Search found 6368 matches

by vineviz
Sat May 30, 2020 2:02 pm
Forum: Personal Finance (Not Investing)
Topic: Excellent Treasury Direct Experience(s)
Replies: 11
Views: 931

Re: Excellent Treasury Direct Experience(s)

Once I learned to not use my browser back button and instead navigate the site correctly, I have had zero issues. :oops: Same here. Someone needs to write a browser extension that automatically disables the "back" button while visiting TreasuryDirect.com. Once I trained myself to follow their guida...
by vineviz
Sat May 30, 2020 1:57 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

One problem with this approach is that no one can predict with certainty what their investment time horizon is, nor can they predict how much money they'll need at such a time perhaps decades later, nor do they know how much cumulation inflation to that point will impact the absurdly low yields cur...
by vineviz
Sat May 30, 2020 12:03 pm
Forum: Personal Investments
Topic: Recommendations for bond funds in a cash balance plan
Replies: 9
Views: 577

Re: Recommendations for bond funds in a cash balance plan

I am becoming somewhat concerned that the major holding (DODIX) is 90% MBS and corps. I understand I need to get 5% growth somewhere, so I either have to add equities or take more risks with bonds. Historically it has delivered very close to 5% return, so its performance matches the plan's objectiv...
by vineviz
Sat May 30, 2020 8:50 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

But I digress. Yes, it would be good if there were a total treasury mutual fund. I suspect the reason that they don't exist is that most investors realize that a "total treasury" fund really isn't necessary or even useful. All US Treasury instruments have the same perceived default/credit risk (i.e...
by vineviz
Sat May 30, 2020 8:13 am
Forum: Personal Investments
Topic: Out of market now and need advice on re-entering
Replies: 33
Views: 2737

Re: Out of market now and need advice on re-entering

Why are you out of the market? This is the elephant in the room. I detect a bit of cognitive dissonance in this portfolio, with elements of contrarian bravado (desire for 90/10 allocation, focus on beaten-down sectors), performance chasing (no international?!), extreme risk-seeking (e.g. preference...
by vineviz
Fri May 29, 2020 7:00 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

Can you expand on why an investor (retiree) who owns a significant amount of stocks (say 60%) might very well prefer the bullet strategy? An investor with an equity-heavy portfolio, who I'm presuming is at least partly interested in diversification (i.e. in having their bonds proverbially "zig when...
by vineviz
Fri May 29, 2020 5:10 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Target Adds TIPS?
Replies: 67
Views: 4025

Re: Vanguard Target Adds TIPS?

And having 40-70% of your portfolio in intermediate and long term fixed income securities with a long term expected return of 1% nominal, give or take, does? It's not clear to me which fund you're referring to. The expected return of long-term bonds is typically 50 to 100 bps higher than short-term...
by vineviz
Fri May 29, 2020 2:14 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

your example from earlier today had an investor using a 15-yr duration long-term bond fund (longest duration available) with a 45-year horizon that's clearly not immunized and won't be able to be immunized for 30 years, that's 30 years of 15-year duration interest rate risk, if you call that reduci...
by vineviz
Fri May 29, 2020 1:54 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

Thanks to all for the fascinating discussion. I'd be especially interested in the thoughts of vineviz and others here who really know this territory about something which hasn't been mentioned yet, namely the use of a Treasury bond "barbell" instead of an ITT fund. Generally speaking, if you compar...
by vineviz
Fri May 29, 2020 1:43 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

that's reinvesting distributions at a depressed nav, not immunization . . . Those are the same thing, in this context. More specifically, reinvesting distriubtions at a lower price (i.e. higher yield) is part of the immunization process. It's part of the what makes the whole thing work. if the dura...
by vineviz
Fri May 29, 2020 1:37 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

So should the duration match the day I retire? Or the day I die? Neither, actually: generally speaking, your duration should match the average (or mid-point) of those two dates. Of course we rarely know in advance the second date, so you have to make some sort of conservative estimate for it. If yo...
by vineviz
Fri May 29, 2020 12:02 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

If rates go up 1% next year, and 1% in six years and 1% in 11 years, where are you 15 years from now? Remember, the fund still has a 15 year duration 1, 6 and 11 years from now. The fund will (probably) still have a 15-year duration at each of those points in time, but the answer to the question ("...
by vineviz
Fri May 29, 2020 11:29 am
Forum: Investing - Theory, News & General
Topic: Effect of being out of the market
Replies: 21
Views: 1542

Re: Effect of being out of the market

Using daily returns from Vanguard Total Stock Market (VTSMX, 1992-2020, 7000+ samples), I computed overall returns for 5 and 10 random samples, repeated 100K times. The average return for 5 random samples was 0.22% and for 10 random samples was 0.42%. I also computed the average return for 5 consec...
by vineviz
Fri May 29, 2020 10:53 am
Forum: Personal Investments
Topic: Portfolio for 72 year old couple
Replies: 22
Views: 1771

Re: Portfolio for 72 year old couple

But since you also said you are terrified of the stock market (a sentiment I can completely sympathize with you, by the way!!) and investing everything in ultra-safe instruments like bonds and CDs ... the best bang for your buck is to simply not renew those shorter term CDs coming due soon. Pay off...
by vineviz
Fri May 29, 2020 10:48 am
Forum: Personal Investments
Topic: Portfolio for 72 year old couple
Replies: 22
Views: 1771

Re: Portfolio for 72 year old couple

We live on our 100k a year. We don’t need to take money from our investments for living expenses. We are as I said thinking of using the vanguard strategic income fund as it is only 20% equity. We are terrified of the stock market having lost in the past due to 2008 and the earlier crash of the mar...
by vineviz
Fri May 29, 2020 10:34 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

at all times that single long-term bond fund with duration of 15 years is going to lose 15% off its nav if rates rise by 1% And at all times the investor (whose time horizon is 15+ years) will recoup that 15% drop in price - and more - because they can reinvest their bond fund dividends at the new,...
by vineviz
Fri May 29, 2020 8:08 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

even if a long-term investor uses a conventional long-term bond fund with a fairly stable duration he does not reap the benefit of matching the fund's long-term duration to his long-term horizon. in order to reap the benefit the duration of the fund has to shorten as the time to the horizon shorten...
by vineviz
Thu May 28, 2020 3:44 pm
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 165
Views: 8673

Re: I don't understand stock buybacks

I read that post, but it didn't make sense. Accounting was never my strong suit. I just don't see how retiring shares levers up the company and increases its risk. Leverage is a function of a company's net debt (i.e. total principal debt outstanding less unrestricted cash). If a company consumes ca...
by vineviz
Thu May 28, 2020 3:36 pm
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 165
Views: 8673

Re: I don't understand stock buybacks

I'm a CPA (as much as that's relevant), and I agree with you. I think the implicit assumption that a buyback requires levering up a company is where this conversation is going off the rails. What if a company has no debt? The net debt/EBITDA ratio can be negative, and it is for many well-known comp...
by vineviz
Thu May 28, 2020 3:25 pm
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 165
Views: 8673

Re: I don't understand stock buybacks

I read that post, but it didn't make sense. Accounting was never my strong suit. I just don't see how retiring shares levers up the company and increases its risk. Leverage is a function of a company's net debt (i.e. total principal debt outstanding less unrestricted cash). If a company consumes ca...
by vineviz
Thu May 28, 2020 2:27 pm
Forum: Personal Finance (Not Investing)
Topic: Pension with No COLA
Replies: 11
Views: 1224

Re: Pension with No COLA

If one has a pension with no COLA is there an amount Or formula to compute how much you need to provide yourself with inflation adjustments? There's not a formula that really gets this problem right, and it's complicated to solve. I'd start with an estimate of your post-retirement annual expenses a...
by vineviz
Thu May 28, 2020 2:08 pm
Forum: Personal Investments
Topic: Bond Fund for 60 year old
Replies: 8
Views: 1208

Re: Bond Fund for 60 year old

Hello all, I am helping manage a portfolio for a family member who will turn 60 next year . . . She plans to continue working for 5-10 years . . . she will hopefully retire within 10 years . . . . she has remarkably low expenses and can earn quite a bit in a short amount of time due to her skills a...
by vineviz
Thu May 28, 2020 1:51 pm
Forum: Investing - Theory, News & General
Topic: Why are 10-20 year treasuries a poor investment now?
Replies: 26
Views: 1615

Re: Why are 10-20 year treasuries a poor investment now?

Good point. I guess I was thinking of a bond fund like TLT, which OP is suggesting, it didn't sound like he was going to use individual Treasuries. In that case it seems like there would be a greater uncertainty "when" he would get his money back. That's right. If the investor is using bond funds, ...
by vineviz
Thu May 28, 2020 1:20 pm
Forum: Investing - Theory, News & General
Topic: Why are 10-20 year treasuries a poor investment now?
Replies: 26
Views: 1615

Re: Why are 10-20 year treasuries a poor investment now?

Maybe. It is true that interest-on-interest becomes a more important factor in your return for longer bonds. But the starting yield of a bond is highly correlated with the final result. If you are holding a 20 year bond to maturity, you are missing out on the higher current rates, and if you sell y...
by vineviz
Thu May 28, 2020 1:11 pm
Forum: Investing - Theory, News & General
Topic: Why are 10-20 year treasuries a poor investment now?
Replies: 26
Views: 1615

Re: Why are 10-20 year treasuries a poor investment now?

As I understand it, you're precisely right. So long as you match the duration of your bonds to the duration of your investments (i.e. if you plan to retire in 20 years, hold 20-year bonds) Thank you for the links, I am reading through it now. I do wonder why retirement age is being mentioned so muc...
by vineviz
Thu May 28, 2020 11:53 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

You can duration match with just two funds as noted in this post above . but you can't do it with a single conventional bond fund which is the claim because of the fairly stable duration of the conventional bond fund I don't see that claim made anywhere, but maybe other people also misunderstand so...
by vineviz
Thu May 28, 2020 8:48 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

How about if one has a 20 year horizon but also has access to the TSP G Fund? If I recall correctly, you aren't a fan of the G Fund? Most investors are better served by the F fund, IMHO. The G fund has a lower effective duration than the F fund and a lower expected return as well. So I recommend th...
by vineviz
Thu May 28, 2020 8:43 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

All I am saying is that absent knowledge of future inflation or deflation, the optimal choice of nominal or TIPS isn't known either. Thus, a choice of intermediate is just as valid. I don't think it is helpful to fixate on making the "optimal choice", if what you mean by that is what I think you me...
by vineviz
Thu May 28, 2020 6:19 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

What do you recommend as an alternative? I have BND as 100% of non stock portion, had bndx as well, but got rid of it as in 2+ yearsbof holding did not see much impact. My general advice is use US Treasury bond funds with a duration appropriate to your investment horizon. Assuming you are long-term...
by vineviz
Thu May 28, 2020 5:59 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

For me it’s simply VAIPX intermediate TIPS and VBILX intermediate bonds minus MBSs. So basically treasuries with some corporates. I'm not sure simply belongs in that sentence :D I'm looking for one fund as part of a 3 fund portfolio. I want simplicity. As in a treasuries fund to consider replacing ...
by vineviz
Thu May 28, 2020 5:57 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

So how do you continuously match duration to investment horizon over time in a bond fund? If my investment horizon is 6 years and I buy an intermediate treasury bond fund with a duration of 6 years ,after year 1 my horizon is 5 years but the fund's duration is still 6 years. At the end of 6 years t...
by vineviz
Thu May 28, 2020 5:50 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

To call the use of an intermediate- or short-term bond fund as "speculative" ignores the very REAL risk that longer duration bonds face. It's an absolutely absurd statement to call intermediate term speculative betting. Rather, duration reduction is a valid admission that we don't know future inter...
by vineviz
Wed May 27, 2020 2:59 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

Doc wrote:
Wed May 27, 2020 2:49 pm

That 3000 share ask was not there when I first looked. The spread for 3000 shares was almost 4% when I first looked.
You keep looking at the order book, and it is scaring you. Stop looking. There's no information there you can use, and it's only going to keep freaking you out.
by vineviz
Wed May 27, 2020 2:57 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 163
Views: 11368

Re: Swedroe’s Bond Advice - no total bond index

Saying that anything other than TBM or a LMP approach is bond 'betting' is nonsensical. Total bond market funds have two strikes against them. One is that that they are relatively poor diversifiers, not only because the credit risk of the corporate bonds is highly correlated with the equity risk in...
by vineviz
Wed May 27, 2020 2:45 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

Chip wrote:
Wed May 27, 2020 2:44 pm
vineviz wrote:
Wed May 27, 2020 2:39 pm
If you enter a market order for 3000 shares of this ETF you'll get immediate execution at an average price that is almost certainly going to be between $25.27 and $27.29.
Didn't you mean between 27.27 and 27.29?
Yes, thank you.
by vineviz
Wed May 27, 2020 2:44 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Target Adds TIPS?
Replies: 67
Views: 4025

Re: Are TIPS Necessary?

I recently made a post showing returns for Total Stock Market and Total bond Market, including 1979 when annual inflation (CPI-U) was 13.3% per year, to show how a combination of Total Bond Market and Total Stock Market provided adequate inflation protection during the worst inflation in recent Ame...
by vineviz
Wed May 27, 2020 2:39 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

I want to buy some 3000 shares of this ETF at one time in the next few months. And you say not to worry? Yes. That's exactly what I'm saying. If you enter a market order for 3000 shares of this ETF you'll get immediate execution at an average price that is almost certainly going to be between $ 25....
by vineviz
Wed May 27, 2020 12:56 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

Nevertheless I am going to be cognizant of not using thinly traded ETFs when I can avoid them. There is no reason to avoid "thinly traded" ETFs, either. Trading volume is indicative of basically nothing. I'd avoid ETFs that have persistently wide bid/ask spreads relative to other similar funds, but...
by vineviz
Wed May 27, 2020 12:53 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

But I don't understand how this affects what is going on in the market book that is trading 100 or 200 shares every five or ten minutes. Is the AP getting in there and buying/selling a few 100 shares every few minutes? Really, all you need to understand is that the AP is there willing to buy or sel...
by vineviz
Wed May 27, 2020 12:45 pm
Forum: Personal Consumer Issues
Topic: How can I use 6 weeks of vacation in the next 6 months in the Covid era?
Replies: 37
Views: 3244

Re: How can I use 6 weeks of vacation in the next 6 months in the Covid era?

jastevenson wrote:
Wed May 27, 2020 12:08 am
We do not own an RV (wish we did!)
If you owned an RV you'd probably wish that you didn't.

That said, renting an RV is totally a thing that is possible. In our area the cost would be approximately $300 to $350/night (including mileage).
by vineviz
Wed May 27, 2020 12:35 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Target Adds TIPS?
Replies: 67
Views: 4025

Re: Vanguard Target Adds TIPS?

That white paper explains the role of TIPS in retirement, but it doesn't address the concern I raised (why not include them earlier?). An interesting question. Morningstar starts to add them about 15 years out. long-term TIPS at first then short-term. https://indexes.morningstar.com/resources/PDF/B...
by vineviz
Wed May 27, 2020 10:57 am
Forum: Investing - Theory, News & General
Topic: Vanguard Target Adds TIPS?
Replies: 67
Views: 4025

Re: Vanguard Target Adds TIPS?

I don't think Vanguard has ever actually explained why they don't include TIPS earlier in their glide path. Although I think their approach to bonds in the Target Retirement funds is "fine", it honestly doesn't make much sense. Their explanation can be found here: https://www.vanguard.com/pdf/s167....
by vineviz
Wed May 27, 2020 10:36 am
Forum: Investing - Theory, News & General
Topic: Vanguard Target Adds TIPS?
Replies: 67
Views: 4025

Re: Vanguard Target Adds TIPS?

Can someone please explain why Vanguard adds TIPS only upon retirement age to their Target Retirement funds? What is it about TIPS and/or Vanguard's view on TIPS that only makes them appropriate in one's deccumulation phase? I don't think Vanguard has ever actually explained why they don't include ...
by vineviz
Wed May 27, 2020 10:22 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

Here's the situation that I do not understand. Suppose the offers are as follows: 10 @ 100 10 @ 99 10 @ 98 10 @ 97 10 @ 96 1) If I place a market order to buy 50 it gets filled immediately at an average price of 98. 2) If I place a limit order to buy 50 with a limit of the same 98 only 30 gets boug...
by vineviz
Wed May 27, 2020 9:08 am
Forum: Investing - Theory, News & General
Topic: Owning Top Stocks in Each Sector?
Replies: 26
Views: 1414

Re: Owning Top Stocks in Each Sector?

For the fun of it, I have been thinking about using a small portion of my equity allocation to purchase stock of the top company (by market weight) in each of the 11 S&P 500 sectors, at equal weight. I'm just wondering if anyone has done this, or any thoughts on this? Thanks. If the goal is to reli...
by vineviz
Wed May 27, 2020 8:52 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

I am obviously far from being an expert on any of this, but I think a market order and a marketable limit order (as mine was) are treated the same way and have a similar opportunity to be filled from sources other than the displayed book. Perhaps the experts can weigh in. The two order types (marke...
by vineviz
Tue May 26, 2020 5:20 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 17947

Re: Rekenthaler: Long Bonds Are for Fools

Long-term bond and short-term bonds can have different effects on the entire portfolio since they have different exposure to inflation and different volatility. These “different exposures” are what my example was a illustrating. So far I’m still wondering whether you think A or B is the better choi...
by vineviz
Tue May 26, 2020 3:57 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 17947

Re: Rekenthaler: Long Bonds Are for Fools

Nobody in this thread is saying to fund a fixed nominal amount of consumption in 20 years with only bonds. And nothing in my example requires the dollars to be nominal. If you'd rather think in terms of "real" dollars, then feel free to do so. The question is the same with either real dollars or no...
by vineviz
Tue May 26, 2020 3:08 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 17947

Re: Rekenthaler: Long Bonds Are for Fools

Nobody in this thread is saying to fund a fixed nominal amount of consumption in 20 years with only bonds. And nothing in my example requires the dollars to be nominal. If you'd rather think in terms of "real" dollars, then feel free to do so. The question is the same with either real dollars or no...
by vineviz
Tue May 26, 2020 2:33 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4870

Re: Alarming Bid/Ask Spreads on ETFs

Moving the markets in stock etfs is possible. It happens frequently. For instance, May 22 10:12:37, VSS best ask was 88.76. Within a few milliseconds, shares executed at 88.76, clearing out the ask, and some executed at 88.79 and 88.80. In aggregate, about 1000 shares were executed, which is on the...