Search found 21812 matches

by grabiner
Sun Jul 22, 2018 10:10 pm
Forum: Investing - Help with Personal Investments
Topic: Bond funds in taxable accounts?
Replies: 26
Views: 3817

Re: Bond funds in taxable accounts?

VWIUX carries a much higher credit risk. Compare the compositions of the funds. The average rating in VBTLX is significantly higher than VWIUX. Bond grades are not averaged the way school grades are averaged; a fund with half its bonds rated AAA and half rated CCC is much riskier than a fund holdin...
by grabiner
Sun Jul 22, 2018 4:24 pm
Forum: Investing - Help with Personal Investments
Topic: Schwab bid/ask spread
Replies: 20
Views: 1544

Re: Schwab bid/ask spread

Yep, check again during open market hours. Average spread over the last 45 days, according to ETF.com, for SCHF was only 0.03%. http://www.etf.com/SCHf And that's the lowest it can be. For an ETF with a share price around $33.33 per share, 0.03% is a penny, and the market can never report a spread ...
by grabiner
Sun Jul 22, 2018 3:38 pm
Forum: Investing - Help with Personal Investments
Topic: Schwab bid/ask spread
Replies: 20
Views: 1544

Re: Schwab bid/ask spread

Yep, check again during open market hours. Average spread over the last 45 days, according to ETF.com, for SCHF was only 0.03%. http://www.etf.com/SCHf And that's the lowest it can be. For an ETF with a share price around $33.33 per share, 0.03% is a penny, and the market can never report a spread ...
by grabiner
Sun Jul 22, 2018 3:28 pm
Forum: Investing - Help with Personal Investments
Topic: Need massive TLs this year-Here's my plan
Replies: 3
Views: 322

Re: Need massive TLs this year-Here's my plan

Stop-losses, even if they trigger at the right price, only limit your losses if you sell and never buy back ; this doesn't seem to be what you are doing. If the market drops 10%, you will hit your stops, and then if your replacement stock drops another 10%, you still combine the losses. The only ben...
by grabiner
Sun Jul 22, 2018 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: Reevaluating mortgage payoff strategy
Replies: 59
Views: 5018

Re: Reevaluating mortgage payoff strategy

Have you run an actual amortization table to compare both scenarios? You may find it useful to nail down the actual dollar amount you would be saving in interest, rather then getting bogged down in theoretical comparative rates of return. If you do this, make sure to compare the time value of money...
by grabiner
Sat Jul 21, 2018 3:30 pm
Forum: Investing - Help with Personal Investments
Topic: Bond funds in taxable accounts?
Replies: 26
Views: 3817

Re: Bond funds in taxable accounts?

Can someone explain this to me? Why is VBTLX return so much higher? VBTLX SEC yield is 3.11% VMMXX is SEC yield 2.05% https://i.imgur.com/dJ3L9lC.png Is VMMXX, Marcus savings etc. just abnormally high right now? The difference between intermediate-term and money-market yields is much lower now than...
by grabiner
Sat Jul 21, 2018 3:12 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited Roth - how to make it last?… (allocations /RMD w 4 funds)
Replies: 6
Views: 833

Re: Inherited Roth - how to make it last?… (allocations /RMD w 4 funds)

The allocation of the inherited Roth doesn't really depend on the fact that it has RMDs. If you get an RMD you don't need to spend, you can invest the money in your own Roth IRA or 401(k) (if you are still working and not maxing them out) or your taxable brokerage account (if you are retired or are ...
by grabiner
Sat Jul 21, 2018 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Reevaluating mortgage payoff strategy
Replies: 59
Views: 5018

Re: Reevaluating mortgage payoff strategy

Having a low rate mortgage is kind of an inflation hedge. If inflation and interest rates go up, you get to pay off your mortgage in deflated dollars. I can recall my parents having mortgage in late 70s / early 80s that was substantially below market rates. The banks were always trying to get them ...
by grabiner
Fri Jul 20, 2018 9:58 pm
Forum: Investing - Help with Personal Investments
Topic: Structured Note
Replies: 16
Views: 1026

Re: Structured Note

You can build almost any combination of relative returns with options. In fact, that is probably what the brokerage is doing, except that it is adding in its own profit. So, do you want this pattern of returns? If not, there is no point in paying extra; just get your own desired stock exposure by mi...
by grabiner
Fri Jul 20, 2018 7:08 pm
Forum: Personal Finance (Not Investing)
Topic: Reevaluating mortgage payoff strategy
Replies: 59
Views: 5018

Re: Reevaluating mortgage payoff strategy

Paying off a 2.6% mortgage is not a rational financial decision. It is completely an emotional one. It flummoxes me to no end how so many Bogleheads advocate an emotional decision in this case. It could be a rational financial decision. The reason is that it is rational to accept lower returns with...
by grabiner
Fri Jul 20, 2018 7:00 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Ladder Managed Account
Replies: 31
Views: 1470

Re: Bond Ladder Managed Account

Here's my understanding of the difference between a bond ladder and a more traditional bond mutual fund (someone correct me if my understanding is wrong). In a bond ladder, I will hold the bond to maturity, therefore I'll never sell a bond at a discount. The ladder is built so that some bonds are m...
by grabiner
Fri Jul 20, 2018 6:41 pm
Forum: Personal Finance (Not Investing)
Topic: Reevaluating mortgage payoff strategy
Replies: 59
Views: 5018

Re: Reevaluating mortgage payoff strategy

Paying off a 2.6% mortgage is not a rational financial decision. It is completely an emotional one. It flummoxes me to no end how so many Bogleheads advocate an emotional decision in this case. It could be a rational financial decision. The reason is that it is rational to accept lower returns with...
by grabiner
Fri Jul 20, 2018 6:28 pm
Forum: Investing - Help with Personal Investments
Topic: $3 Million in Cash at 31; Looking to Invest $2M of it
Replies: 16
Views: 3769

Re: $3 Million in Cash at 31; Looking to Invest $2M of it

The sticking point is that you live in NJ which is arguably in the worst financial shape of any state; short word: horrible (news story yesterday claimed that NJ is considering taxing water [misleading, but makes the point that NJ is desperate for tax revenue]). So while ideally, using a NJ-specifi...
by grabiner
Fri Jul 20, 2018 6:25 pm
Forum: Investing - Theory, News & General
Topic: Market timing benefit? Or just pure luck?
Replies: 15
Views: 2072

Re: Market timing benefit? Or just pure luck?

I ran the numbers again. Compared 10-year, 20-year and 30-year returns with different starting dates. Rebalancing less frequently (more accurately: once every 2 years compared to once a year) gives better return in the last 40 years, so it's not surprising that the coin flip strategy outperformed y...
by grabiner
Thu Jul 19, 2018 10:20 pm
Forum: Personal Finance (Not Investing)
Topic: Another mortgage payoff question
Replies: 3
Views: 562

Re: Another mortgage payoff question

Given the wiki discussion in Paying down loans versus investing a fair comparison would be a risk-free 4% bond portfolio. If you can get the full 4% (not selling stock for a significant capital gain), that's a very good deal. If you would have a substantial capital gain, a partial paydown is likely ...
by grabiner
Thu Jul 19, 2018 10:05 pm
Forum: Personal Finance (Not Investing)
Topic: Reevaluating mortgage payoff strategy
Replies: 59
Views: 5018

Re: Reevaluating mortgage payoff strategy

Even with the mortgage non-deductible, it's likely not worth paying down unless you can pay it off. Paying it down would be equivalent to buying a 13-year, risk-free bond yielding 2.625%, and that isn't a particularly good yield for such a long duration. In addition, you might get a deduction in the...
by grabiner
Thu Jul 19, 2018 9:24 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Ladder Managed Account
Replies: 31
Views: 1470

Re: Bond Ladder Managed Account

Welcome to the forum! It's a pretty sure thing that we're going to see rising interest rates for the next year or so. Given that, it's a bad time to be in bond mutual funds. There is more than one interest rate. It is expected that the federal funds rate (the one that makes the news) will rise. Howe...
by grabiner
Thu Jul 19, 2018 8:55 pm
Forum: Investing - Help with Personal Investments
Topic: $3 Million in Cash at 31; Looking to Invest $2M of it
Replies: 16
Views: 3769

Re: $3 Million in Cash at 31; Looking to Invest $2M of it

I can understand wanting to be conservative, but at 31 I'd have a hard time putting 40-50% of my taxable portfolio in bonds, which after tax at ordinary tax rates are going to basically get you zero real return for many years ahead. In the OP's high tax bracket, the bonds would be munis, likely a p...
by grabiner
Thu Jul 19, 2018 7:19 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11255

Re: Why is leveraging property good but leveraging stocks bad?

Investor A chooses Portfolio 1: 25.00% iShares Core S&P 500 ETF (IVV) 25.00% iShares Core S&P Small-Cap ETF (IJR) 25.00% iShares MSCI EAFE ETF (EFA) 25.00% iShares 20+ Year Treasury Bond ETF (TLT) Investor B chooses Portfolio 2: 25.00% ProShares Ultra S&P500 (SSO) 25.00% ProShares Ultra SmallCap600...
by grabiner
Thu Jul 19, 2018 7:10 pm
Forum: Investing - Theory, News & General
Topic: Market timing benefit? Or just pure luck?
Replies: 15
Views: 2072

Re: Market timing benefit? Or just pure luck?

Actually if you are young and invest with a 80/20 portfolio, over a long time horizon it is best to never rebalance, but your asset allocation wont match your risk tolerance. If you are a young investor with a long time horizon, 100% stock is mathematically optimal, and any strategy which increases...
by grabiner
Wed Jul 18, 2018 11:15 pm
Forum: Investing - Help with Personal Investments
Topic: The future for long term bond index funds? i.e. VWALX
Replies: 5
Views: 650

Re: The future for long term bond index funds? i.e. VWALX

Morningstar, PIMCO, and Vanguard all caution that pension funds are the main consumers of long-term bond funds/quote] This does not apply as much to muni funds, such as the OP's example. Tax-exempt institutions, such as pensions, would not invest in munis. And even taxable institutions have the pro...
by grabiner
Wed Jul 18, 2018 9:56 pm
Forum: Investing - Theory, News & General
Topic: Market timing benefit? Or just pure luck?
Replies: 15
Views: 2072

Re: Market timing benefit? Or just pure luck?

Recently I'm bored and I played with numbers from Simba's backtesting spreadsheet, just for fun. I observed something which is puzzling to me: 1. If I invested $1 in US stocks in 1970, it will grow to $112.66 by the end of 2017. 2. If I invested $1 in ex-US stocks in 1970, it will grow to $59.39 by...
by grabiner
Wed Jul 18, 2018 9:31 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11255

Re: Why is leveraging property good but leveraging stocks bad?

Margin loans are typically higher than mortgage rates plus you have margin calls. My margin loan rate is currently 3.1%. What's your mortgage rate? I thought mortgages were currently at 4.6% or so? You are comparing short-term to long-term rates. A 30-year mortgage locks in a 4.37% rate (current ra...
by grabiner
Wed Jul 18, 2018 9:02 pm
Forum: Investing - Help with Personal Investments
Topic: Relative tax efficiency of total international funds
Replies: 10
Views: 979

Re: Relative tax efficiency of total international funds

2. I was deciding between ROTH or 401k for my new international purchase and was not sure of the optimal choice here. My current dilemma is a. Since historically international has been outperformed by the US stock it is better to place it in 401k in comparison since it will not grow as much. I know...
by grabiner
Wed Jul 18, 2018 8:49 pm
Forum: Investing - Help with Personal Investments
Topic: Simulating VTSMX w/ TIAA 500 Index and Vanguard Explorer
Replies: 3
Views: 305

Re: Simulating VTSMX w/ TIAA 500 Index and Vanguard Explorer

You might try to match the total market across multiple accounts, using only the 500 index in her 403(b), and holding Extended Market Index in one of your IRAs.
by grabiner
Wed Jul 18, 2018 8:47 pm
Forum: Investing - Help with Personal Investments
Topic: The future for long term bond index funds? i.e. VWALX
Replies: 5
Views: 650

Re: The future for long term bond index funds? i.e. VWALX

Welcome to the forum! What concerns me is the potential for distributions to decline over the coming years at the same time as a prolonged drop in NAV. I don’t want my distributions to fall and then I am in a position where I can’t exit the fund to seek higher yields elsewhere without taking a hit o...
by grabiner
Tue Jul 17, 2018 7:54 pm
Forum: Investing - Theory, News & General
Topic: Is Tax-Managed Small Cap (VTMSX) an underrated fund?
Replies: 54
Views: 5764

Re: Is Tax-Managed Small Cap (VTMSX) an underrated fund?

IJS Bid/Ask/Spread 165.86/ 168.03/ 1.30% VIOV Bid/Ask/Spread 130.15/ 144.94/ 10.75% I assume these were both at market close today. Should look during the day. That said I looked at the trading of VIOV during the day a week or two ago and there were periods of time of over ten minutes with no trade...
by grabiner
Tue Jul 17, 2018 7:42 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on using an ETF for TIPS investing
Replies: 22
Views: 1861

Re: Thoughts on using an ETF for TIPS investing

Capital gains distributions from a TIPS fund or individual TIPS you sell are taxed by states with income tax assuming they tax capital gains, which most do as regular income. Check with your own state tax authority. In NJ, for example, capital gains on Treasury bonds and Treasury funds are not taxa...
by grabiner
Tue Jul 17, 2018 7:40 pm
Forum: Personal Finance (Not Investing)
Topic: HSA (or PPO) and a baby
Replies: 16
Views: 1050

Re: HSA (or PPO) and a baby

Are there any scenarios where an HSA doesn't make sense? Every thread I see looks like a no-brainer. I plan to make the switch next year. The NY Times had a really good article about comparing plans last fall. It depends on your own situation, particularly because employees may offer different subs...
by grabiner
Mon Jul 16, 2018 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: HSA (or PPO) and a baby
Replies: 16
Views: 1050

Re: HSA (or PPO) and a baby

We are entertaining the thought of an addition to the family. Two insurance plans to choose from. Keep the existing HSA or switch to a PPO for the birth year. Here's the nitty gritty. HSA: overall deductible for the family = $4,000 out of pocket limit for the family = $10,000 Premium = $1,175/month...
by grabiner
Mon Jul 16, 2018 8:18 pm
Forum: Investing - Theory, News & General
Topic: Balanced Funds and Sequence of Return Risk
Replies: 50
Views: 2976

Re: Balanced Funds and Sequence of Return Risk

If you are in the withdrawal phase, are Balanced Funds (Balanced Index funds, Lifestrategy funds, target date funds, etc.) affected more by Sequence of Return risk than individual funds such as in the 3 fund portfolio? With the 3FP, if stocks are down, you can withdraw from your bond fund (also hel...
by grabiner
Mon Jul 16, 2018 7:46 pm
Forum: Personal Finance (Not Investing)
Topic: Braces: Keeping cost down and insurance questions.
Replies: 18
Views: 1366

Re: Braces: Keeping cost down and insurance questions.

If you do not have a HDHP for your insurance, I would suggest checking to see if your employer offers a healthcare FSA. Even if you do have a HDHP, check whether you have a limited-purpose FSA, usable for only dental and vision; this would allow you to put in $2500 towards braces or other dental co...
by grabiner
Sun Jul 15, 2018 8:16 pm
Forum: Investing - Theory, News & General
Topic: Math help: 401k vs debt payoff formula
Replies: 17
Views: 1451

Re: Math help: 401k vs debt payoff formula

Next, 7% is not realistic for your 401k. However, the 7% return on the 401(k) is the wrong comparison, because it is a risky return. Paying off debt is a risk-free return, and buying munis is a low-risk return. I think it's reasonable to compare after-tax investments to risk-free returns like munis...
by grabiner
Sun Jul 15, 2018 5:12 pm
Forum: Investing - Help with Personal Investments
Topic: Single Investment Fund
Replies: 13
Views: 1699

Re: Single Investment Fund

The Life Strategy funds have a fixed allocation. The Target Date funds have a planned change in allocation over time and you should look at the allocation not the "date" in the name of the fund. Therefore, it is usually better to use the Target Retirement rather than the LifeStrategy funds in a tax...
by grabiner
Sun Jul 15, 2018 9:39 am
Forum: Personal Finance (Not Investing)
Topic: Braces: Keeping cost down and insurance questions.
Replies: 18
Views: 1366

Re: Braces: Keeping cost down and insurance questions.

If you do not have a HDHP for your insurance, I would suggest checking to see if your employer offers a healthcare FSA. Even if you do have a HDHP, check whether you have a limited-purpose FSA, usable for only dental and vision; this would allow you to put in $2500 towards braces or other dental co...
by grabiner
Sun Jul 15, 2018 8:53 am
Forum: Investing - Theory, News & General
Topic: Math help: 401k vs debt payoff formula
Replies: 17
Views: 1451

Re: Math help: 401k vs debt payoff formula

I often run into threads, where I was unable to qualitatively put the yield on debt payoff vs 401k saving. The below math is what I struggle to understand which might help explain my point to new members well. Lets take an example: 1) Debt is at 6%. so the yield in this case is 6% 2) For 401k at 35...
by grabiner
Sun Jul 15, 2018 8:22 am
Forum: Investing - Help with Personal Investments
Topic: Single Investment Fund
Replies: 13
Views: 1699

Re: Single Investment Fund

Since the Tax-Managed Balanced fund (VTMFX) comes closer to my desired asset allocation of 50/50, I still am asking whether or not this could be an appropriate fund for my tax deferred IRA account. I am not a higher-income individual that is referred to in their fund description, but just looking f...
by grabiner
Sat Jul 14, 2018 2:55 pm
Forum: Personal Consumer Issues
Topic: Someone is using my cellphone number
Replies: 21
Views: 2783

Re: Someone is using my cellphone number

I've made up a phone number when filling out forms where the phone number is mandatory many many times over the years and where I don't wish to ever receive a call. Dumb luck that I got yours. I apologize. :sharebeer When I need to do this, I give (410)555-1212. This is not anyone's home number, bu...
by grabiner
Fri Jul 13, 2018 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: 1031 exchange into DST or pay taxes to pay down debt?
Replies: 3
Views: 314

Re: 1031 exchange into DST or pay taxes to pay down debt?

How long are the terms of your loans? If you have, say, a 4.5% mortgage which is not deductible, then paying it down is a risk-free, long-term 4.5% return. The fair investment return on a low-risk, long-term investment is 2.85%, which is the yield on Admiral shares of Vanguard Long-Term Tax-Exempt. ...
by grabiner
Thu Jul 12, 2018 9:10 pm
Forum: Investing - Theory, News & General
Topic: Bonds in rising interest rate environment
Replies: 12
Views: 1050

Re: Bonds in rising interest rate environment

The federal funds rate which is in the news is a very-short-term rate, which is not directly connected to the rates on intermediate-term bonds. In addition, bond rates are set by bond traders, who already know about projected increases in rates. If traders expect interest rates on interrmediate-term...
by grabiner
Thu Jul 12, 2018 8:46 pm
Forum: Investing - Help with Personal Investments
Topic: when is it better to take short term capital gain
Replies: 6
Views: 712

Re: when is it better to take short term capital gain

If you have capital losses exceeding your gains, it doesn't matter whether your gain is short-term or long-term (unless you have both types of gains in the year that your carryovers run out). Therefore, it is worth taking a short-term gain instead of a slightly larger long-term gain.
by grabiner
Thu Jul 12, 2018 8:34 pm
Forum: Investing - Help with Personal Investments
Topic: Time for a taxable account? HSA?
Replies: 4
Views: 509

Re: Time for a taxable account? HSA?

2. HSA earnings are taxed as regular income in CA so I would recommend you use them to help fill your bond allocation (if you have one) instead As to #2 why bonds? Since CA treats the HSA as a normal taxable account would not the normal advice be to use tax efficient equity funds instead? Like the ...
by grabiner
Thu Jul 12, 2018 7:48 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on using an ETF for TIPS investing
Replies: 22
Views: 1861

Re: Thoughts on using an ETF for TIPS investing

I have a follow-up question: The main reason ETFs appeal to me rather than just buying TIPS directly is that I had the impression those shares could be bought and sold without regard to the length of terms of the TIPS held in the fund, making the funds a bit more liquid. Was I confused about that? ...
by grabiner
Wed Jul 11, 2018 9:14 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5994

Re: Larry Swedroe: Look Past Expense Ratios

Tax efficiency is also likely to tilt the scales toward the ETFs; so again, IJS and RZV. Comparing IJS and RZV, we see that RZV buys you more HML per dollar. This is partially offset by the fact that RZV has a much lower liquidity which translates into a higher bid/ask spread ( 0.27% for RZV vs 0.0...
by grabiner
Wed Jul 11, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: Question About Interaction Between Buy & Sell Limit Orders
Replies: 5
Views: 395

Re: Question About Interaction Between Buy & Sell Limit Orders

What usually happens when orders cross is that the trade happens at the price of the first order placed. This makes it practical to place a limit order to buy above the current ask. If I have placed an order to sell 500 shares at $20 which is the best offer, and you want to buy 1000 shares, you can ...
by grabiner
Wed Jul 11, 2018 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on using an ETF for TIPS investing
Replies: 22
Views: 1861

Re: Thoughts on using an ETF for TIPS investing

Welcome to the forum! There is no free lunch in the market. The higher the yield on your bonds, the more risk of some type you will take, so you have to decide whether taking that risk is worthwhile. Note that I said, "in the market". Outside your IRA, you can buy I-Bonds, which are not traded in th...
by grabiner
Wed Jul 11, 2018 7:42 pm
Forum: Investing - Theory, News & General
Topic: "The Fund is classified as non-diversified"
Replies: 44
Views: 5064

Re: "The Fund is classified as non-diversified"

From the Investment Company Act of 1940: (1) ‘‘Diversified company’’ means a management company which meets the following requirements: At least 75 per centum of the value of its total assets is represented by cash and cash items (including receivables), Government securities, securities of other i...
by grabiner
Tue Jul 10, 2018 6:42 pm
Forum: Investing - Help with Personal Investments
Topic: What % of your equity is int’l?
Replies: 141
Views: 7742

Re: What % of your equity is int’l?

There is a philosophy in Computer Science / Software Engineering that there are in general 3 "natural" numbers that should be used in programming: 0, 1, and infinity. Anything else better have a damn good justification. So with that in mind, I see an analogous answer to this question but with only ...
by grabiner
Tue Jul 10, 2018 6:34 pm
Forum: Investing - Theory, News & General
Topic: Wellesley alternative for taxable acct.?
Replies: 25
Views: 2870

Re: Wellesley alternative for taxable acct.?

Vanguard does have a Tax Managed Balanced Fund, which is at about 50% stock. However, it is very different from Wellesley in the type of stocks it contains (blend instead of value). In spite of the fact that you like Wellesley, I'm not sure you are actually looking for something classified as "valu...
by grabiner
Mon Jul 09, 2018 10:16 pm
Forum: Investing - Theory, News & General
Topic: Wellesley alternative for taxable acct.?
Replies: 25
Views: 2870

Re: Wellesley alternative for taxable acct.?

There are no alternatives that will give you what ever it is you are looking for in wellesley. If you want wellesley then you have to decide if the tax situation is worth it. If not then pick something else. I think OP is asking what is the "something else"? OP could consider something like 40% Van...