Search found 377 matches

by ThrustVectoring
Thu May 24, 2018 12:08 am
Forum: Investing - Theory, News & General
Topic: New Trend: Bonds in Roth IRA
Replies: 14
Views: 1961

Re: New Trend: Bonds in Roth IRA

IMHO you don't need to hold bonds anywhere, at least if you're over a decade away from retirement. As far as risk goes, extra stocks in a tax-deferred account makes tax planning more difficult. The goal is to flatten out your tax rate through trying to realize approximately equal amounts of income ...
by ThrustVectoring
Wed May 23, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: New Trend: Bonds in Roth IRA
Replies: 14
Views: 1961

Re: New Trend: Bonds in Roth IRA

IMHO you don't need to hold bonds anywhere, at least if you're over a decade away from retirement. As far as risk goes, extra stocks in a tax-deferred account makes tax planning more difficult. The goal is to flatten out your tax rate through trying to realize approximately equal amounts of income e...
by ThrustVectoring
Mon May 21, 2018 7:32 pm
Forum: Investing - Theory, News & General
Topic: Do bonds make sense if you are more than 10 years from retirement?
Replies: 11
Views: 1328

Re: Do bonds make sense if you are more than 10 years from retirement?

One reason it might make sense is going to the well a bit early than planned. A lot of folks have long bouts of unemployment. Even if you are really, really awesome and everyone agrees and wants to hire you, you might get too sick to work. That's an argument for having good disability insurance, no...
by ThrustVectoring
Sun May 20, 2018 4:45 am
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 30
Views: 2449

Re: Dividend / no dividend index funds?

Berkshire Hathaway is a large multinational conglomerate rather than an index fund, but it is fairly well-diversified and is committed to paying zero dividends.
by ThrustVectoring
Sat May 19, 2018 1:22 pm
Forum: Investing - Theory, News & General
Topic: Buffett says Bonds are a terrible investment now. What should we invest in besides stocks?
Replies: 78
Views: 10102

Re: Buffett says Bonds are a terrible investment now. What should we invest in besides stocks?

I still think bond allocation should be 100% tied to one's near term cash flow needs. if you don't have near term cash flow needs, then you don't need bonds. with bonds you are paying a price for the decreased volatility. that price is not cheap. it comes in the form of decreased expected return in...
by ThrustVectoring
Wed May 16, 2018 6:29 pm
Forum: Investing - Theory, News & General
Topic: How to decide VT vs VTI?
Replies: 6
Views: 776

Re: How to decide VT vs VTI?

VT is more diversified. However, if you use VTI and VEU separately you can choose your own allocation. You may also have more options with respect to tax lots, etc. I tend to be more slicey dicey, but for a worldwide allocation, VT is the "set it and forget it" option. I don't think there is a wron...
by ThrustVectoring
Tue May 15, 2018 11:36 pm
Forum: Investing - Theory, News & General
Topic: NRIA.NET - Real Estate Private Placement - 16% return
Replies: 11
Views: 936

Re: NRIA.NET - Real Estate Private Placement - 16% return

How do you think they can afford to pay for the commercials you saw?

As a rough rule of thumb, the more folks try to market to me the less I'm interested in investing with them. Just stick with index funds and be happy with the returns the market provides.
by ThrustVectoring
Tue May 15, 2018 12:13 pm
Forum: Investing - Theory, News & General
Topic: Would you be willing to temporarily change your AA?
Replies: 27
Views: 1506

Re: Would you be willing to temporarily change your AA?

I don't think a percentage-based asset allocation is necessarily the best choice, just the one that is easiest to explain, follow, and offer as a product. I think something more like a emergency fund -> stocks -> bonds waterfall is better. Like, my target for a retirement portfolio is 18 years of ex...
by ThrustVectoring
Sun May 13, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: Asset allocation in Roth vs pre-tax
Replies: 19
Views: 1534

Re: Asset allocation in Roth vs pre-tax

If you have the option of a pre-tax (trad IRA, 401k) vs roth (roth IRA, roth 401k), what is the common wisdom? My thought Consider everything like a big portfolio. Allocate the assets with most retrun (REITs, SCV, ..) in Roth rest in pre-tax (step 4 in https://www.bogleheads.org/wiki/Tax-efficient_...
by ThrustVectoring
Sun May 13, 2018 2:28 am
Forum: Investing - Theory, News & General
Topic: Asset allocation in Roth vs pre-tax
Replies: 19
Views: 1534

Re: Asset allocation in Roth vs pre-tax

Allocate the assets with most retrun (REITs, SCV, ..) in Roth If you believe that they have the most return, why are you holding other assets? This always makes little sense to me. And if it's for diversification and a better risk-adjusted return, why wouldn't you have that mix in your Roth to maxi...
by ThrustVectoring
Fri May 11, 2018 11:55 am
Forum: Investing - Theory, News & General
Topic: Asset allocation in Roth vs pre-tax
Replies: 19
Views: 1534

Re: Asset allocation in Roth vs pre-tax

Allocate the assets with most retrun (REITs, SCV, ..) in Roth If you believe that they have the most return, why are you holding other assets? This always makes little sense to me. And if it's for diversification and a better risk-adjusted return, why wouldn't you have that mix in your Roth to maxi...
by ThrustVectoring
Wed May 09, 2018 1:37 pm
Forum: Investing - Help with Personal Investments
Topic: Bad(?) advice from employer retirement advisor [on per-year contribution limits]
Replies: 29
Views: 2011

Re: Bad(?) advice from employer retirement advisor [on per-year contribution limits]

You can keep going post-tax in your 401k if you have a big salary. If you are over 55, you can do catch up contributions. $55,000 is the limit for all sources to your 401k. Note that this is a per-plan limit, while the $18.5k is a per-person limit. The primary way this matters is if you have multip...
by ThrustVectoring
Wed May 09, 2018 11:40 am
Forum: Investing - Theory, News & General
Topic: Rationale for placing high expected return funds in Roth rather than tIRA
Replies: 15
Views: 1123

Re: Rationale for placing high expected return funds in Roth rather than tIRA

Putting different funds in Roth vs Taxable or Traditional based on expected returns bothers me. Like, a lot. If you expect something to have a lower return, why are you buying it at all? IMHO you should put your higher expected return funds in both Roth and tIRA, and drop the lower expected return f...
by ThrustVectoring
Sun May 06, 2018 1:44 pm
Forum: Investing - Help with Personal Investments
Topic: Currently fearful, aspiring early retiree, seeks guidance
Replies: 7
Views: 1364

Re: Currently fearful, aspiring early retiree, seeks guidance

You have the TSP, which implies you're a government employee, which implies really good job security. You can afford to be very aggressive until you have the equity portion of your portfolio at retirement. So if you want to retire with a 60% equity portfolio with 30x your annual expenses saved in to...
by ThrustVectoring
Sun May 06, 2018 1:29 pm
Forum: Investing - Help with Personal Investments
Topic: Fund/Funds for retired person who doesnt rely on the money
Replies: 12
Views: 648

Re: Fund/Funds for retired person who doesnt rely on the money

Ask him what he wants to accomplish with the money. His needs are taken care of, so does he want to spend his money down on fun activities while he's still healthy enough to enjoy them? Does he want to leave behind a large charitable contribution or inheritance? The approach taken depends entirely o...
by ThrustVectoring
Sun May 06, 2018 1:25 pm
Forum: Investing - Help with Personal Investments
Topic: Are bonds necessary/beneficial in my situation?
Replies: 21
Views: 2037

Re: Are bonds necessary/beneficial in my situation?

Honestly, it depends on how correlated you think a stock market is with a loss in your ability to make money. And at 11x cost of living in your portfolio, you should be thinking about buying bonds soon-ish anyhow. Your overall goal is something like 30x cost of living in stocks and bonds, with a sto...
by ThrustVectoring
Sun May 06, 2018 2:43 am
Forum: Investing - Theory, News & General
Topic: How do brokerages make $s on cheap index funds?
Replies: 57
Views: 5020

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

The cheap index funds are at cost offerings to bring people onto the platform. Fidelity offers 401(k) plans and presumably charges either plan operators or participants for this, and they need to have cheap index funds in order to be competitive. Also there's uninvested cash balances, and they can p...
by ThrustVectoring
Sat May 05, 2018 11:21 pm
Forum: Investing - Theory, News & General
Topic: Shorting - Can Someone Explain
Replies: 32
Views: 2194

Re: Shorting - Can Someone Explain

I cannot give the pros and cons - but you can also sell short a stock that you continue to own. Doing that is much lower risk. Never done this - but perhaps others can give more details. It's called "shorting against the box" and was primarily useful as a tax avoidance strategy prior to 1997. It's ...
by ThrustVectoring
Mon Apr 30, 2018 7:03 pm
Forum: Investing - Help with Personal Investments
Topic: How do you know when you have "won the game"?
Replies: 142
Views: 15282

Re: How do you know when you have "won the game"?

I keep a very large (probably extreme) emergency fund and invest very aggressively in the markets what I do have invested, unorthodox style for most Bogleheads (active/leveraged). Leaving aside active vs passive, you're probably paying more for the leverage you're using than your emergency fund is ...
by ThrustVectoring
Mon Apr 30, 2018 5:39 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Real Estate Isn’t Special
Replies: 49
Views: 7028

Re: Larry Swedroe: Real Estate Isn’t Special

KyleAAA wrote:
Mon Apr 30, 2018 10:56 am
A nitpick: REITs are not real estate. Real Estate may very well be special, we don't know.
Real estate is definitely special, but it's the mortgage that matters, not the property. There's no better way to short long-term bonds, and long-term bonds are pretty terrible so it's a fantastic short.
by ThrustVectoring
Sun Apr 29, 2018 10:59 pm
Forum: Investing - Theory, News & General
Topic: Money market funds - under par interest rates
Replies: 15
Views: 1478

Re: Money market funds - under par interest rates

So are online savings account banks buying 10 years and offering 2% savings rates and pocketing the 1%? how do i apply to become a bank again? :D You first need to understand duration and interest rate risk. If the yield on those 10-years goes up 1% in a year, they lose 10% of their value, and the ...
by ThrustVectoring
Sat Apr 28, 2018 12:26 pm
Forum: Investing - Theory, News & General
Topic: What's wrong with this critique of indexing?
Replies: 110
Views: 6368

Re: What's wrong with this critique of indexing?

Let's use a toy model to illustrate why cap-weighted indexing is a good choice. Suppose the widget industry has two companies in it: company A is worth $8B, and company B worth $2B. Suppose that there's a big federal widget contract, worth $2B in market cap, and there's a 50/50 chance each company g...
by ThrustVectoring
Tue Apr 24, 2018 6:45 pm
Forum: Investing - Theory, News & General
Topic: Why are rising Bond Yields bad?
Replies: 37
Views: 4426

Re: Why are rising Bond Yields bad?

There's another effect - a change in the discount rate used to value future cash flows. If the discount rate is 3%, then you'd need to get $1.03 next year in order to be convinced to give up a dollar today. If that rises to 4%, then any assets you have that yield cash flows a year out will drop by r...
by ThrustVectoring
Mon Apr 23, 2018 4:12 pm
Forum: Investing - Theory, News & General
Topic: Yield Curves-Treasury, CD, AA/AAA muni
Replies: 91
Views: 8658

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: 12151

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: 634

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: 541

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: 17436

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: 2982

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: 2417

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: 47
Views: 4703

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: 2417

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: 3659

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: 1221

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: 4487

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: 58
Views: 4752

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: 3603

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: 3603

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: 1732

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: 459

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: 459

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: 4838

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: 5400

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: 18197

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: 18197

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: 4077

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: 1931

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: 4163

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: 8871

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: 4079

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.