Search found 661 matches

by venkman
Mon Sep 17, 2018 9:15 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Personal Advisor - .33%
Replies: 17
Views: 1872

Re: Vanguard Personal Advisor - .33%

The funds automatically rebalance regularly. Can you guys clear this up for me? Anything in there I would lose if I stop the .33% advisor fee? Anything else I should be taking advantage of that I'm not? If you have separate individual stock and bond funds that automatically get rebalanced back to a...
by venkman
Mon Sep 17, 2018 8:58 pm
Forum: Investing - Theory, News & General
Topic: “Costly race to bottom on mutual fund fees”
Replies: 13
Views: 1527

Re: “Costly race to bottom on mutual fund fees”

“ I have always been of the opinion that investors have done best in high-fee products with high transactions costs, bought and held over time, which are a built-in form of “advisor alpha.” I will change my mind when I meet my first Vanguard customer who is a billionaire. ” "But where are Jack Bogl...
by venkman
Mon Sep 17, 2018 8:50 pm
Forum: Investing - Theory, News & General
Topic: Chasing Mutual Fund Performance - Follow the Momentum?
Replies: 4
Views: 284

Re: Chasing Mutual Fund Performance - Follow the Momentum?

Moreover, our calculations did not include transaction costs, which are likely in excess of 1%. As a consequence, these results are more theoretical than practical. And, if we impose a minimum holding period of one year, performance chasing looks far less appealing. The best- and worst-performing f...
by venkman
Sat Sep 15, 2018 9:54 pm
Forum: Investing - Theory, News & General
Topic: CDs role in Fixed income part of portfolio
Replies: 31
Views: 2607

Re: CDs role in Fixed income part of portfolio

VG's Short Term Treasury Index (VSBSX) has an average maturity of 2.0 years, and a current SEC yield of 2.58%. Note: The YTD return of VSBSX is 0.10%. The one year total return is -0.31%. A CD ladder purchased a year ago would likely have a similar total return. SEC yield is a far more relevant pre...
by venkman
Fri Sep 14, 2018 10:11 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond or Total Bond/short-term
Replies: 30
Views: 2659

Re: Total Bond or Total Bond/short-term

Vineviz, I see this idea expressed often on the forum, and I'm not at all sure I understand what it means. I wonder if you or someone else can elaborate on it. Surely it can't mean that if interest rates rise, the NAV of a bond fund will remain unchanged—can it? What are the implications of this fo...
by venkman
Fri Sep 14, 2018 9:49 pm
Forum: Investing - Help with Personal Investments
Topic: Help with bond allocation
Replies: 9
Views: 752

Re: Help with bond allocation

I am trying to decide what form the bond portion of my AA should take. I am hesitating between Intermediate-Term Treasuries (under other circumstances I would probably consider long-term Treasuries, but not with the current yield curve) and High-Yield Municipal bonds, bearing in mind that the defau...
by venkman
Fri Sep 14, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: CDs role in Fixed income part of portfolio
Replies: 31
Views: 2607

Re: CDs role in Fixed income part of portfolio

Right now, you can build a 5-year CD ladder with brokered CD's at Vanguard that yields 3.01% in the first year. If you could reinvest the maturing 1-year CD at current 5-year rates, the average yield goes up to 3.19% in year two. The average maturity of the ladder will be 2.5 years, and your princip...
by venkman
Thu Sep 13, 2018 10:23 pm
Forum: Investing - Help with Personal Investments
Topic: Best options for Cash to beat inflation (other than CD) for short term 1-3 years
Replies: 7
Views: 971

Re: Best options for Cash to beat inflation (other than CD) for short term 1-3 years

I have No Penalty CD from Ally which let me break the CD anytime after first 6 days. So if CD rates rise, I can break the earlier CD and get its return till that date and then reinvest the money in a No Penalty CD with new Rates. Its rates are little lower (No Penalty CD 2% and With Penalty CD 2.5%...
by venkman
Tue Sep 11, 2018 10:23 pm
Forum: Investing - Theory, News & General
Topic: Barron's--Vanguard Is Losing Battles on Two Fronts in Fee Wars
Replies: 53
Views: 4513

Re: Barron's--Vanguard Is Losing Battles on Two Fronts in Fee Wars

It would require 9,000 across two accounts to get into the three fund investor class in less than one year and you still couldn't make it work on admiral for about 3 years. Even adding the extra account doesn't really change the fact that minimums add complexity you don't see at competitors. But ge...
by venkman
Mon Sep 10, 2018 10:05 pm
Forum: Investing - Help with Personal Investments
Topic: One bond fund is enough?
Replies: 16
Views: 1668

Re: One bond fund is enough?

My question: How important is it to have all of these bond funds vs. simply the Vanguard Total Bond Market Index Fund? I want to keep it as simple as possible, so I am keen to understand if these additional bond funds are worth getting. I have a long time horizon before retirement (about 20 years)....
by venkman
Thu Sep 06, 2018 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: Invest for income?
Replies: 20
Views: 2001

Re: Invest for income?

Also, if you're getting 7-8% dividends consistently, your sequence of return risk would seem to be lower than if you're getting 4% real and withdrawing 4% per year. Because in the second portfolio, you might be up 20% in one year or down 56% the next. Sorry if I am being dense, but I find the idea ...
by venkman
Thu Sep 06, 2018 9:44 pm
Forum: Investing - Theory, News & General
Topic: Mutual Fund Fee Wars Will Encourage Bad Behavior
Replies: 26
Views: 2602

Re: Mutual Fund Fee Wars Will Encourage Bad Behavior

"But fees on investment products can actually be good. Sometimes, such as with high commissions on stock trades, the sales loads ensure that investors are much less likely to churn their funds if they have to pay 200 to 500 basis points each time they want to get in or out." That's kind of like say...
by venkman
Wed Sep 05, 2018 12:25 am
Forum: Investing - Theory, News & General
Topic: 100% Bonds to boost returns?
Replies: 61
Views: 6352

Re: 100% Bonds to boost returns?

Not really. It's financial planning to calculate expected returns and then decide how best to attempt to get the return you need. That's why folks like Rick Ferri and Jack Bogle make return forecasts. I think the relevant question becomes: How are Rick Ferri and Jack Bogle positioning their portfol...
by venkman
Mon Sep 03, 2018 11:26 pm
Forum: Investing - Theory, News & General
Topic: Hold cash in Treasury Bills or in Money Market Fund?
Replies: 36
Views: 4509

Re: Hold cash in Treasury Bills or in Money Market Fund?

My main reason for holding the cash is as the safety portion of my portfolio, so that I would not have to sell equities for retirement income during a downturn in the market. I am thinking about holding about three years worth of cash, though even at FNSSX rates of 2% that is a bit of a drag on per...
by venkman
Mon Sep 03, 2018 11:17 pm
Forum: Investing - Theory, News & General
Topic: Does it make sense to invest in individual stocks (like Kanye West) if you stick to what you know?
Replies: 110
Views: 5499

Re: Does it make sense to invest in individual stocks (like Kanye West) if you stick to what you know?

In Kanye West’s case, he has a business partnership with Adidas. He may also have had unique insights into some of the other companies he chose. [emphasis added] As far as I can tell, the "business partnership" he has is essentially just Adidas paying him to put his name on their shoes. And his "kn...
by venkman
Sun Sep 02, 2018 8:32 pm
Forum: Investing - Help with Personal Investments
Topic: Is it time to go shorter in bonds ?
Replies: 100
Views: 7295

Re: Is it time to go shorter in bonds ?

Sorry, I guess I misunderstood where you were coming from. Yes, it is a bit curious that the prices are holding on intermediate bonds, especially after the market got spooked and sold off in 2013. The market still seems to have a strong appetite for yield, even in the face of interest rate risk. Al...
by venkman
Sat Sep 01, 2018 11:35 pm
Forum: Investing - Help with Personal Investments
Topic: Is it time to go shorter in bonds ?
Replies: 100
Views: 7295

Re: Is it time to go shorter in bonds ?

If investors in intermediate bond funds aren't being adequately compensated for the duration risk, doesn't that make you wonder WHY so many investors are staying with intermediate bonds, and not moving to short-term? No, it doesn't make me wonder why. I think that most investors don't have the slig...
by venkman
Sat Sep 01, 2018 11:10 pm
Forum: Investing - Help with Personal Investments
Topic: What are your goals when you change your bond funds?
Replies: 36
Views: 2274

Re: What are your goals when you change your bond funds?

My ultimate goal is to wait until long-term bonds start paying a decent return, then put all my bond allocation there.

My short-term goal is to figure out what "a decent return" means, so I'll know when it's time to implement my ultimate goal. :happy
by venkman
Fri Aug 31, 2018 10:35 pm
Forum: Investing - Help with Personal Investments
Topic: Is it time to go shorter in bonds ?
Replies: 100
Views: 7295

Re: Is it time to go shorter in bonds ?

With the Fed's continuing program of raising short-term rates, the spread between the 2-yr and 10-yr Treasuries has narrowed to just 0.20% compared to a historic spread of about 2.0%. This flat yield curve has analysts saying that investors in intermediate term bond funds (such as Vanguard Total Bo...
by venkman
Thu Aug 30, 2018 11:53 pm
Forum: Investing - Theory, News & General
Topic: Can margin be beneficial for long-term investing?
Replies: 61
Views: 3508

Re: Can margin be beneficial for long-term investing?

The companies that make up the US stock market are, in the aggregate, significantly leveraged. True, but that's not a compelling reason for me to add additional leverage to the mix. Agreed. My point was that stocks are already quite leveraged, and I don't think there's any need to leverage that inv...
by venkman
Thu Aug 30, 2018 10:35 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone investing in Municipal bonds ?
Replies: 46
Views: 3129

Re: Anyone investing in Municipal bonds ?

Just out of curiosity, why not VWAHX ? I would definitely consider VWLTX (Long-term tax exempt). The average maturity is around 17 years, but the fund contains a lot of premium bonds, so the duration is 6.8, which is only slightly higher than VG's intermediate taxable funds. Since muni bonds tend t...
by venkman
Thu Aug 30, 2018 10:25 pm
Forum: Investing - Theory, News & General
Topic: Can margin be beneficial for long-term investing?
Replies: 61
Views: 3508

Re: Can margin be beneficial for long-term investing?

willthrill81 wrote:
Thu Aug 30, 2018 10:19 pm
If you aren't borrowing to invest, then you aren't leveraged at all. Having all of your eggs in U.S. stocks doesn't have anything to do with leverage.
The companies that make up the US stock market are, in the aggregate, significantly leveraged.
by venkman
Thu Aug 30, 2018 10:20 pm
Forum: Investing - Theory, News & General
Topic: Wellington VS Balanced Index
Replies: 6
Views: 1531

Re: Wellington VS Balanced Index

Thanks Bloom. This would be in a Tax deferred IRA. He is currently in all stock funds in Vanguard but is beginning to think about adding some bond funds and a balanced fund may be the best for him as he is not an active investor. What about a Target Retirement Fund? He sounds like a good candidate....
by venkman
Thu Aug 30, 2018 10:11 pm
Forum: Investing - Theory, News & General
Topic: Can margin be beneficial for long-term investing?
Replies: 61
Views: 3508

Re: Can margin be beneficial for long-term investing?

If you want assets that are leveraged, going 100% long on the US stock market should be plenty...
by venkman
Wed Aug 29, 2018 9:28 pm
Forum: Investing - Help with Personal Investments
Topic: Ultra Short Term Bond ETF ?
Replies: 32
Views: 2142

Re: Ultra Short Term Bond ETF ?

You are smart to stay away from intermediate term bonds. There is far too much interest rate risk in those portfolios, given their duration in the range of 6+ years. With the current flat yield curve, many analysts are saying that intermediate term bondholders are not being adequately compensated f...
by venkman
Tue Aug 28, 2018 9:21 pm
Forum: Investing - Theory, News & General
Topic: Most commonly misused/misunderstood investing terms and concepts (on BH forum)
Replies: 220
Views: 11067

Re: Most commonly misused/misunderstood investing terms and concepts (on BH forum)

Individual bonds/CD's are "safer" than bond funds because you won't lose principal.
by venkman
Mon Aug 27, 2018 9:19 pm
Forum: Personal Finance (Not Investing)
Topic: Dealing with death and the family finances
Replies: 21
Views: 2940

Re: Dealing with death and the family finances

Mom is also talking about distributing a bunch of the $$$ to the heirs now instead of waiting until she departs, and I am telling her we need to find out about Gift Taxes being triggered.. I know its something like $13k per person per year (double per couple). Would Mom be better off paying for an ...
by venkman
Sat Aug 25, 2018 8:19 pm
Forum: Investing - Theory, News & General
Topic: Help me understand this phrase in BH Wiki
Replies: 25
Views: 2114

Re: Help me understand this phrase in BH Wiki

I forgot about the liquidity premiums in small caps. Any empirical evidence showing the small premium has diminished due to less liquidity risk over time? None that I've been able to find. It's generally a long cycle of under- and out-performance with small caps, so it's hard to pin down what's hap...
by venkman
Fri Aug 24, 2018 9:59 pm
Forum: Investing - Theory, News & General
Topic: Help me understand this phrase in BH Wiki
Replies: 25
Views: 2114

Re: Help me understand this phrase in BH Wiki

Small/value companies have a higher chance of going under completely during bad economic times. They tend to be more leveraged, and have less of a cash cushion to get them through lean periods. One of the theories behind the small/value premium is that investors tend to overestimate the risk of tho...
by venkman
Thu Aug 23, 2018 9:58 pm
Forum: Investing - Theory, News & General
Topic: Help me understand this phrase in BH Wiki
Replies: 25
Views: 2114

Re: Help me understand this phrase in BH Wiki

Small/value companies have a higher chance of going under completely during bad economic times. They tend to be more leveraged, and have less of a cash cushion to get them through lean periods. One of the theories behind the small/value premium is that investors tend to overestimate the risk of thos...
by venkman
Wed Aug 22, 2018 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: Dividend Reinvestment
Replies: 7
Views: 632

Re: Dividend Reinvestment

For taxable accounts, I prefer letting all dividends go to cash, then reinvesting it all once a year. Not only does it help with rebalancing, but it's also a lot fewer tax lots to keep track of. The lost opportunity cost from not immediately reinvesting is pretty minimal.
by venkman
Wed Aug 22, 2018 9:37 pm
Forum: Investing - Theory, News & General
Topic: math wizards - need help to calc cost of dumping high ER funds with cap gains
Replies: 6
Views: 555

Re: math wizards - need help to calc cost of dumping high ER funds with cap gains

Our long term cap gains are about 35% of the total value (example: funds are worth $25 and LTCG are $8.5) . our LTCG rate will be 20% for this year. What's the average ER of the active funds? 20% CG tax on 35% of the total value works out to 7% of the total value. If the average ER is 1%, you could...
by venkman
Mon Aug 20, 2018 11:20 pm
Forum: Personal Finance (Not Investing)
Topic: Question from an FA
Replies: 12
Views: 1351

Re: Question from an FA

So I guess my question is this--what's the best way to convince your tax clients that you're the best choice of investment advisor? What do people really expect from their advisor? "When you know enough to choose a good investment advisor, you no longer need one." Figure out what the EJ guy is doin...
by venkman
Fri Aug 17, 2018 8:55 pm
Forum: Investing - Theory, News & General
Topic: Vanguard predicts 10 year equity returns
Replies: 91
Views: 10314

Re: Vanguard predicts 10 year equity returns

Please tell me these are real returns. I suspect not. I'm pretty sure those are real return estimates. Those are predicted nominal returns. https://advisors.vanguard.com/iwe/pdf/FA863418.pdf They're predicting inflation will stay around 2%, so real US market returns of 1-3% over the next decade.
by venkman
Wed Aug 15, 2018 9:29 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Betting Against Beta
Replies: 12
Views: 1520

Re: Larry Swedroe: Betting Against Beta

It seems like the findings boil down to: Stocks with less price movement tend to outperform during periods when stock prices are high, and more likely to go down.

Makes sense to me. :happy
by venkman
Sun Aug 12, 2018 4:55 pm
Forum: Investing - Theory, News & General
Topic: Massive small cap tilt with low equity AA - anybody do this?
Replies: 33
Views: 2968

Re: Massive small cap tilt with low equity AA - anybody do this?

If I recall correctly, factor returns on REITs can be explained as if REITs were 60% small value stocks and 40% high-yield bonds.

I'm personally a fan of the SCV tilt, but it may not be good diversification if your portfolio is already heavy in real estate.
by venkman
Tue Aug 07, 2018 1:53 am
Forum: Investing - Theory, News & General
Topic: "Don't Obsess About Expense Ratios"
Replies: 240
Views: 21497

Re: "Don't Obsess About Expense Ratios"

Pre-Fidelity announcement: "Lowest expense ratio possible is essential!" Post-Fidelity announcement: "Actually, don't worry about them! Stay with Vanguard!" This explains why absolutely no one here owns Wellesley or Wellington. The .22/.25 ER's violate the essential BH rule to only invest in the fu...
by venkman
Sun Aug 05, 2018 9:41 pm
Forum: Investing - Theory, News & General
Topic: How are muni rates determined?
Replies: 25
Views: 1720

Re: how are muni rates determined?

If the buyer pays a premium for a higher-interest thousand bond (face value $1000), and the computed premium (let's assume $200 for this) is based on the market interest rate, isn't the city really paying only the market interest rate on the total ($1200) received? When the bond is called early, do...
by venkman
Sat Aug 04, 2018 10:59 pm
Forum: Investing - Theory, News & General
Topic: How does one become a financial advisor?
Replies: 34
Views: 2378

Re: How does one become a financial advisor?

maybe im not being clear. there would be no management, no AUM, no executing trades. just pay per use, review/consulting type of info. like my example: show me your 401k options, here is the best portfolio you can make in this % based on you AA, etc, etc. thank you, that will be $100. Series 65 and...
by venkman
Sat Aug 04, 2018 10:20 pm
Forum: Investing - Theory, News & General
Topic: How are muni rates determined?
Replies: 25
Views: 1720

Re: how are muni rates determined?

About 8 years ago my city approved $30M in bonds with a maximum interest rate of 8% 4 years ago we approved $100M with a maximum rate of 6% This year we are looking at $135M and the maximum rate has gone up to 12%! The first two were for infrastructure; the new bond is for affordable housing. The c...
by venkman
Fri Aug 03, 2018 9:44 pm
Forum: Investing - Theory, News & General
Topic: Is schwab TSM index fund serving 2 masters?
Replies: 29
Views: 3214

Re: Is schwab TSM index fund serving 2 masters?

The MM funds are not the problem. Where investors lose out is when the sweep fund is held as bank deposits in a bank owned by the firm, and that sweep fund yields little more than 0. Investors then have to continually be diligent to keep that sweep fund balance to a minimum by moving funds around. ...
by venkman
Thu Aug 02, 2018 10:33 pm
Forum: Investing - Theory, News & General
Topic: STIP (Short Term TIP) yield vs TIP
Replies: 15
Views: 1142

Re: STIP (Short Term TIP) yield vs TIP

If short-term TIPS are yielding essentially the same as long-term TIPS, it means:

1. The market is inefficient.
OR
2. The market is pricing some risk other than term risk into short-term TIPS.

When in doubt, it's probably best to assume markets are efficient....
by venkman
Wed Aug 01, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: how to invest money not needed for 3-5 years?
Replies: 3
Views: 856

Re: how to invest money not needed for 3-5 years?

Assuming you plan to use the money in 3-5 years, I think you should just keep it in your guaranteed 3% account, at least for now. If short-term CD's go significantly above 3% at some point, you might switch to those. But 3-5 years is much too short a time frame to be in the stock market. Any high-di...
by venkman
Mon Jul 30, 2018 9:16 pm
Forum: Investing - Help with Personal Investments
Topic: Taxable investing
Replies: 9
Views: 1495

Re: Taxable investing

I am hoping to get some direction on what my best options are for a taxable investment, I think most of my tax-deferred options are utilized, here is a summary of our situation. -We contribute 1k a month to a brokerage account, it is currently in Life Strategy income (65k balance) -Cash on hand - a...
by venkman
Sun Jul 29, 2018 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: 1 year treasuries @ 2.4% instead of bond funds?
Replies: 32
Views: 3749

Re: 1 year treasuries @ 2.4% instead of bond funds?

if stocks crash the 1 year treasury will rally too (assuming the crash is before maturity). BND gives me interest rate risk. if the yield curve steepens i could get capital losses with BND With 1-year treasuries, you have reinvestment risk. If the economy goes into recession and the stock market cr...
by venkman
Sat Jul 28, 2018 9:52 pm
Forum: Investing - Theory, News & General
Topic: Passive Index Investing, A Bubble Bound To Burst?
Replies: 114
Views: 11773

Re: Passive Index Investing, A Bubble Bound To Burst?

The data for Vanguard funds that follows raises a serious question regarding the long-term superiority of index funds over managed funds. - Target Retirement Income (VTINX) : $1,024,942 - Life Strategy Conservative Growth (VSCGX) : $1,061,585 - Wellesley Income (VWINX) : $1,271,377 The argument isn...
by venkman
Sat Jul 28, 2018 2:03 am
Forum: Investing - Help with Personal Investments
Topic: VWITX (Vanguard Intermediate Term Tax Exempt) Question
Replies: 9
Views: 1691

Re: VWITX (Vanguard Intermediate Term Tax Exempt) Question

Can anyone help me understand why there is the difference shown below, I am investing in VWITX because I want high quality TE bonds, but now I am not so sure...thanks A particular style box rating doesn't mean 100% of the bonds fall into that category. (e.g. VBILX-Vanguard's Intermediate Bond Index...
by venkman
Sat Jul 28, 2018 1:37 am
Forum: Investing - Theory, News & General
Topic: Passive Index Investing, A Bubble Bound To Burst?
Replies: 114
Views: 11773

Re: Passive Index Investing, A Bubble Bound To Burst?

Informed investors seeking a margin of safety should hunt for stocks that have been largely ignored and excluded by passive index/ETF products, especially those with high insider ownership. So, the "safe" bet is stocks that didn't pass the screens for quality, liquidity, etc.? And most of the peopl...
by venkman
Sat Jul 28, 2018 1:14 am
Forum: Investing - Theory, News & General
Topic: Asset Allocation if bond fund currently holds 3% short term?
Replies: 6
Views: 811

Re: Asset Allocation if bond fund currently holds 3% short term?

Presumably, the cash is yielding something. And given the current yield curve, the cash probably isn't trailing that far behind some of the short-term bonds in the fund. I'd just count it all as bonds.
by venkman
Thu Jul 26, 2018 9:51 pm
Forum: Personal Finance (Not Investing)
Topic: The stock that got away
Replies: 40
Views: 3036

Re: The stock that got away

Just because nothing bad happened to your house doesn't mean it was a waste of money to buy homeowner's insurance... :happy