Search found 189 matches

by Malachi
Thu Jun 07, 2012 1:29 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Fund SEC Yield below 2%
Replies: 73
Views: 8482

Re: Total Bond Fund SEC Yield below 2%

FinanceFun wrote:It's not demand raising the value of cash that causes the deflationary issues. Its the slow-down in the velocity of money. Common misconception.
Thank you for that clarification.
by Malachi
Thu Jun 07, 2012 1:15 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Fund SEC Yield below 2%
Replies: 73
Views: 8482

Re: Total Bond Fund SEC Yield below 2%

I would respectively disagree that we are in a deflationary environment. The general price level of goods and services is not dropping at all. In addition to that the calculation of CPI is incredibly flawed as it leaves out energy and food prices. Last I checked everyone had to keep the lights and ...
by Malachi
Thu Jun 07, 2012 12:54 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Fund SEC Yield below 2%
Replies: 73
Views: 8482

Re: Total Bond Fund SEC Yield below 2%

While that may be true, I cannot imagine deflationary pressure materializing in this environment. Politics aside, we've had 4 consecutive years of trillion dollar deficits and the Fed continues to debase the dollar by printing more money. There may very well be consequences to the policies you list...
by Malachi
Thu Jun 07, 2012 11:58 am
Forum: Investing - Theory, News & General
Topic: Guru's still underperforming 2 to 1
Replies: 15
Views: 2727

Re: Guru's still underperforming 2 to 1

We should write a coin flipping simulator that simulates the entire market of gurus. It would simply run a couple of hundred separate but simultaneous coin flipping simulations. Each individual simulation would represent a "market guru". Then, we could see what the distribution of the simulated "gur...
by Malachi
Mon Jun 04, 2012 3:25 pm
Forum: Forum Issues and Administration
Topic: [Problem with] forum format, or bugs?
Replies: 49
Views: 3970

Re: [Problem with] forum format, or bugs?

thomasbayarea wrote:Did you push out a new CSS file? Best to degrade gracefully as Chrome will often error on CSS caching.
If there is a new CSS file, is there a way to tell Chrome to start using it? Because, right now, it's not.
by Malachi
Sat Jun 02, 2012 3:05 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

Assuming that the investor is interested only in investing in the US, US Bond market capitalization ~ 30 Trillion US Stock market capitalization ~ 15 Trillion Where did you get those numbers? So, should the market cap weighted AA be 33/67 Stocks to Bonds? Should any further rebalancing should aim t...
by Malachi
Sat Jun 02, 2012 2:26 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

Is there a difference between rebalancing within a fixed portfolio versus rebalancing with new money? In a taxable account there is. Other than that, not that I'm aware of. Edit: I guess too, in tax advantaged accounts like a 401k, there may be limits on transaction frequency but not usually contri...
by Malachi
Sat Jun 02, 2012 8:47 am
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

However since the rate of issuance is also related to fund turnover, I wonder if (in the absence of direct measurement from an index provider) the turnovers from a fairly comprehensive set of index funds (such as Vanguard Total World Stock Fund + Vanguard Total Bond Market) could be used to estimat...
by Malachi
Sat Jun 02, 2012 8:43 am
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

Yes issuance of different asset classes of securities varies over time so in the paper cited by Bertilak Sharpe recommends periodic reference to total market stock/bond proportions to check markets capitalization as a risk marker but bemoans the lack of readily available data. Are there any reasona...
by Malachi
Fri Jun 01, 2012 3:20 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

To put it another way. Right now we have the following prices: VTSMX - $32.78 VBMFX - $11.12 Let's assume the current market weight is 50/50 for simplicity sake and ignore distributions. So, you buy $5000 of VTSMX and $5000 of VBMFX. Over time, let's say 10-years, both markets double in size. At tha...
by Malachi
Fri Jun 01, 2012 3:04 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

But rebalancing isn't what accounts for newly issued securities...indexing does which is why index fund managers don't rebalance but simply: 1. Buy all newly issued securities. 2. Reinvest all dividends in proportion to the market value of each security in the portfolio. So if your portfolio consis...
by Malachi
Fri Jun 01, 2012 12:39 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

I can certainly accept that the relative risks between stocks and bonds changes over time. I can also accept holding a market weight of stocks and bonds. What I can't accept is that by doing nothing, your portfolio will maintain a market weight. That just isn't true. Stocks and bonds are different k...
by Malachi
Thu May 31, 2012 8:28 am
Forum: Investing - Theory, News & General
Topic: Consumer Reports puts spotlight on 401(k) fees
Replies: 40
Views: 2852

Re: Consumer Reports puts spotlight on 401(k) fees

The poster called it a "contribution fee" which I assume means 0.25% taken from the contribution, which would be a one-time fee for each contribution. If it means 0.25% per year taken from the entire balance then of course the loss to the participant would be much greater. You're right, he did call...
by Malachi
Thu May 31, 2012 7:58 am
Forum: Investing - Theory, News & General
Topic: Consumer Reports puts spotlight on 401(k) fees
Replies: 40
Views: 2852

Re: Consumer Reports puts spotlight on 401(k) fees

OK, that's what I would call a "401k fee".... but taking a one-time 0.25% contribution fee off the top would take $2,500 off a $1,000,000 401k.... It's hard to figure how "401k fees" cost on average $155,000. You're not considering the lost return of that 0.25% over the lifetime of the investment. ...
by Malachi
Wed May 30, 2012 11:20 pm
Forum: Investing - Theory, News & General
Topic: Consumer Reports puts spotlight on 401(k) fees
Replies: 40
Views: 2852

Re: Consumer Reports puts spotlight on 401(k) fees

OK, that's what I would call a "401k fee".... but taking a one-time 0.25% contribution fee off the top would take $2,500 off a $1,000,000 401k.... It's hard to figure how "401k fees" cost on average $155,000. You're not considering the lost return of that 0.25% over the lifetime of the investment.
by Malachi
Wed May 30, 2012 9:44 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing theory
Replies: 82
Views: 5058

Re: Rebalancing theory

When people say "hold the market portfolio", presumably that means stocks and bonds relative to each other. How does one maintain that balance? Presumably, given enough time, stocks will outgrow bonds in your portfolio but that does not mean that, during the same period of time, the stock market out...
by Malachi
Mon May 28, 2012 10:00 am
Forum: Investing - Theory, News & General
Topic: Canadian article: Why isn’t everyone beating the market?
Replies: 45
Views: 3179

Re: Canadian article: Why isn’t everyone beating the market?

I thought it was a good article up to where the author concludes that active investors cannot succeed because they chase performance. But the problem with being an active investor who chases performance is the chasing performance part, not the active investing part. I'm not getting the distinction ...
by Malachi
Mon May 28, 2012 8:51 am
Forum: Investing - Theory, News & General
Topic: Canadian article: Why isn’t everyone beating the market?
Replies: 45
Views: 3179

Re: Canadian article: Why isn’t everyone beating the market?

That was a good and thought provoking article.
by Malachi
Fri May 25, 2012 8:37 am
Forum: Investing - Help with Personal Investments
Topic: Investing Options for a Newbie
Replies: 15
Views: 1171

Re: Investing Options for a Newbie

TIAA Direct savings accounts are paying 1.25%, which is probably better than any short term alternative. And, it's FDIC insured. As already noted, I-bonds cannot be cashed out for one year after they've been purchased, and there is a penalty of 3-months of interest for cashing them out within 5-yea...
by Malachi
Thu May 24, 2012 11:00 am
Forum: Investing - Help with Personal Investments
Topic: Bond Funds: Why are these Safe or are they?
Replies: 31
Views: 3188

Re: Bond Funds: Why are these Safe or are they?

To put it another way, what if you have to sell your laddered bonds before they mature? You're going to get market price for them. True, but the difference is that with a ladder you're in control of whether that occurs or not. Don't get me wrong, for most purposes a fund is better, but there are ad...
by Malachi
Thu May 24, 2012 8:10 am
Forum: Investing - Help with Personal Investments
Topic: Bond Funds: Why are these Safe or are they?
Replies: 31
Views: 3188

Re: Bond Funds: Why are these Safe or are they?

I'm confused about Bond Funds and why these are considered "safe." If you buy an individual bond you're guaranteed a small rate of return plus you get the principal back. If you invest in a Bond Fund (TBM) while the mixture of bonds in the funds continue to pay interest; isn't it likely at some poi...
by Malachi
Wed May 23, 2012 9:49 pm
Forum: Personal Finance (Not Investing)
Topic: House is paid off!!!
Replies: 48
Views: 4888

Re: House is paid off!!!

Awesome.

:thumbsup :thumbsup
by Malachi
Sun May 20, 2012 5:26 pm
Forum: Investing - Theory, News & General
Topic: Investment News Arcticle: Cost stance at Vanguard lures cash
Replies: 15
Views: 1644

Re: Investment News Arcticle: Cost stance at Vanguard lures

Personally, I doubt this trend is permanent. People largely believe that they cannot make money in the market right now. So, they're cutting costs and who are you going to turn to when it comes to cutting costs? Vanguard, of course. But, as soon as they start thinking they can make money in they mar...
by Malachi
Sat May 19, 2012 9:14 pm
Forum: Investing - Help with Personal Investments
Topic: Survey, Mutual fund versus ETF usage
Replies: 26
Views: 1785

Re: Survey, Mutual fund versus ETF usage

Personally, I prefer mutual funds to ETFs and at Vanguard I buy mutual funds. But, if my 401(k) had a brokerage window, I'd happily buy ETFs to get beyond the fund selection I have available to me in that account. On the other hand, if my 401(k) had the mutual funds I wanted, I wouldn't bother with ...
by Malachi
Sat May 19, 2012 9:08 pm
Forum: Investing - Help with Personal Investments
Topic: Survey, Mutual fund versus ETF usage
Replies: 26
Views: 1785

Re: Survey, Mutual fund versus ETF usage

The 8th option from the bottom is, I believe, misworded.
by Malachi
Sat May 19, 2012 4:55 pm
Forum: Investing - Help with Personal Investments
Topic: ETFs or Mutual Funds: A Review and Analysis
Replies: 35
Views: 3790

Re: ETFs or Mutual Funds: A Review and Analysis

nisiprius wrote:Second, read Vanguard's nice and short piece, The basics of ETFs: A primer for the perplexed.
You accidentally used the same URL in this link as the previous one. Here's the page I think you meant:

The basics of ETFs: A primer for the perplexed
by Malachi
Sat May 19, 2012 11:33 am
Forum: Investing - Help with Personal Investments
Topic: My Rebalance needs a Rebalance
Replies: 15
Views: 981

Re: My Rebalance needs a Rebalance

Keep in mind, just because it's a 401(k) doesn't mean that there are no frequent trader restrictions. You should make sure you know what those restrictions are.
by Malachi
Sat May 19, 2012 11:27 am
Forum: Investing - Help with Personal Investments
Topic: My Rebalance needs a Rebalance
Replies: 15
Views: 981

Re: My Rebalance needs a Rebalance

I'm not sure how your question hasn't been answered. If you have chosen to rebalance periodically, then rebalance when the period is up. If you have chosen to rebalance when your AA is a certain percentage out of balance, then rebalance when it reaches that percentage. Yes, you can also direct your ...
by Malachi
Sat May 19, 2012 9:42 am
Forum: Investing - Help with Personal Investments
Topic: ETFs or Mutual Funds: A Review and Analysis
Replies: 35
Views: 3790

Re: ETFs or Mutual Funds: A Review and Analysis

1) How is it possible for anybody to provide such a product for a lower expense ratio than a mutual fund? ...after all they may get traded a lot generating more cost. Because, with ETF's you pay the transaction costs when you make the trade through your broker. With no-load mutual funds, the transa...
by Malachi
Sat May 19, 2012 9:29 am
Forum: Investing - Help with Personal Investments
Topic: My Rebalance needs a Rebalance
Replies: 15
Views: 981

Re: My Rebalance needs a Rebalance

There are two main approaches to determining when to rebalance: a) at periodic intervals, ie. quarterly, yearly, or b) when your account becomes out of balance by a certain percentage. Supposedly, on paper over the long run 'b' gives a minuscule better return. I use 'a' because I use the approach of...
by Malachi
Fri May 18, 2012 12:31 pm
Forum: Personal Finance (Not Investing)
Topic: Treasury Direct's website interface
Replies: 10
Views: 1736

Re: Treasury Direct's website interface

Another alternative would be to auto deposit to the 0 of C (or is that C of 0?), and then auto purchase in larger periods. But keep in mind the "0" stands for 0 interest. And I don't think it's any more convenient than using a personal bank account. -- Tet That's not an unreasonable idea. I opened ...
by Malachi
Fri May 18, 2012 11:35 am
Forum: Personal Finance (Not Investing)
Topic: Treasury Direct's website interface
Replies: 10
Views: 1736

Re: Treasury Direct's website interface

Sure it does. I get paid by the week and it makes it simple. Simple is good. I'm not going to waste my time optimizing for a few pennies. But, I will optimize for my time. Since it appears that dealing with lots of little bonds is going to be a hassle, I think I'm going to start accumulating cash an...
by Malachi
Fri May 18, 2012 9:01 am
Forum: Personal Finance (Not Investing)
Topic: Treasury Direct's website interface
Replies: 10
Views: 1736

Re: Treasury Direct's website interface

Not sure about the interface, but weekly purchases does seem a bit extreme since I'm not sure what benefit it provides you. Quarterly sure sounds more appealing. I'm not sure what's "extreme" about squirreling away money every week. I'd be doing it whether it goes straight into TD or makes a pit-st...
by Malachi
Fri May 18, 2012 7:55 am
Forum: Personal Finance (Not Investing)
Topic: Treasury Direct's website interface
Replies: 10
Views: 1736

Treasury Direct's website interface

I have started to accumulate I-bonds on Treasury Direct at the rate of $100 per week. Treasury Direct automatically withdraws the money directly from my checking account. The purpose of the account is to supplement my emergency funds. I have no specific use planned for the bonds at this time. As I l...
by Malachi
Sat Apr 28, 2012 12:55 pm
Forum: Investing - Help with Personal Investments
Topic: Company changing Vanguard Funds
Replies: 3
Views: 403

Re: Company changing Vanguard Funds

As hoppy stated, they appear to be essentially different share classes to the same fund:

Vanguard Target Retirement 2045 Trust I
Vanguard Target Retirement 2045 Trust II

The only difference I see is the expense ratio and the resulting better returns in Trust I.
by Malachi
Wed Apr 25, 2012 5:59 pm
Forum: Investing - Help with Personal Investments
Topic: JP Morgan (Chase) vs Vanguard
Replies: 18
Views: 21821

Re: JP Morgan (Chase) vs Vanguard

Since I wouldn't even consider investing through a bank, especially when we have Vanguard, I guess I'd have to turn the question around. What is it that you think the bank has to offer over Vanguard?
by Malachi
Wed Apr 25, 2012 5:15 pm
Forum: Investing - Help with Personal Investments
Topic: 60/40 mix isn't that much more balanced than 100% equities
Replies: 12
Views: 1550

Re: 60/40 mix isn't that much more balanced than 100% equiti

You seem to be confusing issues. Most of the volatility of a 60/40 mix comes from the equities, so it makes sense that most of volatility of a 60/40 mix is correlated with equities. It is not the case that the equity portion drives the "entire portfolio's returns". That would be impossible unless b...
by Malachi
Wed Apr 25, 2012 3:11 pm
Forum: Investing - Help with Personal Investments
Topic: 60/40 mix isn't that much more balanced than 100% equities
Replies: 12
Views: 1550

Re: 60/40 mix isn't that much more balanced than 100% equiti

The correlation between 60/40 and 100% in equities is 98%.1 These two portfolios, go up and down in near-perfect tandem. Equities are so much more volatile than bonds that they drive the entire portfolio’s returns. Consequently, 60/40 is not environmentally balanced, because it does well only in ec...
by Malachi
Wed Apr 25, 2012 10:04 am
Forum: Investing - Help with Personal Investments
Topic: Boring Investor Needs Guidance
Replies: 5
Views: 513

Re: Boring Investor Needs Guidance

Or, maybe:

40% - C Fund
30% - I Fund
20% - F Fund
10% - S Fund

If you like pretty, round, and descending numbers. :-)
by Malachi
Wed Apr 25, 2012 10:02 am
Forum: Investing - Help with Personal Investments
Topic: Boring Investor Needs Guidance
Replies: 5
Views: 513

Re: Boring Investor Needs Guidance

Presumably, the S-Fund should be held in a ratio of 1:4 with the C-Fund to match the market. Also, I think you're a little light on the I-Fund.

I might suggest something more along this:

20% - F Fund
45% - C Fund
10% - S Fund
25% - I Fund

Just something to consider.
by Malachi
Wed Apr 25, 2012 7:44 am
Forum: Investing - Help with Personal Investments
Topic: Beginner long-term portfolio
Replies: 36
Views: 1884

Re: Beginner long-term portfolio

I'm hesitant to max out my 401(k) because of the fear of locking down funds that could be needed prior to 65, I assume you all consider not maxing it out a bad idea? Personally, I don't pretend to know what my future tax rate will be or when I might need access to my investments. As such, I spread ...
by Malachi
Wed Apr 25, 2012 7:10 am
Forum: Investing - Help with Personal Investments
Topic: Beginner long-term portfolio
Replies: 36
Views: 1884

Re: Beginner long-term portfolio

When using VEXMX in my Roth IRA, I know Duckie mentioned that the percentages of it in my portfolio is too high but necessary to meet fund minimums. What percentage should I aim for? Do I want roughly 1:4 with the SP Index Fund I have in my 401(K) (as a rough measure)? Yep, when your S&P 500 fund r...
by Malachi
Tue Apr 24, 2012 11:25 pm
Forum: Investing - Help with Personal Investments
Topic: My retirement portfolio
Replies: 21
Views: 1830

Re: My retirement portfolio

twojedimama wrote:fundamental investors RFNX 1.31
Is that, perhaps, suppose to be: American Funds Fundamental Investors R4 RFNEX?
by Malachi
Tue Apr 24, 2012 11:16 pm
Forum: Investing - Help with Personal Investments
Topic: My retirement portfolio
Replies: 21
Views: 1830

Re: My retirement portfolio

Because you have Roth IRAs and taxable accounts, you can pick the least bad funds in your 401k and supplement . Let' see... And there's the crux. Which one? JAFOX appears to me to be the least bad considering what information I've been able to find. That's not a glowing recommendation. Maybe you'll...
by Malachi
Tue Apr 24, 2012 10:45 pm
Forum: Investing - Help with Personal Investments
Topic: My retirement portfolio
Replies: 21
Views: 1830

Re: My retirement portfolio

I looked at some of the funds you have available in the 401(k). Not a very good selection of funds, but you've already been informed of that. I looked at the select aa balanced and growth funds (JELBX and JELGX). They're funds of funds. Meaning, their portfolio consist of other mutual funds. These p...
by Malachi
Tue Apr 24, 2012 9:11 pm
Forum: Investing - Help with Personal Investments
Topic: Fidelity PAS
Replies: 8
Views: 1131

Re: Fidelity PAS

Perhaps, you can call Vanguard and talk with them about moving what you can "in-kind". As for the Strategic (for them) Advisory Funds, I don't know, depends too much on the specifics. Like how much of your portfolio is tied up in them? Are you currently taking distributions? If it's only been a coup...
by Malachi
Tue Apr 24, 2012 8:17 pm
Forum: Investing - Help with Personal Investments
Topic: Beginner long-term portfolio
Replies: 36
Views: 1884

Re: Beginner long-term portfolio

Malachi-- Using the strategy you just referenced, is the goal to worry about maintaining your AA over all of your accounts, and not worry about maintaining them in each? Your strategy would leave the Roth IRA strictly as bonds, and the 401k strictly as stocks. I have never thought about that strate...
by Malachi
Tue Apr 24, 2012 6:08 pm
Forum: Investing - Help with Personal Investments
Topic: Beginner long-term portfolio
Replies: 36
Views: 1884

Re: Beginner long-term portfolio

OK, looking back at your original post, I see you gave us some numbers. So here's one possibility you might want to consider. Adding up your numbers I come up with the following: $10,200 - Taxable (46%) $9,100 - 401(k) (41%) $3,000 - Roth (13%) -------------------- $22,300 - Total Desired AA: 80% - ...
by Malachi
Tue Apr 24, 2012 5:33 pm
Forum: Investing - Help with Personal Investments
Topic: Beginner long-term portfolio
Replies: 36
Views: 1884

Re: Beginner long-term portfolio

According to the fund fact sheet I found for the SA/Templeton Foreign Strategy, it actually has a 1.03% ER. It also has 34% of it's holdings in U.S. stocks. So, it's not really a "foreign" equity fund. It appears to actually be a world equity fund. Personally, out of those choices. I'd go with the f...