything you need to know.
by venkman
Sun Apr 29, 2018 12:04 am
Forum: Personal Finance (Not Investing)
Topic: Would you make this financial decision??
Replies: 18
Views: 1621

Re: Would you make this financial decision??

I know very little about real estate, but there seems to be a guideline that a reasonable monthly rent is equal to one percent of the home's value. That suggests you currently live in a place that's worth about $135,000. Moving to a $500k+ home would be a HUGE jump up. And you don't indicate that yo...
by venkman
Fri Apr 27, 2018 10:26 pm
Forum: Investing - Help with Personal Investments
Topic: Need some Portfolio Advice
Replies: 3
Views: 382

Re: Need some Portfolio Advice

So, for the Roth IRA, my strategy has been: I think biotech and medical tech are growing and will continue to grow, so I picked those two volatile funds. Biotech and medical tech probably will continue to grow. But that's not a good reason to invest in those sectors. The market's best guess at futu...
by venkman
Thu Apr 26, 2018 9:59 pm
Forum: Investing - Theory, News & General
Topic: Financial Freedom
Replies: 22
Views: 2794

Re: Financial Freedom

4) If you get a 50% crash, reduce your budget and work at McDonald's or something until things clear up. Be greedy and flexible, not conservative and inflexible. If there's a 50% market crash, it's probably due to a recession. If there's a recession, jobs will be hard to come by. The local McDonald...
by venkman
Tue Apr 24, 2018 9:49 pm
Forum: Investing - Theory, News & General
Topic: Small premium
Replies: 8
Views: 910

Re: Small premium

According to Portfolio Visualizer, VIMSX does indeed beat DFSCX to date (9.99% to 9.63%) if you start in June 1998.

However, if you start in January 1999, DFSCX wins handily (10.77% to VIMSX's 9.70%).
by venkman
Tue Apr 24, 2018 9:32 pm
Forum: Personal Finance (Not Investing)
Topic: Treasury yields climbing...tap the brakes on paying low interest student loans?
Replies: 7
Views: 1044

Re: Treasury yields climbing...tap the brakes on paying low interest student loans?

If you're able to pay off 85k in less than a year, any extra money you might be able to get by investing in bonds instead of paying off the loan will be a drop in the bucket for you.
by venkman
Mon Apr 23, 2018 9:43 pm
Forum: Investing - Theory, News & General
Topic: "Making decisions based on past performance works (except when it doesn’t)"
Replies: 17
Views: 2115

Re: "Making decisions based on past performance works (except when it doesn’t)"

To be honest, I'm not exactly sure if rising "safe" rates will affect stock prices that much. I think the major force behind the decline of the equity risk premium has been that "stocks for the long run" has become a near universal belief. If all or most dips will be reversed, only to march upwards...
by venkman
Sun Apr 22, 2018 11:28 pm
Forum: Investing - Help with Personal Investments
Topic: Dividend fund in taxable account during retirement, yea or nay?
Replies: 33
Views: 2817

Re: Dividend fund in taxable account during retirement, yea or nay?

If you were in retirement, had a lump sum to invest in a taxable account (in the US portion of a three fund portfolio) and would only need income equal to the amount of dividends that VHYDX happens to provide, would you invest in VHYDX, invest in VTSMX, invest in both or do something different? Mos...
by venkman
Sun Apr 22, 2018 11:06 pm
Forum: Investing - Theory, News & General
Topic: The Limits of Modern Portfolio Theory - Do Investors Understand What They Own?
Replies: 16
Views: 2045

Re: The Limits of Modern Portfolio Theory - Do Investors Understand What They Own?

What’s more, the use of indexing has had unintended consequences on the behavior of asset owners and asset managers; it changes the focus of both away from “which businesses are good businesses worth owning?” to “how do we look relative to the index" Now, as a passive investor, I'm not going to go ...