Search found 8793 matches

by Kevin M
Sat Feb 17, 2018 8:52 pm
Forum: Investing - Theory, News & General
Topic: Help me understand the effect of bonds during bear markets
Replies: 5
Views: 410

Re: Help me understand the effect of bonds during bear markets

All, I'm trying to understand the performance of bonds in a bear market. For example, in 2008, while stocks were plunging, the Vanguard Total Bond Market Index Fund gained 5%. Is there a way to determine whether this gain was attributed from the bonds in the fund itself, or that investors were jump...
by Kevin M
Sat Feb 17, 2018 8:36 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 12 month CD now 2.00%
Replies: 62
Views: 12191

Re: Ally Bank 12 month CD now 2.00%

doneat53 wrote:
Sat Feb 17, 2018 1:37 pm
Thank you Kevin M for your detailed response to my question. Very helpful.
You're welcome!

Kevin
by Kevin M
Sat Feb 17, 2018 1:54 pm
Forum: Investing - Help with Personal Investments
Topic: Reinvesting RMDs
Replies: 4
Views: 463

Re: Reinvesting RMDs

I might even do it very early so later gains are CG, not ordinary income gains. I suppose there could be an argument the other way as well. I think an argument to take the withdrawal later is based on the concept that you only own part of your IRA (the government owns the other part), and the part ...
by Kevin M
Sat Feb 17, 2018 12:20 pm
Forum: Investing - Help with Personal Investments
Topic: Laddering CDs: 6 mos v. 1 year?
Replies: 11
Views: 820

Re: Laddering CDs: 6 mos v. 1 year?

I am getting ready to ladder some CDs. Given that interest rates are rapidly going up on CDs, is it better to go with 6-month terms, or 1-year terms? For example, Ally is now paying 2.05% for a 1-year CD and 1.75% for a 6-month term. (Info: liquidity is not important for me right now.) Given these ...
by Kevin M
Sat Feb 17, 2018 11:52 am
Forum: Personal Consumer Issues
Topic: Is there a way to send text messages on my computer?
Replies: 14
Views: 1263

Re: Is there a way to send text messages on my computer?

I can send and receive texts with a Google Voice extension in my Chrome browser. I have it set up so text messages to my Google Voice are forwarded to my phone, so I can reply from phone or computer.

Kevin
by Kevin M
Sat Feb 10, 2018 2:49 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 12 month CD now 2.00%
Replies: 62
Views: 12191

Re: Ally Bank 12 month CD now 2.00%

1-year Treasury at 1.98% (at Fidelity). If you live in a high tax state, the after tax yield of the TBill is substantially higher than the CD. Here in CA with a marginal rate of ~9.3%, the Treasury at 2% is equivalent to a CD at ~2.2% Not quite that good. First, you have to account for commissions....
by Kevin M
Sat Feb 10, 2018 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 12 month CD now 2.00%
Replies: 62
Views: 12191

Re: Ally Bank 12 month CD now 2.00%

Sorry for the newb question but how does one go about evaluating Munis? 1) where does one go to see the available rates You can get a rough view here at Vanguard: Find Bonds and CDs , and at Fidelity here: Fixed Income, Bonds & CDs . However, the rates shown are the highest rates available, may be ...
by Kevin M
Fri Feb 09, 2018 8:46 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 12 month CD now 2.00%
Replies: 62
Views: 12191

Re: Ally Bank 12 month CD now 2.00%

1-year Treasury at 1.98% (at Fidelity). If you live in a high tax state, the after tax yield of the TBill is substantially higher than the CD. Here in CA with a marginal rate of ~9.3%, the Treasury at 2% is equivalent to a CD at ~2.2% Not quite that good. First, you have to account for commissions....
by Kevin M
Mon Feb 05, 2018 1:39 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 12 month CD now 2.00%
Replies: 62
Views: 12191

Re: Ally Bank 12 month CD now 2.00%

This is now pretty much the market rate for safe 1-year fixed income. DepositAccounts.com shows a number of 1-year CDs at or slightly above 2%. I see new-issue brokered CD rates at 1.95% and 1-year Treasury at 1.98% (at Fidelity). However, to get the 1.98% (1.977%) rate on the Treasury you must buy ...
by Kevin M
Sun Jan 28, 2018 5:14 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with large stock holding in taxable account
Replies: 32
Views: 2322

Re: What to do with large stock holding in taxable account

Something I did to reduce the company-specific risk over a 3-year period during which I was exercising company stock options (to minimize tax impact) was to sell calls on the stock. This limited my upside, but gave me downside protection. He might consider selling covered calls if he wants to minim...
by Kevin M
Sun Jan 28, 2018 10:58 am
Forum: Investing - Theory, News & General
Topic: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]
Replies: 409
Views: 74511

Re: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]

In order for me to prepare for retirement in 2019, I would need to convert $840k of stocks in my taxable accounts to bonds this year. While still working and earning ~$300K. Why? Why not just wait until 2019 when you actually need the cashflow to start selling stocks? In the meantime, stop buying s...
by Kevin M
Sat Jan 27, 2018 1:38 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with large stock holding in taxable account
Replies: 32
Views: 2322

Re: What to do with large stock holding in taxable account

He would pay 0% federal LTCG to the extent his taxable income is in the 12% bracket. Does his state tax LTCG? Something I did to reduce the company-specific risk over a 3-year period during which I was exercising company stock options (to minimize tax impact) was to sell calls on the stock. This lim...
by Kevin M
Thu Jan 25, 2018 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: California - Intermediate Muni Bonds - effect of capital gains tax
Replies: 7
Views: 752

Re: California - Intermediate Muni Bonds - effect of capital gains tax

As you can see, in some years the capital return could be larger than the income return, while in other years the capital return could be negative--perhaps negative enough to more than offset the income return. Due to the uncertainty of the return, especially over one or two years, I would not use ...
by Kevin M
Sat Jan 20, 2018 3:37 pm
Forum: Investing - Help with Personal Investments
Topic: Brokered CDs - Different brokers?
Replies: 15
Views: 1683

Re: Brokered CDs - Different brokers?

I have been researching this lately and I've come to the conclusion that Fidelity is the place to buy brokered CDs. I only have access to Vanguard, Fidelity, and TD Ameritrade so there might be some better brokers out there. The reason I am thinking Fidelity is: 1. They have the lowest fee ($1). Va...
by Kevin M
Sat Jan 20, 2018 3:28 pm
Forum: Investing - Help with Personal Investments
Topic: Brokered CDs - Different brokers?
Replies: 15
Views: 1683

Re: Brokered CDs - Different brokers?

I would verify that whatever broker you use, that the CDs you buy are FDIC insured. I have never seen a non-FDIC-insured CD sold by a broker. Would be interested to hear if anyone else has. Kevin No, I have never seen offerings at Vanguard from non FDIC insured banks. It is, however, up to the buye...
by Kevin M
Wed Jan 17, 2018 7:32 pm
Forum: Investing - Help with Personal Investments
Topic: Conditional Puts - Death Of Holder
Replies: 2
Views: 333

Re: Conditional Puts - Death Of Holder

It means that if you die, whoever inherits the CD from you can sell it at par (100) if they want. So if rates had risen a lot since you bought the CD, and it was valued at less than 100, they could sell it without losing money compared to what you paid for it.

Kevin
by Kevin M
Mon Jan 15, 2018 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: Municipal bonds, pension funds...time to get out of munis and into bonds, stocks?
Replies: 6
Views: 907

Re: Municipal bonds, pension funds...time to get out of munis and into bonds, stocks?

First, I would look at the ratings on your munis. If AAA or even AA, and maturing within 2-3 years, I would not worry. If they are rated lower than AA or maybe A, I'd take a closer look. The pension issues are well known, and should be factored into the ratings. It takes some time for munis to get d...
by Kevin M
Mon Jan 15, 2018 8:29 pm
Forum: Investing - Help with Personal Investments
Topic: CDs & Savings as a substitute for bonds or bond funds
Replies: 20
Views: 2545

Re: CDs & Savings as a substitute for bonds or bond funds

Yeah, reinvestment of interest is a nice advantage of direct CDs. In addition to the automatic reinvestment of interest, some direct CDs automatically roll over to a new CD of the same maturity. This is a bad feature if the new rate is not competitive (perhaps by design) and requires the investor t...
by Kevin M
Mon Jan 15, 2018 8:23 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with money for house down payment?
Replies: 6
Views: 1269

Re: What to do with money for house down payment?

@rl3, I've been finding individual AAA munis in the 1.5-3.0 year range with taxable-equivalent yields (for me) in the 2.5% ballpark. Interestingly, non-CA munis consistently have a higher TEY for me than CA munis (I figure my federal marginal rate at 27%, and CA rate at 8%, and I do not expect to it...
by Kevin M
Mon Jan 15, 2018 3:29 pm
Forum: Investing - Help with Personal Investments
Topic: CDs & Savings as a substitute for bonds or bond funds
Replies: 20
Views: 2545

Re: CDs & Savings as a substitute for bonds or bond funds

The problem with CDs is what to do when the stock market goes down significantly, and you want to re-balance into stocks. You may need to break some CDs and pay EWP, or sell brokered CDs for whatever they are worth on the market. A solution to this is to do some of each. You might hold your expecte...
by Kevin M
Mon Jan 15, 2018 3:20 pm
Forum: Investing - Help with Personal Investments
Topic: CDs & Savings as a substitute for bonds or bond funds
Replies: 20
Views: 2545

Re: CDs & Savings as a substitute for bonds or bond funds

One thing that can reduce the term risk of CDs purchased directly from a bank or credit union is the early withdrawal option. This limits the downside risk to the amount of the early withdrawal penalty. So a ladder of direct CDs with low early withdrawal penalties is indeed less risky than a similar...
by Kevin M
Sun Jan 14, 2018 12:53 pm
Forum: Investing - Help with Personal Investments
Topic: Need to move "safe" money to another place
Replies: 22
Views: 2599

Re: Need to move "safe" money to another place

No, not an IRA account. OK, so we're talking POD/TOD. Using a trust account at Ally would solve your problem, but I understand that you don't want to draft a living trust. Vanguard allows TOD accounts for individuals, but not for joint accounts. I assume that if Vanguard told you they could meet yo...
by Kevin M
Sat Jan 13, 2018 9:37 pm
Forum: Investing - Help with Personal Investments
Topic: Need to move "safe" money to another place
Replies: 22
Views: 2599

Re: Need to move "safe" money to another place

Will I be subject to fees that I wouldn’t have at Ally? Is it complicated to set up? What can I get that will duplicate my Ally savings account (1.25%) that will generate a bit of interest - do they offer those? ...Or would I have to get a money market account? I don’t even know how those work. I j...
by Kevin M
Sat Jan 13, 2018 9:28 pm
Forum: Investing - Help with Personal Investments
Topic: Need to move "safe" money to another place
Replies: 22
Views: 2599

Re: Need to move "safe" money to another place

Are you talking about an IRA account or taxable account?
by Kevin M
Sat Jan 13, 2018 8:55 pm
Forum: Investing - Theory, News & General
Topic: VUSXX vs. TreasuryDirect
Replies: 10
Views: 1088

Re: VUSXX vs. TreasuryDirect

Kevin, Which tax-exempt MM were you thinking? When I look at the Vanguard VMSXX its 7-day yield is only .74%. Hardly seems an alternative to VMMXX paying 1.42%. Dave You're quoting the 1-year return. The SEC yield is 1.22%. For me, this is a TEY of 1.73%. I estimate my 2018 federal marginal tax rat...
by Kevin M
Sat Jan 13, 2018 8:50 pm
Forum: Investing - Theory, News & General
Topic: VUSXX vs. TreasuryDirect
Replies: 10
Views: 1088

Re: VUSXX vs. TreasuryDirect

Windfall-parking theory says to temporarily park large amounts (that would exceed FDIC limits) in short term (say 4-wk) T-Bills or an MM fund, until you figure out what you actually want to do with the cash. pcflow welcome to the forum. You can go up to $250k per person per bank for FDIC coverage. ...
by Kevin M
Sat Jan 13, 2018 8:28 pm
Forum: Investing - Help with Personal Investments
Topic: Short term bond fund question
Replies: 4
Views: 487

Re: Short term bond fund question

If you're trying to match a liability in two years, I would not use a fund. I would use a good 2-year CD, perhaps 2-year Treasuries, or depending on your marginal tax rates a few 2-year AAA or even AA-rated municipal bonds. I have been finding AAA rate munis in the 2-year maturity ballpark with taxa...
by Kevin M
Sat Jan 13, 2018 8:24 pm
Forum: Investing - Theory, News & General
Topic: VUSXX vs. TreasuryDirect
Replies: 10
Views: 1088

Re: VUSXX vs. TreasuryDirect

The conversation might be more productive if we knew why you are asking, and how much money you're talking about. One reason I mention this, is that the FDIC limit can be quite a bit higher than many people realize. For example, with a trust or POD account with five beneficiaries, you get coverage u...
by Kevin M
Sat Jan 13, 2018 12:55 pm
Forum: Investing - Help with Personal Investments
Topic: What is the long term average nominal yield of the total bond market index fund ?
Replies: 27
Views: 1310

Re: What is the long term average nominal yield of the total bond market index fund ?

What is the long term average nominal annual return of the total bond market index fund ? Others have mentioned Morningstar, but I find Portfoliio Visualizer easier and quicker, as long as you're OK with data through the most recent complete month: Backtest Portfolio Asset Allocation This shows the...
by Kevin M
Fri Jan 12, 2018 6:49 pm
Forum: Personal Consumer Issues
Topic: 2017 HR Block tax federal tax update won't install
Replies: 11
Views: 882

Re: 2017 HR Block tax federal tax update won't install

Just did the update on a Windows laptop, and it took less than a minute.

Kevin
by Kevin M
Fri Jan 12, 2018 4:52 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Vs CIT- Seeking advice
Replies: 9
Views: 734

Re: Ally Vs CIT- Seeking advice

One reason I haven't messed around moving money to higher rate savings accounts is that I took advantage of Ally's no-penalty 11-month CDs at 1.75% (now 1.60%). And now the Vanguard municipal money market funds are providing me with taxable-equivalent yields (TEYs) of 1.74% (as of most recent close)...
by Kevin M
Thu Jan 11, 2018 4:59 pm
Forum: Personal Finance (Not Investing)
Topic: Brokered CDs - often better return secondary market
Replies: 48
Views: 5257

Re: Brokered CDs - often better return secondary market

how are you keeping accrued interest as low as possible? If you are concerned about paying taxes on interest you didn't receive, your broker should report accrued interest on your 1099, and on your Schedule B, you should be able to subtract it from interest received. This should not be an issue for...
by Kevin M
Thu Jan 11, 2018 1:56 pm
Forum: Personal Finance (Not Investing)
Topic: Brokered CDs - often better return secondary market
Replies: 48
Views: 5257

Re: Brokered CDs - often better return secondary market

jimishooch wrote:
Thu Jan 11, 2018 9:34 am
how are you keeping accrued interest as low as possible?
Why should I care? I haven't been paying any attention to that.
by Kevin M
Thu Jan 11, 2018 1:02 am
Forum: Personal Finance (Not Investing)
Topic: Brokered CDs - often better return secondary market
Replies: 48
Views: 5257

Re: Brokered CDs - often better return secondary market

yeah, it's gone, always interested in what forum members are buying (not a lot of us on this forum)...2 year is about as far out as i'll go as i hold until maturity... thx jim I've been buying mainly in the 17-25 month range since mid-December, but have gone out as far as four years (1.975%, which ...
by Kevin M
Wed Jan 10, 2018 5:17 pm
Forum: Personal Finance (Not Investing)
Topic: Brokered CDs - often better return secondary market
Replies: 48
Views: 5257

Re: Brokered CDs - often better return secondary market

do you have the CUSIP for the bond you bought? thx jim Not sure why you want it, as the best muni bond deals change daily. But I'm glad to provide it anyway: 262579NS0. Searching on this CUSIP, I don't see any currently available. Searching earlier today, I did not find any deals that were nearly t...
by Kevin M
Wed Jan 10, 2018 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: Brokered CDs - often better return secondary market
Replies: 48
Views: 5257

Re: Brokered CDs - often better return secondary market

Do anyone have experience buying CDs and Bonds via Vanguard's phone fixed income desk? It appears that our 401k VBO does not allow buying bonds, treasurys or CDs online, but require calling the fixed income desk. I presume this is to prevent the buying of tax exempt securities which is not allowed ...
by Kevin M
Tue Jan 09, 2018 6:25 pm
Forum: Personal Finance (Not Investing)
Topic: Brokered CDs - often better return secondary market
Replies: 48
Views: 5257

Re: Brokered CDs - often better return secondary market

When you purchase bonds on the Fidelity brokerage website, you can preview the purchase prior to committing. The preview (supposedly) gives you the after commissions effective yield you would be obtaining on the purchase. When I purchase secondary market CDs at Vanguard, I see the same thing. Both ...
by Kevin M
Tue Jan 09, 2018 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: Brokered CDs - often better return secondary market
Replies: 48
Views: 5257

Re: Brokered CDs - often better return secondary market

So is it correct to assume that for comparison sake, if my commission schedule is $1/ $1000 face value (Vanguard 401k VBO), then I remove 10 bps divided by the term to the yield ( e.g. 2 bps on a 5y CD) (a simplification). Yes, this will be a very close estimate if not exact. If you have basic spre...
by Kevin M
Sun Jan 07, 2018 9:54 pm
Forum: Investing - Help with Personal Investments
Topic: How to calculate total return (including dividends)
Replies: 7
Views: 686

Re: How to calculate total return (including dividends)

I like Portfolio Visualizer: Backtest Portfolio Asset Allocation. Very easy to use, and you can set different rebalancing schemes. Of course like any other backtesting tool, it only shows you historical results, which are unlikely to match future results closely.

Kevin
by Kevin M
Sun Jan 07, 2018 9:15 pm
Forum: Investing - Help with Personal Investments
Topic: Why not Muni Money Market?
Replies: 41
Views: 3485

Re: Why not Muni Money Market?

So I was wondering, the Muni funds are interest tax free, but even if you redeemed the shares back to your bank account? I am asking that because I noticed a disclaimer at the Vanguard Taxable-equivalent yield calculator: Although the income from a municipal bond fund is exempt from federal tax, ca...
by Kevin M
Sun Jan 07, 2018 11:33 am
Forum: Investing - Help with Personal Investments
Topic: Why not Muni Money Market?
Replies: 41
Views: 3485

Re: Why not Muni Money Market?

Pretty small amount to worry about. Can't see why anyone would have MM accounts at today's rates. Online savings accounts pay more. Not after taxes, probably for most people. I calculate the taxable equivalent yield for me of the CA muni fund as 1.97% and the national muni fund as 1.94%. My Ally Ba...
by Kevin M
Sat Jan 06, 2018 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 11 month [No-Penalty CD]
Replies: 382
Views: 31687

Re: Ally Bank 11 month [No-Penalty CD]

<snip> Although I expect to only be in the 12% federal tax bracket in 2018, my federal marginal tax rate will likely by 27%, since I expect to be in the range where a marginal dollar of income pushes qualified dividends from the 0% rate to the 15% rate, and 12% + 15% = 27%. I expect my CA state tax...
by Kevin M
Sat Jan 06, 2018 3:02 pm
Forum: Investing - Help with Personal Investments
Topic: Why not Muni Money Market?
Replies: 41
Views: 3485

Re: Why not Muni Money Market?

The Tax exempt muni MM portfolio is almost 100% VRDO (variable rate deposit obligations) which are long term bonds from municipalities where the interest rate changes on a weekly or so basis and the holder has a put option to be able to sell the bond to an underwritir like a Bank or insurance compa...
by Kevin M
Sat Jan 06, 2018 12:46 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 11 month [No-Penalty CD]
Replies: 382
Views: 31687

Re: Ally Bank 11 month [No-Penalty CD]

Kevin, with the national muni MM fund, what is the risk of loss due to rising market interest rates (assuming they do rise even if the slope is small)? A money market fund typically won't have any losses when rates rise, since the charter of a money market fund is to maintain a stable value of $1.0...
by Kevin M
Fri Jan 05, 2018 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 11 month [No-Penalty CD]
Replies: 382
Views: 31687

Re: Ally Bank 11 month [No-Penalty CD]

The Vanguard municipal money market funds are now a better deal for me. I calculate my taxable equivalent yield (TEY) as 2.00% on the CA muni MM fund (7-day yield = 1.30%) and 1.97% on the national muni MM fund (7-day yield = 1.39%). And I calculate my TEY on the Limited-Term muni fund, with a durat...
by Kevin M
Wed Jan 03, 2018 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: California - Intermediate Muni Bonds - effect of capital gains tax
Replies: 7
Views: 752

Re: California - Intermediate Muni Bonds - effect of capital gains tax

The dividends (income return) will be tax free, but the gain or loss on the sale of shares will be taxed at your capital gain rates (which for CA is the same as for ordinary income). It's impossible to say how much of your return will be from income return and from capital return, but you can see so...
by Kevin M
Wed Jan 03, 2018 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 11 month [No-Penalty CD]
Replies: 382
Views: 31687

Re: Ally Bank 11 month [No-Penalty CD]

I think a phone call can take care of many issues. And yes, their wait time has been longer than usual lately, but if you want the better rate, you have to put in some effort. I don't think so. If you qualify for the 10-day rate guarantee (whatever it is exactly), you'll get the guaranteed rate, an...
by Kevin M
Wed Jan 03, 2018 9:06 pm
Forum: Personal Finance (Not Investing)
Topic: Ally Bank 11 month [No-Penalty CD]
Replies: 382
Views: 31687

Re: Ally Bank 11 month [No-Penalty CD]

I transferred a number of CDs to the higher rate on Jan 1. I also opened an additional one with a zero balance on Jan 1. Just funded it this morning. It shows a rate of 1.6% (the current rate), not the 1.75% promotional rate that was in effect on Jan 1, when i opened the CD. I sent them an e-mail a...
by Kevin M
Wed Jan 03, 2018 9:00 pm
Forum: Investing - Theory, News & General
Topic: Why the Roth IRA Bias?
Replies: 133
Views: 29022

Re: Why the Roth IRA Bias?

I think the end game is to get as much in a Roth as possible <snip> Not necessarily, and this is typical of the confusion I was trying to explore in starting this thread more than seven years ago. The end game is not to get as much in a Roth as possible, but to maximize your after-tax wealth and in...