Bogleheads.org

whodidntante wrote: ↑Sat Mar 18, 2023 9:55 am Honestly, brokerages are a commodity. So I go with the one that offers the highest bonus.

Vanguard had better offer a much higher bonus to coax me into tolerating all of their mistakes.

nisiprius wrote: ↑Sun Mar 19, 2023 8:40 am In other words, if the Edward Jones portfolio was mostly stocks and bonds, it's very likely that, too, would have lost just about -13%.

…Before fees. Worse after fees.

Because people are the worst, that’s why.

Nyc10036 wrote: ↑Sun Mar 19, 2023 9:59 pm

Kookaburra wrote: ↑Sun Mar 19, 2023 9:35 pm

Nyc10036 wrote: ↑Sun Mar 19, 2023 8:03 pm Are your friends and family seeing your "nice" things?
In other words, do you have people over?
Are the nice vacations on your social media?
Do you drive "nice" cars others can see? Teslas?

Why should OP have to hide these things? If they’re just living, why are others’ jealousy their fault?

Did I say it was their fault??????

The natural consequence of not "hiding" these things is what leads to behavior whether real or imaginary that the OP is bemoaning.
He can't have it both ways.
It would be nice if jealousy over material things wasn't a reality.

Did I say he can have it both ways?????

lovely

Nyc10036 wrote: ↑Sun Mar 19, 2023 8:03 pm Are your friends and family seeing your "nice" things?
In other words, do you have people over?
Are the nice vacations on your social media?
Do you drive "nice" cars others can see? Teslas?

Why should OP have to hide these things? If they’re just living, why are others’ jealousy their fault?

Long term buyer, I’m placing my bets on a 0.8% fixed and will be waiting until late October to buy.

bshnew wrote: ↑Thu Mar 16, 2023 6:43 pm Wow. You have all been so helpful. I’m so glad I joined the forum. Thanks again!

Let us know what you decide to do. And if you still consider them your friend.

tibbitts wrote: ↑Wed Mar 15, 2023 10:57 pm Didn't we have this identical thread a couple of days ago? I'm too lazy to look and I can't even remember if I replied to it.

Sounds like you might be willing to pay someone to look for you

We should all strive to be like your friend. They “stayed the course” very nicely.

I am interested in seeking a retention bonus from existing brokerages that I'm with rather than endlessly moving assets around. And anecdotally I understand that some brokerages now offer customer retention bonuses to avoid losing customers to outgoing transfers (often in search of transfer bonuses). Rather than co-mingle retention and transfer bonuses in the thread on brokerage transfer bonuses, I thought it would be helpful to have this thread to learn from others' experiences with brokerage retention bonuses . For those who have attempted to obtain a retention bonus, please share your story. And if you were successful, please share the terms (e.g., institution, asset level, bonus amount awarded) and pertinent info that may have resulted ...

I hold most of my international in 401k. You will forego the foreign tax credit, but depending on your tax bracket it could be worth it since VXUS is less tax efficient than VTI.

Following with interest

6,000 sqft? Just wow.

Are index bond funds better or worse than actively managed in terms of returns?

And which account do folks buy them in? I understand they can be a pain if held in a taxable account (phantom income?). In that case, for those who are still working and don’t have a traditional IRA to hold them in (and presumably can’t buy individual TIPS in a 401k), where do you buy them? The disadvantage to holding TIPS in taxable is that you have taxable income but not the cash to pay it. The principal amount increases with inflation and you're taxed on that increase. This is much less of a problem if you have the cash. The advantage to holding TIPS in taxable is that interest payments are not subject to state tax. How much this matters to you depends on your state tax rate, if any. Is the increase in principal also state tax-exempt ea...

GAAP wrote: ↑Thu Mar 09, 2023 10:57 am You always have the option to create an IRA -- then the problem becomes how to fund it. The advantage is that you would the ability to buy anything in the TIPS space, whether individual bonds or bond funds. The quality of the 401(k) may help determine whether this is a good idea.

The better 401(k) plans will let you rollover your contributions to an IRA while still working. I did that as soon as I realized it was available (the benefits folks generally don't advertise it).

I don’t want a traditional or rollover IRA because this would interfere with the backdoor Roth process.

retired@50 wrote: ↑Tue Mar 07, 2023 5:48 pm

mrspremise wrote: ↑Tue Mar 07, 2023 5:41 pm Any suggestions?

Maybe re-think holding bonds in your taxable accounts...?

If you can find a decent bond index fund in the 401k plan(s), that might actually be more tax efficient. Or, you could use a target date fund with an earlier target year. Probably 5 years sooner would help. Check the bond allocations in the various target date funds to get the desired mix.

See the tax efficient fund placement wiki page for more detail on this line of thinking.

Regards,

I just read that section of the wiki. Wow, it really needs to be updated. It frequently references a “current climate of low bond yields”.

Rick Ferri wrote: ↑Mon Mar 06, 2023 6:56 am

er999 wrote: ↑Sun Mar 05, 2023 11:32 pm

Rick Ferri wrote: ↑Sun Mar 05, 2023 6:55 pm

I have to agree with Chancellor that understanding the environment one is investing in is important.

Rick Ferri

Just out of curiosity what was your personal takeaway — use long term individual tips instead of total bond? Use market cap weight (or higher) for percentage of international stocks instead of tilting to us stocks as many on this board do? Lower safe withdrawal rates?

My original Core-4 portfolio recommendation was:

Total US Stock Index
Total International Stock Index
Total Bond Index
TIPS

Individual TIPS or a TIPS fund?

Charles Joseph wrote: ↑Wed Mar 08, 2023 5:40 pm

secondopinion wrote: ↑Wed Mar 08, 2023 4:34 pm

50sFed wrote: ↑Tue Mar 07, 2023 10:55 pm It is a good time to buy short term treasuries @ 5% plus ( not treasury funds). All those folks piling into bond etfs just took a big beating on their ytd returns with the fed signaling more hikes ahead.

Good luck!

Any thoughts on next year or the year after that? I do not get caught up on single year deals; I do things with many years in mind.

+1000

I only think ahead to Friday night.

mega317 wrote: ↑Wed Mar 08, 2023 9:55 pm You are overlooking that you will have to make another decision in 9 months. If rates are lower you’ll be looking at unattractive reinvestment options while the bond fund prices went up while you were not holding. And if that’s not the case in 9 months you’re in the same position every subsequent 9 months. Better to match your bonds to your horizon.

Rates lower in 9 months. Lol-best joke I’ve heard all day!

This is for retirement.

Is there a particular age (or years until retirement) when those who want to hold TIPS in retirement should start to purchase them?

And which account do folks buy them in? I understand they can be a pain if held in a taxable account (phantom income?). In that case, for those who are still working and don’t have a traditional IRA to hold them in (and presumably can’t buy individual TIPS in a 401k), where do you buy them?

If the effective tax rate on Treasuries vs VTI is the same (as I detailed in my original post), I don't understand how VTI is more tax efficient.

JoMoney wrote: ↑Tue Mar 07, 2023 9:34 pm viewtopic.php?t=350739

Thanks- I had completely forgotten about my post from 2 years ago!

Who is the builder?

Prepare to continue to be disappointed. About 12 months ago, I predicted that the FFR would need to be raised above 6% to tame inflation. Rates will be going higher before the bond gutting is done.

The typical asset location recommendation is to hold tax-inefficient bonds in tax-deferred space and tax efficient equities in a taxable account. But, does a high tax state like Oregon (with no muni bond options, but considering the state tax-free nature of treasuries) change this or at least render it moot?

Assume one is in the 24% federal bracket and the 9.9% Oregon state bracket. Assume investments are in Treasury bonds/ETF and Total Stock Index (VTI).

With Treasuries, I’d lose 24% to taxes.
With VTI, I’d lose 15% QDI rate + 9.9% state = 24.9% to taxes.

I confirmed with Fidelity that one can hold Vanguard muni bond mutual funds there (just not buy more). And since asset transfers to Fidelity are super easy, why not just buy them at Vanguard as-needed and then transfer them over.

Hi everyone, To date, I've paid $290k into BIV (my cost) and market value is $245k , so "loss" of about $45k. :annoyed Of course I do realize it's not a real loss until I sell, and I do get ~$560 a month in dividends from it. I chose BIV initially when I formed my portfolio to balance against stocks. (alloc. is ~60/40 stocks/bonds right now). Having said that, I have two questions: - I don't really understand why there is a loss,i.e. why it has gone down so much. I thought bonds are pretty stable as in they don't fluctuate much. Perhaps if I understand why it has fallen so much I can decide if I keep doing what I am doing or look at something else. - I have DRIP turned on on BIV. Should I at least turn off DRIP and start placing ...

For all the suggestions to write the CEO, how does one actually get the message or letter into the hands of a CEO at a major company? And even if you get it in front of item and they actually read it (two big “ifs”), it seems like they’re more like to blow off a $140 matter than a front desk clerk.

If I purchase a SPIA using after-tax dollars, are the monthly payouts taxable (at the federal and/or state level)? If so, would this favor purchasing SPIAs within the wrapper of a traditional IRA (since they’d be taxable anyways)?

[This thread has been merged into a previous thread by OP discussing the same topic. Moderator Pops1860]

Yep. It's all about how they are taxed. "Qualified" are taxed at the long-term rates. 199A receive special tax treatment as well. What's left are taxed as "ordinary" income - same as you'd pay for interest earned from a bank. I understand that part, but it’s weird to separate them out as such (since I received the full ordinary as a distribution). Previously, I’ve only seen it done this way for international funds, where dividend distributions = total ordinary minus foreign tax. In other words, what you actually see hit your account. Not sure why you think this is weird... As mentioned, they are all taxed differently. So they need to be listed separately. It's the same as selling stocks from taxable. If you have gains, ...

SnowBog wrote: ↑Sat Mar 04, 2023 2:06 pm Yep.

It's all about how they are taxed. "Qualified" are taxed at the long-term rates. 199A receive special tax treatment as well.

What's left are taxed as "ordinary" income - same as you'd pay for interest earned from a bank.

I understand that part, but it’s weird to separate them out as such (since I received the full ordinary as a distribution). Previously, I’ve only seen it done this way for international funds, where dividend distributions = total ordinary minus foreign tax. In other words, what you actually see hit your account.

I’m looking at my Fidelity 1099-DIV and am confused by the column “Dividend Distributions”. This is for VTI. It looks like this:

Box 1a. Total Ordinary Dividends = $1,389.31

Dividend Distributions = $24.30
Box 1b. Qualified Dividends = $1,303.01
Box 5. Section 199A Dividends = $62.00

What exactly are the dividend distributions? Also, the only way to get the total ordinary figure is to add up the three rows, so does that mean the dividend distributions are neither qualified nor Section 199A?

[Title was "Why the difference in VTI and VOO today?" and formerly "VTI and ITOT Divergence" --admin LadyGeek]
[Added Date to title for future tracking. Moderator Pops1860]

Right as of this second, VTI has a daily change of -0.96% vs. ITOT of -0.41%. I realize these don’t track the same index, but how is such a large divergence possible for two total US market funds?

I’m feeling tired due to the relentless nature of work. It’s not my current job per se; it’s any job. Along with all the other things that have to happen each day (errands, shopping, exercise). The need to get up at a certain time, do x, y, and z on a regimented schedule to keep my job, earn $, stay healthy, etc. Then get to bed on time, only to repeat it. With no end in sight. All the while hoping that no major bad news creeps in.


How does one get a reprieve from this hamster wheel? I don’t have the financial means to quit working or ramp down. What have others done that helped?

I won’t be receiving a 1099 from Tastyworks since I only got the $500 bonus and then closed out my account. Their threshold for providing a 1099 is $600. For those who did receive a 1099 from Tastyworks that includes the $500 bonus from a year ago, did they report the bonus as interest (on a 1099-INT) or as miscellaneous income (on a 1099-MISC)? I want to make sure to report it in the correct part of my tax return.

Wow, thanks for all the good advice!

whodidntante wrote: ↑Tue Feb 28, 2023 8:02 pm For bonus hounds still on the hunt, M1 extended their current offer through the end of March.

Perfect timing, as I’m looking for a new home for some ETFs that are languishing in an unloved state at Vanguard. I’ve never used M1 before- anything I should be aware of?

carolinaman wrote: ↑Fri Feb 24, 2023 7:36 am Correcting errors is not a strength of Vanguard's.

So true. You’d think they’d be good at it by now since making errors is a strength of theirs.

I am moving to a rental home in a new town in which I need to provide my own washer and dryer. Since I’m not familiar with appliance stores in the new town, I am considering purchasing a new W/D set from either Costco or Home Depot. I have a few questions about this…

1. Are prices for washer and dryers at Costco and Home Depot pretty competitive with appliance stores?

2. Do Costco or Home Depot deliver and install the washer and dryer, or would I need to pick them up and install myself?

3. Anything else you think I should be aware of?

Thanks in advance for insights.

Most thinking here is rational and based on theories and calculations. I invite you to get crazy and guess the average inflation rate over the next 30 years. Explain your reasoning if you'd like. Here are random historical averages: % avg. From this year until 2/21/2023 3.80. 1960 2.61. 1993 2.69. 2003 2.98. 2013 3.51. 2015 4.12. 2017 5.11. 2019 7.25. 2021 The Federal Bank of Cleveland on 2/14/2023 projected 2.29% based on these criteria: The Federal Reserve Bank of Cleveland estimates the expected rate of inflation over the next 30 years along with the inflation risk premium, the real risk premium, and the real interest rate. Their estimates are calculated with a model that uses Treasury yields, inflation data, inflation swaps, and survey...

I have learned from my mistakes of the past, and have not touched my vanguard stocks since the market has been on a downturn for the last 2 years. I was able to re-invest to U.S. Treasuries (I series and treasury note too) when my old EE series bonds matured. I bought two 30 years I series bonds for each of my children. They mature in 2052. My question is I would like to move some of my equities to treasury bonds ( a much better place to have investments now!) I have watched the drop over the last years and taken no action. However, I am frustrated, thinking that money in total market and small cap could be invested in U.S. treasuries instead! I don't want to move anything while things are down like they are and take the loss. Am I stuck u...

livesoft wrote: ↑Fri Jan 20, 2023 2:56 pm Total Bond Market Index fund went UP more than 3% so far in 2023. How much did cash go up in the past 3 weeks?

Easy come, easy go.

retired@50 wrote: ↑Mon Feb 20, 2023 11:54 am

Kookaburra wrote: ↑Mon Feb 20, 2023 11:22 am You can get a (near risk-free) 4.5% return in most money market funds these days. I would DCA in. I question if Vanguard’s above-referenced position paper takes into account current favorable yields.

The 4.5% rate is only "favorable" if you ignore inflation.

Regards,

I agree. However, my point was comparing a risk-free 4.5% return vs a risky and unknown near-term return for stocks (near term because the options considered are lump sum now or DCA in over a period of a few months). Inflation is the 800-pound gorilla in the background in both cases, so is not a differentiator.

chassis wrote: ↑Mon Feb 20, 2023 3:19 am

Kookaburra wrote: ↑Sun Feb 19, 2023 9:28 pm I would like to capture the both the current yield (5%) and duration (12 months) of a 1-year Treasury. However, this purchase would be inside a 401k self-directed brokerage where I cannot just purchase the Treasury outright (unfortunately). So I’m looking for an ETF that most accurately captures these yield and duration conditions. The options I’m seeing so far are either too short (like SGOV; 1 month) or too long (like VGSH; 1.9 years). Is there a more closely matched ETF?

Have you considered a near-5% yield MM fund such as FZDXX? For me it would be close enough.

I can’t buy Fidelity mutual funds in my 401k.

Where are you seeing near 5%? When I just looked up FZDXX, I see a 7-day SEC yield of 4.3%.

You can get a (near risk-free) 4.5% return in most money market funds these days. I would DCA in. I question if Vanguard’s above-referenced position paper takes into account current favorable yields.

I used to do this. Now, I consider it stage 3 of Rick Ferri’s 4 stages of an Boglehead investor.

I would like to capture the both the current yield (5%) and duration (12 months) of a 1-year Treasury. However, this purchase would be inside a 401k self-directed brokerage where I cannot just purchase the Treasury outright (unfortunately). So I’m looking for an ETF that most accurately captures these yield and duration conditions. The options I’m seeing so far are either too short (like SGOV; 1 month) or too long (like VGSH; 1.9 years). Is there a more closely matched ETF?

I bought a T-bill in August 2022 on the secondary market. The CUSIP is 912796V48. It matures in late April 2023, a little more than 2 months from today. If my understanding is correct, it’s current price would reflect a YTM comparable to other Treasuries on the 2-month part of the yield curve, i.e., about 4.7% at todays yields. Wouldn't selling it now incur a loss compared to its value at maturity and if so are you taking that into account? I don’t think I’d be selling at a loss, and Fidelitys daily tracking of its value shows I’ve gained about 1.3% total return since I bought it. I'm not referring to a loss over the period which you held the bond but a difference between what you can sell the bond for today vs. its value at maturity. At i...