Search found 15 matches

by wise_magus
Tue Aug 27, 2019 6:50 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 7928
Views: 775521

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

No, I was referring to the 50/50 UPRO/TMF (actually 40/60, but anywhere from 30/70 to 60/40 should have been similar). The daily rebalance for UPRO/TMF would have been superior to the monthly/quarterly UPRO/TMF by 100/200 bps. Not quite as exciting as you thought... But isn't this equivalent to a 3...
by wise_magus
Tue Aug 27, 2019 6:07 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 7928
Views: 775521

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

The calculations I've done with different rebalance periods show that daily rebalancing mitigates some of the volatility drag, which adds a percentage point or two to the CAGR. This bonus drops off rapidly as the inverse of the number of days between rebalances. I've thought that an ETF would be th...
by wise_magus
Tue Aug 27, 2019 6:04 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 7928
Views: 775521

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

No, I was referring to the 50/50 UPRO/TMF (actually 40/60, but anywhere from 30/70 to 60/40 should have been similar). The daily rebalance for UPRO/TMF would have been superior to the monthly/quarterly UPRO/TMF by 100/200 bps. Not quite as exciting as you thought... But isn't this equivalent to a 3...
by wise_magus
Tue Aug 27, 2019 5:34 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 7928
Views: 775521

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

The calculations I've done with different rebalance periods show that daily rebalancing mitigates some of the volatility drag, which adds a percentage point or two to the CAGR. This bonus drops off rapidly as the inverse of the number of days between rebalances. I've thought that an ETF would be th...
by wise_magus
Tue Aug 27, 2019 3:38 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 7928
Views: 775521

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

This is addressed in the OP of Part I. MoneyMarathon also did an awesome job of showing how rebalancing against an imperfectly correlated asset reduces the volatility decay. Imagine you rebalanced daily to 33.3% UPRO and the rest in cash, that would perfectly match the S&P500 except for the exp...
by wise_magus
Sat Jun 29, 2019 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: Foreign tax credit from capital gains on an international index fund
Replies: 5
Views: 523

Re: Foreign tax credit from capital gains on an international index fund

That's great to hear, but it contradicts what I read on investopedia. Here's a quote from the article https://www.investopedia.com/articles/personal-finance/012214/understanding-taxation-foreign-investments.asp Many countries have no capital gains tax at all or waive it for foreign investors. But pl...
by wise_magus
Sat Jun 29, 2019 12:34 pm
Forum: Personal Finance (Not Investing)
Topic: Foreign tax credit from capital gains on an international index fund
Replies: 5
Views: 523

Foreign tax credit from capital gains on an international index fund

There are many threads on Bogleheads about the foreign tax credit received due to yearly distributions when holding an international index fund like VTIAX. See, for example, threads like https://www.bogleheads.org/forum/viewtopic.php?t=160289 and https://www.bogleheads.org/forum/viewtopic.php?f=1&am...
by wise_magus
Mon Jun 10, 2019 11:15 am
Forum: Personal Finance (Not Investing)
Topic: How much VTIAX can I hold in a taxable account to have under $300 foreign tax paid?
Replies: 6
Views: 1201

Re: How much VTIAX can I hold in a taxable account to have under $300 foreign tax paid?

Thanks to everyone for their answers, this was all very helpful! From the data point of MNGopher above, we get ~$160K. In the other thread linked to by shiftleft, I saw the estimate $140K. I did some calculations using Vanguard's website as well, and I got a number around $135K. So TLDR: So as a pre...
by wise_magus
Sun Jun 09, 2019 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: How much VTIAX can I hold in a taxable account to have under $300 foreign tax paid?
Replies: 6
Views: 1201

How much VTIAX can I hold in a taxable account to have under $300 foreign tax paid?

An often discussed issue on this forum is that holding too much of an international index fund (say VTIAX or FTIHX or FZILX or something) will lead to a significant amount of foreign taxes paid. If this amount is above $300 (or $600 if MFJ), then one has to fill out a somewhat complicated Form 1116....
by wise_magus
Sun Sep 17, 2017 10:27 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion
Replies: 10
Views: 907

Re: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion

No, in the first 5 years after the IRR, you would owe 10% penalty on 1,000 which was the taxable portion of the IRR. The 5 years carries over to the Roth IRA where this is treated as if it was a Roth IRA conversion of 11k, of which 1k was taxable, and the 1k comes out first. Thanks for the detailed...
by wise_magus
Sun Sep 17, 2017 5:09 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion
Replies: 10
Views: 907

Re: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion

I agree with your assessment. Thanks for looking into this! Are you restricted to quarterly conversions for both in-plan conversions and Roth IRA rollovers? It'd be tedious, but could you adjust your contributions to happen only in the paycheck immediately preceding the quarterly conversion (and re...
by wise_magus
Sun Sep 17, 2017 3:00 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion
Replies: 10
Views: 907

Re: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion

After some more reading, specifically this link (http://fairmark.com/retirement/roth-accounts/roth-distributions/distribution-overview/), I'm now concerned that even my original premise with $10k is wrong. According to Fairmark.com, the order of distributions within conversions is taxable part first...
by wise_magus
Sun Sep 17, 2017 2:34 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion
Replies: 10
Views: 907

Re: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion

LadyGeek wrote: Sun Sep 17, 2017 2:31 pm Welcome! May I suggest you remove your employer's name (ticker symbol) from your post? We don't need it to answer your questions. Additionally, employers usually surf the internet and will find your post. There may be enough info to identify you personally.
OK, done. Thanks!
by wise_magus
Sun Sep 17, 2017 1:36 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion
Replies: 10
Views: 907

Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion

My employer allows after-tax 401k contributions, and has an option for automatic quarterly after-tax 401k -> Roth 401k in-plan conversions. The other option for executing the mega backdoor Roth is to do an out-of-plan conversion, in which I can convert the after-tax 401k contribution to a Roth IRA, ...