Search found 15 matches

by e_swami
Sun Jul 07, 2019 8:58 pm
Forum: Personal Investments
Topic: Is my Asset Allocation too complicated and sub-optimal ??
Replies: 13
Views: 1307

Re: Is my Asset Allocation too complicated and sub-optimal ??

I also did a backtest of my portfolio vs VTSAX and VTIAX at 50/50, since my portfolio is also 50/50 US/Intl. Mine does slightly better than the simple portfolio. But the S&P 500 beats both hands down. So really the question for me is more about the mix of US vs international than about fewer funds. Should I come back to weighting the US more? Thats the big question. Any thoughts on that? Thanks We can also use PortfolioVisualizer to backtest the stock portion of your portfolio and compare it to the dead-simple alternative, 70% VTSAX, the Vanguard Total [US] Stock Market Index Fund, and 30% VTIAX, the Vanguard Total International Stock Market Index fund. One issue I should point out before showing the results is that the Vanguard FTSE Al...
by e_swami
Sun Jul 07, 2019 6:35 pm
Forum: Personal Investments
Topic: Is my Asset Allocation too complicated and sub-optimal ??
Replies: 13
Views: 1307

Re: Is my Asset Allocation too complicated and sub-optimal ??

Thank you nisiprius. Thats a useful tool. And yes, the correlations are fairly high. I had trouble posting the image like you did but all US stocks had a correlation of 0.9 or higher. International was at or below 0.83, with emerging markets the lowest at 0.69

I am thinking about simplifying. But before I do i ant to make sure what i maybe missing, or not missing. Another issue is that my current allocation is effectively 50/50 US and international. I think thats a key reason for the underperformance over the past decade. And a key decision to be made. What is your thinking on weighting US vs international stocks?
by e_swami
Sun Jul 07, 2019 6:04 pm
Forum: Personal Investments
Topic: Is my Asset Allocation too complicated and sub-optimal ??
Replies: 13
Views: 1307

Re: Is my Asset Allocation too complicated and sub-optimal ??

I would have guessed you were using the Craig Israelsen 7/12 portfolio asset allocation. Some folks would say it was complicated and some would not. As for 529 plans, just put it in an age-based aggressive option for both of them and forget about it. I would not be making any more contributions at all. Thanks. I have never heard of Craig Israelsen 7/12 until now. It is quite similar, though I dont have real estate or natural resources in mine. And i thought growth vs value orientation mattered for diversification. Is there a good fund that can actually track "natural resources" prices? Investing in companies does not sound like a good substitute. Also, there are energy, precious metals, industrial metals and agri commodities. Do ...
by e_swami
Sun Jul 07, 2019 5:38 pm
Forum: Personal Investments
Topic: Is my Asset Allocation too complicated and sub-optimal ??
Replies: 13
Views: 1307

Is my Asset Allocation too complicated and sub-optimal ??

Age: 45 Children: One (12 years old) Debt: ~$600K in a 30-yr fixed mortgage with 25 years to go. There is significant equity in my house. I have two questions. One on my 529 and one on my retirement savings 529 : $289K Fixed Income / stable funds: 74% US Large cap value: 20% US small cap: 6% At one point, i used to look at my 529 and retirement funds as one whole portfolio. That has changed now but it left with a strange looking 529 asset mix. About a third of this money is in Virignia 529. The rest in New York. Plan to move funds to NY in the next few years. How much should i have in equity vs fixed income given i have six more years to college? Retirement: Below is my overall asset allocation across IRAs (me and my wife), 401k, taxable et...
by e_swami
Mon Jan 21, 2019 9:07 am
Forum: Personal Investments
Topic: Using 529 for retirement rather than just education?
Replies: 16
Views: 2230

Re: Using 529 for retirement rather than just education?

No, because in addition to the 10% penalty, non-qualified distributions from a 529 plan is subject to ordinary income taxes. A taxable account would not be subject to the 10% penalty, and would benefit from lower long term capital gains tax rates on the growth. Income taxes should not matter for this calculation because my alternative to the 529 is to put the money in a taxable brokerage account on which case I pay taxes every year on interest and dividends. In both cases, I have to pay taxes. In the case of the 529, there is the extra 10% penalty but the benefits of compounding over a couple of decades or more may leave me better off even after paying the 10% penalty What am I missing here? Are u saying that with the 529, i would be payin...
by e_swami
Mon Jan 21, 2019 9:04 am
Forum: Personal Investments
Topic: Using 529 for retirement rather than just education?
Replies: 16
Views: 2230

Re: Using 529 for retirement rather than just education?

Income taxes should not matter for this calculation because my alternative to the 529 is to put the money in a taxable brokerage account on which case I pay taxes every year on interest and dividends. In both cases, I have to pay taxes. In the case of the 529, there is the extra 10% penalty but the benefits of compounding over a couple of decades or more may leave me better off even after paying the 10% penalty

What am I missing here?
by e_swami
Sat Jan 19, 2019 5:06 pm
Forum: Personal Investments
Topic: Using 529 for retirement rather than just education?
Replies: 16
Views: 2230

Using 529 for retirement rather than just education?

It seems to me that if you u let the money stay long enough in a 529 without paying taxes on interest and dividends, you would be better off paying the 10% penalty at the end for "non educational" use of money. Am I making a mistake in looking at it this way? If I am correct, I should look at my 529 as an IRA with no contribution limits.

Also, if u have money from elsewhere for retirement, cant you just change the beneficiary of the 529 to your grandchildren and let that money be used for their educational purposes? That would avoid even the 10% penalty

I would appreciate any thoughts

Thank you

Swami
by e_swami
Sat Mar 31, 2018 5:21 pm
Forum: Personal Investments
Topic: Quantum and Asset Allocation for 529 account
Replies: 3
Views: 521

Quantum and Asset Allocation for 529 account

Hello all

I am thinking about my son's 529 account. He is 11 years old now.

1. How much money should one look to save. Theoretically, $300K should cover 4 years at even the most expensive college. Is that the max one would ever look to save or are there reasons to save more than this amount? I guess one could consider saving for post grad as well but are there any other considerations?

2. How do u think about asset allocation for the 529 with 6 years to go for college? Would it be 50% equity at this point? I would appreciate thoughts on how to think about asset allocation for a 529

Thanks

Swami
by e_swami
Sun Jan 28, 2018 10:07 pm
Forum: Investing - Theory, News & General
Topic: US vs International stocks
Replies: 1
Views: 605

US vs International stocks

I generally try to follow Merriman's style of allocating equal amounts across various equity segments (growth/value, large cap/small cap etc). At current valuations, does it makes sense to weight international stocks more heavily rather than weight all asset segments equally? Or is it part of the discipline to maintain equal allocations to all segments?
by e_swami
Mon Jan 15, 2018 5:37 pm
Forum: Investing - Theory, News & General
Topic: International Small-cap Value Funds ??
Replies: 99
Views: 24109

Re: International Small-cap Value Funds ??

Theoretical wrote: Sun Jan 14, 2018 6:29 pm FNDC and the Powershares PDN (.50) are good options. Don't be unduly taken aback by them being "blend funds" as the RAFI methodology tends to grab a lot of deep value and cheap blend-growth. They're also the only good pair of solutions in taxable accounts.

DLS is great in tax-deferred accounts but not taxable. It historically tracks the DFA fund extremely well.
Hi Theoretical, can u explain why FNDC is good for taxable accounts while DLS is not? Does it pay less by way of dividends for some reason? Or is there some other reason?
by e_swami
Sun Jan 14, 2018 5:48 pm
Forum: Investing - Theory, News & General
Topic: International Small-cap Value Funds ??
Replies: 99
Views: 24109

Re: International Small-cap Value Funds ??

At this point, I only own VSS/VFSVX for international small cap. (It is our largest equity position.) None of the international small-cap value funds that I have access to are compelling yet. I have my eye on ISCF (iShares EDGE MSCI Multifactor International Small Cap ETF), but at the moment it only has $29.9MM in assets. It is a bit over two years old, but it essentially attracted no assets at all until iShares cut the fee to 40 bp a year ago from 60 bp. It has still been a slow process, picking up one $3 MM creation unit every few months. But I like the way the iShares international multi-factor funds are put together. I bought EMGF, ISCF's emerging markets sister fund with a free trade in my Lively-TD Ameritrade HSA a few months ago. EM...
by e_swami
Sun Jan 14, 2018 4:05 pm
Forum: Investing - Theory, News & General
Topic: International Small-cap Value Funds ??
Replies: 99
Views: 24109

Re: International Small-cap Value Funds ??

SCHC and FNDC are not very different from VFSVX. These are all intl small cap but not necessarily "value"

https://personal.vanguard.com/us/funds/ ... true#tab=2
by e_swami
Sun Jan 14, 2018 2:06 pm
Forum: Investing - Theory, News & General
Topic: International Small-cap Value Funds ??
Replies: 99
Views: 24109

International Small-cap Value Funds ??

I like Merriman's Ultimate-buy-and-hold approach. However, Vanguard does not seem to have any funds for the "International small cap value" asset class. Are there any alternatives that work, other than going to DFA?
by e_swami
Sun Jan 14, 2018 9:30 am
Forum: Investing - Theory, News & General
Topic: What should I own on the bond side ???
Replies: 11
Views: 2435

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

Thanks everyone for the responses. I have been telling myself that I am perhaps too worried about loss of value vs higher interest income. This gives me more to act on that

1. What do people here think about international bonds?

2. Thoughts on using 529 for a part of my fixed income requirements overall?
by e_swami
Sat Jan 13, 2018 5:06 pm
Forum: Investing - Theory, News & General
Topic: What should I own on the bond side ???
Replies: 11
Views: 2435

What should I own on the bond side ???

I have a target 70/30 stock/bond mix (I am 43 years old). I have struggled with the fixed income side of my portfolio for the past couple of years under the idea that since interest rates are zero, bonds prices can ONLY decline. As a result my fixed income side has been limited to the following (percentages in brackets are the percentage of my portfolio in each): 1. Vanguard Emerging Markets Government Bond Index Fund Admiral Shares VGAVX (3%) 2. Vanguard Short-Term Investment-Grade Fund Admiral Shares VFSUX (3%) 3. Vanguard Intermediate-Term Bond Index Fund Admiral Shares (2%) 4. Stable Fund in the Virginia 529 (I will transfer Virginia to the NY 529 shortly and close Virginia) - (4%) 5. "Income Portfolio" in the NY 529 (5%) 6. C...