Search found 8672 matches

by Kevin M
Mon Oct 16, 2017 2:01 pm
Forum: Personal Finance (Not Investing)
Topic: Well Done Ally Bank - CD purchase
Replies: 61
Views: 11857

Re: Well Done Ally Bank - CD purchase

Okay, I get it now. Thanks, HueyLD. Ally in fact apparently treats CDs as separate accounts. That is what was throwing me. I've bought CDs before at Fidelity, you just fund them from wherever and they show up as holdings in your account rather than as separate accounts. I was able to set up the CD ...
by Kevin M
Mon Oct 09, 2017 7:43 pm
Forum: Investing - Help with Personal Investments
Topic: admiral shares or investor shares?
Replies: 24
Views: 2895

Re: admiral shares or investor shares?

hello bogleheads, I'm currently in a vanguard target 2040 fund (vforx) (.16% ER) that is about to cross the $10,000 threshold, which qualifies me for an admiral share. i am torn between investor shares & admiral shares...also, vanguard is prompting me to transition to a brokerage account, any advic...
by Kevin M
Mon Oct 09, 2017 1:44 pm
Forum: Investing - Theory, News & General
Topic: What is a “bond bubble”?
Replies: 35
Views: 3158

Re: What is a “bond bubble”?

What would a “deflating” be like to those of us holding broad index funds including investment grade corporate bonds? The 7-year yield on 2/27/1987 was 7.00%, and on 9/30/1987 it was 9.50%: https://fred.stlouisfed.org/graph/?g=flfS. That would have resulted in a capital return of about -11.8% and a...
by Kevin M
Mon Oct 09, 2017 1:32 pm
Forum: Investing - Theory, News & General
Topic: What is a “bond bubble”?
Replies: 35
Views: 3158

Re: What is a “bond bubble”?

in discussing a bond fund ...if something shakes investors psychology and they decide to all get out of VBTLX, can't we have share prices decoupled from the value of the underlying bonds? I don't see how, since the share price is the per share NAV, which is based on the prices of the bonds. Of cour...
by Kevin M
Sun Oct 08, 2017 5:38 pm
Forum: Investing - Help with Personal Investments
Topic: Risk of Long Term Government Bond Index Fund (VLGSX)
Replies: 12
Views: 832

Re: Risk of Long Term Government Bond Index Fund (VLGSX)

If you go to the VLGSX page and then the "portfolio and management" bar, you will see that the fund has "duration" of 17.6. This is a purely mathematical quantity that is very informative; it says that if the interest rate on this fund goes UP by 1% (say from 3% to 4%), then the value of your posit...
by Kevin M
Sun Oct 08, 2017 2:35 pm
Forum: Investing - Theory, News & General
Topic: What is a “bond bubble”?
Replies: 35
Views: 3158

Re: What is a “bond bubble”?

What would a “deflating” be like to those of us holding broad index funds including investment grade corporate bonds? One way to get a sense of this is to look at the worst drawdowns for the bond fund of interest. We can do this with Portfolio Visualizer for monthly returns. The worst drawdown for ...
by Kevin M
Sun Oct 08, 2017 1:26 pm
Forum: Investing - Theory, News & General
Topic: What is a “bond bubble”?
Replies: 35
Views: 3158

Re: What is a “bond bubble”?

In posting the above, I had missed the "if over the next year" part of the "Great American Bond Bubble" quote. So changing the remaining maturity from 10 years to 9 years in the calculation gives a loss of 2.71% for the 2.8%->3.15% scenario (0.97 times the initial yield), and a loss of 8.92% for the...
by Kevin M
Sun Oct 08, 2017 1:16 pm
Forum: Investing - Theory, News & General
Topic: What is a “bond bubble”?
Replies: 35
Views: 3158

Re: What is a “bond bubble”?

<snip> 2) In August 2010, Jeremy Schwartz and Jeremy Siegel warned of a "Great American Bond Bubble" in Treasuries, and said that bad things would happen if "if over the next year, 10-year interest rates, which are now 2.8%, rise to 3.15%, bondholders will suffer a capital loss equal to the current...
by Kevin M
Sat Oct 07, 2017 1:34 pm
Forum: Investing - Theory, News & General
Topic: Simba's Backtesting Spreadsheet: how useful is it?
Replies: 11
Views: 766

Re: Simba's Backtesting Spreadsheet: how useful is it?

I noticed that for SCV the Vanguard return data, when available, is for the Investor class. Maybe you should consider using the Admiral class? Yes, this is a historical thing, the Simba spreadsheet has always used Investor class funds (and ER). I am not fully enthused about that, but I am not too e...
by Kevin M
Mon Oct 02, 2017 11:21 am
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth logistics question re: existing TIRA
Replies: 1
Views: 145

Re: Backdoor Roth logistics question re: existing TIRA

My daughter was in a similar situation. Since it's so easy to open a new traditional IRA at Vanguard, I had her open a new traditional IRA for the new contributions to be converted to Roth. This just keeps things clean, and clearly distinguishes the different purposes of the money in each IRA. I don...
by Kevin M
Sun Oct 01, 2017 2:47 pm
Forum: Investing - Theory, News & General
Topic: Buffett's idea of risk vs risk as in the formula: 'willingness, ability and need'
Replies: 50
Views: 2567

Re: Buffett's idea of risk vs risk as in the formula: 'willingness, ability and need'

I think Buffet conflates the low expected return of safe fixed income with risk. Safe fixed income is not risky in the long run, it is low return in the long run. Investment risk is the uncertainty that you'll earn the expected return of the investment. Buffet, and many on this forum, seem to have 1...
by Kevin M
Sun Oct 01, 2017 11:59 am
Forum: Personal Finance (Not Investing)
Topic: time to transfer money to Vanguard, grumble, grumble
Replies: 28
Views: 3690

Re: time to transfer money to Vanguard, grumble, grumble

I've done many IRA transfers, including many out of and into Vanguard. The transfers usually take 2-3 weeks from the time I mail the form to the receiving custodian (who then mails it to the sending custodian, who then mails a check to receiving custodian). I recently had my first really bad IRA tra...
by Kevin M
Sun Oct 01, 2017 11:43 am
Forum: Investing - Help with Personal Investments
Topic: Question on Bond Portion of AA
Replies: 16
Views: 973

Re: Question on Bond Portion of AA

I would go 100% with the SV fund. For fixed income, Treasuries are the gold standard, so I start my comparisons there, then consider the additional credit risk and the difference in term risk. Yield on the 5-year Treasury is 1.92% and yield on the 10-year is 2.33%. Even the 30-year yield is only 2.8...
by Kevin M
Sun Oct 01, 2017 11:29 am
Forum: Investing - Help with Personal Investments
Topic: IRA contribution issue
Replies: 6
Views: 317

Re: IRA contribution issue

Recharacterize the contribution. You have until the extension due date to recharacterize, and the custodian should be able to handle the earnings appropriately.

IRA recharacterization - Bogleheads
by Kevin M
Sun Sep 24, 2017 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: Transfering 250K online from one bank to another
Replies: 15
Views: 1747

Re: Transfering 250K online from one bank to another

OP here - Thank you all for your responses. I will likely break up the transfer into a few <100k ones. Why bother? The limit at Ally is $250K, so why not just do it in one shot? I very recently transferred >$100K into Ally from a credit union (proceeds from a recently matured CD), and I didn't thin...
by Kevin M
Sun Sep 24, 2017 12:34 pm
Forum: Personal Finance (Not Investing)
Topic: What's the purpose of having a child's name on a deed?
Replies: 41
Views: 3231

Re: What's the purpose of having a child's name on a deed?

Well, from what I understand you'll basically be gaining a tax bill since you won't have a stepped up basis upon their death. I'm just a dumb ol' country boy, though, so might want to check with an accountant. That is incorrect. There would still be a stepped up basis, although there are many other...
by Kevin M
Sat Sep 23, 2017 8:16 pm
Forum: Investing - Help with Personal Investments
Topic: REBALNCE: TLH partner, BONDs
Replies: 7
Views: 312

Re: REBALNCE: TLH partner, BONDs

Your stable value fund is up less than 1% YTD, so I think it is a loser of a stable value fund. I would take the risk and use a bond fund. The YTD of the bond fund that you reported looks suspiciously low, so it is probably not really YTD, so what is it? First 6-months? Funny. YTD of the stable val...
by Kevin M
Sat Sep 23, 2017 8:13 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone own a home and drop insurance coverage after mortgage paid off?
Replies: 36
Views: 2384

Re: Anyone own a home and drop insurance coverage after mortgage paid off?

I dropped flood insurance when I paid off my mortgage, but not homeowners. The liability portion is important. Mine actually paid off to the tune of about $50K plus court costs for an incident involving my son. I was with a different insurance company when the incident ended up in court, but the pre...
by Kevin M
Sat Sep 23, 2017 8:06 pm
Forum: Investing - Help with Personal Investments
Topic: REBALNCE: TLH partner, BONDs
Replies: 7
Views: 312

Re: REBALNCE: TLH partner, BONDs

For a stable value fund, the ER isn't that important. What is important is the yield, which is net of ER. Given that the 1-year return is 1.83%, I'd guess that the yield is in that ballpark, but this is something that should be published somewhere. I think having all of your 25% fixed-income allocat...
by Kevin M
Fri Sep 22, 2017 12:08 pm
Forum: Personal Finance (Not Investing)
Topic: Tax on joint brokerage accounts?
Replies: 13
Views: 948

Re: Tax on joint brokerage accounts?

I'd rather manage one account than three. As already pointed out, at Vanguard, for example, your siblings could grant you agent authorization for their accounts, and you would then have online access to their accounts with your login. It's still three accounts, but with your single login, it wouldn...
by Kevin M
Thu Sep 21, 2017 1:47 pm
Forum: Investing - Help with Personal Investments
Topic: Merging inheritance with different asset allocation
Replies: 17
Views: 1371

Re: Merging inheritance with different asset allocation

- Immediately rebalance because there is no logical reason to not just have all my money at whatever AA I decided on previously. In this case, I would probably do 75/25, or maybe 70/30 since my need to take risk has probably declined a bit. The first and second sentences here are in conflict (assum...
by Kevin M
Wed Sep 20, 2017 12:35 pm
Forum: Investing - Help with Personal Investments
Topic: Paying off primary mortgage
Replies: 24
Views: 1997

Re: Paying off primary mortgage

Franklin Templeton has a sales charge of 3.5% when investing 100K-249K addition money. 100K is about the chunk of change at a time that we can invest...so we have to figure we've lost 3.5%initially before we see the investment profit...hopefully... Yikes! I would place a much higher priority on lea...
by Kevin M
Wed Sep 20, 2017 11:33 am
Forum: Investing - Help with Personal Investments
Topic: Paying off primary mortgage
Replies: 24
Views: 1997

Re: Paying off primary mortgage

Suzyq1952 wrote:
Wed Sep 20, 2017 11:14 am
Costs 3% to buy into stock again.
What does this mean?
by Kevin M
Tue Sep 19, 2017 6:28 pm
Forum: Investing - Theory, News & General
Topic: The Difference Between Risk and Uncertainty
Replies: 41
Views: 2877

Re: The Difference Between Risk and Uncertainty

BobK and Kevin, and any other who wish to comment... in the light of the two groups of definitions BobK has marshaled, what would you say about the fairly frequently echoed phrase, "volatility is not risk?" Answer 1. Because people usually are speaking about short-term uncertainty of returns when t...
by Kevin M
Tue Sep 19, 2017 3:33 pm
Forum: Investing - Theory, News & General
Topic: The Difference Between Risk and Uncertainty
Replies: 41
Views: 2877

Re: The Difference Between Risk and Uncertainty

That's sufficiently "interesting" that I really think I'd better reproduce the page in question. I wonder what happened between the 3rd and the 7th edition? Look in the section on Risk Premiums. In my version, section 4.2 is titled "Risk and Risk Premiums", and the definition I quoted is the first ...
by Kevin M
Tue Sep 19, 2017 12:57 pm
Forum: Investing - Help with Personal Investments
Topic: CDs and Required Minimum Distributions
Replies: 11
Views: 824

Re: CDs and Required Minimum Distributions

It is also usually (but not always) the case that interest on CDs can be withdrawn without the EWD penalty. Also true, but if you're using the Uniform Lifetime Table for your RMD calculation, the minimum withdrawal percentage is 3.65% (1/27.4 at age 70), so with 5-year CD rates in the 2-2.5% ballpa...
by Kevin M
Tue Sep 19, 2017 12:46 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Location: 401k All Fixed Income?
Replies: 16
Views: 1122

Re: Asset Location: 401k All Fixed Income?

If you follow the conventional wisdom of holding fixed income in tax-advantaged accounts, then it's mostly fine. One downside, that's been raised in a post very recently, is that if they need to rebalance out of stocks into fixed income per their investment policies, they may have to pay capital gai...
by Kevin M
Tue Sep 19, 2017 11:57 am
Forum: Investing - Theory, News & General
Topic: The Difference Between Risk and Uncertainty
Replies: 41
Views: 2877

Re: The Difference Between Risk and Uncertainty

It's a zoo. Consider, for example, an actual textbook: Investments , 7th edition, Bodie, Kane, and Marcus. I go to the glossary. I look up the word "risk." It's not there. Interesting. I have the third edition, and in the index I see: Risk defined, 123 On page 123 I see: Risk means uncertainty abou...
by Kevin M
Tue Sep 19, 2017 11:12 am
Forum: Investing - Help with Personal Investments
Topic: CDs and Required Minimum Distributions
Replies: 11
Views: 824

Re: CDs and Required Minimum Distributions

It's true that the terms and conditions for CDs at a number of banks and credit unions allow penalty-free RMDs from their CDs, but it's easy to set things up so you don't have to worry about this. As others have mentioned, you can just structure your CD holdings so that at least one CD of sufficient...
by Kevin M
Mon Sep 18, 2017 8:19 pm
Forum: Investing - Help with Personal Investments
Topic: Bond return negative. CD or money market alternative.
Replies: 30
Views: 3204

Re: Bond return negative. CD or money market alternative.

Your CD is not traded on the market, but it is also worth less than face value, because you could put an equal dollar amount into a higher-yielding CD but your bank will not allow you to do that. Ah, but they will--for a price, in the form of an early withdrawal penalty. And the price (for a good C...
by Kevin M
Mon Sep 18, 2017 3:21 pm
Forum: Investing - Help with Personal Investments
Topic: Making my own Total US stock market fund.
Replies: 20
Views: 1745

Re: Making my own Total US stock market fund.

I don't necessarily disagree with that - but I still find it interesting that they would suggest a two fund portfolio that excludes the middle of the market when you can easily do a two fund portfolio of VFINX and VXF (Vanguard's extended market) that doesn't. Just as simple and fully comprehensive...
by Kevin M
Mon Sep 18, 2017 3:17 pm
Forum: Personal Finance (Not Investing)
Topic: Thoughts on adjusting withholding for an expected tax credit?
Replies: 5
Views: 407

Re: Thoughts on adjusting withholding for an expected tax credit?

I prefer to owe a little at tax time and, given the rash of ID theft associated with tax returns, having a $13K refund sitting at the IRS for months would be irritating. Yeah, that would be more important to me than the little bit of interest I'd earn from the lower withholding, or than the small p...
by Kevin M
Mon Sep 18, 2017 3:11 pm
Forum: Personal Finance (Not Investing)
Topic: Where to park $200K cash?
Replies: 27
Views: 3712

Re: Where to park $200K cash?

I know how to get 3% on 15K But nobody knows how to get 3% on 200K That is my problem Which is why I did not bother recommending a reward checking account to you. Another 3% deal may pop up at any time, but the best rate I see on a 5-year CD is 2.60% APY, and even extending maturity to 10 years you...
by Kevin M
Mon Sep 18, 2017 2:59 pm
Forum: Investing - Help with Personal Investments
Topic: Making my own Total US stock market fund.
Replies: 20
Views: 1745

Re: Making my own Total US stock market fund.

What's interesting about that mix is that it leaves a hole in midcap coverage - everyone's forgotten step-child. The factor exposure is very close to Vanguard's total market fund (though not quite as close as the 80/10/10 mix) but the unloved midcaps remain unloved. Three points. First, small-cap a...
by Kevin M
Mon Sep 18, 2017 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: Thoughts on adjusting withholding for an expected tax credit?
Replies: 5
Views: 407

Re: Thoughts on adjusting withholding for an expected tax credit?

I probably would do it if I had fairly high certainty in my 2018 income. On the other hand, putting $1,000/month for 12 months into a savings account at 1.2% only earns you $66 in interest ( =FV(1.2%/12,12,-1000,0) ), so it's not that big of a deal.

Kevin
by Kevin M
Mon Sep 18, 2017 1:13 pm
Forum: Personal Finance (Not Investing)
Topic: Where to park $200K cash?
Replies: 27
Views: 3712

Re: Where to park $200K cash?

Move $35 to a Redneck Bank Megamoney account at 1.5%. You could also do a checking account for 1.5% but it's the typical "jump through 10 flaming hoops a month" kinda thing. I assume you mean $35K and on $35? An extra 0.3% on $35 won't buy you a cup of coffee :happy And, since OP already has an acc...
by Kevin M
Mon Sep 18, 2017 1:07 pm
Forum: Investing - Help with Personal Investments
Topic: Making my own Total US stock market fund.
Replies: 20
Views: 1745

Re: Making my own Total US stock market fund.

FUSVX tracks the S&P 500 while FSCKX tracks the Russell Midcap Index that covers the companies #201-1000 in size from the Russell 1000 - so those two overlap. FSSVX covers the Russell 2000. What's more, since the Russell indexes cutoff by # of companies rather than targeting a set % of the market (...
by Kevin M
Mon Sep 18, 2017 12:04 pm
Forum: Personal Finance (Not Investing)
Topic: Where to park $200K cash?
Replies: 27
Views: 3712

Re: Where to park $200K cash?

I read somewhere that some CDs come with a penalty where you still make more money than 1 year CD It is like investing in a 5 year CD but you withdraw in 1 year pay penalty but you are better than investing in 1 year CD in the first place Any ideas? Yes, that can be the case, but not necessarily. A...
by Kevin M
Mon Sep 18, 2017 10:33 am
Forum: Investing - Help with Personal Investments
Topic: Frequent Trading Restriction and Automatic Withdrawal in Vanguard Brokerage Account
Replies: 4
Views: 647

Re: Frequent Trading Restriction and Automatic Withdrawal in Vanguard Brokerage Account

I sold $4000 in a mutual fund; the money went to the Vanguard Federal Money Market Fund (Settlement fund). The usual notice came up: Frequent Trading Policy...no buying or selling in this fund for 30 days. <snip> I wondered, would the Account Maintenance/Automatic Withdrawal method still work? The ...
by Kevin M
Mon Sep 18, 2017 10:27 am
Forum: Personal Finance (Not Investing)
Topic: Where to park $200K cash?
Replies: 27
Views: 3712

Re: Where to park $200K cash?

Unless you need the money within six days, a no brainer is to at least move it into Ally no-penalty 11-month CDs earning 1.50% APY. After six days you can do an early withdrawal penalty free. I just bought four at $25K each--took less than 10 minutes. I do them in $25K increments because that's the ...
by Kevin M
Sun Sep 17, 2017 2:59 pm
Forum: Investing - Help with Personal Investments
Topic: 100k short term park
Replies: 10
Views: 1667

Re: 100k short term park

One benefit of keeping it liquid is so you can have it free to make an offer on your next home while selling your current property. If you put it all on your current mortgage, your next purchase may need a contingency added if you need to sell your current property before finalizing on your next. D...
by Kevin M
Sat Sep 16, 2017 3:14 pm
Forum: Investing - Theory, News & General
Topic: Distressing news -> Flight to Safety ?
Replies: 75
Views: 6956

Re: Distressing news -> Flight to Safety ?

Just looking at monthly returns, Vanguard intermediate-term Treasury fund beat TBM by about two percentage points in November 2008, but only by about 30 basis points in December, and then it gave back about 1.7 percentage points more than TBM in January 2009. So over the 3-month period the advantag...
by Kevin M
Sat Sep 16, 2017 2:14 pm
Forum: Investing - Theory, News & General
Topic: Distressing news -> Flight to Safety ?
Replies: 75
Views: 6956

Re: Distressing news -> Flight to Safety ?

It's a minor market timing move that is unlikely to make much difference on the upside or downside. You'd get more insurance with longer-term Treasuries, if we assume similar behavior as in late 2008, but of course at the cost of higher risk. Just looking at monthly returns, Vanguard intermediate-te...
by Kevin M
Fri Sep 15, 2017 6:29 pm
Forum: Investing - Help with Personal Investments
Topic: Advice about portfolio, especially bonds
Replies: 21
Views: 1306

Re: Advice about portfolio, especially bonds

sjb150 wrote:
Fri Sep 15, 2017 4:34 pm
Newbie question: can you clarify what is meant by 'filling the lower tax brackets in retirement' and why it is desirable?
I think this blog post by forum member tfb (Harry Sit) does a pretty good job of explaining it:
The Case Against Roth 401(k)

Kevin
by Kevin M
Fri Sep 15, 2017 3:36 pm
Forum: Investing - Help with Personal Investments
Topic: Advice about portfolio, especially bonds
Replies: 21
Views: 1306

Re: Advice about portfolio, especially bonds

A good alternative to a savings account for short-term is the Ally no-penalty 11-month CD earning 1.5%, but some savings accounts are paying as much as 1.4%. For a 2-year timeframe, the USAlliance 25-month CD at 2.00% APY is the best deal I know of, but it requires joining the credit union (took me ...
by Kevin M
Fri Sep 15, 2017 3:31 pm
Forum: Investing - Help with Personal Investments
Topic: Advice about portfolio, especially bonds
Replies: 21
Views: 1306

Re: Advice about portfolio, especially bonds

The conventional wisdom would lead to locating bonds in tax-advantaged accounts, but there is debate here as to whether or not that's the best approach. If you go with conventional, then all 401k and IRA in bonds would be fine until whatever is in those accounts exceeds your target bond allocation. ...
by Kevin M
Fri Sep 15, 2017 3:12 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA/RMD question
Replies: 6
Views: 491

Re: Inherited IRA/RMD question

As mentioned, it doesn't sound like you're taking required minimum distributions, but larger distributions to shift the income to lower-income years. If stocks tank, then you can take smaller distributions or empty the IRA faster. You can just reinvest the distribution in the same investment in your...
by Kevin M
Fri Sep 15, 2017 2:38 pm
Forum: Investing - Theory, News & General
Topic: [WSJ] Your Tolerance for Investment Risk Is Probably Not What You Think
Replies: 49
Views: 5935

Re: [WSJ] Your Tolerance for Investment Risk Is Probably Not What You Think

What I struggle with now is the dichotomy between need to take risk and ability/willingness to take risk. Relatively low need and relatively high ability to take risk is a typical situation for someone whose financial capital is high relative to residual living expenses (either actual or expected i...
by Kevin M
Fri Sep 15, 2017 1:05 pm
Forum: Investing - Help with Personal Investments
Topic: 100k short term park
Replies: 10
Views: 1667

Re: 100k short term park

Given that you plan to put it into house equity within a year anyway, I'd use it to pay down the 4% mortgage. You won't get a risk-free return anywhere close to that, even for terms of much longer than one year (even the 30-year Treasury yield is only 2.77%). If for some reason you want the liquidit...
by Kevin M
Fri Sep 08, 2017 1:12 pm
Forum: Investing - Theory, News & General
Topic: Simba's backtesting spreadsheet [a Bogleheads community project]
Replies: 1032
Views: 572573

Re: Simba's backtesting spreadsheet [a Bogleheads community project]

FWIW, Portfolio Visualizer uses trailing returns for asset class and portfolio backtest rolling return charts.