Search found 453 matches

by nydad
Thu May 26, 2022 9:02 pm
Forum: Personal Investments
Topic: TIPS fund performance (VAIPX)
Replies: 30
Views: 3464

TIPS fund performance (VAIPX)

A long time ago (at least a decade), I decided on an asset allocation and have mostly stuck with it. This included ~40% of my bond allocation towards TIPS (VAIPX). However, I've seen that this fund NAV has been dropping as inflation has been rising. I still don't understand everything about TIPS, but I'm wondering, what am I missing? Should I expect for example the next dividend payments to be larger? I don't know how this fund should behave in this environment but it seems a bit counter-intuitive.
by nydad
Tue Jan 26, 2021 8:37 pm
Forum: Investing - Theory, News & General
Topic: [GameStop GME trading mega-thread]
Replies: 5086
Views: 396789

Re: Help me set a Sell limit order for GME (GameStop)

Sir, this is a casino.
by nydad
Sun Jan 24, 2021 9:19 pm
Forum: Personal Investments
Topic: Still buying Bonds?
Replies: 68
Views: 9005

Re: Still buying Bonds?

I rebalanced into bonds last week. My holdings are roughly 60% medium term issues (combination of funds due to 401k options + a muni fund in taxable), 40% VAIPX (Vanguard TIPS fund) in 401k. It felt odd to purchase so much with a negative yield, but I grit my teeth and did it.
by nydad
Wed Dec 25, 2019 5:38 pm
Forum: Investing - Theory, News & General
Topic: A Returns Spreadsheet for Bogleheads
Replies: 444
Views: 123265

Re: A Returns Spreadsheet for Bogleheads

Hi - Thanks for putting this spreadsheet together. It is really wonderful. I'm still trying to figure out how it all works, and I also wanted to see if I could submit a feature request - Have you thought about adding performance calculations for 15/20/30/40 years? I lament the fact that Vanguard hasn't seen fit to provide this sort of performance data for holdings they manage, especially given that the Bogleheads/Vanguard philosophy is supposed to provide long-term returns (provided the market is growing during those periods) on the timescale of decades. As of now, a look back 10 years (which is what Vanguard and this spreadsheet provides) misses out on the biggest market dip in recent history. I'd love to be able to see how did my portfoli...
by nydad
Mon Feb 03, 2014 10:25 pm
Forum: Personal Investments
Topic: Schwab Coverdell investment options
Replies: 4
Views: 598

Re: Schwab Coverdell investment options

It's both; we have 529s set up, but are also maxing out the coverdells, in case we want to send junior to a private high school.

I suppose I could just buy the Schwab total stock market index and match it with 20% bonds and do the balancing myself but I was hoping for something that was brainless, too many other accounts to manage. Perhaps I'll just roll the dice and keep it all in total stock market...

(just saw new post)
I see your point about building a 3-fund portfolio, but my goal here is simplicity, so I'm hoping there's a one-fund option (or ETF) out there.
by nydad
Mon Feb 03, 2014 8:14 pm
Forum: Personal Investments
Topic: Schwab Coverdell investment options
Replies: 4
Views: 598

Schwab Coverdell investment options

Hi - I've just opened a Coverdell at Schwab as I understood they had access to Vanguard funds. Big mistake. They do, but they charge a whopping $76 every time you buy or sell. Ouch. Shows the value of doing more research, I guess. My goal was to buy a target date fund, that expires more or less when my kid gets close to college, so Target date 2030 or 2035. Does anyone have any suggestions? I looked at the Schwab target date options, but was underwhelmed, and it has a gross expense ration of 0.92% and invests in a complex mix; I like the simplicity of the Vanguard target date funds. I could buy ETFs, but with the relatively small amounts of money in this account, managing/balancing across ETFs to replicate would be rather a pain. Any other ...
by nydad
Fri Jan 17, 2014 9:31 am
Forum: Personal Investments
Topic: Selling in taxable account?????
Replies: 19
Views: 3425

Re: Selling in taxable account?????

I would strongly suggest you consider a donor advised fund. You can donate appreciated shares and get the immediate deduction, that you can use to offset income from the sale of other shares. Since the money will be in a DAF, you can then give it out to charities of your choice over time, even in small amounts. it will be invested and grow tax free, so you can basically use it for all of your charitable giving going forward. I use fidelity and have been very happy but Schwab and vanguard have them. As well as many others. Just do the math carefully - perhaps spreading it out over several years - both selling shares and donating to offset so that you manage your tax brackets - I suggest a consultation with your tax accountant. I do think tha...
by nydad
Thu Jan 16, 2014 8:50 am
Forum: Personal Investments
Topic: Need guidance please - mutual funds or get an advisor?
Replies: 11
Views: 1356

Re: Need guidance please - mutual funds or get an advisor?

Hi - based on your initial post I think you should consider a solution like betterment or wealthfront which has professionally designed portfolios available for a relatively small management fee, and they handle the investing and rebalancing - all you do is send them a contribution. It sounds like you need a somewhat hands-off approach vs DIY - if you DIY you may be tempted to fiddle, whereas these products will more or less prevent that.
by nydad
Wed Jan 15, 2014 10:11 pm
Forum: Personal Investments
Topic: roth IRA for kids from lemonade stand
Replies: 15
Views: 3465

Re: roth IRA for kids from lemonade stand

Note: I'm not planning on using their money - it will be a sort of gift, and I'm planning on telling them we will match future earnings into their Roth until age X (tbd) - We are funding 529s for them too, but Roths are appealing for different reasons...

For the person who put 10k into the Roth - did your child have income at that level? Not bad!
by nydad
Wed Jan 15, 2014 6:21 pm
Forum: Personal Investments
Topic: roth IRA for kids from lemonade stand
Replies: 15
Views: 3465

Re: roth IRA for kids from lemonade stand

It's a good point, and of course $125 won't grow to much (unless we buy twitter...) :). But for me, receiving the statements, etc has it's own value. They already have a UTMA where gifts from grandparents go, but I'm intrigued by the idea of retirement planning at age 8. Maybe I'm just a bogleheads geek, but I wish I would have had a Roth IRA from early on vs much later when I finally learned about them...
by nydad
Wed Jan 15, 2014 5:59 pm
Forum: Personal Investments
Topic: roth IRA for kids from lemonade stand
Replies: 15
Views: 3465

Re: roth IRA for kids from lemonade stand

Self employment income is also earned income. No Self employment taxes are due if earnings are under $400 I think- it's not just w2.

An open question is whether income paid for chores (eg mowing lawn, etc) from parent to child is earned income. Some say no, since such income isn't usually taxable.
by nydad
Wed Jan 15, 2014 3:53 pm
Forum: Personal Investments
Topic: roth IRA for kids from lemonade stand
Replies: 15
Views: 3465

roth IRA for kids from lemonade stand

Hi -

I'm considering opening a Roth IRA for my kids, aged 7 and 8. They have some income from a lemonade stand they set up this summer which did surprisingly well, and have something around $125 in income each.

Schwab has custodial IRAs with a $100 minimum, so I was thinking this would be a good way to get them interested in investing and long-term growth, and set them up with a Roth IRA they can take with them. As they do other little jobs once they get older, we could continue to fund it accordingly.

Any thoughts on what sort of documentation we'd need to justify the income? I doubt we'll get audited for $125 but just want to be safe...
by nydad
Wed Jan 15, 2014 1:01 pm
Forum: Investing - Theory, News & General
Topic: "Gold to tank in 2014: Goldman Sachs"
Replies: 112
Views: 15336

Re: "Gold to tank in 2014: Goldman Sachs"

Hmm. I'm not sure that gold should have a positive return. Just because something is desired, doesn't mean it will necessarily become more valuable. In the short term gold can be quite volatile - has consumer and industrial demand for gold dropped 30% this year? If not what explains the drop in the price?

I see gold as a store of value. In 10, 20, 30, 50 years, my gold holdings will have equivalent purchasing power, +- 50%, to what they are today. I can't think of any other asset that behaves like that. Dollars during that same time period would be eaten up by inflation, for example.
by nydad
Wed Jan 15, 2014 12:55 pm
Forum: Personal Investments
Topic: High yield dividend vs bond purchase
Replies: 5
Views: 964

Re: High yield dividend vs bond purchase

Hi - Just some personal performance numbers to give texture here. I was also skeptical about bonds while back, but after reading the advice here, I decided on an allocation to bonds (a bit aggressive for my age :D) and bought a mix of PIMCO (401k), Vanguard TIPS (401k), VG Intermediate treasury (Roth), and NY munis (taxable). This was in December of 2010, when all of the pundits were warning of the impending bond bubble, and people were selling their bonds and buying into dividend stocks and other equities. There was a lot of doom and gloom in the air about bonds. Here's one thread from that era, as an example. http://www.bogleheads.org/forum/viewtopic.php?t=64695 You can find many other examples (search on Bond bubble) So, what actually ha...
by nydad
Wed Jan 15, 2014 1:14 am
Forum: Investing - Theory, News & General
Topic: "Gold to tank in 2014: Goldman Sachs"
Replies: 112
Views: 15336

Re: "Gold to tank in 2014: Goldman Sachs"

Gold isn't an asset that should appreciate in the long run. It has, basically, over the long term, a zero expected return.

OTOH, it does tend to zig when other things zag. Case in point, stock market up 30% this year, gold down 30% this year. I know it doesn't always work that way, but some people think it can play a useful role in rebalancing a portfolio.
by nydad
Mon Apr 15, 2013 4:44 pm
Forum: Investing - Theory, News & General
Topic: A nice talk about gold in ones portfolio
Replies: 103
Views: 10049

Re: A nice talk about gold in ones portfolio

I haven't been watching the market at all, just saw this news somehow because an online dealer sent me an email that my price target for silver (~$22) had been reached. So I'm thinking, stack some silver today or tomorrow. why wouldn't I buy when on sale?

I guess I have to plug my numbers into the spreadsheet to see if I hit a rebalancing band. sigh.
by nydad
Mon Apr 15, 2013 4:41 pm
Forum: Investing - Theory, News & General
Topic: Feeling like one of those 500 point market drop days soon
Replies: 31
Views: 5629

Re: Feeling like one of those 500 point market drop days soo

Looks like it's buying time. Gotta build up my stacks. Silver is cheap today!
by nydad
Fri Mar 15, 2013 10:59 pm
Forum: Personal Finance (Not Investing)
Topic: Analysis paralysis with cash-in refinance
Replies: 7
Views: 1220

Re: Analysis paralysis with cash-in refinance

interest rates may not be this low again. I don't have a crystal ball, but they are historically low, and are now trending upwards. I'd get some quotes on no-cost refi, even with PMI, and then perhaps take 50% of planned retirement savings and put it towards getting to 20% LTV (if you're going to be in the house that much longer, no reason to just pay them extra every month in PMI)
by nydad
Fri Mar 15, 2013 10:54 pm
Forum: Personal Finance (Not Investing)
Topic: Finance Home Remodeling
Replies: 29
Views: 3490

Re: Finance Home Remodeling

The 401K loan would be at 3.25%, while a home equity would be somewhere in the 5-6% range.
IMHO it doesn't make sense to compare interest rates like this - in a 401k loan (at least, mine works this way), you pay interest back to yourself. So your 401k is actually growing at that rate - instead of paying that money to a bank. It does mean that money is out of the market, and there is the balloon issue, etc - but they're not apples to apples.
by nydad
Fri Mar 15, 2013 10:45 pm
Forum: Personal Investments
Topic: Portfolio Advice - Would be Grateful for your Help!
Replies: 17
Views: 2167

Re: Portfolio Advice - Would be Grateful for your Help!

Hi -

One thing struck me in your post:
Current yearly gross income = $1MM+

New annual Contributions
$17,500 his 401k + $6,000 company match. Total $23,500
$5,000 his Rollover
0 taxable
Is the net income much lower, are you accounting for it elsewhere, or is there another plan for what to do with the extra income?
by nydad
Fri Mar 15, 2013 8:04 am
Forum: Personal Investments
Topic: Where to put Profits? Don't trust Bond Funds
Replies: 37
Views: 4493

Re: Where to put Profits? Don't trust Bond Funds

Buy some alternative investments if you don't like bonds.

You can get into a TIMO if you have money, that gives you a direct timber play. (Alternatively, you can buy and manage your own timberland, but this is not for the faint of heart).
Real estate, as mentioned by others.
If you want to keep your profits, then go to a Sotheby's auction and plonk down a few 100k on a beautiful medieval painting. Over time, it's quite possible the value will increase, or at least hold its value, and you get to enjoy it.
Many other alternative assets to consider, but I personally think you should still hold bonds.
by nydad
Thu Mar 14, 2013 3:13 pm
Forum: Investing - Theory, News & General
Topic: Managed to unmanaged account... transition
Replies: 16
Views: 2278

Re: Managed to unmanaged account... transition

I went through this a few years ago. I'd suggest moving everything over in kind. Vanguard selling fees are quite low.

That way, you can slowly sell and manage your tax impact. I'd suggest just mapping out what the actual asset allocation is today, based on what you have (even if you don't like it) - then you'll be able to adjust to your real asset allocation even before selling everything, then you can slowly evolve towards it.

Otherwise, a big tax bill could be a bummer. Take your time, those fees on mutual funds are bad but they're not *that* bad that you have to jump out of things within a week.
by nydad
Thu Mar 14, 2013 3:02 pm
Forum: Investing - Theory, News & General
Topic: Where does GLD, SLV or any other commodities fit...
Replies: 35
Views: 2750

Re: Where does GLD, SLV or any other commodities fit...

5% for me, split between GTU and physical. Consider GTU instead of GLD. Read prospectus carefully for any gold ETF. Look at NAV premiums before buying (and consider not buying if it's too high), and try to limit premiums over spot also when buying physical.
by nydad
Wed Mar 13, 2013 11:55 pm
Forum: Personal Investments
Topic: Investing Inheritance
Replies: 19
Views: 3108

Re: Investing Inheritance

Thanks NY Dad. If I set up an 80/20 Stocks/Bonds in index funds and needed (lets say it took me some time to find work after school) money could I sell a portion of my portfolio without penalty and rebalance to 80/20. I guess what I am asking is: are index funds fairly "liquid"? Not sure what you mean by "without penalty" - if the money is in a taxable account, then you will pay capital gains taxes if you made money. That's not a bad thing - it's better than taking a loss of course! However, if you think you will need money after school, you may want to set aside a portion for that - normally it is not suggested to hold stocks for any needs which are short term (e.g. within a few years) - you don't want to end up having...
by nydad
Tue Mar 12, 2013 7:43 pm
Forum: Personal Investments
Topic: ROTH IRA Cash Contribution?
Replies: 4
Views: 1153

Re: ROTH IRA Cash Contribution?

I disagree - if you are confident you
Will be under the Roth IRA contribution limits for the year then just make the contrib now - that way it's done
And the money is out of your bank account and your Roth for the year is done (limit
Is 5500 I think)

If you want to keep it in money market for a few months or until
You're ready to jump in that's fine (it is market timing but to each his own) you
Can hold any number of funds in your Roth IRA.
by nydad
Tue Mar 12, 2013 2:48 pm
Forum: Personal Investments
Topic: Investing for 100 years!!! less wordy version!!
Replies: 17
Views: 3843

Re: Investing for 100 years!!! less wordy version!!

If you're really interested in long term thinking, 100 years is nothing. You should be thinking on 1,000 or 10,000 year timelines. check out these guys: http://longnow.org/ . Some companies have even issued 100 year bonds, so you may want to buy some of those - but don't get me started on the interest rate risk on those bad boys... One other comment - above you've noted that you really want to get the money invested, then sort out how it is going to be managed/structured/etc later - however I think that may be putting the cart before the horse - for example, if you want money set aside to grow for charitable purposes, IMHO it is much better to gift appreciated assets to a DAF today, where it will grow tax-free (and you save on cap gains tax...
by nydad
Mon Mar 11, 2013 2:52 pm
Forum: Personal Investments
Topic: Investing for 100 years!!! less wordy version!!
Replies: 17
Views: 3843

Re: Investing for 100 years!!! less wordy version!!

Buy some managed timberland, harvest it and plant a fresh crop. In 100 years, harvest again. Repeat. :)

Note: I am not a timber expert, but done wisely (and managed well) timber can be a good super-long term investment IMHO.
by nydad
Mon Mar 11, 2013 2:50 pm
Forum: Investing - Theory, News & General
Topic: The mechanics of doing asset allocation
Replies: 8
Views: 1481

Re: The mechanics of doing asset allocation

Why did you pick 80/20 for small/large division of blend instead of say 50/50? Also, what does 'FF' mean? FF= Fama French For blend, I split it as 50/50 as value and growth. The 80/20 split was for midcaps - since I don't have a 'midcap' allocation target, I just considered 80% of the midcaps as "small". It's not perfect, but it's just a rough approximation. I don't remember how I came up with that figure, and I may revisit it. Also this year in reviewing my AA, I've noticed that there is indeed style drift in ETFs/Mutual funds - so if you are serious about doing this, then it's probably worth reviewing the MorningStar ratings for each fund on an annual basis. One thing to note: It seems (to me) to be more "accurate" to...
by nydad
Mon Mar 11, 2013 10:17 am
Forum: Investing - Theory, News & General
Topic: The mechanics of doing asset allocation
Replies: 8
Views: 1481

Re: The mechanics of doing asset allocation

This is what I do: 1) AA for domestic is based on LCV, LCG, SCV, SCG - using cascading asset allocation method. I have a tilt to value and small. 2) I use the morningstar xRay for each of the funds. For each "blend" percentage, I assign that half to value and half to growth. For midcaps, I assign around 80% to small and 20% to large. So, something like this: 24 24 25 6 6 7 3 3 3 Would be LCV: 37.8 LCG: 38 SCV: 11.7 SCG: 12.5 3) Then, my spreadsheet sorts out my actual allocations to SCV according to those percentage splits. Thus, this will show a difference in investing in S&P 500 vs total stock market, as they don't have equal allocations to small caps. For my developed and emerging market AA targets, I just have a split betw...
by nydad
Fri Mar 08, 2013 8:12 pm
Forum: Personal Investments
Topic: Investing for 100 years!!! less wordy version!!
Replies: 17
Views: 3843

Re: Investing for 100 years!!! less wordy version!!

+1 to what Ladygeek said. A few other thoughts: 1) think about the zvi bodi plan for some of your assets which is I think 100% in tips ladder with appropriate maturity. This puts a floor on your expenses that is inflation protected. 2) this essentially means you would have two portfolios - one Which is your expenses until the end, protected at 100%. The Rest is for your heirs, allowing You to take even more Risk there if you desire 3) another option is a SPIA to cover your expenses 4) a close friend told me about something his parents recently Set up - a generation-skipping-tax-free educational trust, invested In 529 plans. This could grow tax free and cover College education expenses for your grand kids, great Grand kids and beyond. Requir...
by nydad
Fri Mar 08, 2013 7:24 pm
Forum: Personal Investments
Topic: Investing for 100 years!!! less wordy version!!
Replies: 17
Views: 3843

Re: Investing for 100 years!!! less wordy version!!

Congratulations! Interesting that you have such an aggressive AA. You've clearly hit your number, so why put more of it at risk? Also, investment real estate is not guaranteed to go up, as you know... so with 75%/25 and then the rest in RE, that's fairly risky. Have you considered just paying off your primary mortgage? I guess I'm not clear on the debt to asset to income ratio. the DCA question is often asked here, and there isn't an answer; some research suggests lump sum is best, but that's on average; in any particular circumstance, DCA could, in hindsight, have been better. So for me, it comes down to psychology - what will help you sleep at night - being done with it and fully invested, or knowing you're slowly getting into the market?...
by nydad
Fri Mar 08, 2013 7:07 pm
Forum: Personal Investments
Topic: Nondeductible IRA contribution - Yes or No?
Replies: 15
Views: 4293

Re: Nondeductible IRA contribution - Yes or No?

I think that is right for that part -- but if your income is over the Roth limits you cannot contribute to that account any more. So (and someone correct me if I am wrong) you will need to create and convert a new account each year....
but I think that's why it's called a "back-door" - income limits don't matter. I don't think there is an income limit for a non-deductible contrib to a traditional IRA, and then if you don't have anything else lying around you can roll it into Roth - no matter what your income is. I think...!
by nydad
Fri Mar 08, 2013 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: Should I Convert my Rollover IRA to Roth?
Replies: 15
Views: 3225

Re: Should I Convert my Rollover IRA to Roth?

Not to threadjack but...

If I'm in the same situation, but have a low-cost/VG 401k, would there be any reason not to roll my traditional IRA into the 401k vs converting it to Roth? To me a tax deferred is a tax not paid, and by rolling it back into the 401k, I don't pay any taxes and can open up the back door as well.

[edit: I suppose there is one thing - fund choices. I have a small value tilt (RZV) and REIT in my IRA now that I can't get in my 401k...]
by nydad
Fri Mar 08, 2013 6:51 pm
Forum: Personal Consumer Issues
Topic: What's Your Favorite Hot Sauce?
Replies: 84
Views: 6983

Re: What's Your Favorite Hot Sauce?

+3 for tapatio
by nydad
Fri Mar 08, 2013 6:35 pm
Forum: Personal Investments
Topic: Investment Allocation [Asset Allocation, Portfolio Help]
Replies: 4
Views: 1101

Re: Investment Allocation [Asset Allocation, Portfolio Help]

agree with above 1) roll all IRAs to Vanguard and consolidate. Why pay those expense ratios? Once all of your accounts are rolled over, you'll have her 401k Vanguard her roth Vanguard his roth Vanguard his traditional IRA Vanguard his roth 401k at Fidelity you could even pay the tax and roll the traditional IRA into a Roth, so you'd only have 4 accounts - not bad - and 3 would be accessible through VG website. 2) re: your question, it's quite hard to answer because we don't know your desired stock/bond balance. Suppose you have decided - based on your desire/need to take risk, and your current age/retirement savings, that you will be 60/30/10 stocks/bonds/reit, with 50% of your stocks in international, and 10% in REIT. This means basically ...
by nydad
Fri Mar 08, 2013 6:08 pm
Forum: Personal Investments
Topic: Saving for 2014 Roth and 401k
Replies: 6
Views: 950

Re: Saving for 2014 Roth and 401k

sell the stocks, pay down the mortgage, and refi. Rates are under 4% (now around 3.5%). that will save you a ton of money...
by nydad
Fri Mar 08, 2013 6:06 pm
Forum: Personal Investments
Topic: Nondeductible IRA contribution - Yes or No?
Replies: 15
Views: 4293

Re: Nondeductible IRA contribution - Yes or No?

It's my understanding that
a) if you don't have any rollover or traditional/deductible IRAs, and
b) don't quality for a deductible contribution to the IRA in the first place

that a backdoor roth is a no-brainer right? You fund it with after tax dollars, roll into the Roth, and "presto" - no more taxes, ever. Am I missing something?
by nydad
Fri Mar 08, 2013 5:54 pm
Forum: Investing - Theory, News & General
Topic: The Experts: Are Higher-Than-Average Fees Worth It for Funds
Replies: 21
Views: 2052

Re: The Experts: Are Higher-Than-Average Fees Worth It for F

Have you ever felt a sentiment here of bogleheads who would rather make 5% and pay 0% tax than make 10% and pay 15% tax. There's a real aversion to paying taxes...

If there was a fund that guaranteed 50% return and charged 10% fees, would any Bogleheads jump on board?? :)
by nydad
Fri Mar 08, 2013 5:43 pm
Forum: Personal Investments
Topic: Am I financially ready to buy this house?
Replies: 40
Views: 3650

Re: Am I financially ready to buy this house?

new yorker here. Yes that house is probably a reasonable price - I mean, if that's what the market will bear, then that is the price you have to pay. I would encourage you to look outside of the city though, for that kind of money you can get a lot more house. Westchester, new jersey, etc. And you can buy a cheaper place... IMHO, don't pay down the car loan - that's crazy - it's free money. But account for it differently - for example, set aside and ringfence $34k of your liquid investments into a high quality CD ladder that matures $1k/month, and use that to pay - that way you don't see it as eating into your monthly income. Or, alternately, since you probably live in the city, sell the car and buy a beater - not sure you need an expensive...
by nydad
Fri Mar 08, 2013 2:36 pm
Forum: Personal Investments
Topic: Should I Invest, or Pay Debt?
Replies: 56
Views: 7134

Re: Should I Invest, or Pay Debt?

On the savings bonds, you may want to hold on to those - those will continue to earn interest for 30 years I think - and if you got them a while ago they're likely earning more interest than any bonds you could buy today. Find out what you have, but consider keeping them until they hit 30 years maturity, and consider them as part of your bond allocation. On the stocks, if you reinvested the dividends, those will add to your basis. Your capital gain is thus calculated more or less as follows: sale value - original purchase cost - sum of all dividend reinvestments = capital gain / loss More on capital gains here: http://money.howstuffworks.com/personal-finance/personal-income-taxes/capital-gains-tax2.htm In any case, it doesn't sound like the...
by nydad
Fri Mar 08, 2013 9:41 am
Forum: Personal Investments
Topic: Another newbie question about investment choices
Replies: 14
Views: 1548

Re: Another newbie question about investment choices

I've thought about it, but it makes me nervous. I'm not sure what I'd choose. You've already made a great start - maxing out your retirement accounts, and buying a target date fund - those are excellent in my opinion - you get exposure to the whole US stock market, the whole international stock market, and a huge portion of the bond market, all for very low expenses - so you're highly diversified. There is nothing to worry about in having everything in one fund, since that fund itself is so diverse. A taxable investing account is no different from an IRA, except any gains (capital gains, dividends, etc) are taxed - but you can buy all of the same things in a taxable account that you can buy in an IRA. What specifically makes you nervous ab...
by nydad
Fri Mar 08, 2013 2:06 am
Forum: Personal Investments
Topic: Help me... Bring sanity to this portfolio...
Replies: 7
Views: 1168

Re: Help me... Bring sanity to this portfolio...

Don't you think the expense ration of Russell target retirement plans are horrible? I thought they were pretty bad... But then I am still learning. Ah, sorry I hadn't looked at that closely. They're not that horrible - the bond fund you hold in your 401k is 0.5 anyway - but if you want lower expenses (but more rebalancing trickiness), just fill up your other IRAs with bond fund until you have enough, then fill the rest of the IRAs with total international, and then buy the russell 1000 index and maybe a small cap index to balance it - that will give you close to total stock market, and you're using the lowest cost fund in the 401k. I don't see much point in holding money market in the tax-sheltered accounts - inflation over the long term w...
by nydad
Thu Mar 07, 2013 10:13 pm
Forum: Personal Investments
Topic: Should I Invest, or Pay Debt?
Replies: 56
Views: 7134

Re: Should I Invest, or Pay Debt?

In general it is suggested that you max out tax advantaged vehicles before investing in taxable. in this case, I don't know your basis in those stocks, nor your tax bracket so I don't know how much capital gains tax you would have to pay on a sale. You need to understand this before selling - it depends on your income in 2013. In any case, you say you want to invest conservatively, which to me suggests, dump the stocks and buy total stock market index in Roth - that retains the same equity exposure, but it's now tax sheltered and much more diversified (you'll likely want to sell them at some point, so why not do so now, and take advantage to fund the Roth) Also since you're self employed, look at other savings options (SEP-IRA, etc). As for...
by nydad
Thu Mar 07, 2013 10:08 pm
Forum: Personal Investments
Topic: Help me... Bring sanity to this portfolio...
Replies: 7
Views: 1168

Re: Help me... Bring sanity to this portfolio...

I have generally been very risk averse, and for the last 5 years or so kept most of my investments in Money Market and Bond funds... Desired Asset allocation: 60%-70% stocks.... If you're risk averse, then perhaps that stock allocation is too high. Given your income, expenses, and savings, do you think you can save enough for retirement with a lower stock allocation? If so, perhaps consider 50/50, or maybe 60/40 (stock/bond) max. I'm just wondering why you've stayed out of the market - it's been on quite a run since the bottom in 2009... Did you balance out of equities in 2008/2009 when the market tanked? Vanguard has a survey that you can take that will help give you a sense of your target asset allocation. In any case, your portfolio loo...
by nydad
Thu Mar 07, 2013 9:39 pm
Forum: Personal Investments
Topic: Should I Invest, or Pay Debt?
Replies: 56
Views: 7134

Re: Should I Invest, or Pay Debt?

I vote to sell $10,500 of the stocks and dump it into Roth IRA for 2012/2013, put it in total market index, then use the $5k to pay down some debt - that way you've tax sheltered a lot of money - there is only a small window for tax shelter each year, so if you can stretch, I'd try to fill it. I also have found that once that money is in there, even though there are ways to get it out (esp of Roth), it is psychologically more difficult and seems less touchable.

Also, turn off re-investment of dividends on those stocks, and use that money to pay down debts even more.
by nydad
Thu Mar 07, 2013 9:35 pm
Forum: Investing - Theory, News & General
Topic: Dow who? New record high for gold
Replies: 13
Views: 2203

Re: Dow who? New record high for gold

It says nothing about some sort of absolute performance of gold.
How would you define this, since gold is denominated/traded in different currencies around the world. If the dollar tanks against the euro, does gold go up or down, or is it not related?
by nydad
Thu Mar 07, 2013 9:33 pm
Forum: Investing - Theory, News & General
Topic: [Help with Understanding] Bond Funds and interest rates
Replies: 8
Views: 827

Re: [Help with Understanding] Bond Funds and interest rates

I like the book on bonds by Larry Swedroe: "The Only Guide to a Winning Bond Strategy You'll Ever Need" However, as pointed out above, bonds are quite complex - there are many different kinds of bonds, in different sectors, with different maturities, and understanding the price/yield relationship is tricky - and then you get into how bond funds behave and whether they are the same as bond ladders, etc etc etc. If you try to buy your own individual bonds, you have to be careful of how you do it, as the markets for some bonds (like munis) are not very liquid. After much reading, I still consider myself a rank amateur in bonds, and I decided the best solution is just to buy a few high quality Vanguard bond funds of medium duration. F...
by nydad
Thu Mar 07, 2013 9:09 pm
Forum: Personal Investments
Topic: Another newbie question about investment choices
Replies: 14
Views: 1548

Re: Another newbie question about investment choices

Another solution would be to put your whole Roth into VTIVX. (see the allocations as they change here: https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList#targetAnchor). Then you'd have a 1-fund portfolio - the dream of all bogleheads... :) When you choose a target retirement fund, you should choose it based on the stock/bond allocation, not necessarily based on your age till retirement - it should be based on your own personal desired stock/bond split. VTIVX currently has 10% bonds, which some consider a bit thin, but that's the allocation chosen by Vanguard so... if you want more bonds, you could just choose another date (e.g. target 2035, which has 15% bonds now) Are you planning on opening a taxable investing account at...
by nydad
Thu Mar 07, 2013 8:51 pm
Forum: Personal Finance (Not Investing)
Topic: NY Life Custom Whole Life Insurance - 28yo Single Father
Replies: 40
Views: 4367

Re: NY Life Custom Whole Life Insurance - 28yo Single Father

There are a number of reasons to own an individual life insurance policy instead of being covered under a group policy.
Would love to hear about these. Thanks!
by nydad
Thu Mar 07, 2013 6:51 pm
Forum: Personal Investments
Topic: Is BIV/VBIIX worth keeping Now?
Replies: 20
Views: 2055

Re: Is BIV/VBIIX worth keeping Now?

Here's another poster who had a similar question: My current asset allocation is 60% stocks 40% cash. I'm afraid to invest in bonds because my 401 plan offers mostly government bond funds and I've read that government bonds are in a bubble and therefore not a good buy. This question was from April, 2009. http://www.bogleheads.org/forum/viewtopic.php?t=36424 If interest rates rise, bond fund NAV will go down; but that fund will start purchasing bonds with higher yields, so you will get a higher percentage return on your money going forward after the duration of the bond fund has passed, more or less. So rising rates are bad for NAV, but they're good in the long run - don't you want more yield? People will continue to predict a bubble, until ...