Search found 13726 matches

by YDNAL
Tue Mar 29, 2016 10:09 am
Forum: US Chapters
Topic: Where is YDNAL?
Replies: 57
Views: 15720

Re: Where is YDNAL?

Hello everyone!!!

I am doing fine. In 2015 I was asked back from semi-retirement by our board. I don't actively participate in the Forum but periodically visit to see what is going on.

Regards,
Landy
by YDNAL
Thu May 14, 2015 11:34 am
Forum: Investing - Theory, News & General
Topic: Where are the dividends with Funds??
Replies: 21
Views: 7259

Re: Where are the dividends with Funds??

If you want those dividends, the obvious choice is to use a mutual fund that focusses on dividend-paying stocks and Vanguard has several. I know little about dividend stock investing because I don't believe in it myself and don't do it, but two obvious possibilities are: Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX and friends) (an index fund) Vanguard Equity Income Fund Investor Shares (VEIPX) (active) I don't think there's any harm at all in using a dividend-focussed fund if you want to use dividends payments as your "sustainable withdrawal strategy," as long as you don't kid yourself that there's much difference between doing that and just selling small amounts of Total Stock. The "distributions" pa...
by YDNAL
Tue May 05, 2015 8:36 am
Forum: Investing - Theory, News & General
Topic: Where are the dividends with Funds??
Replies: 21
Views: 7259

Re: Where are the dividends with Funds??

If you want those dividends, the obvious choice is to use a mutual fund that focusses on dividend-paying stocks and Vanguard has several. I know little about dividend stock investing because I don't believe in it myself and don't do it, but two obvious possibilities are: Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX and friends) (an index fund) Vanguard Equity Income Fund Investor Shares (VEIPX) (active) I don't think there's any harm at all in using a dividend-focussed fund if you want to use dividends payments as your "sustainable withdrawal strategy," as long as you don't kid yourself that there's much difference between doing that and just selling small amounts of Total Stock. The "distributions" pa...
by YDNAL
Fri Apr 03, 2015 2:32 pm
Forum: Investing - Theory, News & General
Topic: The Detriments of Rebalancing
Replies: 67
Views: 13597

Re: The Detriments of Rebalancing

My [original] post was an attempt to gauge the expected returns between a rebalanced portfolio and a non-rebalanced portfolio with the following facts. The portfolio is currently 55/45 AA, will have no contributions or withdrawals for the next 15 years, and then will be spent down from the over weighted portion of the portfolio to a 50/50 AA..... The goal of this analysis is to decide if I am comfortable with my current risk (as measured by expected return rather than AA), and to determine if I can lessen my time investment into the management of my portfolio by not rebalancing over the next 15 years. 1. For illustration , take S&P 500 returns in the TWO preceding 15 calendar years. No data-mining here, just the way it went down. $10K ...
by YDNAL
Thu Mar 26, 2015 12:03 pm
Forum: Investing - Theory, News & General
Topic: Wise move to move some $ to cash before bear market?
Replies: 134
Views: 24051

Re: Wise move to move some $ to cash before bear market?

I just read an article that described how to prepare for a bear market and listed the history of the previous bear markets over time. Since we are at an all time high , a bear market is coming , nobody knows when. The author suggested taking 20%- 30 % and putting it in cash to hold and buy in the bear market, instead of losing 20-30%. This sounds like a good plan, as a bear market is coming sometime in the future.... Is this a sound plan? I'm about to do it. Riptide, 1. Since bear markets do come "sometime in the future" -- are you prepared to put 20-30% in Cash *perpetually* while waiting? 2. Then, ask yourself the reason that you invest in Equities -- in the first place -- and the reason you chose [whatever] exposure to Equitie...
by YDNAL
Wed Mar 25, 2015 2:50 pm
Forum: Investing - Theory, News & General
Topic: Total International Stock Index includes small caps or not?
Replies: 12
Views: 3070

Re: Total International Stock Index includes small caps or n

Can you please help me as I am confused. Does the Vanguard Total International Stock Index Fund include small caps or not? According to Vanguards website in Fund Facts the Fund is a "Foreign Large Blend" fund. However, the index it is tracking (FTSE all World ex US) includes small caps. I am looking for an international stock fund with the broadest possible exposure regarding company size and geographic distribution. Thank all of you for your valuable input. Short answer: yes. Long answer: it doesn't matter much. The investable international stock market, at market weights, is heavily weighted to Large Caps. Vanguard has 2 FTSE funds, one with, one without small caps. Despite it likely irrelevant going forward, this is recently h...
by YDNAL
Wed Mar 25, 2015 9:14 am
Forum: Investing - Theory, News & General
Topic: College funding
Replies: 10
Views: 2151

Re: College funding

MP173 wrote:We have a one year old granddaughter and the parents are asking me how to save for college.

Just to get things straight, they are not asking for financial help (tho that might be a gift down the road), but are wanting to know the best avenue for investing. With my two sons years ago, I set up a UGTM account and funded it in that manner, but I understand there are now better methods...529 plans.

What should parents be looking to do?

Thanks,

Ed
Florida has a prepaid College plan. How about the State where your granddaughter lives?
by YDNAL
Wed Mar 25, 2015 9:10 am
Forum: Investing - Theory, News & General
Topic: Why Bonds With 20 Year Horizon?
Replies: 73
Views: 12016

Re: Why Bonds With 20 Year Horizon?

For savings with a 20+ year horizon (i.e. I'm 35 and plan to retire at 65) why own any bonds? From the 1920s until today I haven't found a 20 year period where bonds beat stocks. Seems INCREDIBLY likely that stocks will beat bonds over any 20 year period in the next 50 years. This is assuming I can happily ride the roller-coaster without ever getting off. :happy Thoughts? A 35 year old doesn't have a 20+ year horizon... more like a 60 year horizon - at least, most of us over 60 would like to think so. 1. As you accumulate, 35yo Rant2112, a 50% Equity drop will sting more at 45, and more at 55, etc. That is, unless you are unable to continue saving -- which is a completely different subject that requires a completely different plan. 2. My s...
by YDNAL
Mon Feb 23, 2015 9:17 am
Forum: Investing - Theory, News & General
Topic: ? present value of soc sec and pension
Replies: 37
Views: 5026

Re: ? present value of soc sec and pension

duffer wrote:Feel free to go with your analysis. But I'll go with John Bogle's recommendation to treat social security (and, of course, well-secured pensions) as an annuity or bond, i.e., as fixed income with a present value. So, I am not really interested in advice on that issue.
Using the "John Bogle" card can lead to contradictory strategies. Jack Bogle also proposes Age = Bond guideline in asset allocation decisions. :confused

That said, at the end of the day, AA decisions regarding INVESTABLE assets should be based on ability & need for risk (personal). We take the risk with these assets that we deem necessary to take -- and then the chips will fall where they fall.
by YDNAL
Sat Feb 21, 2015 9:35 am
Forum: Investing - Theory, News & General
Topic: ? present value of soc sec and pension
Replies: 37
Views: 5026

Re: ? present value of soc sec and pension

I know there have been threads about whether social security and pensions should be valued as part of an asset allocation in the way that bonds are. I am not asking about that. Rather, I would like to know the following: How should one estimate the present cash value of the following three assets: 1. a joint life pension of 55k held by a couple now each aged 65 years, (with a COLA on first $18,000 of up to 3% based on 50% of the CPI). 2. social security entitlement of $30,000 annually beginning two years from now (female, age 67). 3. social security entitlement of $40,000 annually beginning 4 years from now (male, age 70). Thanks for any help putting a present cash value on these. You likely got answers to compute NPV. That said, and recog...
by YDNAL
Thu Feb 19, 2015 12:27 pm
Forum: Investing - Theory, News & General
Topic: The 8x retirement savings rule
Replies: 83
Views: 15374

Re: The 8x retirement savings rule

Recently I got an email from Fidelity about the "8x retirement savings rule", which is basically: When you’re: Aim to have: 67 years old 8x your salary saved 55 5x 45 3x 35 1x Is this realistic? Sorry, OP, but I would not use this (or similar) email to plan MY retirement. First, what salary?.... gross, net (after tax), any other of possible variation? Second, the 67yo above has reached $100K net salary (after tax), has $50K expenses, and (s)he retires because of that rule of thumb: • $100K x 8 = $800K • $50K expenses = 6.25% of $800K • NO ONE in their right mind today, for a likely 20+ year period (age 87+), should tell you to withdraw in retirement over 6% from savings. Third, all that matters is covering $50K expenses (or neces...
by YDNAL
Tue Feb 03, 2015 6:05 am
Forum: Investing - Theory, News & General
Topic: Bill Gross warns about bonds. Are you worried?
Replies: 38
Views: 7376

Re: Bill Gross warns about bonds. Are you worried?

JimmyJammy wrote:Yahoo recently posted this interview with Bill Gross in which he said that bonds are basically safe for 6 to 12 months, but the 10-30 year outlook is bad:

http://finance.yahoo.com/news/bill-gros ... 12765.html
Gross is always saying something (or other).
http://www.cbsnews.com/news/will-pimcos ... -in-a-row/

The rest is history.
by YDNAL
Tue Feb 03, 2015 5:32 am
Forum: Investing - Theory, News & General
Topic: The lowest stock allocation you plan to stay with
Replies: 79
Views: 19020

Re: The lowest stock allocation you plan to stay with

Stupid question, when people say they have saved X times expenses, what do they mean? If I want $80,000 per year and I have a $40,000 pension do I just take the remaining $40,000 and divide by portfolio? Do I ignore future Social Security? I realized I have answered this in polls but maybe not accurately. :oops: It means a savings *multiple* of expenses -- which have been reduced by all other sources of income. In your example, if pension is $40K and social security is $20K (for instance), it is "saving X times" $20K ($80K - $60K). I appreciate the response. We sometimes throw out concepts and assume everyone is interpreting the same way. If you want to read more about it, Bill Bernstein refers to this as a multiple of "resi...
by YDNAL
Sun Feb 01, 2015 12:43 pm
Forum: Investing - Theory, News & General
Topic: The lowest stock allocation you plan to stay with
Replies: 79
Views: 19020

Re: The lowest stock allocation you plan to stay with

jfn111 wrote:Stupid question, when people say they have saved X times expenses, what do they mean?
If I want $80,000 per year and I have a $40,000 pension do I just take the remaining $40,000 and divide by portfolio?
Do I ignore future Social Security?
I realized I have answered this in polls but maybe not accurately. :oops:
It means a savings *multiple* of expenses -- which have been reduced by all other sources of income.

In your example, if pension is $40K and social security is $20K (for instance), it is "saving X times" $20K ($80K - $60K).
by YDNAL
Sun Feb 01, 2015 6:12 am
Forum: Investing - Theory, News & General
Topic: Wiki comments requested: The importance of asset allocation
Replies: 208
Views: 28829

Re: Wiki comments requested: The importance of asset allocat

The SEC? Here's the link: Beginners' Guide to Asset Allocation, Diversification, and Rebalancing That's surprisingly well written. Yes, and that's what I tried to say when i quoted Jane Bryant Quinn. Asset Allocation is part of a long term framework that goes with diversification and rebalancing to manage risk. And, it affects expected return. It's not a thing by itself. Yes. Thus claims of "most important" are not only inappropriate, but wrong! Agree. Claims of "most important decisions, etc." is the fuel that lights argument and debate, and it says a whole lot without proper documentation. IMO, the Wiki should be informative and leave it at that. My preference would be to remove the statement and replace it with the v...
by YDNAL
Sun Feb 01, 2015 6:00 am
Forum: Investing - Theory, News & General
Topic: Vesting and Normal Retirement Age
Replies: 12
Views: 2360

Re: Vesting and Normal Retirement Age

2cents2 wrote:
Dutch wrote:I've never seen normal retirement age defined as age 59.5
What age(s) have you seen to be normal retirement age?
Notice 2012-29
Section 401(a) sets forth the qualification requirements for a trust forming part of a stock bonus, pension, or profit-sharing plan of an employer. Several of these qualification requirements are based on a plan’s normal retirement age. Section 411(a)(8) defines the term normal retirement age as the earlier of (a) the time a participant attains normal retirement age under the plan or (b) the later of the time a plan participant attains age 65 or the 5th anniversary of the time a plan participant commenced participation in the plan.
by YDNAL
Sat Jan 31, 2015 9:07 am
Forum: Investing - Theory, News & General
Topic: The lowest stock allocation you plan to stay with
Replies: 79
Views: 19020

Re: The lowest stock allocation you plan to stay with

Hey folks, Don't get nervous, this is not whether I should go into a 100% stock portfolio. I was looking at the Vanguard Target Retirement Income fund which settles at 30% stocks and I remember in another thread Taylor was saying how 60/40 Balanced Index Fund is too aggressive for an older person. My plan was to settle at 50/50 or 60/40 for life because I think 30% stocks is not enough exposure if I want to leave some behind. For the record, I'm currently at 65/35. Mike, Recent significant Equity declines (2001/02, 2008/09), with relatively swift recoveries, are a recency bias trap. 1. A $1 million portfolio, invested 650/350 split (your AA), takes a $325K hit in a 50% Stock correction. 2. We should ask ourselves..... A prolonged subsequen...
by YDNAL
Sat Jan 31, 2015 12:51 am
Forum: Investing - Theory, News & General
Topic: Wiki comments requested: The importance of asset allocation
Replies: 208
Views: 28829

Re: Wiki comments requested: The importance of asset allocat

On several wiki pages, such as Asset allocation and Risk and return: an introduction , we make a very bold statement: http://www.bogleheads.org/w/images/c/c8/Ambox_notice.png Asset allocation is one of the most important decisions that investors can make. In other words, the importance of an investor's selection of individual securities is insignificant compared to the way the investor allocates their assets to stocks, bonds, and cash equivalents. An important statement such as this should cite a credible source, but none is to be found....... Agree. Claims of "most important decisions, etc." is the fuel that lights argument and debate, and it says a whole lot without proper documentation. IMO, the Wiki should be informative and ...
by YDNAL
Mon Jan 26, 2015 6:04 am
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 6071

Re: What's wrong with volatility if buy&hold

I read that fiance professor Dr. Andrew Lo said that the markets are getting so volatile these days, that the buy and hold strategies don't work anymore. I don't exactly understand why this is the case. I thought that the whole purpose of the buy and hold strategy was to avoid caring about volatility and just get long term returns, which would be the same regardless of volatility. Can someone help clear this up for me? Thanks. The quote originates from a Money Magazine article in October 2012. - Is volatility in 2012 consistently the same (similar) to 2013, 2014.... 2022, 2032? - Given any level of volatility, can we effectively and consistently exploit it so it is more valuable and viable than a Buy & Hold a strategy? Rhetorical quest...
by YDNAL
Mon Jan 26, 2015 5:02 am
Forum: Investing - Theory, News & General
Topic: What is the international portion of your portfolio and why?
Replies: 140
Views: 22132

Re: What is the international portion of your portfolio and

Thanks for the input. I am trying to re-balance to a lower international allocation. Once I get there, I will maintain my AA. Is there a flaw in that approach? When one rebalances they are selling the winners (U.S.) and buy more of the losers (international) as an example from last years world equity performance. I think you mean you want to do the opposite? Sell the losers (International) and buy more of the winners (U.S.). Selling low and buying high is never a good idea. This is a misconception.... "rebalancing" can use new money -- there is no reason to sell anything. The Stock Markets, at times, also help in these matters. Regarding your question, goodenyou, rebalancing to "a lower international allocation" should ...
by YDNAL
Sun Jan 25, 2015 4:07 pm
Forum: Investing - Theory, News & General
Topic: Why not invest in bond fund in taxable account?
Replies: 23
Views: 6661

Re: Why not invest in bond fund in taxable account?

Thanks the response, Doc.

Been watching Heat/Bulls and now OKC/Cleveland basketball.
by YDNAL
Sun Jan 25, 2015 11:09 am
Forum: Investing - Theory, News & General
Topic: Why not invest in bond fund in taxable account?
Replies: 23
Views: 6661

Re: Why not invest in bond fund in taxable account?

So if I have $260k total (including savings, 401k, IRA, etc.) and will need $70k in the next 5 years, I could do something like this: Retirement/long-term money: $190k = 90/10 stock/bond allocation Short-term money: $70k = 20/60/20 stock/bond/cash allocation Total will be $185k stocks, $61k bonds, $14k cash So, your investable assets AA, per below, is 71/29 and influenced by "mental Accounting" issues. Accounts Stocks Bonds Cash Retirement 171 19 0 Other Money 14 42 14 Total 185 61 14 AA 71% 24% 5% First, I believe that someone accumulating doesn't need Cash as an investment. Second, you want $75K in *safer* assets (bonds+cash). Third, say you maintain a comparable $70K in short- and intermediate-term bonds to match need for mone...
by YDNAL
Sun Jan 25, 2015 9:58 am
Forum: Investing - Theory, News & General
Topic: Why not invest in bond fund in taxable account?
Replies: 23
Views: 6661

Re: Why not invest in bond fund in taxable account?

Saved money doesn't care what it is saved for. 1. Regardless how you compartmentalize the savings, "if stocks do tank," NET WORTH is affected identically. 3. Unless/Until we recognize this FACT, we then continue struggling with mental accounting issues. What would you do in my situation? How do I separate the accounts for mental accounting? How do I view and manage it? What I think is that may be stressing over things that perhaps don't deserve the stress. I max out my retirement accounts but have about $30k that I expect to need in a few years.... What I really want to do is this, for simplicity and mental accounting purposes: Keep separate "retirement" accounts and all other money - emergency fund, cash needed for nea...
by YDNAL
Sun Jan 25, 2015 9:16 am
Forum: Investing - Theory, News & General
Topic: Poll: Principles of Boglehead Philosophy
Replies: 68
Views: 7151

Re: Poll: Principles of Boglehead Philosophy

I disagree with you that any discussion of the Bogleheads philosophy must address all ten principles listed in the Wiki. In some contexts, it's very useful; in others, it's too much information. We shall remain in disagreement, because a philosophy is a comprehensive (and non-exclusive) body of principles -- whether it relates to our investing lives or personal lives. For any abstract concept, there is a spectrum of descriptions. In the case of the Bogleheads philosophy, this spectrum may include the following (from the least to the most comprehensive): 1. A single the most important principle. 2. Three most important principles. 3. Five-to-ten most important principles. 4. Ten most important principles, as described in the Bogleheads Wiki...
by YDNAL
Sun Jan 25, 2015 8:17 am
Forum: Investing - Theory, News & General
Topic: Poll: Principles of Boglehead Philosophy
Replies: 68
Views: 7151

Re: Poll: Principles of Boglehead Philosopy

1. Keeping expenses low is the cornerstone of the Bogleheads philosophy. - Implementation of low-cost index funds is Jack Bogle's main contribution to personal finance. - "Low cost" is not the same as the "lowest cost." 2. For most Boglehead newcomers, the best first step is to leave their advisers and high-expense funds and move their money to Vanguard. - If the immediate transfer to Vanguard is not prudent due to capital gains or termination fines, start putting new money to Vanguard. - For a new investor, investing in Vanguard should come first and optimizing taxes can be addressed later. 3. Goals are not equivalent to philosophy. However , this poll combines the elements of both: - For an experienced Boglehead, it's...
by YDNAL
Sun Jan 25, 2015 6:41 am
Forum: Investing - Theory, News & General
Topic: Poll: Principles of Boglehead Philosophy
Replies: 68
Views: 7151

Re: Poll: Principles of Boglehead Philosopy

Nonsense. The Boglehead philosophy isn't about "having fun" with it, or about "goals, fantasy." The philosophy is an activity of thought meant to guide action all of the time. "The most effective number to focus on" is ALL . 10 Principles of the Bogleheads investment philosophy...... You treat this thread as the "Bogleheads Doctrine." For me, it's a guide for prioritizing Bogleheads' principles. Nonsense is in the eyes of the beholder. (emphasis added) Negative... no doctrine, instead an activity of thought meant to guide action all of the time (as stated). That said, it makes NO SENSE to "prioritize" looking at expense ratios down to the fourth decimal place (0.0010 vs. 0.0005, for instanc...
by YDNAL
Sun Jan 25, 2015 5:37 am
Forum: Investing - Theory, News & General
Topic: SCIF vs SCIN vs SMIN
Replies: 2
Views: 1020

Re: SCIF vs SCIN vs SMIN

comeinvest wrote:Can someone please help me analyzing SCIF, SCIN and SMIN?
Look what a difference when letters are transposed.
VDE - Vanguard Energy
EDV - Vanguard Extended Duration Treasury

You need to identify what you want analyzed. Many (most?) Forum participants don't go looking to find out.
by YDNAL
Sun Jan 25, 2015 5:06 am
Forum: Investing - Theory, News & General
Topic: Why not invest in bond fund in taxable account?
Replies: 23
Views: 6661

Re: Why not invest in bond fund in taxable account?

A case could be made for putting retirement money in tax advantaged accounts in the bond fund and taxable investments in equities, then selling equities in taxable and selling bonds in the tax advantaged accounts to buy equities when the money is needed (I know there's a wiki on this). But if if equities tank, this fails, so you need to have about twice as much as your potential cash needs in taxable. What I really want to do is this, for simplicity and mental accounting purposes: Keep separate "retirement" accounts and all other money - emergency fund, cash needed for near future large or one-time purchases, down payment money for my next house (3 years, maybe), allowance for home repairs, new car fund, etc. All of these items a...
by YDNAL
Sat Jan 24, 2015 7:12 am
Forum: Investing - Theory, News & General
Topic: Poll: Principles of Boglehead Philosophy
Replies: 68
Views: 7151

Re: Poll: Principles of Boglehead Philosopy

First three words of original posters post above........"just for fun". Ten, eleven, or whatever is the right number of the Bogleheads principles, provide a comprehensive view of one's personal financial management. Perhaps, things like adequate insurance and estate planning belong here, too. However, the most effective number to focus on is THREE. If you have a list of 10 items on your daily to-do list, you may not complete any of them by the end of the day; if you have three items you will have all of them done. If you have 10 long-term goals, they will remain a fantasy; if you focus on achieving three things (or fewer), you are much more likely to get there. And so the value of this poll is for the participants to present thei...
by YDNAL
Fri Jan 23, 2015 5:36 pm
Forum: Investing - Theory, News & General
Topic: Poll: Principles of Boglehead Philosophy
Replies: 68
Views: 7151

Re: Poll: Principles of Boglehead Philosopy

.
There are no 3, 4 (whatever) important investing principles. The Boglehead investing philosophy is comprehensive -- all 10 principles -- encompassing important investing decisions that enhance our ability (and probability) to meet financial goals.

I didn't really read all responses in detail, but I don't believe one person (for instance) has addressed taxes, or addressed even a MOST IMPORTANT principle to "invest early and often" (savings rate).

I'm done posting about this silly poll -- no offense, original poster.
by YDNAL
Fri Jan 23, 2015 4:05 am
Forum: Investing - Theory, News & General
Topic: Poll: Principles of Boglehead Philosophy
Replies: 68
Views: 7151

Re: Poll: Principles of Boglehead Philosopy

Index Fan wrote:Just for fun...pick what you think are the top 3 Boglehead principles. You can re-vote if you change your mind.
I thought there were only 10 Principles of the Bogleheads investment philosophy. Your poll shows many other choices and some very important choices are actually excluded. Gosh, I dislike these poll thingies.

Code: Select all

1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep costs low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course
by YDNAL
Fri Jan 16, 2015 5:14 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 18890

Re: Is a Sub-4% SWR a Boglehead Quirk?

I don't see what's incorrect about that unless you're making a pedantic argument that instructing the user to exclude needs covered by SS & pensions before putting their input into the calculator is "accounting for it". By contrast, what I was referring to is a calculator like Firecalc, which truly accounts for it by allowing a user actually to input their expected annual benefits and the year in which they will begin, which is a better tool for planning a retirement in which the retirement date and SS start date are not the same. Lets leave it where you said what you didn't mean. ....I was just pointing out that assuming a constant rate for 45 years is not an accurate simulation of my planned retirement. By contrast, what I ...
by YDNAL
Fri Jan 16, 2015 2:37 pm
Forum: Investing - Theory, News & General
Topic: What is the international portion of your portfolio and why?
Replies: 140
Views: 22132

Re: What is the international portion of your portfolio and

100% in equities with 20% in VGSTX... Why: I've done numerous research and run the numbers for different time horizons and ranges and 15-20% gives me the highest returns for the level of risk. I'm not sure if 20 years from now I'll have this weighting of assets (who cares, it's 20 years from now), but right now I'm using this becauseI only really care about the next 5 years. And within the next 5 years I'm still seeing high correlations between US and Intl stocks with the US outperforming Intl, so why take on more risk for less return. In addition, the world is becoming a smaller place and many of US companies are already extremely global. So I'm getting Intl exposure there also. Hey, keelerjr12, sounds like you have it all figured out. If...
by YDNAL
Fri Jan 16, 2015 2:02 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 18890

Re: Is a Sub-4% SWR a Boglehead Quirk?

In the Vanguard calculator , for 30 years and 4%,..... If aware if that (<- I'm aware of that?) and as I said, closer to 4% than 2%; I'm not literally planning on a full 4% WR. Also, most calculators like that fail to account for the value of social security, which can significantly reduce one's portfolio withdrawal rate in later years and act as some degree of insurance against longevity. That would be a user mistake because we control the input. The input requires an amount "to be spent from portfolio" after it is reduced by other projected sources of income (Social Security, Pension, Etc.) I don't consider that a user mistake, it's a limitation of the tool, which makes it inappropriate for someone like myself planning a very e...
by YDNAL
Fri Jan 16, 2015 12:07 pm
Forum: Investing - Theory, News & General
Topic: Buying Call Option to Fund 2015 & 2016 IRA
Replies: 18
Views: 1705

Re: Buying Call Option to Fund 2015 & 2016 IRA

What am I missing? The market can be irrational longer than you can come-up with other mind games! I suggest funding the IRA when you have the money, and while at it, make sure your TOTAL savings are maximized to the best of your ability. I max at all tax advantaged accouts and adding to a taxable account. $174 is a rounding error in the $26,850 I am saving pretax + what I can save in the taxable. I have maximized the saving portion. I am looking to optimize it now. Good for you! Now, TIME IN THE MARKET can also bite you in the @$$ - which includes after you accumulate funds for the IRA contribution. I believe the market is extremely efficient and I am not trying to outsmart it. What I am attempting to accomplish is to increase my TIME IN ...
by YDNAL
Fri Jan 16, 2015 12:03 pm
Forum: Investing - Theory, News & General
Topic: Tilting to Corp. Bonds
Replies: 36
Views: 10181

Re: Tilting to Corp. Bonds

I heard Bogle suggest tilting to corporate bonds. He said that the purpose of indexing is to "beat the guy next door" and most investors have more corporate bonds. He said the reason the index has more government bonds is because other governments buy them. Any thoughts? That's not necessarily what Bogle said (April 2013) . Benz: Let's talk about bond indexing, Jack. We've seen performance of [broad market] bond index funds relative to our intermediate-term bond category look a little [volatile] in recent years. So, in 2011 they did great. More recently they haven't looked as good. Active funds have actually done better. What do you think is the underpinning of that performance bifurcation? Bogle: There is just no doubt about wha...
by YDNAL
Fri Jan 16, 2015 11:50 am
Forum: Investing - Theory, News & General
Topic: Buying Call Option to Fund 2015 & 2016 IRA
Replies: 18
Views: 1705

Re: Buying Call Option to Fund 2015 & 2016 IRA

NOVACPA wrote:What am I missing?
The market can be irrational longer than you can come-up with other mind games!

I suggest funding the IRA when you have the money, and while at it, make sure your TOTAL savings are maximized to the best of your ability.
by YDNAL
Fri Jan 16, 2015 10:27 am
Forum: Investing - Theory, News & General
Topic: Is International Equity a "Factor"?
Replies: 8
Views: 1263

Re: Is International Equity a "Factor"?

I lean mostly toward pure Boglehead principles and don't slice-and-dice. However, I wonder why allocating a part of the equity portion of one's portfolio to various "factors" such as small-cap value, etc. is considered "tilting", while investing in international equity seems not to be. Has investing in international equity become so mainstream and so much a part of conventional wisdom that it is not considered "tilting"? Thoughts, anyone? Steve Steve, Stocks are an asset class, not a factor. We need to first consider all *investable* Stocks in the World. According to FTSE Global all cap index, International Equities (non-US Stocks) are 47.3% of the total. https://personal.vanguard.com/us/funds/snapshot?FundId=...
by YDNAL
Fri Jan 16, 2015 9:51 am
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 18890

Re: Is a Sub-4% SWR a Boglehead Quirk?

I'm sure my family would appreciate me being around more than getting a bigger check when I'm gone, at least the ones that I'd care to leave anything to. Have you asked all of them? :D In the Vanguard calculator , for 30 years and 4%,..... If aware if that (<- I'm aware of that?) and as I said, closer to 4% than 2%; I'm not literally planning on a full 4% WR. Also, most calculators like that fail to account for the value of social security, which can significantly reduce one's portfolio withdrawal rate in later years and act as some degree of insurance against longevity. That would be a user mistake because we control the input. The input requires an amount "to be spent from portfolio" after it is reduced by other projected sourc...
by YDNAL
Fri Jan 16, 2015 9:21 am
Forum: Investing - Theory, News & General
Topic: [What's the difference? All-world ex-US vs. Total Internat.]
Replies: 5
Views: 1630

Re: Could someone explain the difference...

Note that FTSE All-World ex-US has almost 2500 stocks. FTSE All-World ex-US Small Cap has almost 3300 stocks. Total International has almost 5800 stocks. This is quite different than the relation between S&P 500, Extended Market and Total Stock Market on the US side. Total Stock Market has a larger percentage of small companies than Total International, according to Morningstar's definitions of size. Huh? 1. It is irrelevant -- certainly not on topic -- how the US Total Mkt compares to International Total Mkt. 2. How is your post helpful to OP's question regarding 2 different International indices? What's the difference? ...between FTSE all-world (ex-US) index (VFWAX) and Total International Index (VTIAX)? Actually, US Total Mkt has 9%...
by YDNAL
Fri Jan 16, 2015 9:02 am
Forum: Investing - Theory, News & General
Topic: Short term bonds in rising interest rates?
Replies: 26
Views: 4721

Re: Short term bonds in rising interest rates?

hoops777 wrote:What if you do not need the money until you start your RMD's in 8 years and your bond funds will be the main source of the RMD's? Foolish to have it in short term in this case?
Yes, foolish.
  • 1. If you buy Vanguard IT Bond Index (VBILX) today, you can expect to get compensated an amount approximating its SEC yield (2.38%) over the fund's average duration (6.4 years).
    2. With an 8-year investment horizon, why would you settle for ST Bond Index (VBIRX)'s SEC yield of 1.07% over the fund's average duration (2.7 years)?
Generally, it makes sense to switch, after 6 years, from IT to ST to meet money needs in 8 years.
by YDNAL
Fri Jan 16, 2015 8:45 am
Forum: Investing - Theory, News & General
Topic: Why invest in International funds? It's a mystery
Replies: 121
Views: 16256

Re: Why invest in International funds? It's a mystery

.... companies in the S&P 500 get 46.2% of their earnings from overseas, and that's enough international exposure for anyone. If the S&P 500 is giving that much exposure, isn't that enough? And didn't Bogle just say in an interview he thinks US investing is just fine, international is not needed? This is a recycled topic that gets raised (seems) monthly. Why would the discussion be different this month than last month, or the month before? https://www.google.com/search?site=&source=hp&q=bogleheads+international+investing&oq=bogleheads+international+investing&gs_l=hp.3...1005.11713.0.12246.67.52.14.0.0.1.185.4639.40j11.51.0.msedr...0...1c.1.61.hp..12.55.3634.lIrrYflum_0 By the way, Vanguard put a stake on the ground ...
by YDNAL
Thu Jan 15, 2015 12:24 pm
Forum: Investing - Theory, News & General
Topic: Am I making a mistake being too conservative?
Replies: 58
Views: 10689

Re: Am I making a mistake being too conservative?

I need to figure what amount to count of the business in my overall portfolio. I wonder if I should consider what the business would sell (what someone would pay to buy it) today? I don't plan to sell it for at least another 20+ years but life changes may occur that I am not expecting. The business is part of net worth, and it impacts ability & need for risk. The fact you paid the house, it also impacts ability & need for risk. Over the last few months, I hit some major goals by my mid 30s. My portfolio broke the 7 figure mark and I paid off my mortgage. I am officially debt free and plan to never go into debt again. Certainly, all significant financial assets must be considered in determining the level of risk taken with other inv...
by YDNAL
Thu Jan 15, 2015 12:16 pm
Forum: Investing - Theory, News & General
Topic: Short term bonds in rising interest rates?
Replies: 26
Views: 4721

Re: Short term bonds in rising interest rates?

I was reading an article that quoted William Bernstein on the topic of bonds. His position is to invest in short term high grade bond funds exclusively. One point in the article talked about the risk of rising interest rates as it relates to bonds and that the shorter duration of the bond fund, the less risk exposure to interest rates. I'm a newbie here so I hope that last statement is correct, and I welcome any needed correction by others. Yes, the shorter the Duration of a bond fund, the lesser exposure to interest rate risk. But, also, the lesser exposure to projected growth. Regarding Duration, this is a good place to start . Though the fed has hinted to rising interest rates for awhile, it does sound like its only a matter of time unt...
by YDNAL
Thu Jan 15, 2015 10:46 am
Forum: Investing - Theory, News & General
Topic: Am I making a mistake being too conservative?
Replies: 58
Views: 10689

Re: Am I making a mistake being too conservative?

I am considering changing my asset allocation to 40% stock / 60% bonds and keeping this for allocation for the next 20+ years. [/color] my current portfolio will still grow Well, just to be pedantic, you actually can't know that. It probably will grow, but it might not. There's also the risk of it not growing enough to keep pace with inflation, which is financially equivalent to not growing. Statements as yours need to be addressed with some numbers. Returns* Stk Bnd 6% 2% Total 80 20 4.8% 0.4% 5.2% 70 30 4.2% 0.6% 4.8% 60 40 3.6% 0.8% 4.4% 50 50 3.0% 1.0% 4.0% 40 60 2.4% 1.2% 3.6% 30 70 1.8% 1.4% 3.2% 20 80 1.2% 1.6% 2.8% * Projected (use your own projections as you find appropriate!) There is not a hell of a lot of difference in projecte...
by YDNAL
Wed Jan 14, 2015 12:46 pm
Forum: Investing - Theory, News & General
Topic: [What's the difference? All-world ex-US vs. Total Internat.]
Replies: 5
Views: 1630

Re: Could someone explain the difference...

...between FTSE all-world (ex-US) index (VFWAX) and Total International Index (VTIAX)? I get they track different indices. When I graph the performances together they seem identical. If there were no real difference there would not be two (you'd think), so what am I not seeing? VTIAX tracks the FTSE Global All Cap ex US Index. Notice the words "All Cap" telling you that it includes Mid and Small Caps. Value Blend Growth 27 27 25 Large Caps 06 05 05 Mid Caps 02 01 01 Small Caps VFWAX tracks the FTSE All-World ex US Index. This Index is limited to Large and Mid Caps -- it excludes Small Caps. Value Blend Growth 30 30 27 Large Caps 05 04 04 Mid Caps 00 00 00 Small Caps There is no "real difference" in performance because t...
by YDNAL
Tue Jan 13, 2015 11:36 am
Forum: Investing - Theory, News & General
Topic: Do you use the 9 style-box for AA?
Replies: 24
Views: 3226

Re: Do you use the 9 style-box for AA?

I have occasionally read posts on this forum that site the Morningstar style box. Sometimes people will share their numbers in each of the 9 boxes. Until now I have only used this as a tool for individual funds but it sounds like some use this for their whole portfolio. If so, is it used in both AA and rebalancing? Is it also used when people are tilting? My questions may sound a bit scattered but all answers are welcomed as I hope to be educated on this topic. Thank you. Morningstar's methodology (Size, Valuation) is what it is. That said, it provides a quick look under the hood of a FUND to better-understand what we own. We can use it for a group of funds as well. 1. For the heck of it, I just looked at Vanguard S&P 500 VFINX. Valuat...
by YDNAL
Sun Jan 11, 2015 1:52 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 18890

Re: Is a Sub-4% SWR a Boglehead Quirk?

It is shortsighted to see savings rate (33x, 50x, whatever) as a single objective. Savers save for multiple objectives regardless if "you don't." But even you would agree that a SWR can be too low, wouldn't you? What would you say to someone who proposes a 1.5% SWR? My point is simply that many Bogleheads, in disregarding the SWR advice of Vanguard, are working with such conservative SWRs that they will enjoy the material pleasures of retirement less than they could have. I fear they will become the richest guys in the cemetery. After years of habit-forming, careful saving during the accumulation phase, some Bogleheads might be unwilling to push the gas pedal in retirement. I believe that might be the origin of threads advocating...
by YDNAL
Sun Jan 11, 2015 12:04 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 18890

Re: Is a Sub-4% SWR a Boglehead Quirk?

In the most extreme cases, we've even seen a few Bogleheads advocating sub-3% withdrawal rates. Makes very little sense for anyone retiring in their 60s. In sum, this might be a quirk of the conservative nature of Bogleheads who have vigilently denied gratification by saving all those years during the accumulation period. Saving for "sub-3% withdrawal" simply means saving 33x (or more) the projected need for consumption. The saving multiple (50x, 33x, 25x) is dependent on our individual ability to save from earnings, and says nothing about "vigilently denied gratification" -- that sounds like a personal opinion without basis. I would put it this way: Spending 2% of your nest egg in retirement (50x) means you will likely...
by YDNAL
Sun Jan 11, 2015 7:32 am
Forum: Investing - Theory, News & General
Topic: Where do you tilt your Total Int'l Fund?
Replies: 40
Views: 5483

Re: Where do you tilt your Total Int'l Fund?

I have read many posts on here about people that move off the 3 fund portfolio and tilt to US equities. There are some who also tilt their fixed income portfolio. But id like to learn from those who tilt their international index fund - where do you tilt and why? :beer A couple of things: 1. According to FTSE Global all cap index, current Global weights stand at: https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT#tab=2 3.60% Canada 9.00% Emerging Markets   22.00% Europe   13.50% Pacific    0.20% Middle East   51.70% U.S. 2. An investor using Total International index fund is allocated per Global Region weights. Once you tilt from one Region -- at the expense of another -- you are saying that you know better than...