Search found 1763 matches

by patrick
Wed Sep 23, 2020 8:07 am
Forum: Personal Investments
Topic: "emergency" fund earning .5%
Replies: 19
Views: 1989

Re: "emergency" fund earning .5%

If you want to keep the money in cash you don't need to settle for sub-1% interest. See https://www.doctorofcredit.com/high-interest-savings-to-get/ for a fairly updated list of the best accounts. Some of the best for your situation would look like: 1.11% at National Cooperative. This account a $25,...
by patrick
Fri Sep 04, 2020 3:40 pm
Forum: Investing - Theory, News & General
Topic: Where do you put cash now? Vanguard's Prime Money Market is too low!
Replies: 76
Views: 11543

Re: Where do you put cash now? Vanguard's Prime Money Market is too low!

You can get 1.21% on a plain savings account from Varo Bank.

HMBradley pays 3% on their deposit accounts up to a limit of $100,000 provided that you have direct deposit and save 20% of all deposits each quarter.
by patrick
Fri Aug 21, 2020 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Are emergency funds for suckers?
Replies: 202
Views: 15721

Re: Are emergency funds for suckers?

I think we are not wrangling over the word, "fungible," so much as talking past each other because of different experience with money. The lists I have been making, when a dollar can be more or less than a dollar, are really choices. When you need $500 right now, what do you do? The emergency fund ...
by patrick
Fri Aug 21, 2020 3:18 pm
Forum: Personal Finance (Not Investing)
Topic: Are emergency funds for suckers?
Replies: 202
Views: 15721

Re: Are emergency funds for suckers?

I agree - if your car breaks down and you need $500 to fix it - that money can come from a variety of places, and it is all nominally "$500." That doesn't mean it was a $500 consequence, equally, to you in your personal finances. $500 from wallet is $500 $500 on credit card - you paid more than $50...
by patrick
Fri Aug 21, 2020 3:05 pm
Forum: Personal Finance (Not Investing)
Topic: Are emergency funds for suckers?
Replies: 202
Views: 15721

Re: Are emergency funds for suckers?

There are two reasons that always come up for Emergency Funds: 1) Unforseen expenses 2) Expenses that need coverage in the case of unexpected Job loss. Both of these happened to me less than a week apart. I had no need of a traditional emergency fund. As an example of #1 - if I am a homeowner and n...
by patrick
Fri Aug 21, 2020 2:38 pm
Forum: Personal Finance (Not Investing)
Topic: Are emergency funds for suckers?
Replies: 202
Views: 15721

Re: Are emergency funds for suckers?

Two dollar bills in two plastic buckets are indeed fungible. They are alike, and totally movable. But I'm not sure why you would want to put dollar bills in buckets. A dollar in one checking account, and a dollar in a different checking account, are alike, movable, fungible, so long as neither acco...
by patrick
Fri Aug 21, 2020 10:17 am
Forum: Personal Finance (Not Investing)
Topic: Are emergency funds for suckers?
Replies: 202
Views: 15721

Re: Are emergency funds for suckers?

So to sum up, we have: $1 in your wallet = $1 $1 in credit card debt = worse than $1 $1 in payday loan debt = magnitudes worse than $1 $1 in 401(k) money = less than $1 at time of withdrawal, probably more than $1 due to compounding if left alone $1 in home equity = really hard to get a handle on, ...
by patrick
Thu Aug 20, 2020 1:38 pm
Forum: Personal Finance (Not Investing)
Topic: Are emergency funds for suckers?
Replies: 202
Views: 15721

Re: Are emergency funds for suckers?

I had near-simultaneous emergencies last year, but didn't need a cash emergency fund. I fractured a tooth resulting in a large dental bill even though I had insurance. I also lost my job. Both of these happened less than a week apart! The dental bill, along with regular day to day spending, was paid...
by patrick
Mon Aug 10, 2020 3:05 pm
Forum: Personal Investments
Topic: Bond Alternatives in the time of Zero rates
Replies: 151
Views: 13619

Re: Brighthouse Shield Annuities.

I'm considering using these products in my traditional IRA to replace a portion, not all, of my bond mutual funds. These got a bad rap on our forum when comparing them to no load index stock mutual funds mostly because they don't pay dividends. Throwing away dividends isn't the only reason against ...
by patrick
Fri Jul 24, 2020 10:24 am
Forum: Investing - Theory, News & General
Topic: Gold $1600 Oz - When?
Replies: 370
Views: 26005

Re: Gold $1600 Oz - When?

Forester wrote: Tue Jun 30, 2020 10:35 am Disaster for the gold critics - gold soars past $1,800 to a 9 year high.
That is a unique way to look at it. "Stocks are at/near all time highs" is often used as an argument against investing in stocks, so it's rather strange to see the reverse for gold.
by patrick
Mon May 25, 2020 12:44 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 18877

Re: Rekenthaler: Long Bonds Are for Fools

And what if you don't know whether you will see deflation or inflation? You don't know whether to choose nominals or TIPS. If you want to minimize interest rate risk, you choose based on how sensitive your future income needs are to inflation. The approach I use is that non-discretionary expenses s...
by patrick
Fri May 15, 2020 12:43 pm
Forum: Personal Investments
Topic: HY Savings vs Govt Bonds vs Treasuries
Replies: 7
Views: 557

Re: HY Savings vs Govt Bonds vs Treasuries

It would be better to get a HY savings acct at 1.75%, currently offered by First Foundation.
by patrick
Fri May 15, 2020 11:00 am
Forum: Investing - Theory, News & General
Topic: RedNeck/AllAmerica Bank 1.5%/1.75%
Replies: 3
Views: 515

Re: RedNeck/AllAmerica Bank 1.5%/1.75%

I used them in the past without much trouble, but I left for better interest rates elsewhere. For plain savings accounts, you can get 1.75% from First Foundation without a balance cap. There are better reward checking options too. I currently use Elements Financial which pays 2% on balances up to $2...
by patrick
Tue May 12, 2020 8:54 am
Forum: Personal Consumer Issues
Topic: United Airlines miles and bankruptcy
Replies: 46
Views: 4144

Re: United Airlines miles and bankruptcy

Apparently the gift card redemptions already got devalued quite a bit ... they used to well above 0.3 cents per mile.
by patrick
Thu May 07, 2020 4:56 pm
Forum: Investing - Theory, News & General
Topic: [Investment strategy from this point forward]
Replies: 50
Views: 2199

Re: [Investment strategy from this point forward]

I will be doing individual stocks. Im sure stock pickers right now will beat the pants off of indexers until we have a normal economy/vaccine. Stock pickers in the aggregate have no chance to beat indexers because they have the same aggregate portfolio as indexers. Indexers follow the market as a w...
by patrick
Thu May 07, 2020 4:25 pm
Forum: Investing - Theory, News & General
Topic: [Investment strategy from this point forward]
Replies: 50
Views: 2199

Re: Coronavirus economy

The market has already recognized winners and losers. Your general index fund has been recovering due to the outperformance by the winners. Amazon is up 40% in just 2 months when it hit its lows. Netflix up 47% in the same time period. Southwest airlines down another 17% since that March general ma...
by patrick
Tue May 05, 2020 5:51 pm
Forum: Investing - Theory, News & General
Topic: Is G-fund safer today than previously?
Replies: 38
Views: 2664

Re: Is G-fund safer today than previously?

I may be reading your question incorrectly, so forgive me if I am off base. But to answer your question, the G fund is a very good vehicle to give you decent interest with effectively zero risk. The G fund should out perform money markets, online savings, etc. because each days interest is base on ...
by patrick
Sat May 02, 2020 2:54 pm
Forum: Investing - Theory, News & General
Topic: The Collapse in Global Inflation Expectations
Replies: 106
Views: 6680

Re: The Collapse in Global Inflation Expectations

Why do you think the opinion of this paper is correct in spite of the extreme amount of QE that is going on now? The paper determined that breakeven inflation rates were reasonably accurate before, during and after the 2008-09 Financial Crisis, which had a comparable amount of quantitative easing a...
by patrick
Sat May 02, 2020 2:44 pm
Forum: Investing - Theory, News & General
Topic: Do you keep moving your cash around chasing yield?
Replies: 56
Views: 5594

Re: Do you keep moving your cash around chasing yield?

I would consider it a waste of time to switch just for an extra 0.05% in interest, especially since the new account might lower the rate. However, with the top savings accounts paying more than 1% higher than money market funds, I do consider the switch out of money market funds to be worth it.
by patrick
Sat May 02, 2020 2:11 pm
Forum: Non-US Investing
Topic: Ways to minimize bank bankruptcy exposure?
Replies: 24
Views: 2241

Re: Ways to minimize bank run exposure?

I would not keep $1 MILLION in any bank. Simply invest the cash or consider a combination of short term bond funds and money market funds. Bank accounts currently have much higher yield. You can get 1.75% on plain deposit accounts versus 0.63% on Vanguard prime money market and 0.82% on short term ...
by patrick
Fri May 01, 2020 4:36 pm
Forum: Investing - Theory, News & General
Topic: The Collapse in Global Inflation Expectations
Replies: 106
Views: 6680

Re: The Collapse in Global Inflation Expectations

Folks, I know that I know nothing. Hence, the base assumption of my financial planning assumes that everything is possible. 1) Why 1% in Gold/Silver? A) If I am wrong, it won't matters. B) If I am right and we hit hyperinflation, the Gold/Silver will go up to 30X to 100X. 1% is more than enough. Pr...
by patrick
Thu Apr 30, 2020 2:53 pm
Forum: Investing - Theory, News & General
Topic: Win Win for Gold?
Replies: 25
Views: 1049

Re: Win Win for Gold?

How did I point out that they are not an explanatory factor? Rate movements in both directions could cause the gold price to surge (in contrast to no rate movement causing it to plummet) or rate movements could simply be associated with gold price changes. So if rates go up and gold price surges it...
by patrick
Thu Apr 30, 2020 9:36 am
Forum: Personal Investments
Topic: Holding Gold as "Doomsday Fund"
Replies: 164
Views: 8523

Re: Holding Gold as "Doomsday Fund"

Which would mean: 70% stocks 20% bonds 10% gold That is likely to be much more resilient than a 70/30 portfolio. Over the last ~50 years, it would have supported a higher withdrawal rate and had significantly less start-date sensitivity than a 70/30 AA. Over that same time frame, I literally cannot...
by patrick
Wed Apr 29, 2020 7:49 pm
Forum: Investing - Theory, News & General
Topic: What explains the continued rise in equities?
Replies: 167
Views: 13195

Re: What explains the continued rise in equities?

Are you willing to trust your heard earned resources in a market that is not understandable? Given the dollars involved, I certainly believe/hope that more than opinion is driving the market. Otherwise, we are at the mercy of the greater fool hypothesis. The reasons behind the recent movement shoul...
by patrick
Wed Apr 29, 2020 3:00 pm
Forum: Investing - Theory, News & General
Topic: Expected return of stocks equals EE savings bonds
Replies: 23
Views: 1324

Re: Expected return of stocks equals EE savings bonds

You forgot dividends (and I'm not sure if you are accounting for inflation either) I think your calculations are incorrect. Although I didn't initially note this, the historical equity premium from the Credit Suisse Yearbook is based on total returns, so it already includes dividends. The returns I...
by patrick
Wed Apr 29, 2020 10:52 am
Forum: Investing - Theory, News & General
Topic: Expected return of stocks equals EE savings bonds
Replies: 23
Views: 1324

Expected return of stocks equals EE savings bonds

I estimated the expected return on stocks and found it about the same as EE bonds held 20 years. Of course, the actual return from stocks could be very different (in either direction) than the expected return. I start with the Credit Suisse Yearbook, which shows a historical global equity premium (v...
by patrick
Wed Apr 29, 2020 10:16 am
Forum: Personal Investments
Topic: Money market rates... Vanguard Prime vs online banks
Replies: 17
Views: 1909

Re: Money market rates... Vanguard Prime vs online banks

You can get up to 1.75% on plain savings accounts (see https://www.doctorofcredit.com/high-int ... gs-to-get/ for an extensive list) so the gap is even wider. The best deposit accounts have beaten money markets funds for quite some time.
by patrick
Tue Apr 28, 2020 4:52 pm
Forum: Personal Investments
Topic: Holding Gold as "Doomsday Fund"
Replies: 164
Views: 8523

Re: Holding Gold as "Doomsday Fund"

I've got a high risk tolerance, and the rule of thumb around here has been that you need to be able to tolerate a 50% drop in the markets. But, especially after seeing what happened with oil, I'm not at all sure 50% is anywhere near the potential bottom. The worst case for stocks is indeed worse th...
by patrick
Thu Apr 23, 2020 10:56 am
Forum: Investing - Theory, News & General
Topic: "Retail investors who believed they were investing in crude oil"
Replies: 51
Views: 4261

Re: "Retail investors who believed they were investing in crude oil"

...Seems like a pretty badly constructed ETF... It is not "an ETF." It is "a commodity pool." Or, at least, there is widespread and possibly intentional confusion about what the heck it actually is. This is important because the Investment Company Act of 1940 provides a large number of protections ...
by patrick
Wed Apr 22, 2020 4:53 pm
Forum: Investing - Theory, News & General
Topic: Fixed Index Annuities - better than bonds?
Replies: 18
Views: 1094

Re: Fixed Index Annuities - better than bonds?

Bond yields today are indeed very low, and thus expected bond returns are also very low. However, it is not so obvious what to do about this. Presumably the index annuities were priced to provide the insurance company a profit after all their costs, including sales commissions, regardless of market ...
by patrick
Wed Apr 22, 2020 12:58 pm
Forum: Investing - Theory, News & General
Topic: "Retail investors who believed they were investing in crude oil"
Replies: 51
Views: 4261

Re: "Retail investors who believed they were investing in crude oil"

A forum participant said I wrote that off as corporate/legal speak. I'm sure if you read any prospectus, it will say and add all sort of caveats.... That the S&P 500 fund for example, will not track S&P 500 index because of <laundry list of reasons>, which is to cover [themselves] from being sued. ...
by patrick
Wed Apr 22, 2020 10:32 am
Forum: Investing - Theory, News & General
Topic: Vanguard Website Down?
Replies: 11
Views: 824

Re: Vanguard Website Down?

I just checked now ... it gave an error at first but works after clearing browser cookies.
by patrick
Tue Apr 21, 2020 1:01 pm
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 15128

Re: Deflation is everywhere. Get used to it.

If you need a computer which is at least as powerful as a $2000 computer purchased 15 years ago, the price you had to pay 15 years ago was $2000, but now it is under $400. If only the best computers sold today suit you, that means that you are demanding something previously not available in the con...
by patrick
Tue Apr 21, 2020 12:14 pm
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 15128

Re: Deflation is everywhere. Get used to it.

One can find more discussion of the chart in this Forbes article from 2017. That article could benefit from some serious proofreading and spell checking. Is that what's happened to Forbes? Anyway, I guess I have a bit of a problem with Hedonic quality adjustments. If the price of a new computer sta...
by patrick
Sat Apr 11, 2020 12:20 am
Forum: Investing - Theory, News & General
Topic: There Is No Gold
Replies: 160
Views: 12591

Re: There Is No Gold

FWIW - some common dealers of gold and silver bars have some stock available reasonably close to spot prices. Could you name at least one? The ones I look at (Kitco, usgoldbureau) have very high premiums and limited supply. Kitco itself is selling gold at 2% over the spot price: https://online.kitc...
by patrick
Fri Apr 10, 2020 9:32 pm
Forum: Personal Investments
Topic: Opinion on Cash portion of portfolio
Replies: 11
Views: 1126

Re: Opinion on Cash portion of portfolio

I don't see much reason to invest in ultra short treasuries as they currently yield even less than FDIC insured accounts. Series I savings bonds are probably a better "near cash" asset as they are inflation protected, have higher yields than regular inflation protect bonds, have a 0% semiannual floo...
by patrick
Fri Apr 10, 2020 11:52 am
Forum: Investing - Theory, News & General
Topic: There Is No Gold
Replies: 160
Views: 12591

Re: There Is No Gold

FWIW - some common dealers of gold and silver bars have some stock available reasonably close to spot prices. Could you name at least one? The ones I look at (Kitco, usgoldbureau) have very high premiums and limited supply. Kitco itself is selling gold at 2% over the spot price: https://online.kitc...
by patrick
Thu Apr 09, 2020 9:27 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 177
Views: 12275

Re: Why not go EE bonds (instead of bond funds)?

Surely, probabilistic and general answers should at least be grounded in possibilities - I hope we can agree on that. So far, I haven't seen anyone present even a possible scenario in which EE Bonds lose to the various things they're being compared to. Here is a simple scenario where EE bonds lose ...
by patrick
Thu Apr 09, 2020 3:07 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 177
Views: 12275

Re: Why not go EE bonds (instead of bond funds)?

We're probably drifting off-topic, but generally speaking the ultimate goal of any saving/investing strategy is to fund future consumption. That future consumption is the liability, right? There can be little doubt that future non-discretionary expenditures can be considered to be real liabilities,...
by patrick
Fri Apr 03, 2020 7:30 pm
Forum: Personal Investments
Topic: Green Dot online savings account is 3% APY - what?
Replies: 10
Views: 1537

Re: Green Dot online savings account is 3% APY - what?

Don't forget the $7.95 monthly fee on this card, which adds up to $95.40 annually. If you kept the full $10,000 in there, your net interest rate after subtracting the fee would be more like 2.05% (and it's worse when you consider that the full 3% is taxable income). I'd suggest looking at https://ww...
by patrick
Fri Apr 03, 2020 7:00 pm
Forum: Personal Investments
Topic: Why Do So Many Recommend 70% - 100% Stocks?
Replies: 167
Views: 9769

Re: Why Do So Many Recommend 70% - 100% Stocks?

Note also that nominal bonds (such as those in total bond index) can lose purchasing power over 25 year periods. For example (according to the inflation calculator on https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=448.17&year1=198012&year2=195512 and historical returns from http://pages.stern.nyu.edu...
by patrick
Fri Apr 03, 2020 6:44 pm
Forum: Personal Investments
Topic: Why Do So Many Recommend 70% - 100% Stocks?
Replies: 167
Views: 9769

Re: Why Do So Many Recommend 70% - 100% Stocks?

It looks like the examples you give include the additional contributions as part of the portfolio growth. If you remove them (set cashflows to none on that site) so as to see only the returns of the investments themselves, the annualized returns are 8.74% for stocks and 5.12% for bonds. Bond yields ...
by patrick
Thu Apr 02, 2020 8:25 am
Forum: Investing - Theory, News & General
Topic: Why does anyone invest in international funds?
Replies: 306
Views: 18613

Re: Why does anyone invest in international funds?

I'm a 90% international guy, but not trying to cram that down anyone's throat. I'm just dreaming of the day I can smile with my superior returns and can see the sad faces of the US only crowd who start getting a bad case of FOMO. Superior international returns have happened over the last two weeks....
by patrick
Tue Mar 24, 2020 8:27 pm
Forum: Investing - Theory, News & General
Topic: Why does anyone invest in international funds?
Replies: 306
Views: 18613

Re: Why does anyone invest in international funds?

International has CRUSHED domestic since March 19, 2020:

+5.33% VTIAX (Vanguard Total International Stock Index Fund Admiral)
+1.98% VTSAX (Vanguard Total Stock Market Index Fund Admiral)
by patrick
Tue Mar 24, 2020 8:15 pm
Forum: Investing - Theory, News & General
Topic: Inflation
Replies: 63
Views: 4890

Re: Inflation

The breakeven inflation rate with 10 year TIPS (vs. 10 year Treasuries) is only .97%. So the market must (1) believe that inflation will be very low over the next decade, (2) be placing significant value on TIPS illiquidity premium, or (3) adhere to a combination of #1 and #2. .97% seems like a ver...
by patrick
Tue Mar 24, 2020 8:06 pm
Forum: Personal Investments
Topic: Please help me follow my IPS by telling me what my IPS says
Replies: 6
Views: 474

Please help me follow my IPS by telling me what my IPS says

I had first posted my IPS here nearly 10 nearly ago (https://www.bogleheads.org/forum/viewtopic.php?t=61915). The portion regarding percentage in stocks is as follows: Portfolio will stay at 84% stocks while under 250K, reduced to 80% when reaching 250K, and another 4% for each further multiple of 2...
by patrick
Mon Mar 09, 2020 5:00 pm
Forum: Investing - Theory, News & General
Topic: The ideal investment percentage in cryptocurrencies.
Replies: 42
Views: 1938

Re: The ideal investment percentage in cryptocurrencies.

You could start by looking at the market weight. The total market cap of cryptocurrencies (according to https://coinmarketcap.com/) is about 0.225 trillion dollars. The total float adjusted market cap of equities (starting with https://research.ftserussell.com/Analytics/Factsheets/Home/DownloadSingl...
by patrick
Sun Mar 08, 2020 8:22 pm
Forum: Personal Investments
Topic: Move from bonds to Money Market,CDs, savings acct, etc.?[UPDATE]
Replies: 98
Views: 8918

Re: Move from bonds to Money Market,CDs, savings acct, etc.?

Listen, all I claimed is that investors who face inflation risk should take steps to protect against it (or at least plan for a way to manage it) and cash instruments like CDs, money market funds, savings accounts, etc. probably aren't terribly effective at doing this. Long-term nominal bonds proba...
by patrick
Sun Mar 08, 2020 5:26 pm
Forum: Personal Investments
Topic: Move from bonds to Money Market,CDs, savings acct, etc.?[UPDATE]
Replies: 98
Views: 8918

Re: Move from bonds to Money Market,CDs, savings acct, etc.?

For some investors, monthly Social Security payments (which are fully indexed to inflation) or a CPI-linked annuity will cover the vast majority - or even all - of their non-discretionary retirement expenses. These investors might have little need to protect against inflation volatility compared to...
by patrick
Sun Mar 08, 2020 4:19 pm
Forum: Personal Investments
Topic: Move from bonds to Money Market,CDs, savings acct, etc.?[UPDATE]
Replies: 98
Views: 8918

Re: Move from bonds to Money Market,CDs, savings acct, etc.?

I never said anything about being “immune to inflation” nor did I recommend assuming “zero inflation”. Neither of those things follow from the observation that different people have different degrees of sensitivity to inflation volatility and/or unexpected inflation. Then what are you saying? When ...