Search found 426 matches

by TD2626
Fri Oct 20, 2017 1:38 am
Forum: Investing - Theory, News & General
Topic: Charles schwab - why so much cheaper?
Replies: 23
Views: 2520

Re: Charles schwab - why so much cheaper?

Some are skeptical that all of the players are for sure in this for the long run, keeping ERs low perpetually and keeping the funds open. In a taxable account, it might be worth thinking a couple or few decades down the line. I was with you until this last statement. People have been saying the sam...
by TD2626
Thu Oct 19, 2017 2:49 pm
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1870

Re: Currency risk?

Emerging markets have more political risk than developed markets. But is political risk compensated ? (Some risks are compensated and some are uncompensated - single stock risks and currency risks are uncompensated because it's risk with no expected reward. Stock market risk and interest rate risk ...
by TD2626
Thu Oct 19, 2017 2:00 pm
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1870

Re: Currency risk?

There is a reason why the Vanguard website lists VTSAX as a 4 and VTIAX as a 5 on a risk scale (from 1-5). Yeah, but is it currency risk? If so, how important? The VTIAX skews small cap, value, and emerging market - all of these factors carries a higher risk. Is currency the thing that shifts it fr...
by TD2626
Thu Oct 19, 2017 1:27 pm
Forum: Investing - Theory, News & General
Topic: Is a crash coming soon?
Replies: 62
Views: 4863

Re: Is a crash coming soon?

No a crash is not coming any time soon (3+ years). I'm a young investor praying every day for a market crash, and for me to keep my job. :twisted: For someone with a long term time horizon and an iron stomach, a crash drives away from the market those who are inappropriately taking excessive risk a...
by TD2626
Thu Oct 19, 2017 1:15 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

It took a while, but I finally got a chance to read over, in its entirety, Modigliani and Miller's "Dividend Policy, Growth, and the Valuation of Shares". It was long and the math was difficult, but ultimately things are spelled out very clearly. Given the assumptions specified in the paper, the am...
by TD2626
Thu Oct 19, 2017 12:42 pm
Forum: Personal Consumer Issues
Topic: How many miles/years do you keep your car?
Replies: 103
Views: 6329

Re: How many miles/years do you keep your car?

My own personal views: A car is a device that is designed to provide reliable transportation from point A to point B. It is a necessary expense if alternatives, such as carpooling or public transport, are unavailable. If one is faced with the need to acquire a car in order to have reliable transport...
by TD2626
Thu Oct 19, 2017 11:34 am
Forum: Investing - Theory, News & General
Topic: Dow more than tripled in 8 years
Replies: 6
Views: 906

Re: Dow more than tripled in 8 years

Investing in stocks involves the potential for staggering losses on the order of 90% or more in Great Depression like scenarios. This could happen at any time and there is in my opinion known reliable, reasonable way to avoid stock market crashes other than investing in bonds and cash. However, it a...
by TD2626
Thu Oct 19, 2017 10:31 am
Forum: Investing - Theory, News & General
Topic: The overselling of international diversification
Replies: 56
Views: 4684

Re: The overselling of international diversification

gotta get me some popcorn to watch the carnage develop on this thread. :beer Well, as a European, calling everything non-US "international" is kind of amusing. I'm about 25% US, 28% West-Europe, 10% Japan and 37% Emerging Markets (so more less a GDP weighting) with four ETFs. Now, let the carnage c...
by TD2626
Thu Oct 19, 2017 10:28 am
Forum: Investing - Theory, News & General
Topic: The overselling of international diversification
Replies: 56
Views: 4684

Re: The overselling of international diversification

I respect the "Armageddon" argument for buying foreign stocks, but it's overdone, IMO. For example, I don't understand is why anyone who is willing to something as significant as investing their hard-earned money in foreign stocks as a hedge apparently doesn't consider other hedges that would make ...
by TD2626
Thu Oct 19, 2017 10:17 am
Forum: Investing - Theory, News & General
Topic: "Using Jack Bogle's own words against him when it comes to international investing"
Replies: 28
Views: 3209

Re: "Using Jack Bogle's own words against him when it comes to international investing"

I sortof feel sorry for people for whom every single word they say is latched onto by article after article. Everyone's probably said some contradictory things at some points in their lives - but for people for whom every word is recorded by the headlines, there can be consequences to those contradi...
by TD2626
Thu Oct 19, 2017 10:07 am
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

Some funds distribute capital gains and you have to pay taxes on those too. Selecting funds that trade infrequently or using Vanguard funds that funnel gains to in-kind etf redemptions can limit distributions. However, broad index funds (such as those at Fidelity) can distribute capital gains. I ag...
by TD2626
Thu Oct 19, 2017 9:29 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1870

Re: Currency risk?

In the long run, I see the currency risk as small enough for me to consider it a wash. My stock allocation is 60/40 US/International, and it doesn't bother me one bit. Just my two cents. Those close to or in retirement are much more sensitive to short-term currency movements than those with long in...
by TD2626
Thu Oct 19, 2017 9:25 am
Forum: Investing - Theory, News & General
Topic: Regular Taxable Accounts vs Tax-Advantaged
Replies: 19
Views: 1675

Re: Regular Taxable Accounts vs Tax-Advantaged

Thank you for the in depth response - some reactions in blue. The gist of my question: Is it OK for certain investors in unusual cases to invest via traditional, regular, “taxable” accounts and never invest in tax-advantaged accounts (like 401Ks, IRAs, or Roth accounts)? Explanation: I have been try...
by TD2626
Thu Oct 19, 2017 9:11 am
Forum: Investing - Theory, News & General
Topic: Regular Taxable Accounts vs Tax-Advantaged
Replies: 19
Views: 1675

Re: Regular Taxable Accounts vs Tax-Advantaged

With my tax deferred accounts, I am able to convert qualified dividends, which would be taxed at 15% in a taxable account, into Ordinary Income, which is federally taxed at 25-28% in my case... This is probably one of the biggest things I would be worried about with tax-deferred accounts. That, and...
by TD2626
Thu Oct 19, 2017 9:09 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1870

Re: Currency risk?

In the long run, I see the currency risk as small enough for me to consider it a wash. My stock allocation is 60/40 US/International, and it doesn't bother me one bit. Just my two cents. Those close to or in retirement are much more sensitive to short-term currency movements than those with long in...
by TD2626
Wed Oct 18, 2017 9:43 am
Forum: Investing - Theory, News & General
Topic: The overselling of international diversification
Replies: 56
Views: 4684

Re: The overselling of international diversification

I've read and followed with great interest the overriding question of how much to invest (from a USA prospective) in international. 0 to 10 percent sayeth Bogle and Buffett. "No, no, the US has peaked so 50 percent is the safest bet" says the maximum diversity folks. In an annual conversation with ...
by TD2626
Tue Oct 17, 2017 2:25 pm
Forum: Investing - Theory, News & General
Topic: When everything goes up, what goes down & vice versa
Replies: 28
Views: 3062

Re: When everything goes up, what goes down & vice versa

Someone buys 1 shares with $2. Market capitalization of the company is now $2 x 100 = $200. However deposits have not changed (just changed hands). Money supply has not changed. As I inerpet dantes post, the question is, where did that $2 come from? Someting must be worth $2 less. ... It came from ...
by TD2626
Tue Oct 17, 2017 7:55 am
Forum: Investing - Theory, News & General
Topic: Regular Taxable Accounts vs Tax-Advantaged
Replies: 19
Views: 1675

Re: Regular Taxable Accounts vs Tax-Advantaged

Ultimately most of my accounts are in tax advantaged and i think it saves me a LOT of effort. I don’t have to worry about dividends and capital gains basis calcs and taxes, and don’t have to worry about the tax impact of making a portfolio change. IMO they are much easier than a taxable account. In...
by TD2626
Tue Oct 17, 2017 7:52 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1870

Re: Currency risk?

...It's probably not a big error for a US investor to have zero weight in global equities... Now, that is the key point, I think. John C. Bogle has written that "Successful investing involves doing just a few things right and avoiding serious mistakes." Nobody has ever been able to convince me that...
by TD2626
Tue Oct 17, 2017 7:13 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1870

Re: Currency risk?

Historical there has been a 1% volatility in inflation adjusted FX rates in developed markets. For equities that does not constitute one of the major risk factors. Where did you find that 1% volatility in currency? I found previously in this thread (https://www.bogleheads.org/forum/viewtopic.php?f=...
by TD2626
Mon Oct 16, 2017 10:00 pm
Forum: Investing - Theory, News & General
Topic: Swedroe: ‘Sure Things’ Check-In
Replies: 5
Views: 1426

Re: Swedroe: ‘Sure Things’ Check-In

I love his "sure things" articles. It is so difficult not to be sucked in when "everybody" is sure about something. It's really important to remember just how often these broad consensus, strong conviction predictions turn out to be completely wrong. I agree - these articles are helpful to show peo...
by TD2626
Mon Oct 16, 2017 6:29 pm
Forum: Investing - Theory, News & General
Topic: Regular Taxable Accounts vs Tax-Advantaged
Replies: 19
Views: 1675

Regular Taxable Accounts vs Tax-Advantaged

The gist of my question: Is it OK for certain investors in unusual cases to invest via traditional, regular, “taxable” accounts and never invest in tax-advantaged accounts (like 401Ks, IRAs, or Roth accounts)? Explanation: I have been trying to better learn investing theory in order to better manage...
by TD2626
Sun Oct 15, 2017 5:00 pm
Forum: Investing - Theory, News & General
Topic: International [Are multinational US companies the same as international?]
Replies: 12
Views: 607

Re: International [Are multinational US companies the same as international?]

Things are complicated and we live in an interconnected global world. An American investor in Total International can buy a car from a Japanese car company, which makes the car using parts and materials from a dozen different countries, including the US, makes a profit, and pays a dividend to shareh...
by TD2626
Sun Oct 15, 2017 10:50 am
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

I have a preference for dividends but I don't chase them and I don't buy investments just for their yield. The market does a pretty good job setting prices, I know people who have chased yield too hard only to see the value of their securities decline over time. What the extra yield giveth, decline...
by TD2626
Fri Oct 13, 2017 11:09 am
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

Some opinions and questions: I recognize that dividend payments are simply part of total return, and that it to first order it shouldn't matter mathematically whether the total return is from dividends or buybacks/capital gains. I further recognize that an investor should not chase yield and should...
by TD2626
Fri Oct 13, 2017 10:10 am
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

Some opinions and questions: I recognize that dividend payments are simply part of total return, and that it to first order it shouldn't matter mathematically whether the total return is from dividends or buybacks/capital gains. I further recognize that an investor should not chase yield and should ...
by TD2626
Fri Oct 13, 2017 9:19 am
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

I have a preference for dividends but I don't chase them and I don't buy investments just for their yield. The market does a pretty good job setting prices, I know people who have chased yield too hard only to see the value of their securities decline over time. What the extra yield giveth, decline...
by TD2626
Wed Oct 11, 2017 12:33 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Non-US Valuations Look Attractive
Replies: 73
Views: 6852

Re: Larry Swedroe: Non-US Valuations Look Attractive

For those looking to improve portfolio efficiency, I would consider this time, with these relative valuations, a good opportunity to increase one’s international allocation towards it’s market cap weighting of 50%. Dave In my opinion, an investor who wants market cap weighting in stocks could consi...
by TD2626
Mon Oct 09, 2017 12:32 am
Forum: Investing - Theory, News & General
Topic: Our most important decision in one minute
Replies: 4
Views: 1395

Re: Our most important decision in one minute

Good point - Asset allocation is generally much more important than specific technical questions. I think I spend too much time thinking about minor technicalities (like "Could the value factor exposure in a dividend fund partially compensate for that fund's higher tax drag in a taxable account?) wh...
by TD2626
Sun Oct 08, 2017 9:52 pm
Forum: Personal Finance (Not Investing)
Topic: Question About Long Term Care
Replies: 75
Views: 5750

Re: Question About Long Term Care

I think family history of longevity should be a factor when deciding in this type of insurance. There is always academic research that can be consulted instead of speculating on this topic. For example: "Blame the parents? The association between parental longevity and successful ageing" by Gjonça&...
by TD2626
Sun Oct 08, 2017 12:27 am
Forum: Investing - Theory, News & General
Topic: measurement of success of investment(s)
Replies: 52
Views: 4165

Re: measurement of success of investment(s)

What do you mean? The market portfolio is the 500 best stocks in the country based on large cap performance. A particular fund has an index which is unique to that fund. Like a dividend fund based on a dividend index perhaps, it's benchmark. That's all. That is absolutely not the market portfolio f...
by TD2626
Sat Oct 07, 2017 11:51 pm
Forum: Investing - Help with Personal Investments
Topic: mimicking duration of total bond using municipal bond funds
Replies: 5
Views: 667

Re: mimicking duration of total bond using municipal bond funds

I read over this thread. Interesting math and ideas. If you wished, you could also use 0% short - 58% intermediate and 42% long. It probably won't matter much which of the solutions you use, but I prefer to keep things simple. The short-term bonds are for stability, though, and even if overall risk ...
by TD2626
Sat Oct 07, 2017 11:16 pm
Forum: Investing - Theory, News & General
Topic: Relative Importance of Savings Rate, Asset Allocation, and Investment Selection
Replies: 21
Views: 1700

Re: Relative Importance of Savings Rate, Asset Allocation, and Investment Selection

I have been wondering the answer to this question: What percentage of the average Boglehead investor's success is due to having a high savings rate and living below one's means? What percentage of the average Boglehead investor's success is attributable to stock/bond/cash asset allocation? What per...
by TD2626
Sat Oct 07, 2017 11:00 pm
Forum: Investing - Theory, News & General
Topic: Exposure Distributions in Equivalent-Risk Portfolios
Replies: 6
Views: 506

Re: Exposure Distributions in Equivalent-Risk Portfolios

Here are my opinions on this subject: Portfolio A: Plain Vanilla Portfolio Uses Total World Stock and Total Bond. A relatively standard 60/40 portfolio, say. ---This portfolio has simplicity and little complexity. It has substantial theoretical merit. However, from an intellectual perspective I wond...
by TD2626
Sat Oct 07, 2017 10:41 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

Some funds distribute capital gains and you have to pay taxes on those too. Selecting funds that trade infrequently or using Vanguard funds that funnel gains to in-kind etf redemptions can limit distributions. However, broad index funds (such as those at Fidelity) can distribute capital gains. I ag...
by TD2626
Sat Oct 07, 2017 10:08 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

KlangFool, I can give you (some) of my reasons for liking dividends. 1). Since both of are parents are gone (I' am on my own & can't borrow money from them in a emergency). In a emergency I can use my credit card & pay if off with the next dividend payment. (Financial Security). 2). Compounding, th...
by TD2626
Sat Oct 07, 2017 9:45 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

Some funds distribute capital gains and you have to pay taxes on those too. Selecting funds that trade infrequently or using Vanguard funds that funnel gains to in-kind etf redemptions can limit distributions. However, broad index funds (such as those at Fidelity) can distribute capital gains. I ag...
by TD2626
Sat Oct 07, 2017 9:16 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

Some funds distribute capital gains and you have to pay taxes on those too. Selecting funds that trade infrequently or using Vanguard funds that funnel gains to in-kind etf redemptions can limit distributions. However, broad index funds (such as those at Fidelity) can distribute capital gains. I agr...
by TD2626
Sat Oct 07, 2017 1:33 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

<<(Of course, "divided stock fund" is a imperfect proxy for "value stock fund")>> Why go for the proxy when you get the real thing? Because the dividend fund can do double duty and the value index fund can't. Basically, the dividend fund is a "double imperfect proxy" - it's an imperfect proxy for a...
by TD2626
Sat Oct 07, 2017 1:25 pm
Forum: Investing - Theory, News & General
Topic: Relative Importance of Savings Rate, Asset Allocation, and Investment Selection
Replies: 21
Views: 1700

Re: Relative Importance of Savings Rate, Asset Allocation, and Investment Selection

And here are two numbers: 4.86% and 4.44%. They are the past 10-year average annual growth rate of two funds. The 0.42% difference is pretty small and might be attributed to difference in expense ratio or taxes or something else. One is Vanguard LifeStrategy Moderate Growth and one is LifeStrategy ...
by TD2626
Sat Oct 07, 2017 12:42 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

As for the tax implications, we are in the 15% bracket and pay taxes on the dividends anyway so ... why not spend them? If you invest in Total Stock Market, whose dividends are mostly qualified, isn't the tax rate essentially zero in the 15% bracket? Correct. I believe VTSAX was 93% qualified last ...
by TD2626
Sat Oct 07, 2017 12:32 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

I don't really think this kind of testing is needed, or even helpful. You can calculate with mathematical precision what your losses would have been with a dividend tilt. There is no need for a backtest. What's more, if your goal is a value tilt there are more tax efficient ways to achieve that. It...
by TD2626
Fri Oct 06, 2017 11:52 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

I don't really think this kind of testing is needed, or even helpful. You can calculate with mathematical precision what your losses would have been with a dividend tilt. There is no need for a backtest. What's more, if your goal is a value tilt there are more tax efficient ways to achieve that. It...
by TD2626
Fri Oct 06, 2017 11:11 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Evidence Of Shrinking Alpha
Replies: 5
Views: 1032

Re: Larry Swedroe: Evidence Of Shrinking Alpha

I think that markets are fairly efficient over short time scales and very efficient over long time scales. Of course there are inefficiencies, as it still takes computers nanoseconds for computers to process information. However, new information is incorporated very quickly into the market. The ques...
by TD2626
Fri Oct 06, 2017 10:38 pm
Forum: Investing - Theory, News & General
Topic: Relative Importance of Savings Rate, Asset Allocation, and Investment Selection
Replies: 21
Views: 1700

Relative Importance of Savings Rate, Asset Allocation, and Investment Selection

I have been wondering the answer to this question: What percentage of the average Boglehead investor's success is due to having a high savings rate and living below one's means? What percentage of the average Boglehead investor's success is attributable to stock/bond/cash asset allocation? What perc...
by TD2626
Fri Oct 06, 2017 9:43 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

I really don't want to get into this argument again. However, I would like to point out some items to (Physician On Fire) for future reference. 1). Not everyone lives in California. 2). Not everyone is in the 25% tax bracket. 3). Not every State imposes high taxes on dividends. 4). Everyone is not ...
by TD2626
Fri Oct 06, 2017 8:04 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

Principal is one type of capital, but there are many others. Principal is money somebody owes to somebody else. You might owe it, or somebody might owe it to you. Unlike other types of capital, you have some reasonable expectation (but defaults and bankruptcies sometimes occur) that whoever it is w...
by TD2626
Fri Oct 06, 2017 7:34 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 14635

Re: Dividends vs. Capital Gains for Spending Needs?

I spend from my dividend pocket and my capital gains pocket. I didn't feel the tax drag of dividends until I sold most of my BRK to become more diversified. Spending only dividends is a way some people discipline their spending. The dividend puzzle has been discussed for a long time. It is good for...
by TD2626
Fri Oct 06, 2017 7:15 pm
Forum: Investing - Theory, News & General
Topic: Time Value of Money (Young Investors)
Replies: 29
Views: 1894

Re: Time Value of Money (Young Investors)

I think it's important for young people to realize the time value of money and important of saving early. This should be drilled into their head in high school. 5k invested @ 18 years old = 120k @ 65 years old (assuming 7% growth) 5k invested @ 30 years old = 50k @ 65 years old 5k invested every ye...
by TD2626
Fri Oct 06, 2017 6:56 pm
Forum: Investing - Theory, News & General
Topic: Exposure Distributions in Equivalent-Risk Portfolios
Replies: 6
Views: 506

Re: Exposure Distributions in Equivalent-Risk Portfolios

Which of the following portfolios would be best? Assume that the exact size of the tilts (generally 5-10% tilts) are adjusted so that each portfolio can be reasonably thought to have roughly the same expected risk and return of the standard 60/40 portfolio. I don't think "best" is knowable when per...