Bogleheads.org

"Other issue/question is why you want div appreciation and equity income in Roth." I thought it was good spot for dividend funds, but I am wide open for changing. Suggestions? Considering I have no foreign funds, should I switch these? I have read conflicting information here how they fit into a 2 fund portfolio? If switch in order, suggestions for international/global fund? Thank you so much for concrete detailed responses! Lots of BH here have bought the line that total stock market is better than dividend funds, this against Jack Bogle’s own advice, who loved dividend funds. During the accumulation phase I would probably only keep total stock market, but once retired it’s perfectly appropriate to hold a dividend fund. I’m reti...

robindbee wrote: ↑Tue Jan 24, 2023 2:45 pm These are both in my Roth portion of portfolio. One is actively managed, other is index. Should I keep both or absorb one into the other? Thanks, as always!


Vanguard Equity Income Fund Inv/VEIPX (Large Value) Vanguard Dividend Apprec Idx Adm/VDADX (Large Blend)

[OP’s duplicate post requesting a portfolio review was merged into this thread below - moderator ClaycordJCA]

ETF version of VDADX is VIG, which I love (along with SCHD).
I’d keep VDADX/VIG in favor of VEIPX.

Speaking just of the vanguard taxable account which is held jointly with my wife the easiest thing to do in the short run may be to not attempt to name beneficiaries by splitting the fund between us somehow but to rely on the will and from what was said above about cost basis and so forth perhaps the concern about tax consequences for heirs are overblown.. But it might be worth looking into a trust for funds held in certificates of deposit elsewhere that might become a large single year tax hit for heirs. Why would CD's create a large tax hit for the heirs? Only the interest is taxable to you, initially. The principal is not taxable. I'm not sure whether CD's are grossed up somehow when they pass to heirs. I leave further elucidation to th...

Florida Orange wrote: ↑Fri Jan 20, 2023 4:32 pm The bonds you're talking about buying are selling at a percentage (which may be more or less than 100%) of their nominal value depending on how much interest they pay relative to current rates. Any advantage in interest rates will be offset by the premium/discount that you pay for the bonds. It is extremely unlikely that you will profit from moving money around to whatever currently has the highest interest rate.

+1

By cash I assume you mean money market.
Trying to time the switch from bonds to MM and then back is a fool's errand.
Just be happy with whatever you get from your favorite bond index ETF and stop worrying about short term movements.

As far as Lastpass security, all it was stolen is a small amount of encrypted password vaults. That wasn't the impression I got when I listened to Episode #904 of Security Now!: GRC | Security Now! Episode Archive - read the transcript. Additionally, the LastPass vault does not encrypt everything. (Other password managers do.) Hackers can use that data (websites visited, etc.) to target specific accounts. They can also find the "low hanging fruit" for vaults that are easy to hack. Episode #905 delves into that, as they show how to decrypt the vault in PowerShell. See the Episode #905 show notes for the transcript. It's a real bummer that Lastpass stores the URL in clear, and yes it makes the relevant information easier to find (f...

I used passwordsafe for many years before migrating to lastpass because I wanted the data to be accessible by multiple computers and other features (like sharing folders with family members).

If you are happy with the ability of only using it on one computer, then password safe is a perfectly good option.

[Post merged into here from: Please review your passwords . I also changed the title of this post. --admin LadyGeek] Earlier today, a member's account was hijacked. In this case, the member's post was filled with spam. Thanks to a member who reported the post, we got to it quickly and the post was removed. We also performed some additional actions behind the scenes. (I also received a PM.) This is a reminder that members should verify that their passwords are secure (a lot of random characters). If your password is not secure, please change it. You can do this two ways: The first way - In the User control panel --> Profile --> Edit account settings (generic link which goes to the right spot) 1. New password: (enter the new password) 2. Con...

Just thinking about yield, it's impossible to say now which option is better because you don't know what TIPS yields will be in 2032. For the Year 2033 the decision seems to be a slam dunk though. I'm in the same boat except I have 2032 TIPS all the way up to 2039. Edit: my thinking is I'll keep 2032 TIPS for 2032 and roll over to 2033 for the years 2033-2039. As I think more about each gap year, I don't think it will ever make much of a yield difference to roll up one year each year as you will be a buyer and a seller on the same day for nearly the same maturity. In taxable I suppose this works best if you can TLH on the trade; otherwise there is gain and it would all be short term for me this year. For example I sell 160 of my 2032s whic...

Seems strange that the rate is 0%, do you have a link of the announcement?. According to TD https://www.treasurydirect.gov/instit/annceresult/press/preanre/2023/A_20230112_3.pdf Thanks Squirrel, I looked at this new issue on Schwab early this a.m. and I was almost certain that the coupon rate was displayed at zero on their site. After reading your reply I checked again and I now see a coupon for this auction listed at 1.5%. So either it has been updated or I misread it this morning. At any rate I very much appreciate your reply and your citing the current quote for the 2032 TIP. They probably updated it later. I checked with Fidelity and their quote is 1.25% coupon rate. In both cases it's an estimate, as the coupon rate will be determined...

Since your HSA and Roth IRA are both growing tax-free for expenses in retirement, you should invest as if they were a single account. (This is how I handle mine; the HSA is smaller than my desired allocation to the ETF I hold there, so I also hold this ETF in my Roth IRA.) The HSA has an extra tax advantage over the Roth IRA, but you got that advantage when you made the contribution. Once the contribution is made, the two accounts are almost equivalent. (You should prefer to spend from the HSA because of the one non-equivalent situation: if you die, the HSA becomes taxable, while the Roth IRA can be inherited tax-free.) Can you elaborate on "if you die, the HSA becomes taxable"? I assume this applies for instance to children inhe...

Just thinking about yield, it's impossible to say now which option is better because you don't know what TIPS yields will be in 2032.
For the Year 2033 the decision seems to be a slam dunk though.

I'm in the same boat except I have 2032 TIPS all the way up to 2039.

Edit: my thinking is I'll keep 2032 TIPS for 2032 and roll over to 2033 for the years 2033-2039.

Seems strange that the rate is 0%, do you have a link of the announcement?. According to TD

https://treasurydirect.gov/marketable-securities/tips/

Rate should be at least 0.125%.

In any case I would think the the actual yield will be similar to the current quote for the 2032 TIP:

https://www.wsj.com/market-data/bonds/tips

Which was 1.356% yesterday

Edit: here is link to auction announcement :

https://www.treasurydirect.gov/instit/a ... 0112_3.pdf

In regard to the lastpass breach, the hackers at most could hold your encrypted data, so they would need to know your master password to decrypt it. Hopefully your master password is long and complex enough to make brute force decryption prohibitive. Best thing to do is to change the master password as well as all the passwords and usernames of financial accounts. Also change password for email accounts and most of all make sure you have two factor authentication enabled for financial accounts and email. I'd also enable two factor Auth for social media if you have any. Great advice but first please check your accounts PBKDF2 Iterations value if it is not > 100,000 then make is so. And if this is 1 or 500 then get changing ALL your password...

In regard to the lastpass breach, the hackers at most could hold your encrypted data, so they would need to know your master password to decrypt it. Hopefully your master password is long and complex enough to make brute force decryption prohibitive.

Best thing to do is to change the master password as well as all the passwords and usernames of financial accounts. Also change password for email accounts and most of all make sure you have two factor authentication enabled for financial accounts and email. I'd also enable two factor Auth for social media if you have any.

Bogleheads: I always stand behind what I say -- so from the beginning I have used my real name. Taylor Jack Bogle's Words of Wisdom: "One of our most important values is candor--tell the whole truth and nothing but the truth, with no strings attached, and let the chips fall where they may." A distinction needs to be made for a username used on Bogleheads (where it's a personal choice whether to use a real name or not) and a username for financial accounts (banks, brokers and such). For the latter, the security best practice is to use a random alphanumeric string to make it difficult for hackers to guess it. In other words, treat your Schwab username in a manner no different than a password and store both in a password manager lik...

My username for financial accounts is a random alphanumeric string, different for each account.

You mentioned US taxation, so I assume you are a US citizen. If that is not the case you can ignore this comment. If are a US citizen it's really bad to hold ETF or mutual funds which are not domiciled in the US. Looking at VWCE, it's domiciled in Europe. It's a big no-no in regard to US taxation on account of PFIC regulations, which basically is a punitive taxation of any ETF or mutual fund that is not held in the US (lookup related thread). Since you already hold these funds, I would definitely sell them immediately. As to how the deal with US PFIC taxation for the past years, you should ask a tax lawyer on what to do. But definitely, from now on only buy ETF and mutual funds domiciled in the US. In theory you could buy them and do a mark...

I'm not a smart guy on this but, I can tell you the fund expenses can be critical. I would almost never go over .5%. Higher than that really can negatively impact your long-term growth (my only b-school instructor used to say that a 1% expense rate will remove 25% of your profits). I didn't see your age. Assuming you are very young, make sure you are investing aggressively enough, in that you have a lifetime of compounding earnings. The risk on SP500s is 1.00 (neutral), for a young person it is pretty conservative (middle-aged probably OK). My priorities are low cost and a portfolio that is balanced to reflect my risk tolerance (if you can't sleep, you are too aggressive). Don't know if this helped, but it is worth what you paid for it! OP...

It seems that CNET has been using AI automation to write some articles on finance:

https://www.engadget.com/cnet-gets-caug ... 26432.html

CNET claims that the writings are "fact checked" by the staff for accuracy before publishing and that's the part that bothers me because it's unknown to me how knowledgeable this staff actually is about finance.

This, coupled with the fact that ChatGPT makes some glaring errors in explaining TIPS (see thread viewtopic.php?t=394553), makes me deeply suspicious of this kind of approach, and I'd caution Bogleheads about relying on financial writings done by AI, whether it's "fact checked" or not.

On a related topic, is there a place to find the historical yield of bond funds like VGIT (intermediate treasuries) vs MUB (intermediate muni).

Current yield for VGIT is 3.8%
Currebt yield for MUB is 3.14%, equivalent to 4.13% with 24% tax bracket and equivalent to 4.03% for 22% tax bracket.

We are currently in 24% bracket and it's highly unlikely we'll be below 22% bracket, but I'm trying to figure out what I should be holding long term, as I would hate having to swap later on (once rates stabilize and hence bond funds will have unrealized capital gains for funds bought now).

It matters when you are thinking about trading your free time to earn that next dollar, for Roth conversions, and whether to sell that investment or not. Thank you. Could you expand a little on each of your points above (or point to relevant sources)? For working overtime, the marginal tax rate affects the actual amount you earn. If your marginal tax rate is 22%, and working overtime causes you to be paid $1000, you will have $780 more to spend or invest. (A penny saved is more than a penny earned; if you save $1000 by making your own lunch twice a week rather than going out, that is a full $1000 benefit for your time.) For Roth conversions, the comparison is between the marginal tax rate now and when you withdraw. If you have $1000 in a t...

I’ve always invested regularly thru 401k via payroll and any excess cash into IRA and brokerage accounts. I’ve done that thru out the GFC of 2008 as well, without caring about what the market was doing.

I am not going to do all the math, but I would suggest you track your investment by return rather than NAV. Return by definition includes reinvestment of dividends. TIPS funds pay out the inflation increment in the dividend. The effect is that your return is increased for inflation by owning more shares rather than by the NAV increasing. Return is calculated by computing the value of the holding over time. Value is computed by multiplying NAV by number of shares. Dividends not reinvested are withdrawals. That is my query, how could I have suffered an unrealized loss already, with real rates essentially flat? I don't get it. You cited a single real rate and one that is longer than the average held by the fund (which holds multiple bonds). I...

Here is another feature that could be helpful: currently it will pick the bond with the highest available yield. It would be great to specify the maximum desirable inflation factor so that one could limit the maximum downward exposure in the (unlikely, but possible) case of deflation.

For instance, given these 3 bonds maturing in the same year X:

yield 1.5% inflation factor 1.3
yield 1.8% inflation factor 2.5
yield 1.6% inflation factor 1.4

by default it would pick the 1.8% yield, but if user specifies maximum inflation factor = 2, then it would pick the 1.6% yield.

kaesler wrote: ↑Tue Jan 10, 2023 4:34 pm

squirrel1963 wrote: ↑Tue Jan 10, 2023 10:29 am This tool is awesome, thanks for sharing. Couple suggestions:
(1) for the 2033-2039 "TIPS great black hole", allow picking 2032 TIP only

Available in an update made just now just now.

I saw it, cool !!!!

I think you need to question why you are rebalancing. You invest in a bond ladder to assure yourself of having a certain quantity of money coming your way at intervals. Why would you disrupt that to shift into risky assets? Building a ladder is a way of minimizing risks going forward. Rebalancing from bonds to stocks increases risk. If you want to rebalance from stocks to bonds after building a ladder, you can just buy funds. Note that when you are spending down your ladder, your portfolio is becoming riskier, absent market movements and riskier yet if stocks outperform bonds. if you want to hold a constant allocation percentage, you will likely be selling stocks to buy bonds, leaving the remainder of your ladder intact. I don't take it as...

jebmke wrote: ↑Tue Jan 10, 2023 5:45 pm For me, a ladder might make sense for a liability matching structure for a finite period of time -- what I call a collapsing ladder.

A rolling ladder and a fund are not different enough to be worth my time. All my fixed income is fairly short duration and the only long position I would take might be individual Tips if rates got attractive.

That's also my take. We have individual TIPS for liability matching in IRA and in taxable we keep an intermediate muni bond fund (MUB) because we don't really have a duration in mind for that, it's just a reserve of cash for unanticipated large expenses. Once our tax rate drops again I'll just switch to a Treasury Fund (VGIT).

MotoTrojan wrote: ↑Tue Jan 10, 2023 3:54 pm

preach wrote: ↑Tue Jan 10, 2023 3:27 pm I originally opened the account at Betterment with around $500, lost a little money, hated the options and user interface and so I closed it down.

Is this not what explains the loss? Maybe a ~$20 transfer fee? I don't think trying to recover it is going to work and given the relatively small sum of $ your time is probably spent better elsewhere, I would just let it go.

Fidelity has a great HSA by the way which allows you to invest in stocks/ETFs/funds for free. With fractional shares you could build a very nice diverse HSA with $480.

+1 for Fidelity HSA

I don't recall the exact details, but at a previous megacorp (2005-2013) we (the "highly compensated employees") had the same issue, and were never able to max-out the 401k contribution on account of a large workforce in fullfillment centers which had low compensation. If I recall correctly they usually returned about 10%-20% of the amount contributed, not the whole amount. Sorry but this is all I can recall. What I do recall is that some of us impacted talked to HR / Payroll and the explanation on this was very complex, as the non-discrimination test is a very complicated thing. FYI, it wasn't that the people in the fulfillment centers had low compensation- its that they had a low rate of participation in the 401K. Its not a tri...

This tool is awesome, thanks for sharing. Couple suggestions:
(1) for the 2033-2039 "TIPS great black hole", allow picking 2032 TIP only
(2) allow specifying 3 ranges of desired income ( pre-medicare&pre-SSA, medicare&pre-SSA, medicare&SSA ), or optionally allow to manually override the income desired for each year.

Hyperchicken wrote: ↑Mon Jan 09, 2023 11:47 pm No idea if that makes you eligible for IRA. In my case that was clearly a no since most of my contributions stayed in.

Pre-tax contributions are determined by how much you contributed to 401k (you'll need to lookup the rules, I forgot them), but if your income exceeds the phase-out threshold you may only be allowed to contribute after-tax money. The good news is that after-tax contributions are only limited to the max IRA contribution.

I don't recall the exact details, but at a previous megacorp (2005-2013) we (the "highly compensated employees") had the same issue, and were never able to max-out the 401k contribution on account of a large workforce in fullfillment centers which had low compensation.
If I recall correctly they usually returned about 10%-20% of the amount contributed, not the whole amount.
Sorry but this is all I can recall. What I do recall is that some of us impacted talked to HR / Payroll and the explanation on this was very complex, as the non-discrimination test is a very complicated thing.

assyadh wrote: ↑Mon Jan 09, 2023 1:33 pm Full webinar about this: https://youtu.be/LY2WKG-XTgw?t=499

In english

Very informative thanks much. I've come to the conclusion that if we ever move to Europe we'll move to France and not Italy. The latter tax system is just too complicated and expensive for a US citizen, especially in regard to Roth IRAs.

ssel wrote: ↑Sun Jan 08, 2023 2:38 am

squirrel1963 wrote: ↑Thu Jan 05, 2023 2:34 pm https://www.morningstar.com/articles/10 ... d-calendar

Yikes! Did they really think it a good idea to turn the tax rate schedules into a dense paragraph of English prose?

OK, I exaggerate. But the real challenge would be rendering it as a series of haikus...

Ten percent tax rate
Eleven thousand or less
Single taxpayers

Yes I wish the tax brackets would have been reported in tabular format, still it's useful to have all the numbers in one single place.

The aiku is great idea LOL

The banks to do the reporting on your behalf for wire / ACH transfers. Nothing to worry about.
The only exception would be if you deposit more than $10K cash (the green bills), in which case I think you would need to file a report.

https://www.forbes.com/advisor/money-tr ... -transfer/

We also got our PINs 10 days ago by snail mail.

Dividends may be irrelevant to you but who are you to say they are irrelevant to someone else? Investing is very complex and people are all different emotionally, psychologically and financially. This argument always ends the same way for reasons that I will not mention. The fact is dividends are very relevant to millions and millions of investors, so I guess that makes them relevant regardless of what any academic wants to argue. Now tell me that dividends do not influence how millions of people invest and I will tell you that inflation does not matter at all. Completely agree. Dividends are very relevant, as shown for instance by lots of retired people in this forum (including me) who love them. My main comment though is "here we go...

rkhusky wrote: ↑Thu Jan 05, 2023 9:08 pm The Tax Foundation also has a handy page:
https://taxfoundation.org/2023-tax-brackets/

Thanks!

Seems something that many BH will find useful:

https://www.morningstar.com/articles/10 ... d-calendar

Stock analysts exist to make astrologers look good.

Sector rotation is market timing and you are almost guaranteed to lose money compared to holding a broad market index like S&P500.
And I'd definitely stay away from anyone who claims who can do it. Even if somehow they were to get lucky and correctly guess the right sector, the extra gains would probably be voided by management expenses and taxes.
BH investing at its core is (1) avoid market timing (2) buy&hold low cost broad market index funds. It's a strategy that has served very well in the past and will continue to do so. And it's so simple you don't need to pay anyone to do it for you.

It doesn't matter when you buy, it's a crapshoot anyway as to what you'll get. Buy it all in January or half in January and half in June, but either way don't expect to get the best rates.

I have about 4% in BRK.B, not quite a fund but close enough. Everything else is either individual bonds or index funds.

great sexurity feature (which no one else seems to have) is the ability of locking down ACATS transfers, which is another common way which scammers use to attempt to defraud you. How intriguing.. this.. feature. Please do tell me more. It's called "lockdown" and basically disables any kind of outbound transfer, including ACATS transfers, which is to say the electronic transfer of assets out of the account into another brokerage. Why is this important? There have been fraud cases in which scammers open an account using your personal data at some broker (say for instance ETRADE), then initiate an account transfer to ETRADE. All is required is (1) the account number and (2) that the account owner information match. Once the account ...

great sexurity feature (which no one else seems to have) is the ability of locking down ACATS transfers, which is another common way which scammers use to attempt to defraud you. How intriguing.. this.. feature. Please do tell me more. It's called "lockdown" and basically disables any kind of outbound transfer, including ACATS transfers, which is to say the electronic transfer of assets out of the account into another brokerage. Why is this important? There have been fraud cases in which scammers open an account using your personal data at some broker (say for instance ETRADE), then initiate an account transfer to ETRADE. All is required is (1) the account number and (2) that the account owner information match. Once the account ...

This morning I am trying to sell a non-Vanguard mutual fund at the Vanguard web site. When I hit the sell button I get a blank screen. When I go back to the page showing my holdings I get a message that they are having problems and not all data can be displayed. Great way to start the new year Vanguard. :annoyed BobK Let me translate that error message for you: "At Vanguard, we long ago lost interest in the retail brokerage business. If you want to pay us 0.3% for our PAS, maybe we can talk to you. Otherwise, wouldn't you rather hold the same funds elsewhere, with better IT, better customer service, and thousands of dollars in transfer bonuses? Give us a call - but not evenings or weekends, of course, and don't try looking for the sec...

I've been frustrated with Vanguard web site for a long time now, it's buggy and poorly designed.
It's the main reason why I moved out to Vanguard in favor of Schwab and Fidelity. I still use Vanguard ETFs and I love them, I just don't love their web site at all.

I moved out from vanguard to Fidelity in part to consolidate from 3 brokers down to 2 and I picked Fidelity (rather than vanguard) because I am very frustrated by Vanguard web site, which manages to be both difficult to use and ugly. I find Fidelity and Schwab web sites so much better, simply because they have not messed it up. In general though I think that insofar as competence, or lack thereof, you will find varying quality at any broker, I've had my shares of frustrations with all of them for different reasons. In your case though it's far far worse, if I were to pay 0.3% in management fees I'd expect them to not make any major mistakes AND to compensate you if they do. Given that you'll be doing DIY again I think you'll be happy with F...

My last two employers went from PTO model to "unlimited" time off model, so they stopped paying accrued vacation balance.
There are also a million other reasons why you might not get that balance.
I definitely would not count on it.