Search found 315 matches

by secondopinion
Fri Feb 26, 2021 3:19 pm
Forum: Investing - Theory, News & General
Topic: What is the highest expense ratio you willingly pay?
Replies: 128
Views: 9227

Re: What is the highest expense ratio you willingly pay?

Curious to hear what other Bogleheads happily pay to get exposure to non 3-fund approved funds? Obviously some 401k's have egregious fees, but I am wondering what people will buy in their IRA or brokerage accounts where low single-digit basis-point options are aplenty. For me it is FNDC's 40bp ER f...
by secondopinion
Fri Feb 26, 2021 2:33 pm
Forum: Investing - Theory, News & General
Topic: So...Can we now start to consider buying bonds again?
Replies: 12
Views: 1308

Re: So...Can we now start to consider buying bonds again?

Timing the bond market is, imho, harder than timing the stock market. Unlike stocks which go up most of the time, bond interest rates don't move in any particular direction over time. (Maybe a very long term decline over centuries.) And what's worse, the government can manipulate interest rates in ...
by secondopinion
Fri Feb 26, 2021 1:26 pm
Forum: Investing - Theory, News & General
Topic: An even better adventure
Replies: 24
Views: 2107

Re: An even better adventure

And one more thing with put writing versus LETFs, the collateral of the written put option can be stored in any investment; LETFs do not. That is a big concern should one already have a mature portfolio with a lot of gains. Also, the gains/losses on the put option (given it is a stock/ETF option and...
by secondopinion
Fri Feb 26, 2021 12:43 pm
Forum: Investing - Theory, News & General
Topic: An even better adventure
Replies: 24
Views: 2107

Re: An even better adventure

For me, I stay away from LETFs; the LETF strategy is convex, which is costly in flat but volatile markets. If I am going to take a leveraged position, I much rather put write slightly OTM long LEAPs (2-3 years) on a S&P 500 ETF (and the invested premium) and have shares of the S&P 500 ETF a...
by secondopinion
Fri Feb 26, 2021 11:00 am
Forum: Investing - Theory, News & General
Topic: Would you buy permanent debt?
Replies: 41
Views: 2272

Re: Would you buy permanent debt?

Wait until someone introduces no-maturity no-coupon bonds. In this case, then I think the principle of it being a bond falls apart and we start to address that it would be an insurance. We think of paper cash being zero-maturity, no-coupon bonds; of course, there is a "default risk" of yo...
by secondopinion
Thu Feb 25, 2021 7:05 pm
Forum: Investing - Theory, News & General
Topic: An even better adventure
Replies: 24
Views: 2107

Re: An even better adventure

For me, I stay away from LETFs; the LETF strategy is convex, which is costly in flat but volatile markets. If I am going to take a leveraged position, I much rather put write slightly OTM long LEAPs (2-3 years) on a S&P 500 ETF (and the invested premium) and have shares of the S&P 500 ETF as...
by secondopinion
Thu Feb 25, 2021 6:33 pm
Forum: Investing - Theory, News & General
Topic: Why do Treasury Zeros Yield Higher than Regular Treasuries?
Replies: 5
Views: 823

Re: Why do Treasury Zeros Yield Higher than Regular Treasuries?

Consider that a 10 year bond is actually 20 different bonds. A 6 month bond, a 1 year bond, a 18 month bond, etc. 19 small little bonds (coupons) and then 1 big bond at the end. When you hear “yield curve” they are not referencing the price of a 10 year bond, rather that last payment. This stuff is...
by secondopinion
Thu Feb 25, 2021 6:16 pm
Forum: Investing - Theory, News & General
Topic: Asset Classes Expected Behaviour
Replies: 9
Views: 643

Re: Asset Classes Expected Behaviour

Sure, but your expected growth is on the high side and the usual disclaimer that a good economy doesn't necessarily need to support RE prices, i.e. work-from-home, flight from urban areas, death of retail. ... There's commodities and commodity futures. I would expect commodity prices themselves to ...
by secondopinion
Thu Feb 25, 2021 5:50 pm
Forum: Investing - Theory, News & General
Topic: Would you buy permanent debt?
Replies: 41
Views: 2272

Re: Would you buy permanent debt?

We think of paper cash being zero-maturity, no-coupon bonds; of course, there is a "default risk" of you or someone else losing the cash by some means. Also, the very, very, low chance of paper cash being made illegal tender would turn paper cash into a highly speculative no-maturity, no-...
by secondopinion
Thu Feb 25, 2021 5:23 pm
Forum: Investing - Theory, News & General
Topic: Would you buy permanent debt?
Replies: 41
Views: 2272

Re: Would you buy permanent debt?

Wait until someone introduces no-maturity no-coupon bonds. In this case, then I think the principle of it being a bond falls apart and we start to address that it would be an insurance. We think of paper cash being zero-maturity, no-coupon bonds; of course, there is a "default risk" of yo...
by secondopinion
Thu Feb 25, 2021 4:26 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short-Term Bond ETF BSV Alternative
Replies: 17
Views: 1041

Re: Vanguard Short-Term Bond ETF BSV Alternative

I doubt the 6.60% MBS is going to do anything much negatively. However, from the perspective of price risk, reinvestment risk, and correlation with equites they (MBS) cannot be recommended. Larry Swedroe and Joseph Hempen, The Only Guide to a Winning Bond Strategy You'll Ever Need. p161 If I start ...
by secondopinion
Thu Feb 25, 2021 3:36 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short-Term Bond ETF BSV Alternative
Replies: 17
Views: 1041

Re: Vanguard Short-Term Bond ETF BSV Alternative

Doc wrote: Thu Feb 25, 2021 2:37 pm I can find non-substantially identical pairs for short Treasuries and short corporates but not for a short "mix" without introducing MBS into the picture.
I doubt the 6.60% MBS is going to do anything much negatively.
by secondopinion
Thu Feb 25, 2021 2:27 pm
Forum: Investing - Theory, News & General
Topic: 3-way tax harvesting
Replies: 3
Views: 390

Re: 3-way tax harvesting

Few weeks ago, I put some of my play money in Vanguard Energy ETF (VDE) which has gone up 22%. Incidentally, bond investment (LQD) in my primary portfolio has some losses. I wish to take gains on VDE off the table and reinvest as per my AA in a tax-efficient manner. Please critique my tax harvestin...
by secondopinion
Thu Feb 25, 2021 2:15 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short-Term Bond ETF BSV Alternative
Replies: 17
Views: 1041

Re: Vanguard Short-Term Bond ETF BSV Alternative

You can try a VGSH/VCSH combination. Doesn't solve the problem because I already hold both of them in taxable. And would have the same wash sale concerns. So you hold BSV, VGSH, and VCSH in the taxable account? If you are deliberately trying to get a custom treasury/corporate allocation in the taxa...
by secondopinion
Thu Feb 25, 2021 12:09 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short-Term Bond ETF BSV Alternative
Replies: 17
Views: 1041

Re: Vanguard Short-Term Bond ETF BSV Alternative

I am looking for an alternative short term government/credit ETF to use in in tax advantaged accounts so as to avoid any wash sale complications with BSV in taxable. A government/credit fund using a different index would be great but I can't find any. Any thoughts? You can try a VGSH/VCSH combinati...
by secondopinion
Thu Feb 25, 2021 12:04 pm
Forum: Investing - Theory, News & General
Topic: Long patterns in bond real rates
Replies: 5
Views: 513

Re: Long patterns in bond real rates

I think the long-term expectation for bonds should be 0 real return. One shouldn't be entitled to any hoped for investment return without equitably sharing in the losses. In aggregate, that will be the result regardless, we can't create growth that doesn't happen. A bond that promises something pot...
by secondopinion
Wed Feb 24, 2021 7:03 pm
Forum: Investing - Theory, News & General
Topic: TIPS v. inflation protected mutual fund/ETF
Replies: 23
Views: 1945

Re: TIPS v. inflation protected mutual fund/ETF

I did read your post in the other thread and found it informative and am sticking with my conclusion that a TIPS ETF or Mutual Fund is equivalent to the sum of its parts. Here's a graph comparing two $10k purchases on 7/15/11, tracking them over a ten year period: https://i.postimg.cc/yNx6LwNk/9128...
by secondopinion
Wed Feb 24, 2021 6:35 pm
Forum: Investing - Theory, News & General
Topic: Staying the course means buying your AA despite the "conversation in the marketplace"
Replies: 15
Views: 1477

Re: Staying the course means buying your AA despite the "conversation in the marketplace"

I think that you can deviate slightly. You don't necessarily buy your AA, you try to rebalance, usually with new contributions in my method. I think of staying the course like driving to a destination. You basically go a certain direction, but can drift slightly off course, and you put in small cor...
by secondopinion
Wed Feb 24, 2021 1:46 pm
Forum: Investing - Theory, News & General
Topic: Staying the course means buying your AA despite the "conversation in the marketplace"
Replies: 15
Views: 1477

Re: Staying the course means buying your AA despite the "conversation in the marketplace"

In my experience, among the hardest to execute components of Boglehead investing is purchasing your AA every month, even when you personally think valuations are high, and especially when the marketplace is filled with conversations about topics like ("are we in a bubble" "bonds are ...
by secondopinion
Wed Feb 24, 2021 1:08 pm
Forum: Investing - Theory, News & General
Topic: New Money: what's the justification for buying Bonds in 2021?
Replies: 25
Views: 2608

Re: New Money: what's the justification for buying Bonds in 2021?

I am approaching retirement. Money I may need for spending in the short run, say the next five years (arguably longer), if I put that in the stock market even an broad market index fund there is the risk of permanent loss of capital. For me, that money belongs in fixed income. If that money I don't...
by secondopinion
Wed Feb 24, 2021 12:28 pm
Forum: Investing - Theory, News & General
Topic: What would it take?
Replies: 2
Views: 352

Re: What would it take?

I've been watching the global market for an incredibly short period of time (about 2 years). But its machinations seem simple to me: If the US market goes up, the rest of the world's markets go up. If the US market goes down, the rest of the world's markets go down. I consider myself a US-tilting, ...
by secondopinion
Wed Feb 24, 2021 11:58 am
Forum: Investing - Theory, News & General
Topic: New Money: what's the justification for buying Bonds in 2021?
Replies: 25
Views: 2608

Re: New Money: what's the justification for buying Bonds in 2021?

However... we seem to be in a unique era of "financial repression" with ~0% rates, which implies that, as someone investing *new* money, wouldn't I be crazy to buy into a bond fund (e.g. BND) rather than park it in Marcus for 0.5%? The principal value has nowhere to go but down when inter...
by secondopinion
Wed Feb 24, 2021 11:33 am
Forum: Investing - Theory, News & General
Topic: VTI not doing its job?
Replies: 20
Views: 3823

Re: VTI not doing its job?

The author is 30 years old and is still wet behind the ears. He tells investors to invest all of their small caps in small cap growth. Perhaps his next article should be about performance chasing. He is green in comparison but age has little to do with it; I am around that age and have more sense t...
by secondopinion
Wed Feb 24, 2021 11:23 am
Forum: Investing - Theory, News & General
Topic: Cheapest ways to Long Volatility / Hedge against equity volatility?
Replies: 24
Views: 1396

Re: Cheapest ways to Long Volatility / Hedge against equity volatility?

Although this is not for tail risk per se, First Trust has some buffered stock ETFs for 0.85% expense. The regular buffer works against the first -10% while the deep buffer starts at -5% and goes until -30%. Not the best returns (and certainly will trigger a lot of taxes as they do not hold stock bu...
by secondopinion
Tue Feb 23, 2021 6:36 pm
Forum: Investing - Theory, News & General
Topic: Cheapest ways to Long Volatility / Hedge against equity volatility?
Replies: 24
Views: 1396

Re: Cheapest ways to Long Volatility / Hedge against equity volatility?

One major reason I'm skeptical that it's worth adding a tail-hedged position using options is if it was so effective.... wouldn't there be an ETF for it? Wouldn't it be commonly recommended as an addition to lower risk in an equities heavy portfolio? Are there efficiency reasons why this wouldn't w...
by secondopinion
Tue Feb 23, 2021 5:50 pm
Forum: Investing - Theory, News & General
Topic: Cheapest ways to Long Volatility / Hedge against equity volatility?
Replies: 24
Views: 1396

Re: Cheapest ways to Long Volatility / Hedge against equity volatility?

[*] You buy the put alone. It is the best insurance, but it is expensive still and long term insurance (>1 year) is especially expensive. Historically, there is not much evidence that singleton puts are helpful. In fact, assuming fair price of call options and an equity premium, you will be losing ...
by secondopinion
Tue Feb 23, 2021 4:52 pm
Forum: Investing - Theory, News & General
Topic: Cheapest ways to Long Volatility / Hedge against equity volatility?
Replies: 24
Views: 1396

Re: Cheapest ways to Long Volatility / Hedge against equity volatility?

You need to use options, but this is one person who did it correctly: https://www.cnbc.com/2018/02/12/the-mysterious-trader-nicknamed-50-cent-made-200-million-last-week-as-the-market-blew-up.html Got lucky. Seriously, hedging is not about do this but reducing risk. ? This person was down 200M then ...
by secondopinion
Tue Feb 23, 2021 4:35 pm
Forum: Investing - Theory, News & General
Topic: Cheapest ways to Long Volatility / Hedge against equity volatility?
Replies: 24
Views: 1396

Re: Cheapest ways to Long Volatility / Hedge against equity volatility?

Marseille07 wrote: Tue Feb 23, 2021 4:25 pm You need to use options, but this is one person who did it correctly: https://www.cnbc.com/2018/02/12/the-mys ... ew-up.html
Got lucky. Seriously, hedging is not about do this but reducing risk.
by secondopinion
Tue Feb 23, 2021 4:25 pm
Forum: Investing - Theory, News & General
Topic: VTI not doing its job?
Replies: 20
Views: 3823

Re: VTI not doing its job?

Its job is to match the stock market. Seems the author should take up his beef with the stock market, not VTI. Agreed. The author can tilt toward smaller caps if they so choose; I see nothing wrong with that (I do this myself to bump my that 20% of stocks not in the S&P to 40-50%). But VTI is d...
by secondopinion
Tue Feb 23, 2021 3:23 pm
Forum: Investing - Theory, News & General
Topic: The inflation trade
Replies: 88
Views: 5994

Re: The inflation trade

Remember, fixed rate debt is in effect a strong hedge against inflation, even more than the investments so far mentioned. Something like fixed rate debt can, in theory, actually can have serious positive real returns (but only with inflation strong enough to surpass the interest). Now if you could ...
by secondopinion
Tue Feb 23, 2021 3:15 pm
Forum: Investing - Theory, News & General
Topic: My unusual buy-only LEAP strategy
Replies: 29
Views: 2341

Re: My unusual buy-only LEAP strategy

The strategy works like this: Year 1 Step 1. Max out tax-advantaged accounts with standard index fund investments (in my case 100% VTSAX). Step 2. If the price is right, buy enough 2-year, moderately deep in-the-money call options on VTI to cover most of the taxable investments I plan to make two y...
by secondopinion
Tue Feb 23, 2021 1:16 pm
Forum: Investing - Theory, News & General
Topic: Cheapest ways to Long Volatility / Hedge against equity volatility?
Replies: 24
Views: 1396

Re: Cheapest ways to Long Volatility / Hedge against equity volatility?

After reading about the Dragon Portfolio I'm interested in finding an easy way to long volatility -- preferably without using options. I know there's VXX, TAIL, VIXY, etc but even a tiny position in them doesn't seem worthwhile compared to just reducing equities exposure. Someone on Reddit mentione...
by secondopinion
Mon Feb 22, 2021 7:07 pm
Forum: Investing - Theory, News & General
Topic: Help me think about qualitative risk in alt investments
Replies: 6
Views: 430

Re: Help me think about qualitative risk in alt investments

Let's suppose I'm interested in Krasnovian dollar-denominated 1 year CDs, which are paying 73% APY -- but carry risks of bank failure and political instability. I'll quote from the third link above: "Qualitative risks cannot be accurately and easily measured using objective data." Even if...
by secondopinion
Mon Feb 22, 2021 6:46 pm
Forum: Investing - Theory, News & General
Topic: Is too much saving a zero sum game ?
Replies: 72
Views: 7117

Re: Is too much saving a zero sum game ?

I am always grateful whenever I go to bogleheads.org and get some valuable insights on personal finance and investing. It has also bolstered my instinct for saving for a rainy day and a better tomorrow. But can saving be a zero sum game? For a well to do group of people such as here, isn’t the extr...
by secondopinion
Mon Feb 22, 2021 6:30 pm
Forum: Investing - Theory, News & General
Topic: How to think about bonds
Replies: 22
Views: 1715

Re: How to think about bonds

I'll probably get shouted down on this but here it goes anyways. With expected negative real returns on bonds should I even think of bonds as an investment in my asset allocation? Or rather just a buffer asset/reserves that I own as necessity, in order to keep from having to sell liquidate stocks i...
by secondopinion
Mon Feb 22, 2021 5:59 pm
Forum: Investing - Theory, News & General
Topic: How to think about bonds
Replies: 22
Views: 1715

Re: How to think about bonds

Should a long term investor instead stop thinking in terms of "60/40 portfolio" or "age in bonds"? Instead think in terms what he or she needs to have in risk free assets (reserves), based on their personal situation (younger person in accumulation, middle aged near retirement, ...
by secondopinion
Mon Feb 22, 2021 5:51 pm
Forum: Investing - Theory, News & General
Topic: Asset Allocation & Inexperience During Bear Markets
Replies: 72
Views: 3073

Re: Asset Allocation & Inexperience During Bear Markets

20% down. "Normal" investor: "I am even losing even more money; I should have had more bonds..." Me: "Oh, it is a sale! Sell some more of my bonds and increase my investing even more." Andrew Lo of MIT stated, if I am remember correctly based on his data, a 20% loss or...
by secondopinion
Mon Feb 22, 2021 2:38 pm
Forum: Investing - Theory, News & General
Topic: Asset Allocation & Inexperience During Bear Markets
Replies: 72
Views: 3073

Re: Asset Allocation & Inexperience During Bear Markets

I've been struggling to feel confident in my asset allocation between stocks and bonds. Some days I think 90/10 is a good idea while others days 80/20 or 70/30 seems more reasonable, then the next day I don't know why I have any bonds at all. In the second edition of Bogleheads Guide to Investing i...
by secondopinion
Mon Feb 22, 2021 1:36 pm
Forum: Investing - Theory, News & General
Topic: The inflation trade
Replies: 88
Views: 5994

Re: The inflation trade

Remember, fixed rate debt is in effect a strong hedge against inflation, even more than the investments so far mentioned. Something like fixed rate debt can, in theory, actually can have serious positive real returns (but only with inflation strong enough to surpass the interest). Now if you could b...
by secondopinion
Fri Feb 19, 2021 4:44 pm
Forum: Investing - Theory, News & General
Topic: Questions on Using Margin to Pre-Purchase
Replies: 16
Views: 659

Re: Questions on Using Margin to Pre-Purchase

Not all stocks/ETFs have options. With a minimum purchase of 100 shares, it is very difficult for small buyers to execute the strategy. Ah, I made the incorrect inference that you intended to buy a typical Boglehead asset allocation, not individual stocks. For odd lots, margin is going to be the on...
by secondopinion
Fri Feb 19, 2021 4:01 pm
Forum: Investing - Theory, News & General
Topic: Questions on Using Margin to Pre-Purchase
Replies: 16
Views: 659

Re: Questions on Using Margin to Pre-Purchase

I have been wondering on margin; I can see where mass leverage can be a problem with it. My question is wonder it makes any sense to buy on margin when you will have the money to pay for the stocks in a short timeframe (a month to a years the scope). Does it make any sense to purchase ahead for tax...
by secondopinion
Fri Feb 19, 2021 3:40 pm
Forum: Investing - Theory, News & General
Topic: Questions on Using Margin to Pre-Purchase
Replies: 16
Views: 659

Re: Questions on Using Margin to Pre-Purchase

Yes. But my question is geared towards short term use rather than general idea of long-term leverage for extended periods. My objective is to buy a stock or stock ETF when I do not have the cash at the precise moment but will in the near future. The details in that thread (under "What are ways...
by secondopinion
Fri Feb 19, 2021 3:37 pm
Forum: Investing - Theory, News & General
Topic: Questions on Using Margin to Pre-Purchase
Replies: 16
Views: 659

Re: Questions on Using Margin to Pre-Purchase

Yes. But my question is geared towards short term use rather than general idea of long-term leverage for extended periods. My objective is to buy a stock or stock ETF when I do not have the cash at the precise moment but will in the near future. The details in that thread (under "What are ways...
by secondopinion
Fri Feb 19, 2021 2:33 pm
Forum: Investing - Theory, News & General
Topic: Re-evaluating Total World Bond (BNDW)?
Replies: 141
Views: 7546

Re: Re-evaluating Total International Bond (BNDW)?

The bond portion of my portfolio is already split between US treasuries and emerging market government bonds. My impression is that emerging markets such as China are actually more responsible and conservative with their spending and fiscal policies and the US and many other developed countries (wh...
by secondopinion
Fri Feb 19, 2021 2:23 pm
Forum: Investing - Theory, News & General
Topic: Questions on Using Margin to Pre-Purchase
Replies: 16
Views: 659

Re: Questions on Using Margin to Pre-Purchase

Have you seen the thread on Lifecycle Investing? It has details on strategies to use leverage like this. https://www.bogleheads.org/forum/viewtopic.php?t=274390 Yes. But my question is geared towards short term use rather than general idea of long-term leverage for extended periods. My objective is...
by secondopinion
Fri Feb 19, 2021 1:10 pm
Forum: Investing - Theory, News & General
Topic: Questions on Using Margin to Pre-Purchase
Replies: 16
Views: 659

Questions on Using Margin to Pre-Purchase

I have been wondering on margin; I can see where mass leverage can be a problem with it. My question is wonder it makes any sense to buy on margin when you will have the money to pay for the stocks in a short timeframe (a month to a years the scope). Does it make any sense to purchase ahead for tax ...
by secondopinion
Fri Feb 19, 2021 12:06 pm
Forum: Investing - Theory, News & General
Topic: Relationship between income and assets
Replies: 23
Views: 2357

Re: Relationship between income and assets

I am currently far from high in either, but my guess in 20 years is that I will be much better in the net worth category than the wage category. It is merely the point in life that usually explains the difference.
by secondopinion
Fri Feb 19, 2021 11:56 am
Forum: Investing - Theory, News & General
Topic: "Stocks Fall, Weighed Down by Tech Losses and Jobless Claims"
Replies: 24
Views: 1651

Re: "Stocks Fall, Weighed Down by Tech Losses and Jobless Claims"

Raymond wrote: Fri Feb 19, 2021 11:44 am
secondopinion wrote: Fri Feb 19, 2021 11:30 am
...If they cannot be honest, why should I ever listen to them?...
(emphasis added)

You answered your own question with the underlined part.
I meant it rhetorically; I know it and I do not listen to them. I have lived my life without listening to much of any news, let alone financial news.
by secondopinion
Fri Feb 19, 2021 11:54 am
Forum: Investing - Theory, News & General
Topic: Mutual Fund Fees
Replies: 16
Views: 897

Re: Mutual Fund Fees

I think Vanguard would not be interested. Their big push is into ETFs, which they offer at a lower expense ratio than the mutual fund share classes of the same fund. With ETFs, they do not need to be a custodian (no brokerage costs) and the ETF structure means sales would not impact the fund like r...