Search found 354 matches

by ThrustVectoring
Mon Apr 23, 2018 4:12 pm
Forum: Investing - Theory, News & General
Topic: Yield Curves-Treasury, CD, AA/AAA muni
Replies: 11
Views: 1248

Re: Yield Curves-Treasury, CD, AA/AAA muni

Have you looked into the after-tax return of treasury futures? Gains and losses get treated as 60% long-term / 40% short-term capital gains, which is probably advantageous.
by ThrustVectoring
Sun Apr 15, 2018 1:41 am
Forum: Investing - Theory, News & General
Topic: What is your AA, given your age? and, Why?
Replies: 163
Views: 11369

Re: What is your AA, given your age? and, Why?

30, 100% stocks (excluding emergency fund in cash). Bonds suck over the long run and I spent my 20s digging myself out of student loan debt and getting my career set up rather than investing. My glide path is going to be "start buying bonds at stock value == 18x annual expenses until getting 12 year...
by ThrustVectoring
Sun Apr 08, 2018 11:08 am
Forum: Investing - Theory, News & General
Topic: Do 401k Plan Providers Make Money from Mutual Fund Fees
Replies: 6
Views: 609

Re: Do 401k Plan Providers Make Money from Mutual Fund Fees

Depends on the plan. My employer has a 401(k) from Vanguard, and they pay the recordkeeping and compliance fee. There's no match, but at least we get to dump money into VTSAX et al on a pre-tax basis.
by ThrustVectoring
Sat Apr 07, 2018 8:05 pm
Forum: Investing - Theory, News & General
Topic: ETFs’ Hidden Source of Return—Securities Lending
Replies: 2
Views: 521

Re: ETFs’ Hidden Source of Return—Securities Lending

You can view any ETF's security lending policy using ETF.com's data under the "Efficiency" tab. Although it does bother me when an ETF issuer doesn't plow all the securities lending money back into the ETF, it's hard to complain when the ETF beats its own index. Also, even though I understand the i...
by ThrustVectoring
Thu Apr 05, 2018 12:35 pm
Forum: Investing - Theory, News & General
Topic: Trying the Impossible - Financing 30-Year Retirements with 40-Year Careers
Replies: 118
Views: 17141

Re: Trying the Impossible - Financing 30-Year Retirements with 40-Year Careers

Excellent presentation, but there's an even simpler way to look at it, which is the paradigm of Arnott and Cascells, FAJ, 2003: Imagine a desert island with 4 inhabitants, each of who performs a separate, vital economic task (growing food, building shelter, repairing equipment, etc.). The medium of...
by ThrustVectoring
Wed Apr 04, 2018 5:34 pm
Forum: Investing - Theory, News & General
Topic: How Scalabale is the 3/4 Fund portfolio?
Replies: 38
Views: 2844

Re: How Scalabale is the 3/4 Fund portfolio?

At a truly enormous amount of wealth, you're likely better off paying someone to replicate the S&P 500 index with individual stocks, tax-loss harvesting losers, and donating appreciated stocks to donor-advised funds. Eg, if your $10k of GM stock doubles and your $10k of Ford stock gets wiped out, an...
by ThrustVectoring
Wed Apr 04, 2018 12:54 pm
Forum: Investing - Theory, News & General
Topic: CDOs are back! How to spot them in fund holdings?
Replies: 10
Views: 2369

Re: CDOs are back! How to spot them in fund holdings?

The markets are efficient. That's the whole point of being on the Bogleheads forums. CDOs are a great way to diversify your beta portfolio. Not all markets are efficient. They're only as efficient as pricing discrepancies are exploitable. The thickly traded equity markets with tons of public inform...
by ThrustVectoring
Tue Apr 03, 2018 3:49 pm
Forum: Personal Finance (Not Investing)
Topic: Insight Card (APY 5%) full personal review
Replies: 32
Views: 2776

Re: Insight Card (APY 5%) full personal review

It's likely a false positive on some anti-fraud alarm.
by ThrustVectoring
Tue Apr 03, 2018 3:01 pm
Forum: Investing - Theory, News & General
Topic: CDOs are back! How to spot them in fund holdings?
Replies: 10
Views: 2369

Re: CDOs are back! How to spot them in fund holdings?

IMO the fixed income side of your portfolio is not where you want to take risks. If you need higher returns, you're typically better compensated by increasing equity exposure than by choosing less-safe bonds. Personally, all my money is in either FDIC insured accounts, bonds issued by the US treasur...
by ThrustVectoring
Wed Mar 28, 2018 3:51 pm
Forum: Investing - Theory, News & General
Topic: Anyone hold any defensive funds in their portfolio?
Replies: 41
Views: 3456

Re: Anyone hold any defensive funds in their portfolio?

Doing better in downturns is easy - just hold more cash or bonds and lower your exposure to market beta that way. And if low-volatility stuff has better risk-adjusted returns than the stock market as a whole, then that implies someone who is 100% equities would be better off levering up on low-vol s...
by ThrustVectoring
Sun Mar 18, 2018 1:53 pm
Forum: Investing - Theory, News & General
Topic: How can EMH be consistent with this finding?
Replies: 18
Views: 1149

Re: How can EMH be consistent with this finding?

Well, the weak form of the EMH says technical analysis can't work, the semi-strong form says fundamental analysis can't work, and the strong form says nothing can work. Well, not that fundamental analysis can't work. It's just that doing fundamental analysis should provide approximately the same am...
by ThrustVectoring
Wed Mar 14, 2018 6:11 pm
Forum: Investing - Theory, News & General
Topic: your cash is trash at brokers J.Zweig - WSJ
Replies: 23
Views: 4405

Re: your cash is trash at brokers J.Zweig - WSJ

Interactive Brokers is the only us broker that I know that pay any decent interest on credit cash balance.. IB pay fed funds rate minus 50 basis point which is about .93 percentage now but should go up as fed raises. IB don't pay any interest for the first 10k and you don't get any interest at all ...
by ThrustVectoring
Tue Mar 13, 2018 7:34 pm
Forum: Investing - Theory, News & General
Topic: Bloomberg commodities index still in contango
Replies: 53
Views: 4091

Re: Bloomberg commodities index still in contango

Why should the expected real return of a commodity be anything other than zero, recent historical backwardation or otherwise? In some markets, you're performing a valuable service - using your capital to take on the risk of variable future commodity prices so that producers of said commodities de-r...
by ThrustVectoring
Mon Mar 12, 2018 5:43 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation once you've passed your "number"
Replies: 41
Views: 3536

Re: Asset Allocation once you've passed your "number"

100% equities + enough cash to cover day-to-day needs. That said, my plan involves retiring with far too much money :) ThrustVectoring, << enough cash to cover day-to-day needs. >> For how long? 1 day? 1 month? 1 year? 10 years? KlangFool It's floated around based on what I've needed, but usually r...
by ThrustVectoring
Mon Mar 12, 2018 4:24 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation once you've passed your "number"
Replies: 41
Views: 3536

Re: Asset Allocation once you've passed your "number"

100% equities + enough cash to cover day-to-day needs.

That said, my plan involves retiring with far too much money :)
by ThrustVectoring
Thu Mar 08, 2018 2:02 pm
Forum: Investing - Theory, News & General
Topic: Give me the long-term predictability of shares, at any age
Replies: 14
Views: 1709

Re: Give me the long-term predictability of shares, at any age

Rick Van Ness has it right in the underlined parts: Why bonds: #1 because stocks are risky Stocks remain volatile every day of every year, including the day before you sell them 40 years from now . But this is an easy mistake to make because we often hear that “stocks held for decades rarely lose m...
by ThrustVectoring
Wed Mar 07, 2018 4:33 pm
Forum: Investing - Theory, News & General
Topic: Roth IRA options for tax arbitrage?
Replies: 2
Views: 456

Re: Roth IRA options for tax arbitrage?

On further thought, this doesn't work - it's just a well disguised long volatility strategy. If you also did a similar situation with a synthetic short, you'd just be long a straddle in your Roth IRA and short it in your taxable account. Overall, I suspect that if you do the math, the expected flows...
by ThrustVectoring
Wed Mar 07, 2018 3:20 pm
Forum: Investing - Theory, News & General
Topic: Roth IRA options for tax arbitrage?
Replies: 2
Views: 456

Roth IRA options for tax arbitrage?

So, IRA accounts can go long option contracts, and one interesting fact about options is that long call + short put + cash = long underlying. And there is a healthy options market on the S&P 500, allowing you to have a synthetic long position fairly cheaply. If your account balances are large enough...
by ThrustVectoring
Wed Mar 07, 2018 2:40 am
Forum: Investing - Theory, News & General
Topic: no bonds in roth?
Replies: 34
Views: 4752

Re: no bonds in roth?

What am I missing? Since Roth dollars are worth more you may want to be more aggressive or more conservative. If we hit another 2008 and you need that money, you'd probably want some bonds to cushion your losses in your Roth and rebalance. I suppose you could not touch your Roth until late retireme...
by ThrustVectoring
Sun Mar 04, 2018 4:42 pm
Forum: Investing - Theory, News & General
Topic: What is your investment strength?
Replies: 70
Views: 5288

Re: What is your investment strength?

Being process oriented and willing to take reasonable risks. If I think my investment plan is the best thing to do with my money, I commit to it.
by ThrustVectoring
Sun Mar 04, 2018 4:38 pm
Forum: Investing - Theory, News & General
Topic: Is Cash Trash? The Purpose of Cash
Replies: 178
Views: 17803

Re: Is Cash Trash? The Purpose of Cash

When I was still working, I always had a source of cash: my paycheck. I spent upwards of 80% of it each month, invested the rest. Now that I'm retired, my cash comes from Social Security and RMD's from my retirement fund. I spend upwards of 90% each month, "save" the rest for a rainy day or special...
by ThrustVectoring
Sun Mar 04, 2018 1:40 pm
Forum: Investing - Theory, News & General
Topic: Is Cash Trash? The Purpose of Cash
Replies: 178
Views: 17803

Re: Is Cash Trash? The Purpose of Cash

Sheepdog wrote:
Sun Mar 04, 2018 12:40 pm
others can opt to reduce risk using dollar cost averaging strategies.
Dollar cost averaging doesn't reduce risk beyond just having a lower equity percentage.
by ThrustVectoring
Fri Mar 02, 2018 3:01 pm
Forum: Investing - Theory, News & General
Topic: Goodbye Emergency Fund (sorta)
Replies: 34
Views: 3955

Re: Goodbye Emergency Fund (sorta)

You could have a similar amount of market exposure with a more stable cash availability if you replaced the target retirement funds in your tax-advantaged accounts with VTSAX/VTIAX. Basically: find out how much stock market exposure you "should" have, replace the target-retirement funds with 100% eq...
by ThrustVectoring
Wed Feb 28, 2018 3:09 pm
Forum: Investing - Theory, News & General
Topic: International funds: Tax-deferred or Roth?
Replies: 32
Views: 1883

Re: International funds: Tax-deferred or Roth?

Doesn't it make sense to locate funds with the highest expected growth in the traditional account? Having a difference in expected growth rate implies making a change to your asset allocation first. Like, if you're retiring in 30 years and believe (for good reason) that stocks are basically certain...
by ThrustVectoring
Tue Feb 27, 2018 11:24 pm
Forum: Investing - Theory, News & General
Topic: Why have Emergency Funds?
Replies: 54
Views: 4113

Re: Why have Emergency Funds?

You don't necessarily need an emergency fund. You do need an emergency plan . Whether it's selling stocks or bonds, taking out a margin loan, putting a major emergency purchase on a credit card, or simply withdrawing from your savings account - you will likely regret not being able to come up with m...
by ThrustVectoring
Tue Feb 27, 2018 8:54 pm
Forum: Investing - Theory, News & General
Topic: Boglehead contradiction, constant asset allocation is market timing
Replies: 100
Views: 8717

Re: Boglehead contradiction, constant asset allocation is market timing

It's risk management, not market timing. A risk management strategy that targets levering up to 120% on stocks would manage risk by buying stocks when they increase in value and selling when they decrease.
by ThrustVectoring
Mon Feb 26, 2018 3:18 pm
Forum: Investing - Theory, News & General
Topic: Personal rules for buying in a down market?
Replies: 55
Views: 4005

Re: Personal rules for buying in a down market?

Buying in a down market is way easier when you're 100% equities. You pretty much buy when you have the free cash flow to support additional investments, rather than at any particular price point.
by ThrustVectoring
Wed Feb 21, 2018 4:47 pm
Forum: Investing - Theory, News & General
Topic: What's the impact of no more Roth recharacterization?
Replies: 30
Views: 3090

Re: What's the impact of no more Roth recharacterization?

It's a good thing, it closes a pretty major loophole. You can buy and write covered options in retirement accounts. This opens up some tax sheltering strategies that are pretty significant - specifically, buying one leg of an options strategy in a recharacterizable Roth IRA account, and concentratin...
by ThrustVectoring
Mon Feb 19, 2018 3:58 pm
Forum: Investing - Theory, News & General
Topic: Interactive Brokers fee structure for passive investors
Replies: 39
Views: 3091

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: 1490

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: 33
Views: 2531

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: 9
Views: 684

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: 2027

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: 81
Views: 9944

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: 2027

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: 2027

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: 686

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: 6084

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: 6084

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: 413

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: 914

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: 914

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: 914

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: 1239

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: 6920

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: 689

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: 1024

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: 2244

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: 1177

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: 4635

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...