Search found 326 matches

by ThrustVectoring
Mon Feb 19, 2018 3:58 pm
Forum: Investing - Theory, News & General
Topic: Interactive Brokers fee structure for passive investors
Replies: 19
Views: 1132

Re: Interactive Brokers fee structure for passive investors

in_reality wrote:
Mon Feb 19, 2018 8:29 am

IB has better currency conversion costs. Lowest anywhere I think.
Also really low margin loan rates. Not that margin is a great idea for everyone, but a limited amount is fine for being able to deal with emergent situations without having a large amount of cash drag.
by ThrustVectoring
Fri Feb 16, 2018 4:08 pm
Forum: Investing - Theory, News & General
Topic: I bonds instead of Total bond in a 3-fund portfolio?
Replies: 9
Views: 1229

Re: I bonds instead of Total bond in a 3-fund portfolio?

4) I Bonds may or may not beat Total Bond - they are safer, but you may be trading off some return for that safety If your fixed income investment choice is safer and has a lower return, that's easily fixed by increasing your equity allocation. The question is how much safer it is vs how much retur...
by ThrustVectoring
Thu Feb 15, 2018 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: Suggestions for Reasonably Safe Funds
Replies: 27
Views: 1829

Re: Suggestions for Reasonably Safe Funds

Hmmmm If held to maturity, the value does not change. A $1000 bond pays $1000 at maturity, plus the interest paid at the coupon dates. Highly rated bonds are in many cases better options than a fund of bonds, which right now are dropping like a rock. Those bonds are losing value.... You just don't ...
by ThrustVectoring
Thu Feb 15, 2018 7:04 pm
Forum: Investing - Help with Personal Investments
Topic: Pledged Asset Line (PAL)/Line of Credit for Real Estate Investments
Replies: 7
Views: 444

Re: Pledged Asset Line (PAL)/Line of Credit for Real Estate Investments

You're probably taking on too much risk, especially if you go anywhere near the top end of the amount they allow you to borrow. The extra margin is helpful to avoid margin calls, but it's no panacea. What happens if your real estate investment loses money and the stock market tanks at the same time?...
by ThrustVectoring
Thu Feb 15, 2018 4:07 pm
Forum: Investing - Help with Personal Investments
Topic: Just added Total Int'l Stock; add Total Int'l Bond too?
Replies: 25
Views: 1848

Re: Just added Total Int'l Stock; add Total Int'l Bond too?

Boosting your fixed-income returns by taking on the credit risk of foreign governments seems silly to me - if your investment strategy calls for taking more risk, it probably gets paid better for it by buying more equities, rather than buying riskier bonds. As long as the risk is compensated, I don...
by ThrustVectoring
Thu Feb 15, 2018 3:59 pm
Forum: Investing - Theory, News & General
Topic: Can someone help me explain to my wife...?
Replies: 76
Views: 8026

Re: Can someone help me explain to my wife...?

Her opinion is that we should sell all of our index funds in our Roth IRA, take the profit now in the fund, because surely the bottom will fall out soon. My opinion is that I've always been told to simply contribute the max, do 70/30 for our age range, and then forget about it until age 65. She say...
by ThrustVectoring
Thu Feb 15, 2018 3:48 pm
Forum: Investing - Help with Personal Investments
Topic: Just added Total Int'l Stock; add Total Int'l Bond too?
Replies: 25
Views: 1848

Re: Just added Total Int'l Stock; add Total Int'l Bond too?

International bonds seem like more of a no-brainer to me than international stocks. You get a little protection against dollar inflation, you get a little more risk and a little more yield. They help bonds suck less. Yesterday was a good example, where my US bonds lost .38% my internationals only l...
by ThrustVectoring
Thu Feb 15, 2018 2:07 pm
Forum: Investing - Help with Personal Investments
Topic: Just added Total Int'l Stock; add Total Int'l Bond too?
Replies: 25
Views: 1848

Re: Just added Total Int'l Stock; add Total Int'l Bond too?

International bonds seem like more of a no-brainer to me than international stocks. You get a little protection against dollar inflation, you get a little more risk and a little more yield. They help bonds suck less. Yesterday was a good example, where my US bonds lost .38% my internationals only l...
by ThrustVectoring
Thu Feb 15, 2018 12:24 am
Forum: Investing - Help with Personal Investments
Topic: Advice on Building a Portfolio from Scratch?
Replies: 6
Views: 622

Re: Advice on Building a Portfolio from Scratch?

HeftyLefty , welcome to the forum. Age: 33 Desired Asset allocation: 75-80% stocks / 15-20% bonds At age 33 I'd be at least 20% bonds. At "just started investing", I'd be 100% stocks. Bonds are for adding stabilization to your portfolio value as it nears the end of accumulation. Granted, this may n...
by ThrustVectoring
Tue Feb 13, 2018 9:24 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5766

Re: In plain English, please explain what was VIX, what happened to it and why?

VIX is a measure of the expected variance of the S&P 500 index. If the price is expected to move around a lot, call and put options are more expensive, and so VIX tracks that and goes up. What happened is this: a bunch of people realized that the actual volatility is generally lower than what peopl...
by ThrustVectoring
Tue Feb 13, 2018 7:06 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5766

Re: In plain English, please explain what was VIX, what happened to it and why?

VIX is a measure of the expected variance of the S&P 500 index. If the price is expected to move around a lot, call and put options are more expensive, and so VIX tracks that and goes up. What happened is this: a bunch of people realized that the actual volatility is generally lower than what people...
by ThrustVectoring
Mon Feb 12, 2018 2:01 pm
Forum: Investing - Help with Personal Investments
Topic: Help with the pros and cons of diversification strategies
Replies: 9
Views: 339

Re: Help with the pros and cons of diversification strategies

I was interested in some informed opinions on the ways I'm considering diversifying my equity holdings. I have approximately 85k spread between 6 indices and another 15k in cash intended for investment. I'm planning for a retirement that is at least 30 years in the future. What ares the pros and co...
by ThrustVectoring
Sat Feb 10, 2018 1:47 pm
Forum: Investing - Help with Personal Investments
Topic: 0% 18/MO.Balance Transfer w/2% fee
Replies: 17
Views: 842

Re: 0% 18/MO.Balance Transfer w/2% fee

What makes a credit inquiry worth $250? I agree it's hard to justify the 2%. I am currently floating a 0% card but I didn't transfer a balance. Just have the money invested at my overall AA and will pull from my portfolio when it's time to pay it off. We're talking about less than 1% of the portfol...
by ThrustVectoring
Sat Feb 10, 2018 10:45 am
Forum: Investing - Help with Personal Investments
Topic: 0% 18/MO.Balance Transfer w/2% fee
Replies: 17
Views: 842

Re: 0% 18/MO.Balance Transfer w/2% fee

What makes a credit inquiry worth $250? I agree it's hard to justify the 2%. I am currently floating a 0% card but I didn't transfer a balance. Just have the money invested at my overall AA and will pull from my portfolio when it's time to pay it off. We're talking about less than 1% of the portfol...
by ThrustVectoring
Fri Feb 09, 2018 11:28 pm
Forum: Investing - Help with Personal Investments
Topic: 0% 18/MO.Balance Transfer w/2% fee
Replies: 17
Views: 842

Re: 0% 18/MO.Balance Transfer w/2% fee

You have to figure in the opportunity cost in terms of the hard credit inquiry and carrying a balance that gets reported to credit agencies, hurting your score until it gets paid down. The hard inquiry is worth something like $250. Interactive Brokers has margin lending at just under 3%. So you're l...
by ThrustVectoring
Thu Feb 08, 2018 6:49 pm
Forum: Investing - Help with Personal Investments
Topic: What Investments are Inversely Correlated with US Stocks?
Replies: 14
Views: 1125

Re: What Investments are Inversely Correlated with US Stocks?

Use the G fund to mitigate risk - it's just about the best you can do. You don't want something with inverse US stock market correlation - the stock market tends to go up, so something that's too much like "shorting the US stock market" will just lose you money over time. You want something with lit...
by ThrustVectoring
Wed Feb 07, 2018 4:22 pm
Forum: Investing - Theory, News & General
Topic: Huge afternoon stock drop on 2.5.2018 and stock raise on 2.6.2018 is caused by mutual fund holders
Replies: 46
Views: 6774

Re: Huge afternoon stock drop on 2.5.2018 and stock raise on 2.6.2018 is caused by mutual fund holders

Does Vanguard make use of futures ? Prospectuses says they can. Annual and semi-annual reports say they do. Neither really says why, although some possibilities are discussed. IIRC it's because cheaply levering up with futures is a more cost efficient way to meet withdrawal demands for cash. So ins...
by ThrustVectoring
Thu Feb 01, 2018 11:43 pm
Forum: Investing - Theory, News & General
Topic: Stock Dividend Confusion
Replies: 9
Views: 648

Re: Stock Dividend Confusion

The price adjustment happens on the ex-dividend date, not when the cash is physically delivered.
by ThrustVectoring
Thu Feb 01, 2018 5:36 pm
Forum: Investing - Theory, News & General
Topic: When Vanguard papers say "diversification benefits," what precisely are they referring to?
Replies: 7
Views: 988

Re: When Vanguard papers say "diversification benefits," what precisely are they referring to?

When one asset wins at the expense of another, diversification means that your portfolio value remains mostly unchanged. It's free risk-reduction and lowers volatility and uncertainty. For example, if a foreign airline starts taking business in international flights away from US airlines, a portfoli...
by ThrustVectoring
Wed Jan 31, 2018 2:19 pm
Forum: Investing - Help with Personal Investments
Topic: 50K to invest for the long hall - VTSMX
Replies: 18
Views: 2087

Re: 50K to invest for the long hall - VTSMX

There's a decent probability that the current price of VTSAX is the lowest it will ever be. I always lump-sum things into the market as soon as I believe that I won't need the money for twenty years.
by ThrustVectoring
Tue Jan 30, 2018 7:06 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on this beginner strategy?
Replies: 16
Views: 1110

Re: Thoughts on this beginner strategy?

Does this make sense? Or should I forego the target date fund and start immediately with a stock index, and when I save enough money buy a bond index, and so on? Either works great. With only $5k of your total retirement portfolio invested, what you're invested in doesn't particularly matter. Do wh...
by ThrustVectoring
Tue Jan 30, 2018 5:15 pm
Forum: Investing - Help with Personal Investments
Topic: Don't market time...i know, i know.
Replies: 34
Views: 4504

Re: Don't market time...i know, i know.

... Applying the Kelly Criteria on conservative estimates of expected return and volatility in the stock market yields something like 140% equities before you stop being better off with more exposure to the market and really feel the pain of buying rallies and selling dips to maintain proper levera...
by ThrustVectoring
Tue Jan 30, 2018 4:28 am
Forum: Investing - Help with Personal Investments
Topic: Company Stock - % in portfolio
Replies: 21
Views: 1816

Re: Company Stock - % in portfolio

By the way, the rule of thumb is to limit ownership in company stock to 10% of your net worth. I would say to make it even less than that. There was a company I worked for in the past, it's stock reached the pinnacle just before the 2008 debacle - 10 years later, the total compounded annual return ...
by ThrustVectoring
Tue Jan 30, 2018 4:23 am
Forum: Investing - Help with Personal Investments
Topic: Don't market time...i know, i know.
Replies: 34
Views: 4504

Re: Don't market time...i know, i know.

What is your maximum allowable loss? A good rule of thumb is a stock allocation of 2 times your maximum allowable loss. But I can't be 130% in stocks. If my maximum allowable loss is around 65%, does that mean that even at 100/0 I am under-allocated to equities? Come on, I'm getting as close as I c...
by ThrustVectoring
Tue Jan 30, 2018 3:10 am
Forum: Investing - Theory, News & General
Topic: Vanguard CEO - "4-4.5% Market Returns Over The Next Decade"
Replies: 35
Views: 5226

Re: Vanguard CEO - "4-4.5% Market Returns Over The Next Decade"

if return is just 4_4.5%m why invest? I pay down my mortgage effective return would be 4.5% with no risk. There's one school of thought: there's little to no benefit in owning bonds until you pay off your mortgagee. From a portfolio perspective, having a mortgage is effectively shorting a bond, whi...
by ThrustVectoring
Tue Jan 30, 2018 3:04 am
Forum: Investing - Theory, News & General
Topic: The ''Bulletproof'' Wait and See Portfolio - Anti-Inflation and Minimum Risk
Replies: 49
Views: 5233

Re: The ''Bulletproof'' Wait and See Portfolio - Anti-Inflation and Minimum Risk

There's a decent chance that today's price is the lowest that the S&P 500 will ever be. If you want to "buy low", the best plan is to buy early . The probability of that are well implied by various market instruments, and it is definitely not "a decent chance." Usually such things are closer to 50%...
by ThrustVectoring
Mon Jan 29, 2018 8:21 pm
Forum: Investing - Help with Personal Investments
Topic: Here's my net worth....I max everything out.....now what?
Replies: 64
Views: 11456

Re: Here's my net worth....I max everything out.....now what?

We owe $245K on the house at 2.8% interest. House is worth $400K. House be paid off in 10 years if we stick to normal schedule. I'd keep that loan open as long as possible. 2.8% is a great rate to borrow money at. No car payment no credit cards. From a personal finance perspective, putting purchase...
by ThrustVectoring
Mon Jan 29, 2018 8:04 pm
Forum: Investing - Help with Personal Investments
Topic: Reinvest dividends in taxable account?
Replies: 13
Views: 1019

Re: Reinvest dividends in taxable account?

In taxable accounts, I generally reinvest dividends, but not automatically. I periodically check the cash balance between my investment and banking accounts, siphon off what's in excess of my short-term needs, and put the new cash into whatever ETF is most below-target-allocation. Dividends get trea...
by ThrustVectoring
Mon Jan 29, 2018 7:29 pm
Forum: Investing - Theory, News & General
Topic: The ''Bulletproof'' Wait and See Portfolio - Anti-Inflation and Minimum Risk
Replies: 49
Views: 5233

Re: The ''Bulletproof'' Wait and See Portfolio - Anti-Inflation and Minimum Risk

There's a decent chance that today's price is the lowest that the S&P 500 will ever be. If you want to "buy low", the best plan is to buy early.
by ThrustVectoring
Sun Jan 28, 2018 3:05 pm
Forum: Investing - Theory, News & General
Topic: If you're really rich you're probably not an index-fundi Boglehead
Replies: 61
Views: 10906

Re: If you're really rich you're probably not an index-fundi Boglehead

Of course. Take a hundred people founding fifty startups, and you wind up with four multimillionaires, a few regular well-off folks, and the rest failed. Putting a lot of eggs into the "business interests" basket is a recipe to either get really rich or fail. There's fewer outcomes near the mean com...
by ThrustVectoring
Sun Jan 21, 2018 12:10 pm
Forum: Investing - Theory, News & General
Topic: AA is much harder than I thought...
Replies: 45
Views: 4977

Re: AA is much harder than I thought...

Sounds like you really want to be 100% equities. You're early in your accumulation, so what's going to matter is savings rate and how well you can take advantage of bull markets. If you have a good exit plan for when to start buying bonds to stabilize your portfolio, I'd say drop the bond portion an...
by ThrustVectoring
Fri Jan 19, 2018 8:44 pm
Forum: Investing - Theory, News & General
Topic: How do Bogleheads reconcile efficient markets theory with Bitcoin?
Replies: 45
Views: 2366

Re: How do Bogleheads reconcile efficient markets theory with Bitcoin?

Cryptocurrency in general is a Keynesian beauty contest where every picture is blank.

Good luck making a speculative buck there. Combined with being less well regulated than penny stocks, I've decided against having any crypto position.
by ThrustVectoring
Mon Jan 15, 2018 9:14 pm
Forum: Investing - Help with Personal Investments
Topic: Changing Vanguard 3 Fund Portfolio to 2 fund portfolio?
Replies: 9
Views: 1336

Re: Changing Vanguard 3 Fund Portfolio to 2 fund portfolio?

Investors should expect a 50% decline (or more) in stocks during a bear market. One benefit of bonds in an investment portfolio is having a pool of funds available to rebalance into stocks. This was invaluable during the financial crisis. If there are no bonds available, one must rely on contributi...
by ThrustVectoring
Sat Jan 13, 2018 10:47 pm
Forum: Investing - Theory, News & General
Topic: When the Fed stops what do you do?
Replies: 17
Views: 2403

Re: When the Fed stops what do you do?

When the Fed funds rate reaches 3% and allowing for a slight flattening of the yield curve from today, 30-year Treasuries will be somewhere north of 4%. Knowing that a 4% SWR will be more than sufficient to live on (so leaving extra room for taxes and inflation), does it not make sense to move all ...
by ThrustVectoring
Sat Jan 13, 2018 10:43 pm
Forum: Investing - Theory, News & General
Topic: What should I own on the bond side ???
Replies: 11
Views: 1698

Re: What should I own on the bond side ???

I-bonds are a fantastic choice, though there are purchase amount limits, so it may not cover the full gap. But anyhow, your position is probably better off if you buy $10k of I-bonds.
by ThrustVectoring
Fri Jan 12, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Individual investors, possible structural advantages
Replies: 10
Views: 754

Re: Individual investors, possible structural advantages

Individual investors also get financing terms that generally aren't available for institutional investors - home mortgages. The prepayment and refinancing options are excellent and very competitively priced.
by ThrustVectoring
Fri Jan 12, 2018 12:59 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17869

Re: Why Buy Bonds If You Have A Mortgage?

I don't hold bonds in a taxable account, nor should most people, unless they are munis, which have a low yield, nor do I intend to borrow against my home. I also hold Total Bond Index, which is medium duration not long duration. Actually, it can be optimal to hold bonds in taxable accounts. See her...
by ThrustVectoring
Thu Jan 11, 2018 11:43 pm
Forum: Investing - Theory, News & General
Topic: Using 1% of portfolio to buy VIX (Volatility Index) as Hedge...
Replies: 5
Views: 827

Re: Using 1% of portfolio to buy VIX (Volatility Index) as Hedge...

VIX isn't an actual product, it's an index that measures the cost of offloading risk by buying options. When VIX is low it implies that you can relatively cheaply access risk at S&P 500 prices far away from the current market price through put and call options.
by ThrustVectoring
Thu Jan 11, 2018 9:19 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17869

Re: Why Buy Bonds If You Have A Mortgage?

I don't hold bonds in a taxable account, nor should most people, unless they are munis, which have a low yield, nor do I intend to borrow against my home. I also hold Total Bond Index, which is medium duration not long duration. Actually, it can be optimal to hold bonds in taxable accounts. See her...
by ThrustVectoring
Thu Jan 11, 2018 3:00 pm
Forum: Investing - Theory, News & General
Topic: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data
Replies: 44
Views: 3101

Re: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data

For a real world situation of continuous contributions over a working lifetime, the case for leverage is actually much clearer (although it starts high and tapers off quickly), because of the outsized impact of poor portfolio performance in the end (when it it is much larger). By leveraging at the ...
by ThrustVectoring
Thu Jan 11, 2018 1:57 pm
Forum: Investing - Theory, News & General
Topic: Kodakcoin
Replies: 101
Views: 8310

Re: Kodakcoin

KODAKcoin has some serious problems. They went by-the-book, which means that it's a registered security that you can only sell to accredited investors. These sorts of investments you should never expect to be able to sell, ever - they're often held perpetually. And uhh, KODAKcoin doesn't pay any div...
by ThrustVectoring
Thu Jan 11, 2018 1:50 pm
Forum: Investing - Theory, News & General
Topic: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data
Replies: 44
Views: 3101

Re: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data

My general heuristic for these sorts of models is that they tend to be overconfident, so for safety's sake you probably want to drop like 20% of the position size they recommend. Far better to be under-levered than over, and the slope of increasing gains flattens out near the point recommended by th...
by ThrustVectoring
Wed Jan 10, 2018 4:54 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4471

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 ...
by ThrustVectoring
Tue Jan 09, 2018 6:01 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5529

Re: An economist dismisses the idea of dollar cost averaging

I was reading the revised version of Steven Landsburg's The Armchair Economist and found chapter 19 to be interesting. Beginning on page 237, he looks at dollar cost averaging. An excerpt: "Having money in the stock market for 10 months is like betting on the spins of 10 roulette wheels. If you dol...
by ThrustVectoring
Tue Jan 09, 2018 5:55 pm
Forum: Investing - Help with Personal Investments
Topic: adjust the ratio of stock/bond?
Replies: 10
Views: 882

Re: adjust the ratio of stock/bond?

I know it's not a good thing to time the market Don't time the market then. The relevant variables in play are: 1. How old are you? 2. When do you plan on retiring? 3. What are your annual expenses? 4. What is your current retirement portfolio value? There's two different ways to measure how close ...
by ThrustVectoring
Tue Jan 09, 2018 5:29 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4471

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 ...
by ThrustVectoring
Tue Jan 09, 2018 4:45 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4471

Re: Corporate bonds vs. Treasuries

With an equity dominated portfolio relatively early in the accumulation phase, you probably want zero bonds. Cash is a cheaper way to damp equity risk. Held in a highly liquid taxable account, it does a great job of handling personal finance risk. You seem to be conflating two different things - eq...
by ThrustVectoring
Tue Jan 09, 2018 4:10 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4471

Re: Corporate bonds vs. Treasuries

Very interesting post. One more point to add. If you have an equity dominated portfolio, say 90/10, 80/20, 75/25, a case can be made for a very high or even 100% allocation to Treasuries in the bond portfolio. In that case you have considerable equity risk and also considerable upside appreciation ...
by ThrustVectoring
Tue Jan 09, 2018 3:59 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds as Alternative Asset Class (Not Fixed Income)
Replies: 11
Views: 989

Re: Long Term Bonds as Alternative Asset Class (Not Fixed Income)

I think I'd do a 50/50 EDV (Vanguard Extended Duration)/LTPZ (PIMCO 15+ year TIPS) of the slug that's being "alt'd" if I was going to do this, though is actually prefer using DXKLX (Direxion 2x Bull Monthly 7-10 year Treasury) and LTPZ in a 1:2 ratio. Either gives you some diversifications on the s...
by ThrustVectoring
Tue Jan 09, 2018 3:52 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4471

Re: Corporate bonds vs. Treasuries

Very interesting post. One more point to add. If you have an equity dominated portfolio, say 90/10, 80/20, 75/25, a case can be made for a very high or even 100% allocation to Treasuries in the bond portfolio. In that case you have considerable equity risk and also considerable upside appreciation ...