[Thread merged into here --admin LadyGeek]
I received an email from Vanguard this morning, titled "You could generate additional income using securities you already own." It's an invitation to lend securities, "available only to clients like you" with click-buttons to go further. Warning that SIPC protection doesn't apply to shares on loan. I'm not interested in the offer, but wonder what the group thinks.
Search found 203 matches
- Mon Mar 18, 2024 3:38 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard invites clients to lend securities
- Replies: 21
- Views: 1293
- Sun Feb 25, 2024 10:41 am
- Forum: Personal Investments
- Topic: iShares iBonds 2033 Term TIPS ETF - advantages over TIPS
- Replies: 31
- Views: 3878
Re: iShares iBonds 2033 Term TIPS ETF - advantages over TIPS
I would buy one or more individual TIPS rather than the fund. The market price of both the TIPS and the fund will vary, perhaps by a lot, between now and 2033. This is irrelevant for individual TIPS, as real YTM is locked in at purchase. The fund, because of the need to reinvest at least the OID paid out as interest, is inevitably exposed to market variation in price.
- Sun Feb 25, 2024 10:09 am
- Forum: Personal Investments
- Topic: Long TIPS ladder: buy in parts?
- Replies: 10
- Views: 1296
Re: Long TIPS ladder: buy in parts?
As you no doubt know, once you buy a TIPS the YTM is locked in no matter what happens to the market interest rate. Real rates are now quite good. No one can predict, but the overall trend in rates over the next year or so is quite likely to be down as the Fed finally waits then begins to cut. So I would buy the full ladder now if at all possible.
- Fri Feb 02, 2024 3:49 pm
- Forum: Investing - Theory, News & General
- Topic: Asset allocation strategy
- Replies: 37
- Views: 3757
Re: Asset allocation strategy
Mid-80s, just sold 2 homes, moved to retirement community. The income from the house sales (after relocation costs) went into VWLUX. (Looking for income, indifferent to market price, hence choice of long-term fund.) We are much more conservative than many here. After reinvesting the house sales we are just 25% equities (75% VTI, 25% VXUS). Almost 15% in TIPS and Ibonds (the good old 3% to 3.6% real yield Ibonds, to be redeemed for income 2025-2031.) Bought $250,000 in TIPS this year, as high inflation is the greatest threat to our financial security - have you looked at the govt deficit lately? Of the TIPS, 3 of $50,000 face value, maturing each of 3032/3/4, after Ibonds mature. I expect my wife to live far into her 90s (he older sister is ...
- Fri Jan 26, 2024 5:38 pm
- Forum: Personal Investments
- Topic: The AMD/NVDA chip stocks are driving me crazy
- Replies: 79
- Views: 11305
Re: The AMD/NVDA chip stocks are driving me crazy
Neither I nor anyone else knows how NVDA will perform as a stock, though prospects for the company are good. Consider as an example Qualcom, one of the big favorites of the 2000-era tech bubble, and, unlike many, a solid company with real profits. The company has done very well in the usual metrics (sales, profits, and so on). The stock has not - it was simply too expensive. The same may be true of NVDA - though, again, I don't know.
- Tue Dec 12, 2023 4:37 pm
- Forum: Investing - Theory, News & General
- Topic: S&P Index Too Heavily Weighted Toward High Tech?
- Replies: 118
- Views: 14827
Re: S&P Index Too Heavily Weighted Toward High Tech?
I have no opinion on the issue of the S&P being so strongly influenced by a few stocks. I do dispute the several posts claiming that no theory supports the total market portfolio. John Norstad of Northwestern long ago published a paper "Three Proofs that TSM is Efficient," in which he proves that 1. If the efficient market hypothesis is true, then TSM is efficient. 2. If the capital asset pricing model is true, then TSM is efficient. 3. If the Fama-French three-factor pricing model is true, then TSM is efficient. Of course, none of these three models is exactly true - that's the nature of models. But theory must make some assumptions, and here are three assumptions supporting TSM. [Sorry - downloaded the paper long ago and did...
- Tue Dec 12, 2023 4:13 pm
- Forum: Investing - Theory, News & General
- Topic: Help me understand a Haghani et al claim
- Replies: 4
- Views: 748
Help me understand a Haghani et al claim
Haghani and White (authors of the 'Missing Billionaires" book much-discussed in this forum), along with Vladimir Ragulin, have posted a note titled "Sharpe's Arithmetic and the Risk Matters Hypothesis" (https://elmwealth.com/risk-matters-hypothesis/). They claim that: "The average risk across all actively-managed portfolios of stocks will be greater than the risk of the market portfolio." The argument is that "every active portfolio can be expressed as holding the market portfolio plus an 'active exposures' portfolio of longs and shorts in all the constituents, such that the market portfolio plus the active exposures portfolio equals the given active portfolio. Further, each active portfolio requires that there...
- Tue Nov 21, 2023 12:24 pm
- Forum: Investing - Theory, News & General
- Topic: What is the role of fixed income to you?
- Replies: 118
- Views: 15998
Re: What is the role of fixed income to you?
Income. Period.
You have no doubt heard this Groucho Marx anecdote: “Groucho, how do you invest your money?” He answered, “I keep my money in Treasury bonds,” to which the trader replied, “But Groucho, they don’t make you much money.” And Groucho responded, “They do, if you have enough of them!”
You have no doubt heard this Groucho Marx anecdote: “Groucho, how do you invest your money?” He answered, “I keep my money in Treasury bonds,” to which the trader replied, “But Groucho, they don’t make you much money.” And Groucho responded, “They do, if you have enough of them!”
- Sat Nov 18, 2023 5:20 pm
- Forum: Personal Investments
- Topic: Question re TIPS Yield to Maturity and Bid Ask Price
- Replies: 13
- Views: 1243
Re: Question re TIPS Yield to Maturity and Bid Ask Price
As a warning to the naive: At maturity, the owner receives the final inflation-adjusted principal. This value is unknown, as it depends on the intervening rate of inflation. In particular, it is NOT the YTM times the purchase price.
- Thu Nov 16, 2023 10:13 am
- Forum: Investing - Theory, News & General
- Topic: Are you satisfied with your past/current Roth conversions ? Why, or why not, or simply no look-back?
- Replies: 37
- Views: 3997
Re: Are you satisfied with your past/current Roth conversions ? Why, or why not, or simply no look-back?
I converted a large IRA to Roth in 2010, the first year large conversions were allowed. The intent was to make this our two kids' main inheritance, so I named them as equal beneficiaries. I paid more than $600,000 in tax on the conversion, from other assets, being in the top tax bracket. So the conversion would have made no sense if it were for my future rather than our children's. I left it to them in a trust, which could go on indefinitely, because both kids are doing well and might want to leave it for their kids. I was satisfied - a Roth is the best thing you can leave your kids - until the govt reneged on the implicit agreement by requiring that the Roth be emptied by the end of the 10th year after my death. This is fully justified for...
- Thu Nov 16, 2023 9:49 am
- Forum: Personal Investments
- Topic: Challenges of Large Tax Deferred Retirement Accounts Balance
- Replies: 66
- Views: 8612
Re: Challenges of Large Tax Deferred Retirement Accounts Balance
I had two tax-deferred accounts and adequate resources outside them. So I did a Roth conversion on one (an IRA) and made our two kids beneficiaries. This will be their primary inheritance - a Roth is the best thing you can inherit even with the 10-yr limit. The Roth (created 2010) has grown and will (I hope) continue to grow with no income tax liability. So if the amounts work out, you might consider using one of your accounts as an inheritance.
- Wed Oct 11, 2023 4:21 pm
- Forum: Personal Investments
- Topic: Muncipal Bonds questions
- Replies: 2
- Views: 383
Re: Muncipal Bonds questions
Most municipal bonds are callable. The probability that a bond will be called depends on the relation of the bond's coupon rate to current interest rates for similar bonds. If the bond has a high coupon rate (probably purchased recently) it is likely to be called if rates decline significantly. But it can't be called before the call date, which is known when you buy the bond - interest continues at the coupon rate until called. If the bond was bought in 2021 or before, it probably has a low coupon rate relative to current rates and would not be called unless rates drop below the coupon rate. Buying individual munis is generally not a great idea. Funds provide wide diversification and (if actively managed like Vanguard's funds) professional ...
- Tue Sep 26, 2023 4:26 pm
- Forum: Personal Investments
- Topic: The case for international bonds?
- Replies: 30
- Views: 3992
Re: The case for international bonds?
In the new edition of Bernstein's Four Pillars, he argues as follows:
Because currency exchange rate volatility greatly exceeds bond volatility, international bond holdings should be hedged
But hedged international bonds behave very much like domestic bonds
Therefore there is little reason to complicate life by holding international bonds
Because currency exchange rate volatility greatly exceeds bond volatility, international bond holdings should be hedged
But hedged international bonds behave very much like domestic bonds
Therefore there is little reason to complicate life by holding international bonds
- Tue Sep 26, 2023 4:18 pm
- Forum: Investing - Theory, News & General
- Topic: I Bonds Mega Thread (I Bond Heads Rejoice!)
- Replies: 6651
- Views: 1204276
Re: sell ibonds? Bought Nov 2021
The interest rate for an Ibond bought in Nov 2021 (fixed rate 0%) dropped from 6.48% to 3.38% on June 1. The current rate is below market rates for safe investments (e.g. Treasuries, TIPS and many CDs). Selling loses the last 3 months interest - that is, the interest for June/July/August. That's just $96 as all three months were ar the 3.38% rate. I would certainly sell and reinvest.
- Mon Sep 25, 2023 11:34 am
- Forum: Investing - Theory, News & General
- Topic: Long real recovery periods for stocks
- Replies: 172
- Views: 17336
Re: Long real recovery periods for stocks
I'm guessing that many of us are past the prime accumulation phase. I remember the 1966-1982 period with pleasure. I got my PhD and started work in 1967, just did the then-common thing by putting 50% of the university's quite generous retirement contribution into TIAA traditional and 50% into CREF stock. (Of course, if I had known then what I know now I would have chosen a higher stock allocation.) Did not look again until 1980 (after being busy: two promotions, 2 children, a house, then a better house). The equity performance was shocking. Fortunately, Malkiel's "Inflation-Beater's Investment Guide" (approximate title from memory) came out that year. He compared stock prices with historical levels and with the book value of the u...
- Fri Sep 08, 2023 6:51 pm
- Forum: Personal Investments
- Topic: is Vanguard Flagship service better? (I sure hope so)
- Replies: 34
- Views: 4689
Re: is Vanguard Flagship service better? (I sure hope so)
I'm happy to see several members report good to excellent service from Flagship, as opposed to the usual grumbling about Vanguard. I also have experienced excellent and prompt service.
- Thu Aug 24, 2023 1:01 pm
- Forum: Investing - Theory, News & General
- Topic: Superb Interview- The Uncertainty Solution with John Jennings
- Replies: 9
- Views: 2089
Re: Superb Interview- The Uncertainty Solution with John Jennings
OK, I listened. Meh.
- Thu Aug 24, 2023 11:33 am
- Forum: Investing - Theory, News & General
- Topic: Superb Interview- The Uncertainty Solution with John Jennings
- Replies: 9
- Views: 2089
Re: Superb Interview- The Uncertainty Solution with John Jennings
Hmmm. The book mentioned has probably the most favorable collection of reviews I have seen on Amazon, So I will take the time to listen.
- Sun Aug 20, 2023 5:53 pm
- Forum: Investing - Theory, News & General
- Topic: YTM definition for TIPS
- Replies: 6
- Views: 912
YTM definition for TIPS
Consider a bond, $50,000 par value, maturity 07/15/2032, coupon 0.625%, market price $46,654. If this were a nominal bond, buyer would receive two sources of income: (a) semiannual interest payments based on the par value and the coupon rate; (b) increment from current market value to the par value $50,000 to be received at maturity. The YTM of this bond is the interest rate that makes the present value of this stream of payments (semiannual interest plus $50,000 at maturity) equal to the present price of the bond. But the bond is a TIPS, with a third source of income: (c) daily increments of the par value based on inflation. (For simplicity, assume these are all positive.) The stated YTM is 1.883%. I understand that this is the real return...
- Thu Aug 10, 2023 11:25 am
- Forum: Investing - Theory, News & General
- Topic: convert iBonds from paper --- how long is too long?
- Replies: 67
- Views: 8241
Treasury time estimates for service
[Thread merged into here --admin LadyGeek] I long ago converted my Ibonds to electronic form at Treasury Direct. I don't recall the waiting time, but it was quite short. Last week I mailed a stray EE bond for conversion. Got a prompt "we have received" email with the following time estimates: "Cases are worked in the order they are received in our office. Your request is important to us and will receive attention as soon as possible. Please be aware of our estimated processing times to process your case which are based on the case type: Cases requesting to cash your savings bonds held in your name, at least 7 weeks Claims for missing, lost, or stolen bonds, at least 6 months All other cases, at least 20 weeks" Don't be ...
- Mon Aug 07, 2023 7:08 pm
- Forum: Personal Investments
- Topic: Buy order for TIPS "rejected." Why?
- Replies: 3
- Views: 644
Buy order for TIPS "rejected." Why?
Building a TIPS ladder at Vanguard, selecting from available listings in the secondary market. All but one order executed immediately. One showed "Open" for 10 minutes or so, then "Rejected." I placed the identical order again and it executed immediately.
Out of curiosity, what might cause an order from an existing listing to be rejected? I thought that perhaps the seller changed the price in the few seconds between looking at the final screen and placing the order, but several of the executed orders had final prices differing by a few dollars from those on the final screen, so price changes don't seem to prevent execution. Any ideas?
Out of curiosity, what might cause an order from an existing listing to be rejected? I thought that perhaps the seller changed the price in the few seconds between looking at the final screen and placing the order, but several of the executed orders had final prices differing by a few dollars from those on the final screen, so price changes don't seem to prevent execution. Any ideas?
- Sat Aug 05, 2023 8:07 pm
- Forum: Investing - Theory, News & General
- Topic: Nuggets from Bernstein's "Four Pillars"
- Replies: 57
- Views: 9272
Nuggets from Bernstein's "Four Pillars"
Much of this widely praised 2nd edition repeats material that most Bogleheads already know. Here are some nuggets that are either not such common knowledge or opine on topics debated in this forum. p8 "Your ability to stay the course is directly proportional to the amount of short-term safe assets in your portfolio, denominated in years of living expenses. By far the biggest determinant of your investment success is how well you respond to the worst few percent of times ... nothing will see you through them as well as your T-bills and CDs, no matter how low their yield." p53 "Value stocks also tend to do relatively well during periods of high inflation ... they are relatively more indebted than growth stocks and benefit as in...
- Sat Aug 05, 2023 3:43 pm
- Forum: Personal Investments
- Topic: SDY vs SCHD and when to switch
- Replies: 11
- Views: 1485
Re: SDY vs SCHD and when to switch
OP (and I) view SCHD as primarily a high-quality large-cap value fund, not as a high-dividend fund.
- Wed Jul 19, 2023 1:50 pm
- Forum: Personal Investments
- Topic: Please Sanity Check my I-Bonds exit strategy
- Replies: 1
- Views: 598
Re: Please Sanity Check my I-Bonds exit strategy
Ibonds are intended as a long-term investment and are excellent for that purpose. But last year even though the base rate (real rate) was 0%, the inflation adjustment was so high that they made temporary sense as a short-term investment. You are correct that this is no longer true and it's time to redeem. The usual (good) advice is that because you lose the last three months' interest, wait to redeem until the last three months are at the new lower interest rate. A specific example: A $10,000 Ibond bought August 2022 earned 9.62% for 6 months then 6.48% for the next 6 months. Great rates. Effective August 1 2023 the rate will drop to 3.38%, not great. Wait to redeem until after Nov 1 so as to lose 3 months at 3.38%. You will get $10,820 aft...
- Wed Jul 19, 2023 1:29 pm
- Forum: Personal Consumer Issues
- Topic: SoftwareGeek's Guide to Computer Security
- Replies: 608
- Views: 71449
Re: What do you do about online/internet security for retirement accounts?
It is reasonable to ask what could happen to e.g. a Vanguard account if your login credentials were compromised. Can the perp withdraw money? Nope, VG allows transfers only to bank accounts you have registered. The perp could of course enjoy him/herself by moving your entire account to ARKK. It appears to me that your bank account is at greater risk than your investment/retirement accounts at a major shop such as Vanguard. Is that wrong, and if so, why?
- Sun Jul 16, 2023 1:52 pm
- Forum: Personal Investments
- Topic: TIPS question
- Replies: 4
- Views: 811
Re: TIPS question
The site for TIPS is Tipswatch. See this post there on the July 20 auction of new 10-year TIPS:
https://tipswatch.com/2023/07/16/real-y ... ttractive/
https://tipswatch.com/2023/07/16/real-y ... ttractive/
- Mon Jun 26, 2023 10:03 am
- Forum: Investing - Theory, News & General
- Topic: At what tax rate do Munis make sense?
- Replies: 66
- Views: 11503
Re: At what tax rate do Munis make sense?
Don't forget that your tax rate on taxable bonds can be higher than your rate on earned income due to the 3.8% NIIT. That will often turn a 22% tax rate into 25.8% and make munis a clear choice in the "22% tax bracket."
- Wed Jun 21, 2023 3:57 pm
- Forum: Investing - Theory, News & General
- Topic: What active funds do you like (and why)?
- Replies: 54
- Views: 7365
Re: What active funds do you like (and why)?
VWIUX and VWLUX. Munis are so numerous and so varied in quality that I prefer professionals do due diligence rather than an index fund that uses sampling.
- Sun Jun 18, 2023 12:20 pm
- Forum: Investing - Theory, News & General
- Topic: Muni Funds: Why is VWIUΧ preferred over VWLUX?
- Replies: 57
- Views: 7905
Re: Muni Funds: Why is VWIUΧ preferred over VWLUX?
Yes, intermediate bond funds are often described as the best choice in terms of return vs. risk. But being long retired, I am interested in higher income. Our longtime holding in VWIUX have been moved to VWLUX. I'm indifferent to declines in NAV (due to rising interest rates) as I don't intend to sell. Income will remain roughly the same through variations in NAV.
- Thu Jun 08, 2023 3:43 pm
- Forum: Personal Finance (Not Investing)
- Topic: Should I appeal property tax?
- Replies: 48
- Views: 4844
Re: Should I appeal property tax?
I successfully appealed an assessment - easy argument because the house next door was built the same year, similar design by the same architect, and had a lower assessment. So: do you have a good argument?
- Thu Jun 08, 2023 3:38 pm
- Forum: Personal Finance (Not Investing)
- Topic: Quicken 2019 and forward
- Replies: 1061
- Views: 114323
Re: Quicken 2019 and forward
Well .... I'm using Quicken 2002. Just use it to keep track of investments, enter by hand weekly (usually). Low 8-figure portfolio, just 8 funds/ETFs. It's not a chore to enter by hand and it makes me think about the portfolio.
- Thu Jun 01, 2023 11:32 am
- Forum: Investing - Theory, News & General
- Topic: Will the ESG fight eliminate true index funds?
- Replies: 9
- Views: 1196
Will the ESG fight eliminate true index funds?
Vanguard Group, BlackRock win brief FERC reprieves, but ESG-hostile AGs may make it illegal for them to run index funds without buzz-kill asterisks... [Link formatted by admin LadyGeek] Details are complex, but the substance seems to be that the Federal Energy Regulatory Commission rules limit an investor (such as an index fund) to no more than 10% ownership of a power utility company. Vanguard (and others) have exemptions allowing them to exceed this limit (and a related limit of 20% ownership across all Vanguard funds) - with conditions stating that they may not attempt to interfere with management of the companies. The Republican members of FERC and the attorney generals of 13 red states allege that Vanguard (and other fund companies) v...
- Fri Apr 28, 2023 9:04 pm
- Forum: Personal Consumer Issues
- Topic: Accuracy of HR [Heart Rate] monitors: watch vs. app
- Replies: 6
- Views: 613
Accuracy of HR [Heart Rate] monitors: watch vs. app
I recently purchased a new Polar H9 heart rate sensor (chest strap with snap-on sensor). It linked easily to my existing Polar FT7 wrist monitor and to Polar's "Beats" app on my phone. Using app and watch simultaneously while on elliptical or exercise bike revealed that the two give quite different HRs, from the same sensor. Often differ by 10-12 bpm, and now and then by 20 bpm or more.
Does anyone have a justified reason to prefer the watch or the app for more accurate HR readings?
Does anyone have a justified reason to prefer the watch or the app for more accurate HR readings?
- Thu Apr 20, 2023 1:06 pm
- Forum: Personal Consumer Issues
- Topic: Seabourn Cruise Lines BH experiences
- Replies: 5
- Views: 671
Re: Seabourn Cruise Lines BH experiences
My wife and I have taken several cruises on Seabourne. I strongly recommend them. The ships are small, the food is very good, the itineraries are well thought out. Worth the cost. A good travel agent can add to the pleasure - ours is a member of the Virtuoso group. They arranged things like a full-day guide in Venice, partly by boat, and also some no-cost extras for the Virtuoso clients on a Seabourne cruise.
- Wed Mar 22, 2023 9:49 am
- Forum: Personal Consumer Issues
- Topic: Morningstar TIAA discussion group?
- Replies: 30
- Views: 3048
Re: Morningstar TIAA discussion group?
This is weird. Went to M* TIAA group: blank. Signed in on that page: still blank. Went to the M* Vanguard group: also blank. But the sidebar there listed some other groups, including TIAA - clicked on that and voila all the posts appeared! M* discussion groups appear to be FUBAR.
- Tue Mar 21, 2023 10:37 am
- Forum: Personal Consumer Issues
- Topic: Morningstar TIAA discussion group?
- Replies: 30
- Views: 3048
Re: Morningstar TIAA discussion group?
OP here. I am registered and did log in when reaching the blank TIAA discussion page - still blank after logging in. Just tried again, same result.
- Tue Mar 21, 2023 10:33 am
- Forum: Investing - Theory, News & General
- Topic: Vanguard weirdness
- Replies: 19
- Views: 4620
Vanguard weirdness
I placed an order with Vanguard yesterday, exchanging between two bond mutual funds - this amounts to selling fund A then buying fund B. Today I looked at the confirmation for this trade: It said I had sold shares completely other than what I ordered. A long session with a rep online finally confirmed that what I ordered had been done and that the confirmation statement was completely wrong.
I find this hard to understand - surely confirmations are automatically generated and should agree with the realized gains and losses page, which was correct. Something else to watch out for?
I find this hard to understand - surely confirmations are automatically generated and should agree with the realized gains and losses page, which was correct. Something else to watch out for?
- Sun Mar 19, 2023 1:10 pm
- Forum: Personal Consumer Issues
- Topic: Morningstar TIAA discussion group?
- Replies: 30
- Views: 3048
Morningstar TIAA discussion group?
Does anyone know what became of the Morningstar Community TIAA funds discussion group? Its former URL,
community.morningstar.com/s/topic/0TO3o000001yV0gGAE/tiaa-funds, has been empty for some time now.
community.morningstar.com/s/topic/0TO3o000001yV0gGAE/tiaa-funds, has been empty for some time now.
- Thu Aug 18, 2022 4:08 pm
- Forum: Personal Investments
- Topic: Why would anyone buy an income annuity?
- Replies: 121
- Views: 12375
Re: Why would anyone buy an income annuity?
Well, I annuitized a large TIAA 403(b) at age 80. Two-thirds tied to the performance of TIAA Real Estate, so not fixed and preserves the diversification benefit of REA. Why? Mortality credits are large at age 80. Interest rates were very low and I did not want to exceed 50% equities. We had already provided generously for our children. My wife's mother lived to 93 and her older sister is going strong at 95.
- Thu Aug 18, 2022 3:52 pm
- Forum: Investing - Theory, News & General
- Topic: 16 Year Bear Market '66-'82
- Replies: 94
- Views: 7173
Re: 16 Year Bear Market '66-'82
Big bear markets are heaven for the young. I got my PhD and started work in Sept 1967. I was busy and just left TIAA at 50% stocks (had I known what I now do it would have been 100%) all that time. Then the great 1982-2000 bull market started, and buying during those lean 18 years for stocks assured that I would be able to retire in comfort.
As an aside, Malkiel's "Inflation Beater's Guide to Investing" (title from memory) appeared in 1980. He went through a long analysis of fundamentals (stocks versus company profits) and history, arguing that stocks were so undervalued that they had to go up a lot ... eventually. That persuaded me not to give up. Malkiel was just 2 years early.
As an aside, Malkiel's "Inflation Beater's Guide to Investing" (title from memory) appeared in 1980. He went through a long analysis of fundamentals (stocks versus company profits) and history, arguing that stocks were so undervalued that they had to go up a lot ... eventually. That persuaded me not to give up. Malkiel was just 2 years early.
- Wed Aug 17, 2022 11:26 am
- Forum: Personal Investments
- Topic: TIPS in taxable... ever?
- Replies: 19
- Views: 4032
Re: TIPS in taxable... ever?
Are you really in the 24% bracket, or in the 27.8% bracket (for taxable bond interest) due to the 3.8% additional investment tax? If so, munis are definitely preferred.
- Mon Aug 08, 2022 11:39 am
- Forum: Investing - Theory, News & General
- Topic: Past investment mistakes
- Replies: 49
- Views: 4880
Re: Past investment mistakes
Many long years ago, when I was in grad school, my friend the electrical engineering hardware guru returned from a trade show raving about Viatron Computer Systems. Everyone was going to want one. So I bought a few shares. Viatron could not source the large scale integrated circuits needed in sufficient quantity to produce their device. They went bankrupt in four years.
The lessons are obvious, starting with do your research rather than buying on a tip and ending with DIVERSIFY.
The lessons are obvious, starting with do your research rather than buying on a tip and ending with DIVERSIFY.
- Tue Aug 02, 2022 9:51 am
- Forum: Investing - Theory, News & General
- Topic: [Allan Roth -- Why stay at Vanguard?]
- Replies: 116
- Views: 11756
Allan Roth on NOT leaving Vanguard
Allan Roth -- "Why I’m Not Leaving Vanguard"
https://www.etf.com/sections/index-inve ... g-vanguard
[Edited for clarity -- moderator oldcomputerguy]
https://www.etf.com/sections/index-inve ... g-vanguard
[Edited for clarity -- moderator oldcomputerguy]
- Fri Jul 29, 2022 10:24 am
- Forum: Investing - Theory, News & General
- Topic: Bond fund risk for income investors
- Replies: 21
- Views: 1697
Re: Bond fund risk for income investors
I appreciate the diverse comments. For what it's worth, I do have a SPIA, and I follow total return in stocks but not bonds - Florida Orange explains why. No TIPS ladder because I have no tax-sheltered space and hold a large amount of Ibonds.
- Thu Jul 28, 2022 9:54 am
- Forum: Investing - Theory, News & General
- Topic: Bond fund risk for income investors
- Replies: 21
- Views: 1697
Bond fund risk for income investors
Suppose that I am a retired investor who holds a bond fund solely for income. I am indifferent to changes in the fund's market price, as I do not intend to sell. When interest rates increase and the market price goes down, the fund still has the same portfolio of bonds producing the same stream of income. In fact, interest rate increases are good news for an income investor, as the fund's holdings will eventually be replaced by bonds earning a higher rate, increasing my income. It is clear that the common definition of risk as volatility of market prices is not appropriate in this context. Risk is something like the probability that my income will be inadequate to cover my expenses. This is individual and hard to quantify. We often see inte...
- Sun Jun 26, 2022 12:53 pm
- Forum: Personal Finance (Not Investing)
- Topic: Can I splurge on a Tesla model Y?
- Replies: 57
- Views: 6323
Re: Can I splurge on a Tesla model Y?
The first law of personal finance is "Nobody can afford everything they can afford." Economists rephrase this in terms of opportunity cost. The proper question is usually not "Can I afford X?" but "Am I willing to give up something else in order to buy X?"
- Sun Jun 26, 2022 12:47 pm
- Forum: Investing - Theory, News & General
- Topic: What's the deal with dividend funds?
- Replies: 439
- Views: 31867
Re: What's the deal with dividend funds?
Isn't it time to wrap up this thread?
- Sat Jun 25, 2022 11:32 am
- Forum: Investing - Theory, News & General
- Topic: Tax rate where munis make sense?
- Replies: 8
- Views: 1071
Re: Tax rate where munis make sense?
Don't forget that your marginal federal tax rate may be 2.3% higher on taxable bonds and other investment income.
- Mon Jun 20, 2022 8:20 pm
- Forum: Investing - Theory, News & General
- Topic: What's the deal with dividend funds?
- Replies: 439
- Views: 31867
Re: What's the deal with dividend funds?
Well ... higher dividends reinvested lead to higher long-term growth. Portfolio Visualizer shows that over the period 1/2012 to 5/2022 (SCHD first appeared in 11/2011): (a) $10,000 with dividends reinvested grew to $40,776 in SCHD vs $38,774 in VTI (b) SCHD produced higher income in every year (c) SCHD had higher CAGR and lower standard deviation, resulting in Sharpe Ratio 1.06 vs 0.97 for VTI. VTI is my largest equity investment, in accordance with Boglehead principles, but I plan to add to my smaller holding in SCHD next time I rebalance into equities.
- Sun Jun 19, 2022 8:21 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard high yield (VWALX) or long tern (VWLUX) muni fund?
- Replies: 15
- Views: 3640
Re: Vanguard high yield (VWALX) or long tern (VWLUX) muni fund?
Thank you all. Yes, my tax rate on non-exempt income is 27.3%, so taxable funds lose out. What electron's detailed analyses show is surprisingly little difference in income between VWALX and VWLUX. With dividends taken in cash, I get just $190 higher income for VWALX on $10,000 investments over about 20.5 years. Even if (as planned) I invest $500,000 this would not be a material difference over my expected remaining lifetime and even over my wife's, especially given the slightly higher risk of VWALX.