Search found 339 matches

by SovereignInvestor
Sun Jul 21, 2019 12:14 pm
Forum: Personal Investments
Topic: Thoughts on 33% Large 33% Mid and 33% small?
Replies: 46
Views: 2207

Re: Thoughts on 33% Large 33% Mid and 33% small?

What about the other 1%?

Also that's over weighting small and mid caps. Large caps are around 80% of total market cap.

Something like 80/10/10 would more so reflect total market.
by SovereignInvestor
Wed Jul 17, 2019 3:08 pm
Forum: Personal Investments
Topic: Add on CD as insurance against falling rates
Replies: 9
Views: 1242

Re: Add on CD as insurance against falling rates

Insurance against falling rates us buying long duration bonds.
by SovereignInvestor
Wed Jul 17, 2019 9:01 am
Forum: Investing - Theory, News & General
Topic: Sustainability of State and Local Government Pensions
Replies: 9
Views: 1306

Re: Sustainability of State and Local Government Pensions

ThE issue affecting state and local government ones is same as multiemployer ones. They don't mandate a discount rate to use so the plans use "expected rate of return on assets" to discount liabilities. Most plans use 7-8% returns which is way too high so it understates how much contribution is need...
by SovereignInvestor
Wed Jul 17, 2019 7:27 am
Forum: Personal Finance (Not Investing)
Topic: How do I determine the interest rate if I finance the sale of my business?
Replies: 7
Views: 547

Re: How do I determine the interest rate if I finance the sale of my business?

It should be the risk free rate over the blended average term. Then add on a risk premium. But it's so hard to estimate their apprpximate credit risk. Instead you can just piggy back off what a bank would assess their risk as. What is the term? What would the 2 individuals get for a commercial mortg...
by SovereignInvestor
Wed Jul 17, 2019 7:19 am
Forum: Personal Investments
Topic: Should I refinance my home loan?
Replies: 13
Views: 1007

Re: Should I refinance my home loan?

The 30 year note is generally for people buying at the max borrow they can qualify for, or people who just aren’t really adding up the costs of borrowing- lol or both. There is massive opportunity cost of paying off mortgage in 15 years versus 30 years. Interest isn't the only cost. Also, not every...
by SovereignInvestor
Wed Jul 17, 2019 7:10 am
Forum: Personal Investments
Topic: Should I refinance my home loan?
Replies: 13
Views: 1007

Re: Should I refinance my home loan?

I spoke with a trustworthy broker and he said the rule of thumb in the industry is to only refinance if you can get a rate decrease of 1% or more. We are in the process of refinancing now. Our taxes went up significantly this year and my new payment will still be $120ish less than it is right now. ...
by SovereignInvestor
Tue Jul 16, 2019 11:08 pm
Forum: Personal Investments
Topic: Should I refinance my home loan?
Replies: 13
Views: 1007

Re: Should I refinance my home loan?

The 30 year note is generally for people buying at the max borrow they can qualify for, or people who just aren’t really adding up the costs of borrowing- lol or both. There is massive opportunity cost of paying off mortgage in 15 years versus 30 years. Interest isn't the only cost. Also, not every...
by SovereignInvestor
Tue Jul 16, 2019 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: Buying a home; Very HCOL Area
Replies: 40
Views: 3617

Re: Buying a home; Very HCOL Area

Yeah NY times calculator is great. Comparing S&P total return to only the appreciation of a house is not like to like.

The house provides reduced cash flows when owning it versus having to pay rent of a EQUIVALENT house. That cash flow is a sort of yield that needs to be accounted for.
by SovereignInvestor
Tue Jul 16, 2019 4:59 pm
Forum: Personal Finance (Not Investing)
Topic: Do you care about your home appreciating?
Replies: 91
Views: 4729

Re: Do you care about your home appreciating?

Unless you are sure it is your forever home, then yes. Sure, your next home will also be more expensive but your equity will increase many times faster due to leverage, so you still come out well ahead. but will it? lets say I purchase a home for 200k now., I put down 20% (40k). Home goes up in val...
by SovereignInvestor
Mon Jul 15, 2019 5:32 pm
Forum: Personal Investments
Topic: Old pension plan- take the lump sum or wait for the monthly payout?
Replies: 23
Views: 1892

Re: Old pension plan- take the lump sum or wait for the monthly payout?

Roll it over. That is a 3.1% annualized rate of return through age 60...but that includes mortality meaning if you pass before then beneficiary may only get 1\2. Adjusting for this the ROR is likely well below 3%. I'd take the cash and if you want fixed income then put it in a mix of longer term hig...
by SovereignInvestor
Mon Jul 15, 2019 5:16 pm
Forum: Personal Finance (Not Investing)
Topic: Refi at this rate?
Replies: 31
Views: 2847

Re: Refi at this rate?

TFCU, Island FCU, Suffolk FCU.
by SovereignInvestor
Mon Jul 15, 2019 4:40 pm
Forum: Personal Finance (Not Investing)
Topic: Refi at this rate?
Replies: 31
Views: 2847

Re: Refi at this rate?

Yeah what's crazy about TFCU is they keep same ARM rate all month so July rate is what I cited but if rates fall by end of month on market like 10Y yield..I'd wait until August for new lower rate..if rates rise then just lock in july rate. Not only is rate so low but they hold it for entire month to...
by SovereignInvestor
Sun Jul 14, 2019 8:59 pm
Forum: Personal Finance (Not Investing)
Topic: Geico subrogation claim
Replies: 16
Views: 1770

Re: Geico subrogation claim

If you want to add a CDW (collision deductible waiver) to your policy, Geico will pay the deductible if the 'At Fault' party has no insurance. If you have CDW, your policy statement will say 'WAIVER' on it. The State allows drivers to drive without insurance, and we (responsible citizens) are expec...
by SovereignInvestor
Sun Jul 14, 2019 10:36 am
Forum: Personal Finance (Not Investing)
Topic: Yet one more mortgage vs investing - ARM and tax situation
Replies: 5
Views: 510

Re: Yet one more mortgage vs investing - ARM and tax situation

Can't you just refinance the ARM into another ARM since rates are low, so you extend the favorable rate longer? potentially a new 10/1 ARM. that ways years 4-10 will have a lower rate than possibly the reset rate. Most reset to unfavorable levels like ~5% even in today's market. It depends on reset....
by SovereignInvestor
Sun Jul 14, 2019 10:28 am
Forum: Investing - Theory, News & General
Topic: S&P MidCap 400: Outperformance and Potential Applications
Replies: 18
Views: 1853

Re: S&P MidCap 400: Outperformance and Potential Applications

Mel's Unloved Mid-Caps are finally being "discovered". They're validating what I first reported back in 2000. A bit late to the party! The S&P 500 is at 17.0x forward earnings while mid cap S&P 400 is at just 15.8 x earnings. The midcaps also have greater projected earnings growth. I started shifti...
by SovereignInvestor
Thu Jul 11, 2019 6:11 pm
Forum: Personal Finance (Not Investing)
Topic: Pay student loans via cash-out refinance?
Replies: 41
Views: 1856

Re: Pay student loans via cash-out refinance?

I would probably do the cash out refinance. You still have good home equity. Is that the best rate right now with rates falling? I would look at a 10/1 ARM and see if you can get below your current 3.7%. Good idea. I haven't look at the rate for 10/1 ARM. Although I have heard that the Fed is plann...
by SovereignInvestor
Thu Jul 11, 2019 7:52 am
Forum: Personal Finance (Not Investing)
Topic: Refi at this rate?
Replies: 31
Views: 2847

Re: Refi at this rate?

What region are you in? My local credit union is offering 2.25% for 5/1 ARM. 2.125% for LTV under 75%. Wow those are good rates. Which CU? I am in FL. First republic doesn’t cover my city so still waiting their quote. Best so far is from fifth third bank 10/1 -3.500% 7/1 - 3.375% 5/1 - 3.250% All w...
by SovereignInvestor
Thu Jul 11, 2019 7:50 am
Forum: Investing - Theory, News & General
Topic: Was the great bond bull market just plain bull?
Replies: 47
Views: 5155

Re: Was the great bond bull market just plain bull?

Long term treasurys have more interest rate risk than intermediate. Not for long-term investors, they don't. Interest rate risk is not a function of the bond's duration but rather of the mismatch between the bond's duration and the investment horizon of the investor. For a retirement cash flow whic...
by SovereignInvestor
Thu Jul 11, 2019 7:40 am
Forum: Investing - Theory, News & General
Topic: Was the great bond bull market just plain bull?
Replies: 47
Views: 5155

Re: Was the great bond bull market just plain bull?

Long term treasurys have more interest rate risk than intermediate. But no one is suggesting a 100% Long treasury allocation. So the risk should be judged based on marginal risk for entire portfolio. If someone has 60% stocks and other 40% bonds, with the 40% heavily in long treasurys versus heavil...
by SovereignInvestor
Mon Jul 08, 2019 7:18 am
Forum: Investing - Theory, News & General
Topic: Was the great bond bull market just plain bull?
Replies: 47
Views: 5155

Re: Was the great bond bull market just plain bull?

Long term treasurys have more interest rate risk than intermediate. But no one is suggesting a 100% Long treasury allocation. So the risk should be judged based on marginal risk for entire portfolio. If someone has 60% stocks and other 40% bonds, with the 40% heavily in long treasurys versus heavily...
by SovereignInvestor
Sat Jul 06, 2019 6:39 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 1317
Views: 125021

Re: U.S. stocks continue to soar!

S&P is getting close to 3,000! I know... it doesn't really matter to us folks that have many years to retirement. Kind of a psychological achievement if/when it makes the leap over 3,000. Glad to have adopted the buy & hold philosophy, it seems like it'd be near impossible to perfectly time this ma...
by SovereignInvestor
Sat Jul 06, 2019 6:26 am
Forum: Personal Finance (Not Investing)
Topic: Refi at this rate?
Replies: 31
Views: 2847

Re: Refi at this rate?

What region are you in? My local credit union is offering 2.25% for 5/1 ARM. 2.125% for LTV under 75%.
by SovereignInvestor
Sat Jul 06, 2019 6:24 am
Forum: Personal Finance (Not Investing)
Topic: Land in FEMA Flood Plain
Replies: 23
Views: 1624

Re: Land in FEMA Flood Plain

It seemed that I see 100 year flood events every year in the United States now. Warmer air holds more moisture and you can get more severe rain or snow storms. Yes because if there are 100 unique flood regions in the US and they each have a 1 in 100 year flood risk then on average one would flood e...
by SovereignInvestor
Tue Jul 02, 2019 5:11 pm
Forum: Personal Investments
Topic: Any idea why S&P 600 is not so hot these days?
Replies: 19
Views: 2616

Re: Any idea why S&P 600 is not so hot these days?

Small caps S&P 600 crushed large caps in late 2016 do badly it's basically been giving back the gains since then.
by SovereignInvestor
Tue Jul 02, 2019 10:06 am
Forum: Personal Investments
Topic: Pension (rollover IRA or stay put)?
Replies: 13
Views: 932

Re: Pension (rollover IRA or stay put)?

In extreme example, if I promise you $1 now or 1 million if you live to 120 years old...72 years later but only if you're alive and the heirs get nothing if you pass... That is implied 21% return. But statistically the chance of living to 120 is zero so the actual mortality adjusted return is 0. Bet...
by SovereignInvestor
Tue Jul 02, 2019 10:02 am
Forum: Personal Investments
Topic: Pension (rollover IRA or stay put)?
Replies: 13
Views: 932

Re: Pension (rollover IRA or stay put)?

The pension is like fixed income. But those who say it is 4% implied return overstate it. If God forbid you were to die before you take it, does wife get any of it? If not then the pension is returning less than 4%, the 4% would include provision for chance you don't live to.65 to collect it. So the...
by SovereignInvestor
Sat Jun 29, 2019 8:14 am
Forum: Personal Finance (Not Investing)
Topic: Shopping for Mortgage - Question re ARMs
Replies: 16
Views: 1214

Re: Shopping for Mortgage - Question re ARMs

I would do the 5/1 ARM. 3 years goes by very fast. We have a 5/1 ARM now. Got it in 2011, re-locked our rate at 4.5 years in for another 5 years at same rate and will likely re-lock again when the time comes. Interest rates will likely be higher but probably not that much higher (I hope). Even thou...
by SovereignInvestor
Sat Jun 29, 2019 8:11 am
Forum: Personal Consumer Issues
Topic: how much to finance a new car at .9%
Replies: 57
Views: 3863

Re: how much to finance a new car at .9%

I would finance as much as possible. You're netting a small gain on an interest earned versus extra imerest paid basis...but you're getting much more liquidity..which has value!
by SovereignInvestor
Sat Jun 29, 2019 8:10 am
Forum: Personal Consumer Issues
Topic: how much to finance a new car at .9%
Replies: 57
Views: 3863

Re: how much to finance a new car at .9%

Strangely the offer of $500 bucks off if you take the financing is quite attractive. I would finance it initially, then you can easily choose to pay it off as quickly as you like. I financed my car, took the $500 off, and the 0.9% financing, and paid it off in 24 payments. Or do it in 12.... or 2.....
by SovereignInvestor
Sat Jun 29, 2019 6:20 am
Forum: Personal Finance (Not Investing)
Topic: What are the alternatives to 203K Mortgage with less hassle ?
Replies: 7
Views: 1041

Re: What are the alternatives to 203K Mortgage with less hassle ?

What are the alternatives to 203K Mortgage with less hassle ? =================================================== Thanks for your replies to my threads. I know this question has been asked, but here goes...Considering putting an offer on a home that needs considerable work (at least 35-40k). House ...
by SovereignInvestor
Fri Jun 28, 2019 10:10 pm
Forum: Personal Finance (Not Investing)
Topic: Shopping for Mortgage - Question re ARMs
Replies: 16
Views: 1214

Re: Shopping for Mortgage - Question re ARMs

ARM is great for low payment of 30 year ammortization with low rate of shorter loan. If you have cash to pay it off any time you can take the risk here. Remember, one can always refinance an ARM into another ARM. 3/1 rate seems super low in rate but 3 years is pretty short. In your situation you can...
by SovereignInvestor
Fri Jun 28, 2019 1:45 pm
Forum: Personal Consumer Issues
Topic: Fuel type for 2 month car storage
Replies: 36
Views: 2143

Re: Fuel type for 2 month car storage

Why is ethanol added at all? It seems like it only potentially harms autos without a benefit? As for comment about lawn mower...it probably won't affect most 4 cycle mower engines but 2 cycle ones may be more vulnerable. To satisfy the big agricultural lobby. It also can reduce some emissions, but ...
by SovereignInvestor
Fri Jun 28, 2019 1:16 pm
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 87
Views: 9063

Re: How safe are pensions in the U.S.?

Regarding Multiemployer plans...as I've been saying someone wrote a piece today on this quoting testimony: https://thehill.com/opinion/finance/450445-multiemployer-pension-bailout-is-fatally-flawed "It's estimated that the retirement plans of workers and retirees covered by these plans in the mining...
by SovereignInvestor
Thu Jun 27, 2019 12:08 pm
Forum: Investing - Theory, News & General
Topic: 10 Year Treasury Under 2%
Replies: 41
Views: 4601

Re: 10 Year Treasury Under 2%

It seems to indicate the market is expecting a rate cut. If you look at fed fund futures..they are priced that it implies a 100% chance of July rate cut and a 28% chance the cut is 50bps. https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html As a result some analysts have a rule tha...
by SovereignInvestor
Wed Jun 26, 2019 11:12 pm
Forum: Personal Finance (Not Investing)
Topic: Securing a "Private Pension"?
Replies: 18
Views: 2466

Re: Securing a "Private Pension"?

It's interestin that a single premium.annuity is essentially identical to a pension and most commenters love pensions and agree about their safety but so many are reluctant to endorse annuities.
by SovereignInvestor
Wed Jun 26, 2019 11:10 pm
Forum: Personal Consumer Issues
Topic: Fuel type for 2 month car storage
Replies: 36
Views: 2143

Re: Fuel type for 2 month car storage

Why is ethanol added at all? It seems like it only potentially harms autos without a benefit?

As for comment about lawn mower...it probably won't affect most 4 cycle mower engines but 2 cycle ones may be more vulnerable.
by SovereignInvestor
Wed Jun 26, 2019 7:43 pm
Forum: Investing - Theory, News & General
Topic: 10 Year Treasury Under 2%
Replies: 41
Views: 4601

Re: 10 Year Treasury Under 2%

Thanks for the great stats on the 10Y.

The 2-10 spread already bottomed months ago and has actually been widening a bit. They say the 2Y is more responsive to fed policy and the market started pricing in rate cuts pretty quickly it seems.

the 2-10 never inverted yet.
by SovereignInvestor
Wed Jun 26, 2019 2:47 pm
Forum: Investing - Theory, News & General
Topic: 10 Year Treasury Under 2%
Replies: 41
Views: 4601

Re: 10 Year Treasury Under 2%

Expection theory of interest rates says the 10Y yield reflects average yield expected for short term borrowers over next 10 years. Inflation expectations have plunged and economic forecasts have as well. More.importantly the market is pricing in 3 rate cuts this year based on fed fund futures prices...
by SovereignInvestor
Tue Jun 25, 2019 7:02 am
Forum: Investing - Theory, News & General
Topic: SPY buyback adjusted yield
Replies: 10
Views: 788

Re: SPY buyback adjusted yield

S&P put out press release today about Q1 2019. https://seekingalpha.com/pr/17553433 The buyback + dividend yield for Q1 2019 annualized is 5.4%. Yes we need to net for share issuave but i believe total share issuacne is a bit punitive because not all shared are issued for executive comp...lots of i...
by SovereignInvestor
Tue Jun 25, 2019 7:00 am
Forum: Investing - Theory, News & General
Topic: SPY buyback adjusted yield
Replies: 10
Views: 788

Re: SPY buyback adjusted yield

This probably has a 1/1/2019 estimate of net buyback yield after dilution from new shares: https://www.aqr.com/Insights/Research/Alternative-Thinking/2019-Capital-Market-Assumptions-for-Major-Asset-Classes I haven’t read the 2019 report. In 2018 I think the net buyback yield was around 0% in US. It...
by SovereignInvestor
Mon Jun 24, 2019 5:36 pm
Forum: Investing - Theory, News & General
Topic: SPY buyback adjusted yield
Replies: 10
Views: 788

Re: SPY buyback adjusted yield

S&P put out press release today about Q1 2019. https://seekingalpha.com/pr/17553433 The buyback + dividend yield for Q1 2019 annualized is 5.4%. Yes we need to net for share issuave but i believe total share issuacne is a bit punitive because not all shared are issued for executive comp...lots of is...
by SovereignInvestor
Mon Jun 24, 2019 5:33 pm
Forum: Personal Finance (Not Investing)
Topic: Deciding on the right mortgage product
Replies: 5
Views: 536

Re: Deciding on the right mortgage product

You can always do cash out refinance later if you regret not doing interest only.

Also of you're torn between the extreme of locking in low rate for long time via 30Yr FRM or having a super low rate via 3/1 or 5/1 ARM, then perhaps a 10/1 ARM is the middle ground and best of both worlds?
by SovereignInvestor
Sat Jun 22, 2019 9:08 pm
Forum: Personal Finance (Not Investing)
Topic: Should I refinance my mortgage?
Replies: 17
Views: 1702

Re: Should I refinance my mortgage?

Save money with no risk or initial payment required and have the potential to save more of rates drop.

Great deal! Take it.
by SovereignInvestor
Sat Jun 22, 2019 9:06 pm
Forum: Personal Investments
Topic: Heavy concentration in Electric Utilities
Replies: 20
Views: 1773

Re: Heavy concentration in Electric Utilities

My wife and I are retired, both have pensions, both get soc. sec., no debts. Our IRAs are about 500k, which about 250k in electric utilities and 250k in cds. These funds will be past on our children. Should I be more concerned about the high concentration in Utility Stocks for the next 18 months? Y...
by SovereignInvestor
Thu Jun 20, 2019 7:51 am
Forum: Investing - Theory, News & General
Topic: Why are 1 month t-bill rates low?
Replies: 10
Views: 1171

Re: Why are 1 month t-bill rates low?

Great question . I think bevause the treasury market includes all people not just Fed member banks. If a large institution wants to park short term money the most direct way is 1 month treasury in open market and not via Federal Reserve system. Also the fed pays interest on excess reserved at a rate...
by SovereignInvestor
Thu Jun 20, 2019 7:42 am
Forum: Personal Finance (Not Investing)
Topic: Interest Only Loans
Replies: 9
Views: 1010

Re: Interest Only Loans

I also was looking for these rates and it's seems very few if any lenders have rates published for these. I got some quotes but only after typing in my information. The interest rates are typically much much higher than amortizing...so it becomes very much worth it to go with normal amortizing loan ...
by SovereignInvestor
Wed Jun 19, 2019 6:05 pm
Forum: Investing - Theory, News & General
Topic: What rating bonds are considered investment grade ?
Replies: 24
Views: 1463

Re: What rating bonds are considered investment grade ?

It is refreshing to see OP asking this question. In my opinion, too many bogleheads believe that all corporate bonds are too risky and confine their bond purchases to US Treasuries. Good point. In fairless even the safer corporate bonds usually selloff in panic market so the correlation to equity m...
by SovereignInvestor
Wed Jun 19, 2019 11:11 am
Forum: Personal Investments
Topic: Tempted to market time bond fund
Replies: 15
Views: 1322

Re: Tempted to market time bond fund

Interest rates keeping dropping which is why the muni fund rallied. To avoid a drop if you believe rates will pop up again you can seek a shorter duration fund if they have one.
by SovereignInvestor
Wed Jun 19, 2019 10:10 am
Forum: Investing - Theory, News & General
Topic: happy when the market is down - want to understand
Replies: 42
Views: 3561

Re: happy when the market is down - want to understand

Most people are not thinking rationally. They have $1 million portfolio, yet feel that they benefit somehow if the market goes down 5%, as they can buy $20k of stocks. Sometimes a market decline is short, but usually, it takes maybe 6 months to recover - and that is lost time when stocks would othe...