Search found 634 matches

by TD2626
Thu Sep 06, 2018 8:13 pm
Forum: Investing - Theory, News & General
Topic: Mutual Fund Fee Wars Will Encourage Bad Behavior
Replies: 26
Views: 3354

Re: Mutual Fund Fee Wars Will Encourage Bad Behavior

Low fees are good, and churning is bad. The rational thing to do is to buy and hold in a low-fee, broadly diversified fund.

Maybe if Vanguard imposed a small fee - not a 200 to 500 basis point fee, but a 50 - 150 basis point fee - for buying and/or selling, it would discourage short term trading. I believe it does this on some funds already. It could reduce the ongoing expense ratios for long-term investors by the amount raised by the fees since it operates at cost. This could allow it to have lower expense ratios and compete more closely with Fidelity.
by TD2626
Mon Sep 03, 2018 4:14 pm
Forum: Personal Investments
Topic: What's wrong with putting most of my money into two stocks: Alphabet and Amazon?
Replies: 79
Views: 6628

Re: What's wrong with putting most of my money into two stocks: Alphabet and Amazon?

steve321, do you have any more specific questions on this topic? It looks like things are getting repetitive, and all sides of the issue have been discussed. prudent, I have a question on the risks you mentioned in you previous post; basically if it's so risky why are people who have gotten very rich, like Bezos, and don't need to get richer but should be more interested in capital preservation - why are they concentrated in a single stock instead of indexing? What's the specific risk? Could Amazon go to zero?! Yes - any specific single company could go to zero - it happens all the time. Being well diversified by owning dozens, hundreds, or even thousands of stocks (e.g. through mutual funds) mitigates this risk. Concentrating in a small n...
by TD2626
Mon Sep 03, 2018 2:01 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: 7913

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

It's worth noting that author (Adam Grossman) of the article the OP cited says in his last paragraph "I still believe that the best path for investors is to stick to low-cost index funds and to steer clear of stock-picking." This isn't something that should be a main focus for long term investors. Having a small percent (say, 5) of the portfolio in individual stocks is likely not going to hurt too badly - but a small allocation like that wouldn't help much either. It's probably just a waste of time that could be better spent focusing on one's real job and trying to earn more money at that. Working longer hours and earning more in wages is a far more likely way to have more savings than spending one's evenings pouring over annual r...
by TD2626
Mon Sep 03, 2018 12:46 pm
Forum: Personal Finance (Not Investing)
Topic: Emergency fund size
Replies: 72
Views: 13204

Re: Emergency fund size

Also - you can look at potential future known possible large expenses. These are things that would suddenly require large amounts of money but that are at least somewhat predictable. For example, if your car is 15 years old and you know if it has a significant mechanical problem costing for more than the value of the car to fix, you'd buy a new car, you have a $25,000 expense coming up in the next "several" years that may suddenly spring up on you. Or, for example, if you have an appliance that has been "having problems" and you think it might go out at some point (but you just don't know when). Or you can look at the potential for large medical expenses based on what your health coverage deductible is. Basically, you ca...
by TD2626
Mon Sep 03, 2018 12:14 pm
Forum: Personal Finance (Not Investing)
Topic: Emergency fund size
Replies: 72
Views: 13204

Re: Emergency fund size

I handle it somewhat differently. My preferred asset allocation is 5% in cash, 60% in bonds, and 35% in stocks. My cash allocation is my emergency fund. It’s invested in a money market fund, and it’s enough for me to live on for several years. It isn’t paying very much, but I like knowing that it’s there if I need it. I tend to like a specific percentage in cash, like 5%. (Note - by cash, I mean mostly high-yield savings accounts or money markets that earn interest - not a 0% yield checking account or actual currency - which lose to inflation). However, if someone is just starting investing, they can't have 5% cash if their portfolio is only a few thousand dollars. I think that's why an emergency fund is recommended for new investors. A go...
by TD2626
Mon Sep 03, 2018 12:04 pm
Forum: Investing - Theory, News & General
Topic: "Ten Things You Should Know About Index Fund Investing"
Replies: 9
Views: 2663

Re: "Ten Things You Should Know About Index Fund Investing"

A very interesting article and a very clear, well written review of the main points of indexing. Thanks for sharing the link. It boils down a lot of information into bite sized chunks and would be helpful to share with anyone who is unfamiliar with indexing.

It is especially good that this article lists potential mistakes indexers might make (such as buying an overpriced index funds or market timing using ETFs).
by TD2626
Mon Sep 03, 2018 11:52 am
Forum: Personal Finance (Not Investing)
Topic: [How do I include inflation in my pay raise?]
Replies: 29
Views: 2182

Re: [How do I include inflation in my pay raise?]

Since the tax brackets are indexed to inflation, the amount in the highest bracket will not change if you get a raise equal to CPI. The lower bound for that bracket will go up as the tax brackets themselves are changed, and the higher bound will go up with the raise.
by TD2626
Sun Sep 02, 2018 6:41 pm
Forum: Investing - Theory, News & General
Topic: The Power of Passive Investors
Replies: 3
Views: 14421

Re: The Power of Passive Investors

Voting by individuals via mutual funds would be pure entertainment. We on this board can't agree on the proper temperature for ale. I'd just love to see a mutual fund allowing individuals vote on a contentious corporate issue! And, with Total Stock and Total International, I'd get to vote 10,000 times a year. I think it'd be easier to change mutual fund families, if they started voting in a way you didn't approve of. Although the benefits of diversification mean investment in mutual funds is far superior to individual stocks to individual investors, one downside of not investing in individual stocks is that one doesn't have the opportunity to influence corporate governance through voting over contentious corporate matters. Such a change wo...
by TD2626
Sun Sep 02, 2018 4:53 pm
Forum: Investing - Theory, News & General
Topic: What constitutes a haystack? (for stocks)
Replies: 32
Views: 3264

Re: What constitutes a haystack? (for stocks)

nedsaid wrote: Sun Sep 02, 2018 4:44 pm My gosh. We have gone from stock picking to index picking to haystack picking. When will this ever end?
Indexers tend to follow the advice of Bogle: “Don't look for the needle in the haystack. Just buy the haystack!”.

However, some indexers try to pick haystacks that have the most needles, or try to avoid haystacks that have no needles.
by TD2626
Sun Sep 02, 2018 4:47 pm
Forum: Investing - Theory, News & General
Topic: Investing in the food industry
Replies: 13
Views: 1409

Re: Investing in the food industry

arcticpineapplecorp. wrote: Sun Sep 02, 2018 4:40 pm All of them
Good answer. Individual investors tend to not have the time to put full-time research into stocks and carefully pour over annual reports of companies - so they'd presumably lag behind the returns of professional investment managers. However, there is even debate over whether professional investment managers can beat the market on this forum (after fees).

“Don't look for the needle in the haystack. Just buy the haystack!” - John C. Bogle
by TD2626
Sun Sep 02, 2018 4:41 pm
Forum: Investing - Theory, News & General
Topic: What constitutes a haystack? (for stocks)
Replies: 32
Views: 3264

Re: What constitutes a haystack? (for stocks)

I believe the "haystack" for stocks is the global equities market, something like Vanguard Total World. In my opinion, this should be the starting point for an equity portfolio design. I think there is only one haystack, one earth. However, that doesn't mean a small and intentional tilt towards US stocks isn't acceptable and even possibly advisable. Frictions and things like currency risk exist, and these may be reasonable reasons to have 30 - 40% international instead of cap weight in international. (Also --- the US is probably one of the few countries where many prominent investors support having all one's equities in. If you were from ((pick a random country, like Sweden, Peru, or New Zealand)) would you have 100% of equities i...
by TD2626
Sun Sep 02, 2018 4:13 pm
Forum: Investing - Theory, News & General
Topic: The Power of Passive Investors
Replies: 3
Views: 14421

Re: The Power of Passive Investors

It would be nice if individual investors in mutual funds could vote the shares that they indirectly own through mutual funds. Obviously, this would require a different structure of mutual fund, and a lot of work on the part of investors. Indeed, no individual investor would be able to vote every shareholder vote for every underlying stock when there are thousands of stocks in a total market fund. However, maybe there could be a system where investors could vote the specific, contentious elections that they wished to vote on, and leave it to Vanguard/Blackrock to decide how to vote other items. Or, shareholders could give standing orders to "always vote with management's recommendation" or "always vote for sustainability"...
by TD2626
Sat Sep 01, 2018 6:10 pm
Forum: Investing - Theory, News & General
Topic: Stocks beginning with the letter 'A' continue to soar!
Replies: 10
Views: 1180

Re: Stocks beginning with the letter 'A' continue to soar!

watchnerd wrote: Sat Sep 01, 2018 5:38 pm
TD2626 wrote: Sat Sep 01, 2018 5:34 pm There are tons of arbitrary distinctions, such as what letter the company name starts with or what state the company is headquarted in (is the HQ in Atlanta or Albany?) that shouldn't change one's investment strategy in my opinion.
What about zodiac sign of the CEO?

Look for Aries?
Completely meaningless.

Of course, what city the company is headquarted in is to me is pretty arbitrary when most large companies are multinationals and when there's a fairly integrated global economy. However, while everyone agrees that whether the company is headquartered in Atlanta or Albany doesn't really matter, people have very different views on whether the company is headquartered in Atlanta vs Amsterdam.
by TD2626
Sat Sep 01, 2018 5:34 pm
Forum: Investing - Theory, News & General
Topic: Stocks beginning with the letter 'A' continue to soar!
Replies: 10
Views: 1180

Re: Stocks beginning with the letter 'A' continue to soar!

There are tons of arbitrary distinctions, such as what letter the company name starts with or what state the company is headquarted in (is the HQ in Atlanta or Albany?) that shouldn't change one's investment strategy in my opinion.
by TD2626
Sat Sep 01, 2018 5:25 pm
Forum: Personal Consumer Issues
Topic: Daily Driver (Car) Over 100K Miles?
Replies: 96
Views: 9465

Re: Daily Driver (Car) Over 100K Miles?

The decision to sell is comes when the cost of repair approaches the value of the vehicle. I understand the sentiment, but I'm not sure I'd agree. Knowing the complete history and condition of one's existing vehicle makes it worth considerably more than a random, unknown, similar vehicle, IMO. What do you mean by "considerably more" -- if the value of the car was $2000 and one was facing a $3000 repair would you pay? Maybe there could be a formula such that one doesn't pay for a repair that would cost more than, say, 125% the value of the car. This assumes there is a "base" value for a car that is is fairly old (10-20 years) and high mileage (a few hundred thousand) but mechanically sound. This would be the value of tra...
by TD2626
Sat Sep 01, 2018 5:09 pm
Forum: Investing - Theory, News & General
Topic: Are CDs considered an investment?
Replies: 75
Views: 5317

Re: Are CDs considered an investment?

Just like at the track or casino? I should have expressly included the common denominator that separates both savings and investments from things like wagers: ownership of an asset. OK, so at the other end of the spectrum is there a common denominator that separates investments from speculation in oyster bed individual stocks? Prudence? Good answer. When trying to define "investment" one has to also has to define "savings", "speculation", and "gambling". (Note that speculation and gambling are not prudent and ill-advised) I would consider "speculation" to be characterized by diversifiable risk, short-term trading, and strategies with risk substantially above even a (very risky) 100% stock p...
by TD2626
Sat Sep 01, 2018 4:33 pm
Forum: Investing - Theory, News & General
Topic: The US debt is even larger than stated
Replies: 25
Views: 2471

Re: The US debt is even larger than stated

Do nothing. To begin with, how does the value of the US national debt figure, as a number, into your spreadsheets, your calculations, your asset allocation? It doesn't. So if it's "larger than stated," it doesn't change any numbers. One place, in theory, that one would put this figure directly into spreadsheets would be if one had something similar to a world stock/bond portfolio where the gov't bond portion had US treasuries weighted at ((total US gov't debt)/(total debt of all governments in the world)). Of course, few people have such a portfolio. One thing that I think people get wrong is that there is nothing you can do that is cheap, reliable, or effective to protect yourself against a societal collapse in your own country....
by TD2626
Sat Sep 01, 2018 4:12 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing Frequency? Daily vs annually?
Replies: 34
Views: 4818

Re: Rebalancing Frequency? Daily vs annually?

Maybe doing a combination of some of the re-balancing approaches discussed here: https://www.bogleheads.org/wiki/Rebalancing could work. For example, doing it at a minimum annually; and also using regular contributions/withdrawals to move closer to the desired allocation, and also rebalancing if the allocation is more than X% off the desired could work. (X would presumably be around 5% or something like that).

The benefit of rebalancing daily is probably not very large, if there even is one. This, however, assumes a perfectly rational investor that displays no behavioral problems. If a system is rebalancing daily with no direct investor involvement, this may make it psychologically easier to rebalance during a crash.
by TD2626
Sat Sep 01, 2018 3:57 pm
Forum: Personal Consumer Issues
Topic: The twenty dollar rule
Replies: 44
Views: 4733

Re: The twenty dollar rule

Also - think about purchases that are less than $20 but that are wastefully expensive if you're on a tight budget. For example, a $19.99 entree at a fine restaurant, when one could buy dinner off the dollar menu for $0.99 --- this is a $19 dollar savings. Further, if one gets a expensive coffee for $6 twice a day when a $1 coffee twice a day could do, that's another $10 a day wasted. Total excess spending = $29/day. Assuming this occurs about 300 days per year, there's $8700 down the drain. Small expenses do add up.

Not suggesting that anyone have teleconference with their family every time they spend a dime. Some people may live like that, but it may be better to either make a general budget or focus in on frugality in general.
by TD2626
Sat Sep 01, 2018 3:45 pm
Forum: Personal Consumer Issues
Topic: The twenty dollar rule
Replies: 44
Views: 4733

Re: The twenty dollar rule

What the OP meant to say was that both he and his spouse report to each other before spending $20 on anything. The rules are the same for both of them. I think that's kind of ridiculous but whatever works for them and is fair to both is fine. The OP didn't exactly say this. If the OP meant to say that he and his spouse each consult before spending >$20, then that is at least fair. My wife and I have always worked like this, but (a) the threshold was higher than $20, (b) the rule only applied to discretionary spending, and (c) we never codified a value for the threshold - we just “knew” when something needed to be discussed beforehand. Oh, and gifts for each other were excluded from the rule since that would defeat the surprise. Having a no...
by TD2626
Sat Aug 18, 2018 8:54 pm
Forum: Investing - Theory, News & General
Topic: Do You Believe Diversification Is The Right Strategy Only If The Investment Horizon Is Long?
Replies: 28
Views: 2920

Re: Do You Believe Diversification Is The Right Strategy Only If The Investment Horizon Is Long?

If your horizon is short (several years) maybe "saving" is a more appropriate term than "investing". Since a horizon that short calls for low-risk investments (like US Treasury Bills or FDIC savings accounts) you probably don't need do diversify as much. Basically, because riskier investments (stocks instead of bonds) are the right strategy (in general) if the horizon is long (decades), and since diversification is likely more important for risky investments (stocks can go bankrupt or decline by 90% while short term treasuries are widely regarded as very safe) diversification is more more important if the horizon is long. Of course, diversification is always important. For example --- An investor with a few decade horizo...
by TD2626
Sat Aug 18, 2018 7:33 pm
Forum: Investing - Theory, News & General
Topic: Workers on Corporate Boards - Principal-Agent Problem
Replies: 17
Views: 1756

Re: Workers on Corporate Boards - Principal-Agent Problem

Many here keep referring to the mutual ownership structure of Vanguard as being one of the main reasons to pick Vanguard, since they do not suffer from the principal-agent problem that non-mutual organizations (virtually all other major money managers) do suffer from. They do not have to "serve two masters". And I agree. Structurally, Vanguard has no incentive to do anything but do what is best for their investors. Others will have to serve two masters, in one form or the other. Sorry but the whole mutual company is better than others because they don't serve two masters is a bunch of hogwash. The funny thing is that people who sell Permanent Life insurance say the same thing. Sometimes, mutual company or not-for-profit structure...
by TD2626
Sat Aug 18, 2018 7:05 pm
Forum: Investing - Theory, News & General
Topic: Do You Believe Diversification Is The Right Strategy Only If The Investment Horizon Is Long?
Replies: 28
Views: 2920

Re: Do You Believe Diversification Is The Right Strategy Only If The Investment Horizon Is Long?

At first glance it would seem like diversification is more important the longer the time horizon. Conventionally, if one's time horizon is short (a few years), one can have a FDIC-insured cash account or a short-term, high credit quality bond fund. If the time horizon is medium (several years to 10 years) one would mostly have bonds, which would benefit from diversification -- but likely not as much as stocks (provided one is in something like a high quality bond fund). Things like tilting towards small cap stocks, for example, would seem to require the very longest of time horizons (40+ years) to allow for multiple periods of underperformance and overperformance vs a non-tilted portfolio. That seems like a reason many would consider avoidi...
by TD2626
Sat Aug 18, 2018 6:48 pm
Forum: Investing - Theory, News & General
Topic: Workers on Corporate Boards - Principal-Agent Problem
Replies: 17
Views: 1756

Re: Workers on Corporate Boards - Principal-Agent Problem

But that is not the deal I am looking for when I enter into deals with corporations, entrusting them with my capital. This somehow feels like betrayal. How is it betrayal, exactly? You can choose not to invest your capital in those companies, no? I agree that it's not "betrayal" exactly -- one knows (or should know) how companies are managed and operating before investing. If companies state their focus is partly on shareholder returns and partly on other things (e.g. society/the environment/workers/etc), then presumably investors focused solely on shareholder returns will not be willing to pay as much for shares in that company, driving the stock price down, possibly until near the point where the company's structure is "pr...
by TD2626
Sat Aug 18, 2018 6:38 pm
Forum: Investing - Theory, News & General
Topic: Workers on Corporate Boards - Principal-Agent Problem
Replies: 17
Views: 1756

Re: Workers on Corporate Boards - Principal-Agent Problem

Many here keep referring to the mutual ownership structure of Vanguard as being one of the main reasons to pick Vanguard, since they do not suffer from the principal-agent problem that non-mutual organizations (virtually all other major money managers) do suffer from. They do not have to "serve two masters". And I agree. Structurally, Vanguard has no incentive to do anything but do what is best for their investors. Others will have to serve two masters, in one form or the other. Sorry but the whole mutual company is better than others because they don't serve two masters is a bunch of hogwash. The funny thing is that people who sell Permanent Life insurance say the same thing. Sometimes, mutual company or not-for-profit structure...
by TD2626
Sat Aug 18, 2018 6:25 pm
Forum: Investing - Theory, News & General
Topic: S&P500 Global percentages
Replies: 1
Views: 533

Re: S&P500 Global percentages

Foreign companies also have a large percentage of sales to the US. (Lots of people buy gas from Shell or BP or cars from Toyota, Samsung is a major electronics company, etc). This basically means that US company's returns are dependent on the economies of other nations (so that, for example, someone in Europe can buy an Apple device) while foreign company returns are dependent on the economy of the US (if the US economy is strong, consumers purchase more electronics from Sony). This raises correlations between US and foreign returns, potentially reducing the benefit of diversification. However, it simultaneously could make the case stronger for diversification, as if companies are fully globalized and there are fewer frictions across border...
by TD2626
Sat Aug 18, 2018 6:00 pm
Forum: Investing - Theory, News & General
Topic: Diversification
Replies: 13
Views: 1153

Re: Diversification

JoMoney wrote: Sat Aug 18, 2018 4:18 pm Most of the benefit of "Diversification" comes from the returns on the assets being uncorrelated. If they tend to go in the same direction, you're not getting that.
This is ultimately a matter of correlation and correlation coefficients. US and International stocks have a positive, and relatively high, correlation. However, it isn't 1.00 --- so there would be some benefit to diversifying in theory.
by TD2626
Sun Jul 15, 2018 5:28 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 8896

Re: Larry Swedroe: Look Past Expense Ratios

For example, say that I happen to like a high probability of a small downside and a low probability of a big upside--positive skew, "lottery ticket." Then, if what I think I've read is correct, I ought to like small growth stocks. On the other hand, if I want a high probability of a slow and steady upside coupled with a low probability of a severe downside, I ought to like small value stocks. That would be personal preference. However, I think I hear factor advocates suggesting that everybody ought to prefer small value, perhaps because widespread taste for small growth has driven its price up. That would make sense if I do not care about the skewness of returns, but if I like a positive skew, then I might still prefer small grow...
by TD2626
Mon May 07, 2018 5:23 pm
Forum: Investing - Theory, News & General
Topic: How do brokerages make $s on cheap index funds?
Replies: 57
Views: 7227

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

It's also a point of vanity to say "We at brokerage ABC hold "X" amount in assets" insinuating that the more they hold the better they must be. They are happy to let a BH have a high 6 or 7 figure account with index funds because it boosts their tagline. Fidelity's S&P 500 fund has more in assets under management than their (largest active fund) Contrafund. I'd guess Fidelity does see Boglehead types as: A) Not losing the company too much money, since although it is likely a loss leader, they do charge only slightly under Vanguard's at cost options. B) Growing the company's assets under management inexpensively C)Customers that coild eventually become more profitable for the company by buying more expensive products...
by TD2626
Mon May 07, 2018 7:50 am
Forum: Personal Investments
Topic: DRIP (Dividend Reinvestment Plan)
Replies: 30
Views: 4899

Re: DRIP (Dividend Reinvestment Plan)

DRIPs I believe were more important historically, when index funds didn't exist. DRIPs still exist and in theory a portfolio of a couple dozen in all different industries, bought and hold for decades, might work but it would be very clunky. Decades ago it was a traditional way to invest cheaply... but nostalgia aside low cost, broadly diversified mutual funds, bought and hold for decades, are much easier to manage these days and strongly preferred.
by TD2626
Wed Apr 18, 2018 10:44 pm
Forum: Investing - Theory, News & General
Topic: Theoretical question. What would happen if 100% of investors are buy and hold.
Replies: 19
Views: 3507

Re: Theoretical question. What would happen if 100% of investors are buy and hold.

I don't think this could ever happen - not 100%.

However, it is easy to envision a world where the overwhelming majority of individual investors buy and hold index funds for the overwhelming majority of their portfolios, with some people having small amounts in relatively low cost active funds and with high fee active management and individual stocks generally frowned upon. Even in this world, though, prices are still being set, by those who invest small amounts in active funds or "play money" accounts.
by TD2626
Mon Apr 09, 2018 12:44 pm
Forum: Investing - Theory, News & General
Topic: Just how safe is a short-term corporate bond fund?
Replies: 53
Views: 11031

Re: Just how safe is a short-term corporate bond fund?

It's the classic case of incurring higher risk for the expectation of higher reward, in a highly efficient market. This is a great quote. The decision is based on if whether the (possible) higher return is worth the higher risk. Why is the higher return desired or needed? Is the higher risk worth it or appropriate? I also think decisions should account for whether the a short term corporate fund is the best way to get higher return for higher risk (vs, say, Ibonds, munis, or putting slightly more in Total Bond) if that is needed. Sorry for the bump of an old thread, but this post touched on something on my mind: which risk is really higher, the duration risk of TBM or the credit risk of the short term corporate bond fund in question? Inter...
by TD2626
Tue Mar 27, 2018 3:21 pm
Forum: Investing - Theory, News & General
Topic: Engineered Portfolio
Replies: 14
Views: 2940

Re: Engineered Portfolio

It's probably what happens if you do excessive backtesting and go with it. Sometimes the outputs of backtests are a quirk of history and not all that likely to work well in the future. It reminds me of this viewtopic.php?t=5410

Excessively unconventional and highly risky, in my opinion.
by TD2626
Tue Mar 27, 2018 3:15 pm
Forum: Investing - Theory, News & General
Topic: Tax Efficiency of Mutual Funds
Replies: 7
Views: 1207

Re: Tax Efficiency of Mutual Funds

One thing that index funds, particularly at Vanguard (due to their index/etf structure) do is generally have lower capital gain distributions compared to active funds that trade a lot. Indeed, active funds can sometimes have truly enormous capital gain distributions.
by TD2626
Mon Mar 19, 2018 10:02 am
Forum: Investing - Theory, News & General
Topic: Why is 16 the magic number for FAs?
Replies: 27
Views: 5208

Re: Why is 16 the magic number for FAs?

I wonder if "exactly 16" is more common than "about 16" -- maybe one could look at posts on this board to find that out! I think wealth management is a dying industry, sort of like horse buggy whip makers in the 1920's. I think John Bogle in one of his books even recommends that young people choosing a career avoid it and do something more substantive either in business or other professional career. It would be interesting to know if "exactly 16" is more common than "16-ish". Maybe one could study posts on this board and see! Investment management is not really that hard - take 15 minutes of searching on the internet and Amazon, find this blog and the recommended books, choose a 3- fund vanguard portf...
by TD2626
Mon Mar 19, 2018 9:49 am
Forum: Investing - Theory, News & General
Topic: How much TLH can be done with a 3 fund portfolio?
Replies: 19
Views: 1989

Re: How much TLH can be done with a 3 fund portfolio?

jhfenton wrote: Mon Mar 19, 2018 8:10 am
car733 wrote: Mon Mar 19, 2018 7:51 am
bubbadog wrote: Sun Mar 18, 2018 8:44 pm Each individual lot is a TLH opportunity.
Sorry, what do you mean by "each individual lot"?
If you use the specific identification method for tracking cost basis and calculating capital gains and losses, each individual purchase of a stock, ETF, or mutual fund creates a "lot" with its own cost basis.
car733 wrote: Mon Mar 19, 2018 7:53 am
travelogue wrote: Sun Mar 18, 2018 8:48 pm What if you viewed AA as buckets rather than specific funds.
What does AA mean?
Asset allocation.
If it helps, by the way -- there's actually a Wiki page for acronyms -- https://www.bogleheads.org/wiki/Abbrevi ... d_Acronyms
They can definitely be confusing at times since there's so many!
by TD2626
Sun Feb 11, 2018 10:23 pm
Forum: Investing - Theory, News & General
Topic: Just how safe is a short-term corporate bond fund?
Replies: 53
Views: 11031

Re: Just how safe is a short-term corporate bond fund?

iceport wrote: Sun Feb 11, 2018 1:39 pm It's the classic case of incurring higher risk for the expectation of higher reward, in a highly efficient market.
This is a great quote. The decision is based on if whether the (possible) higher return is worth the higher risk. Why is the higher return desired or needed? Is the higher risk worth it or appropriate?

I also think decisions should account for whether the a short term corporate fund is the best way to get higher return for higher risk (vs, say, Ibonds, munis, or putting slightly more in Total Bond) if that is needed.
by TD2626
Sun Feb 11, 2018 10:10 pm
Forum: Personal Finance (Not Investing)
Topic: Yes, one is required to use the tax tables. So plan wisely to save a few dollars
Replies: 23
Views: 4266

Re: Yes, one is required to use the tax tables. So plan wisely to save a few dollars

This is impressive! (More or less impossible for many, though, especially those who don't have the information they need to do this in or compiled before the end of the year, though.)
by TD2626
Fri Feb 09, 2018 9:43 pm
Forum: Investing - Theory, News & General
Topic: Funds without dividends
Replies: 17
Views: 5547

Re: Funds without dividends

A hypothetical non-dividend fund would potentially not be diversified enough. It may have a growth tilt, as well -
though value is not synonymous with high dividend yeild. Remember single company stocks are considered very risky, also. Maybe do calculations to see if the tax savings from a low dividend fund are "worth it" given that a tax managed fund may have a higher expense ratio.
by TD2626
Fri Feb 09, 2018 9:36 pm
Forum: Personal Investments
Topic: Accredited investor resources
Replies: 26
Views: 3585

Re: Accredited investor resources

Why would someone want to invest in these sorts of things? In my opinion people seem to wrongly think "its an opportunity limited to few, so it must be good". Um, instead it's often overly risky and non-transparent - and total market index funds may be used even for large portfolios. Nevada has tens of billions in low cost index funds (https://www.marketwatch.com/story/how-o ... 2016-10-28).
by TD2626
Fri Feb 09, 2018 8:56 pm
Forum: Investing - Theory, News & General
Topic: "The stock market is officially in a correction... here's what usually happens next"
Replies: 83
Views: 17471

Re: "The stock market is officially in a correction... here's what usually happens next"

"Stay the course" is not the same as "Buy and hold." Corrections and bear markets can often be an opportunity to rebalance, sell an unwanted fund, tax-loss harvest or move to another company. These seem like good points. One question: By "sell an unwanted fund" would you be referring to a situation like this: An investor has large accumulated capital gains in diversified but overly complex or high expense ratio stock fund(s) and wants to consolidate into a smaller number of stock funds, like "total market" index funds, while not having to realize large amounts of taxable gains. Should they consider using the opportunity of a bear market or correction to accomplish this while tax loss harvesting and k...
by TD2626
Thu Jan 18, 2018 11:43 pm
Forum: Personal Investments
Topic: Are ETFs Really That Safe?
Replies: 61
Views: 8941

Re: Are ETFs Really That Safe?

A big concern is the fact that many etfs are small and/or concentrate on tiny sectors of the market. Also, they allow short term speculation. Responsible buy and hold investors tend to dislike narrow sector bets and short term trading. I guess in a sense etfs could be unsafe in the wrong hands (e.g. when used by people with unhealthy predispositions to short term trading).

Long term buy and hold investment in things like Vanguard's broad market ETFs are probably just as risky (or safe) as the roughly equivalent Vanguard mutual funds. There are major differences under the hood in how etfs vs traditional funds work, though and one could imagine (probably unlikely) scenarios where that could make an impact.
by TD2626
Wed Jan 10, 2018 12:15 am
Forum: Investing - Theory, News & General
Topic: How diversified are you really with cap weighted foreign markets?
Replies: 37
Views: 2959

Re: How diversified are you really with cap weighted foreign markets?

Right. Don't buy country-specific products just because they're offered and "cheap." This is a non sequitur vis-à-vis Total International Stock Market or Total World, though. Good point - these are not the kinds of buy and hold funds that would likely be held by Bogleheads, in my opinion. Why would one want to hold a dozen or more individual country funds whey one can just get total world or total international? It creates excess complexity and likely isn't worth the hassle. So that leaves these single country funds as mostly useful for speculation, which in my opinion is basically gambling and not investing and isn't responsible. (Of course, having a one country fund for a country that is the home country to overweight it for, s...
by TD2626
Wed Jan 10, 2018 12:02 am
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 9592

Re: Corporate bonds vs. Treasuries

If you don't need to touch your investment portfolio for the next 30 years the experts recommend a small amount of Treasuries with that high equity allocation because of the negative correlation of Treasuries with stocks in times of stress. It has nothing at all to do with selling your investments to fulfill some unanticipated personal need. Well, the experts here are wrong, given the consensus expert opinion on expected treasury and stock market returns and variance. Having a position in treasuries does give an anti-correlation boost, but it also drags down total return by reducing your exposure to the greater returns of the stock market. Under all future stock market conditions that are worth considering, you're better off with more equi...
by TD2626
Tue Jan 09, 2018 11:41 pm
Forum: Personal Investments
Topic: How crucial are Admiral shares?
Replies: 6
Views: 2092

Re: How crucial are Admiral shares?

The nice thing is that this can be in theory partially quantified - one could calculate exactly how much in excess fees are being paid, and compound this effect out for many years. I believe a lot of the issue with fees comes from compounding - e.g. the fact that you'd hope to earn money on the money that was saved in fees in the first years in all subsequent years eventually adds up. It's ultimately a "is this a cost worth paying" question. (Any behavioral phenomenon are also important, and should be taken into account - but are probably harder to quantify). One could compare the effect like this, for example: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2007&firstMonth=1&endYe...
by TD2626
Tue Jan 09, 2018 11:35 pm
Forum: Investing - Theory, News & General
Topic: 2017 Callan Periodic Table of Investment Returns
Replies: 35
Views: 8137

Re: 2017 Callan Periodic Table of Investment Returns

It's interesting the performance of Russell 2000 Value relative to other things given SCVs popularity. One must remember that investing for a lifetime-length goal is often a 40-70 year endeavor so single years likely don't matter much --- but SCV supporters shouldn't expect too much (if anything) and should realize it can perform poorly!

Also, the chart is interesting regarding emerging markets. It's worth looking at the number of times EM has been at the bottom of the chart and particularly its staggering past losses (in 2008, for example). The volatility is very apparent from the chart.
by TD2626
Wed Dec 27, 2017 9:57 pm
Forum: Investing - Theory, News & General
Topic: Public Service Credit Union (PSCU) of Colorado is trying Reverse Tier Savings to attract new deposits
Replies: 20
Views: 3909

Re: Reverse tier savings?!

^^^ Sorry, I wasn't clear. PSCU is my B&M financial home. I keep a month of living expenses (<$2K) in savings... just because. --Today my <$2K is earning 0.10%. --The teller said she could convert the account ("no extra effort on my part"). --I move in new money ( through actually, which I do every month, when I rebalance into a linked single-state muni) and my new balance $0-$2K starts earning 3%. Looks like "found money" to me. A blind squirrel.... You are correct though, I wouldn't open a new account at another bank/CU to get 3% on $2K. Oh - if you have an account there already and plan on having a $2k balance anyway it could be a great deal. Good luck with the mechanics of it - hopefully it's straightforward eno...
by TD2626
Wed Dec 27, 2017 4:55 pm
Forum: Investing - Theory, News & General
Topic: Public Service Credit Union (PSCU) of Colorado is trying Reverse Tier Savings to attract new deposits
Replies: 20
Views: 3909

Re: Reverse tier savings?!

BH Reverse tier savings My little CU is trying this no-fee no-minimum-balance savings account idea. Only restriction, it must be new money: 0-2K: 3.25% APY 2-5K: 1.5% APY 5-10K: 0.75% APY 10-50K: 0.4% APY >50K: 0.3% APY vs. their current personal share (savings) account: 0.10% APY. While I’m a convert to livesoft’s idea of reducing Sch B part I income as a partial justification for not chasing rates, this new CU offer looks like “found money” with no extra effort on my part. So guess I’ll pick it up, even if uncle sugar and his cousins at state get a taste. For those interested, the CU is: www.pscu.org Are you taking into account time costs of the "found money"? What do you mean by "no extra effort"? Assuming you can ge...
by TD2626
Wed Dec 27, 2017 4:44 pm
Forum: Investing - Theory, News & General
Topic: How to setup a crypto-currency "index fund" (Bitcoin, etc.)
Replies: 77
Views: 10740

Re: Speculating vs. Boglehead Investing

Perhaps the board could have a crypto currency sub-forum. ;) Not sure if this was meant tongue-in-cheek, but if this helps people who don't want to think about crypto-currencies avoid popping into threads to mutter "ponzi" or "tulip" repeatedly, rather than contributing to the topic at hand, that would be an improvement. I don't think that people are failing to contribute by muttering "ponzi" or "tulip". There are very substantial, very valid reasons to think Bitcoin could easily be a tulip-like bubble. An article published as recently as yesterday quoted a state securities regulator as comparing this to tulip bulbs. (https://www.theatlantic.com/business/archive/2017/12/bitcoin-dotcom-bubble/549155/)...
by TD2626
Wed Dec 27, 2017 4:11 pm
Forum: Investing - Theory, News & General
Topic: Muni Money Market funds starting to look good!
Replies: 139
Views: 34518

Re: Muni Money Market funds starting to look good!

Thanks for the links and post. It's good to see that short-term yields are rising in both taxable and tax exempt funds.

That being said, rising rates on savings accounts probably aren't as important as many think.

If a hypothetical investor has $90,000 in stocks and $10,000 in cash, and gets (in a hypothetical year) 10% on their stocks (to make the math easy) and 1% on their cash, they have returns for that year of $9000 in stocks and $100 from cash --- e.g. only 100/9100 = ~1.1% of the portfolio's return coming from cash.