Search found 110 matches

by altruistguy
Fri Apr 18, 2014 2:02 pm
Forum: Personal Investments
Topic: Draft email to investment advisor re outperforming Total Mar
Replies: 24
Views: 3978

Consider Inst Class Shares/Seek out a lower cost Passive Adv

Hello Susan, 1) You're definitely on the right track. 2) But you can do better than VTI. Learn about the Vanguard Total Stock Market Index Fund Institutional Shares (VITSX): https://personal.vanguard.com/us/funds/snapshot?FundId=0855&FundIntExt=INT It has an expense ratio of 0.04%. That's 20% less expensive than VTI AND you get the benefit of not having to use limit orders to buy and sell it (i.e., you ALWAYS buy and sell at NAV -- this is desirable). If you don't want to pony up the $5M initial purchase for this share class, use the Admiral Class shares instead of the ETF: https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT For even more diversification, you might also consider the Vanguard Total World Stock ...
by altruistguy
Sun Jan 26, 2014 8:40 am
Forum: Personal Consumer Issues
Topic: Office Chair: Inexpensive Herman Miller Aeron Alternative
Replies: 17
Views: 27130

Fitness Ball

I stopped using my HM Aeron chair in favor of a fitness ball. Have been using the fitness ball for the past five years or so and love it. I find that it keeps me from slouching and engages my core a bit.

Oh -- and I sit at my desk using my computer pretty much all the time -- it is how I do my work.

Eric E. Haas
by altruistguy
Sat Aug 10, 2013 1:26 pm
Forum: Investing - Theory, News & General
Topic: [Sad news - Pat Larimore]
Replies: 225
Views: 26695

Re: [Sad news - Pat Larimore]

Hello Taylor,

Sorry for your loss. LOVED the video!

Pat was an extremely beautiful woman who clearly loved life. Hers appears to be a life quite well lived.

Again, sorry for your loss.

Eric E. Haas
by altruistguy
Fri Jul 12, 2013 11:19 am
Forum: Personal Investments
Topic: Dodge & Cox (DODGX) good for Large Cap Value?
Replies: 13
Views: 2525

Re: Dodge & Cox (DODGX) good for Large Cap Value?

Hello SnowSkier,

I suggest that you get your value exposure elsewhere in your portfolio. In your 401(k), load up on the least bad stuff in there and compensate elsewhere in your portfolio. Incidentally, you are fortunate to have some really good low-cost index funds -- so just use those and be happy that you have access to them (and get index exposure to value elsewhere).

Eric E. Haas
by altruistguy
Tue Jun 04, 2013 6:34 am
Forum: Personal Investments
Topic: beginner here, maxed out my SEP-IRA...now what?
Replies: 12
Views: 1305

Re: beginner here, maxed out my SEP-IRA...now what?

Next Step -- do a Self-Employed (Roth) 401(k) at Vanguard!

This allows each of you to do both of the following:
- Contribute up to the lesser of $17.5k or your earnings, as either pre- or post- tax contributions to the 401(k) as employee contributions.
- Contribute up to the SEP-IRA limits (about 25% of your earnings) as pre-tax contributions to the 401(k) as employer contributions, so long as the combination of employee and employer contributions doesn't exceed $51,000.

For questions about details, contact Vanguard!
by altruistguy
Fri May 10, 2013 9:47 am
Forum: Personal Investments
Topic: Low-dividend paying ETFs - are there any?
Replies: 11
Views: 11861

Re: Low-dividend paying ETFs - are there any?

Yes -- it sure would be nice if there existed some low-dividend ETFs. But to my knowledge, there still are none. While there certainly may be some out there with lower yields, that doesn't mean that they are specifically managed to minimize dividends. In addition to the Vanguard Tax-Managed Capital Appreciation fund, I believe that the Vanguard Tax-Managed Balanced Fund uses the exact same dividend-lessening strategy for its stock component. DFA's tax-managed funds used to do this too. But when the Bush tax-cuts hit about ten years ago, lessening the problem with dividends (qualified dividends, anyway), they dramatically lessened (to the point of apparent elimination) their attempts to lessen yield of those funds. It remains to be seen whet...
by altruistguy
Tue Apr 02, 2013 12:05 pm
Forum: Investing - Theory, News & General
Topic: Momentum: AQR, Bridgeway, & other implementation details
Replies: 16
Views: 2302

Re: Momentum: AQR, Bridgeway, & other implementation details

stan1 wrote:OK, let's say I've read the research and have become a believer. I've drank the Kool-Aid so I am willing to accept the higher expense ratio. I have access to the Bridgeway fund in my Roth IRA and have "room" to add it to my asset allocation by shifting some holdings out of my domestic equity allocation to momentum. What would the resulting asset allocation look like?
There are typically infinitely many ways of setting up just about any allocation so as to get similar factor exposures. We try use a combination of momentum & profitability (the new ones from DFA) funds to implement the "non-value" portions of our asset allocations.

Eric E. Haas
by altruistguy
Tue Apr 02, 2013 11:08 am
Forum: Investing - Theory, News & General
Topic: Momentum: AQR, Bridgeway, & other implementation details
Replies: 16
Views: 2302

Momentum: AQR, Bridgeway, & other implementation details

Hello Folks, 1) The evidence on the momentum premium is both voluminous and credible -- going back to a paper written in 1993. 2) Until recently, it appeared as though it would be imprudent to try to capture the momentum premium (or even portions thereof) in the real world. Two papers by Keim & Lesmond/Schill/Zhou , circa 2003-2004, found that, in the real world, transaction costs would tend to overwhelm the abnormal profits that one would hope to get by implementing such a strategy. 3) Beginning in 2009, there started to be available real-world passively-managed momentum funds: - AQR started three momentum funds in 2009. - Bridgeway started a momentum fund in 2010. - QuantShares started a long-short momentum ETF in 2011. - Russell star...
by altruistguy
Fri Jul 06, 2012 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Long term care insurance
Replies: 61
Views: 6054

Re: Long term care insurance

FYI, here's a good guide to LTCI:
http://www.ltcfeds.com/documents/files/ ... _Guide.pdf

Eric E. Haas
by altruistguy
Fri Jul 06, 2012 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: Long term care insurance
Replies: 61
Views: 6054

Re: Long term care insurance

Hello, You've gotten some pretty good advice here. I would add: - The federal government's LTC plan appears well administered, but it is not subsidized. If you qualify, it is probably worth considering it. - My second choice would be USAA's. - If you get LTCI, get one with the longest elimination period (i.e., a year, if possible) that you can. You don't need LTCI for short periods. You may need it for long periods. This is the LTCI equivalent of getting high deductibles on your auto insurance policy (i.e., which is also a good idea). - If you get LTCI, you should avoid Non-forfeiture benefits. This is sort of like the cash accumulation feature of whole life policies. - Inflation protection feature is probably a good thing to get. - At leas...
by altruistguy
Thu Jul 05, 2012 11:02 am
Forum: Personal Investments
Topic: What would you consider "high" in fees or expense ratio ?
Replies: 12
Views: 1634

Re: What would you consider "high" in fees or expense ratio

As always, Taylor gave you some excellent advice, which I agree wholeheartedly with.

Eric E. Haas
by altruistguy
Sat Jun 23, 2012 9:58 pm
Forum: Non-US Investing
Topic: Vanguard in europe. Anybody with experience?
Replies: 4
Views: 764

Re: Vanguard in europe. Anybody with experience?

You may be able to open a low cost brokerage account in the US. If so, then you could at the very least buy US-based ETFs, even if the mutual funds don't want to sell to foreigners (and I understand that Vanguard, for one, doesn't want to sell to foreigners at this time).

Eric E. Haas
by altruistguy
Fri Jun 08, 2012 6:21 am
Forum: Personal Investments
Topic: setting up Solo 401K
Replies: 3
Views: 963

Re: setting up Solo 401K

Good replies so far, which I will echo. I've used both Fidelity and Vanguard. Both have no admin fees and no transaction fees, as I recall, so long as you stick with their respective funds. This is a problem for Fidelity, as they have very few funds worth using (i.e., the very limited selection of Spartan index funds). Vanguard offers the Roth option, an advantage. Vanguard has dramatically greater selection of good investing options, an advantage. And yes, if you want to dump all the pre-tax money from your trad IRA to your 401(k), in order to either facilitate free conversion of post-tax contributions, or to faciliate future back-door contributions, or both, then you need to do it at Fidelity, because Vanguard doesn't allow it. If that is...
by altruistguy
Mon May 28, 2012 9:35 am
Forum: Personal Investments
Topic: Dual Military family investment planning help
Replies: 6
Views: 1055

Re: Dual Military family investment planning help

2. With the whole portfolio approach, I will not hit the point of maximum utilization of TSP (34K for both) but this is due to the desire of having accessible funds from 40-59.5. The risk I see with this is that our age 40-59.5 allocations would be 100% equity and they have the shortest time until needed. Should I consider two separate portfolios and reach for an 70/30 taxable using muni bonds and VGTSMX/ VTSMX then consider the TSP + Roth IRA as a separate portfolio with something more aggressive like 80/20 split and keep the REIT/TIPS to that account? This would also bring up the question of my proposed contribution percentages between taxable and TSP/ Roth IRA to meet h 40-59.5 goals Hello Squall, If you make your TSP contributions via ...
by altruistguy
Thu May 24, 2012 8:08 am
Forum: Personal Investments
Topic: 401k Fund Choices
Replies: 13
Views: 1330

Re: 401k Fund Choices

OK, this is an easy one.

VINIX is clearly BY FAR the best option here. If I were you, I would put 100% of my 401(k) into VINIX and build the rest of my portfolio around that fact. In other words, asset allocate your entire portfolio, not just your 401(k). If you need/want a bit of bond exposure, get it in your IRA or something. But here, load up on the best value.

It is disappointing that most of your 401(k) investing choices are so bad, but it is fantastic that you have ONE choice that is not only not-too-bad, but is actually one of the best funds in the world!

Eric E. Haas
by altruistguy
Thu May 24, 2012 7:45 am
Forum: Investing - Theory, News & General
Topic: Should You Buy a Life Annuity from Social Security?
Replies: 83
Views: 8239

Re: Should You Buy a Life Annuity from Social Security?

IF you can afford to do it (i.e., you can get necessary cash-flows from elsewhere between now and age 70) AND you expect to live at least as long as actuarially expected, then yes, this can make sense.

But if you have reason to believe that you will be shorter-lived than actuarially expected OR you can't get necessary cash-flows from elsewhere in short-term, then no, you shouldn't delay starting to receive SSA benefits.

Incidentally, there is an excellent new book that recently came out that helps to analyze this sort of decision, "Social Security Strategies" by Reichenstein/Meyer.

Eric E. Haas
by altruistguy
Sun May 20, 2012 10:14 am
Forum: Personal Consumer Issues
Topic: Volkswagen Jetta Sportwagon TDI (Diesel)
Replies: 102
Views: 28603

Re: Volkswagen Jetta Sportwagon TDI (Diesel)

Toyota Prius V. Compared to Volkwagen Jetta Sportwagen TDI, EPA City numbers about 50% higher, Hwy numbers about the same. Better predicted reliability.
by altruistguy
Sun May 20, 2012 10:01 am
Forum: Personal Investments
Topic: Tax Gain Harvesting and Donor-Advised Funds
Replies: 12
Views: 1863

Re: Tax Gain Harvesting and Donor-Advised Funds

Hello, I recommend that all of my clients who both (a) make material cash donations to charities each year and (b) have material unrealized capital gains in their taxable accounts, instead donate highly appreciated shares from their taxable account. The most efficient way of doing so is to utilize a low-cost donor-advised fund. This has the following benefits: 1) You get the exact same deduction for the gift of appreciated securities as you would if you donated cash. 2) You avoid ever having to pay taxes on the capital gains of the gifted securities. The receiving charity never has to pay them, either. 3) Using a donor-advised fund bypasses significant administrative hassle in trying to coordinate directly with multiple charities to donate ...
by altruistguy
Fri May 04, 2012 12:48 pm
Forum: Personal Consumer Issues
Topic: Toyota Highlander overkill for 2 people?
Replies: 52
Views: 9777

Twice the mileage

IF you must have an SUV, I suggest going with Consumer Reports' top-rated small SUVs: Subaru Forester, Toyota RAV-4 (4-cyl gets best mileage), or Honda CR-V. All three should get you fantastic reliability. That is if you really MUST have an SUV. I strongly suggest getting a more practical, fuel efficient vehicle, though. For example, your favorite of the four Toyota Prius', perhaps one of the excellent Volkswagen TDIs, or the incredibly utilitarian Honda Fit, or the cute little Scion iQ. There are several cars which get TWICE the gas mileage of the above SUVs. What cars on the market today get around 60 to 65 MPG on the highway? Using the tested "Overall MPG" values from Consumer Reports: Subaru Forrester 2.5: 22 mpg Honda CR-V: ...
by altruistguy
Fri May 04, 2012 8:48 am
Forum: Personal Consumer Issues
Topic: Toyota Highlander overkill for 2 people?
Replies: 52
Views: 9777

Four person vehicle options with adequate luggage room

We are looking to replace the minivan, so this thread interests me. We have two kids, so anything we get would have to seat four + the occasional guest. And, we need room for luggage for four. I looked at Highlander but am wondering if I can get away with something smaller. I'll get myself to the showrooms to check out the cars in person, but does anyone have recommendations that I should put on my short list? Hello Tom_T, Get your favorite efficient four or five seat vehicle (e.g., Toyota Prius, Honda Fit, etc.) and supplement it when necessary with a car-top carrier for extra luggage room. I do this with my Toyota Prius and it works great. Most of the time, after all, you don't need that extra luggage room. So I get to drive this ultra-e...
by altruistguy
Thu May 03, 2012 8:58 pm
Forum: Personal Consumer Issues
Topic: Toyota Highlander overkill for 2 people?
Replies: 52
Views: 9777

Highlander IS overkill for two people

Hello Dark Knight, I'm a Highlander owner. I think that it is not only overkill for two people, but it is overkill for FOUR people! IF you must have an SUV, I suggest going with Consumer Reports' top-rated small SUVs: Subaru Forester, Toyota RAV-4 (4-cyl gets best mileage), or Honda CR-V. All three should get you fantastic reliability. That is if you really MUST have an SUV. I strongly suggest getting a more practical, fuel efficient vehicle, though. For example, your favorite of the four Toyota Prius', perhaps one of the excellent Volkswagen TDIs, or the incredibly utilitarian Honda Fit, or the cute little Scion iQ. There are several cars which get TWICE the gas mileage of the above SUVs. If it were me, I would try to train myself to like ...
by altruistguy
Sun Apr 15, 2012 10:53 am
Forum: Personal Investments
Topic: Solo 401k allowing after-tax contributions? (not Roth)
Replies: 24
Views: 4795

Re: Solo 401k allowing after-tax contributions? (not Roth)

I am talking about making nondeductible, non Roth contributions by the employEE in excess of the elective deferral limit. This is legal and I have done it at prior employers. The limit is your salary, so you can contribute all $50k if that's all you make (say from a side business). As you can imagine, this is considerably better than only getting the 20-25% of salary employER contributions. Hello Xerty, You are mistaken. Here's authoritative guidance on the law here. Here's a relevant quote from that source: " Excess not withdrawn by April 15. If you do not take out the excess deferral by April 15, 2012, the excess, though taxable in 2011, is not included in your cost basis in figuring the taxable amount of any eventual distributions ...
by altruistguy
Sun Apr 15, 2012 9:26 am
Forum: Personal Investments
Topic: New situation - need advice on changing investments
Replies: 14
Views: 1542

Re: New situation - need advice on changing investments

Hello Team Sammy, Congrats on putting yourself in what appears to be a pretty comfortable financial position. Now the challenge will be to avoid making the big mistakes that most folks routinely do when managing their money. The fact that you are at Bogleheads is a good omen. It suggests that you MAY be open to the principles of prudent investment. I hope that it goes well with you. 1) The most important thing here is to avoid making big mistakes, among them: - Attempts at market timing - Attempts at stock picking/over-concentration 2) There are many, many "fine points" that can increase your after-tax risk-adjusted returns. These are quite small effects, however, compared to the big important issue of avoiding big mistakes. So --...
by altruistguy
Sun Apr 15, 2012 9:10 am
Forum: Investing - Theory, News & General
Topic: backdoor to backdoor Roth
Replies: 6
Views: 781

Re: backdoor to backdoor Roth

Hello, This is, indeed, how it is done. But there exist the following caveats: 1) The 401(k) is not required by law to accept the incoming transfer of pre-tax assets (but most do). This apparently isn't a problem in your case. 2) Once the pre-tax money has been moved into the 401(k), it is locked in there until you are 59.5 and/or you leave the company. If your 401(k) is a bad one (as most are), you could be hurting yourself more than your are helping yourself with this entire plan. 3) It is desperately important that you keep good records on your IRA basis and that you properly reflect all these transactions on your tax return. Specifically, it will be important to get the Form 8606 correct AND to ensure that the IRA custodian gets the dis...
by altruistguy
Sun Apr 15, 2012 8:56 am
Forum: Investing - Theory, News & General
Topic: have/would you invest in a hedge fund?
Replies: 43
Views: 3325

Re: have/would you invest in a hedge fund?

I am SHOCKED that there exist alleged BogleHeads who would consider this. To all who would consider, I strongly recommend that you take a look here.

Eric E. Haas
by altruistguy
Sun Apr 15, 2012 8:51 am
Forum: Personal Finance (Not Investing)
Topic: Solo 401k Roth Contributions
Replies: 3
Views: 567

Re: Solo 401k Roth Contributions

Hello Ossi,

Nope -- I don't think that your Roth employee contributions to a solo 401(k) show up anywhere on your federal tax return.

Once your solo-401(k) balance gets up to at least $250k, the IRS will have your annual Form 5500 filings. Until then, it may actually be the case that the IRS has no way of verifying that you had enough income to justify the level of employee 401(k) contributions, but I wouldn't count on it! I recommend that you follow the law. At the very least, if the IRS audits you for some other reason, this could very well come out. And it is illegal to deliberately violate the law (i.e., I suppose that you could go to jail if you did this deliberately).

Eric E. Haas
by altruistguy
Sun Apr 15, 2012 8:39 am
Forum: Personal Investments
Topic: Solo 401k allowing after-tax contributions? (not Roth)
Replies: 24
Views: 4795

Re: Solo 401k allowing after-tax contributions? (not Roth)

Hello Xerty, This one is easy. Vanguard's solo-401(k) plan allows Roth contributions (but only for the employee portion of contributions). However, federal law prohibits what you said you wanted about getting the full employer contribution regardless of income. I think that the income you currently need to get the full contribution is just under $200k. Here's a useful calculator that calculates how much you are allowed to contribute based on your income and age. It also compares this to what you would be allowed to contribute to a SIMPLE-IRA, an SEP-IRA, or a defined benefit pension plan. So the bottom line is look no further than Vanguard for your solo 401(k). And also try to get your income up to at least $200k or so. Then you will be in ...
by altruistguy
Fri Apr 13, 2012 1:27 pm
Forum: Personal Finance (Not Investing)
Topic: USAA's Comprehensive Financial Plan
Replies: 11
Views: 2622

Re: USAA's Comprehensive Financial Plan

Hello SteelerFan, I'm generally a big fan of USAA. For insurance (esp. auto & homeowners), they are hard to beat. USAA Federal Savings Bank has been a good choice too. First, USAA is one of only two Financial Planning companies I am aware of who offer a money-back guarantee (from their Form ADV Part 2 brochure: "Clients may terminate their enrollment at any time and may request a refund at anytime."). Here's the experience of a friend who bought a financial plan from them about ten years or so ago (they passed on a copy of the plan to me): - On the title page of the written plan was a disclaimer that the Bush tax cuts have just been passed, but those changes haven't been reflected in the plan -- causing much of the plan to be ...
by altruistguy
Tue Mar 20, 2012 9:33 pm
Forum: Personal Investments
Topic: Which 403B company to consider?
Replies: 8
Views: 1580

Re: Which 403B company to consider?

Hello RedBug, Just looking at the list of companies, it looks like a bunch of high-cost providers. Honestly, if there is no company match, you may be better off skipping these entirely. I did some modeling for one of my clients. I found that the fees of her awful 403(b) choices were so incredibly large that they exceeded the benefit of tax deferral. In other words, using what I believed to be reasonable assumptions, I expected that, on an after-tax basis, using these awful 403(b) choices would make her LESS wealthy in the future than if she did not contribute to the 403(b) (i.e., than if she instead invested that same money in a taxable account). It may be the case for you too. But if there is a company match, you probably want to take adva...
by altruistguy
Mon Mar 19, 2012 9:51 am
Forum: Personal Investments
Topic: College savings - 529 Plan
Replies: 12
Views: 1434

Re: College savings - 529 Plan

Hello Acheruk,

VEST is now a pretty good program, especially for Virginians. Here's detail of the low fees of their index fund investments.

So -- at least for the first $4k of contributions per year, contribute to the VEST and keep your investments in VEST's index offerings. According to SavingForCollege.com, $4k is the annual max that is state-tax deductible.

If you'd like to contribute more than $4k per year, you can feel free to use one of the other good plans out there for the excess. But for simplicity's sake, you might just stick with VEST.

Eric E. Haas
by altruistguy
Sat Mar 03, 2012 9:32 pm
Forum: Personal Consumer Issues
Topic: Toyota Prius Info
Replies: 38
Views: 4228

Prius C

Hello,

2nd Gen Prius Owner. Upgraded four years ago from a 1st gen Scion xB (which got 34 mpg). Over the past four years, I've been averaging about 52 mpg or so in my Prius. I estimate that I've saved about 200 gallons/yr because of the upgrade.

That said, I urge consideration of the new Prius C. About the same mileage as the standard Prius, but much less expensive. That sounds like a good combination to me.

Otherwise, I'd urge consideration of Honda Fit, Toyota Yaris or the cute new Scion iQ. All three fantastically inexpensive, quite fuel efficient, and all cars mentioned here are exceptionally reliable.

Fun discussion!

Eric E. Haas
by altruistguy
Thu Feb 23, 2012 8:00 am
Forum: Personal Finance (Not Investing)
Topic: Prepaid tuition?
Replies: 27
Views: 4028

Re: Prepaid tuition?

Hello Anil, For most folks, direct-sold 529 plans that are NOT pre-paid tuition plans offer the best deal. Pre-Paid tuition plans generally require the child to attend an in-state school to get full benefit. If they don't do that, then not only is it a less good deal, it may end up being a really bad deal. As an example, the last time I checked, here's how my state's Pre-Paid tuition plan worked: - To get max benefit, you had to go to the state's most expensive public university (unlikely -- the most-expensive public university for this state is one of the most competitive schools in the nation). - If you go out of state, you get the same benefit as if you attended the LEAST expensive public university in my state. This is inconvenient -- b...
by altruistguy
Sun Feb 19, 2012 8:49 am
Forum: Investing - Theory, News & General
Topic: Scott Burns blows the whistle on ETFs (and Vanguard too?)
Replies: 39
Views: 7961

Re: Scott Burns blows the whistle on ETFs (and Vanguard too?

Hello Folks, Dad2000 has it right. Criticizing Rick is just silly -- he is one of the lowest-cost competent investment managers in the world. To criticize one of the lowest cost -- and most ethical -- of such providers -- for being too expensive and/or unethical just seems wrong. Rick has long been advocating for the investment management industry to lessen their fees to something more reasonable (i.e., like his extremely low fees). Rick is clearly one of the "good guys". If anything, his pricing practices are clearly worthy of emulation, not castigation. One more comment about the goodness of the AUM compensation model. a) Folks, potential liability (of the adviser) goes up linearly with AUM. Further, a client's propensity to sue...
by altruistguy
Mon Jan 30, 2012 6:18 pm
Forum: Personal Investments
Topic: Recent Engineering College Grad- Help!
Replies: 50
Views: 4937

Re: Recent Engineering College Grad- Help!

mikef40320 wrote: All Vanguard-

Vanguard Target Retirement Income Fund investor shares (VTINX)
2005 (VTOVX)
2010 (VTENX)
2015 (VTXVX)
2020 (VTWNX)
2025 (VTTVX)
30 (VTHRX)
35 (VTTHX)
40 (VFORX)
45(VTIVX)
50 (VFIFX)
55 (VFFVX)

Should I spread it over a few or put it all towards one(50 or 55)??
GREAT! Just dump it all into the 55 fund and forget about it! This is fantastic. Extremely simple, extremely well-diversified, extremely inexpensive --- AND a company match(!!). Thank your lucky stars that you have such a great 401(k).

Eric E. Haas
by altruistguy
Sun Jan 29, 2012 8:23 am
Forum: Personal Investments
Topic: Recent Engineering College Grad- Help!
Replies: 50
Views: 4937

Re: Recent Engineering College Grad- Help!

mikef40320 wrote: As far as puttingmy AA to 100%, what do you suggest for splitting that into different equities???
Hello Mike,

This is easy. Especially for somebody with very small amounts to invest -- the fact is that it just doesn't matter much (i.e., fancy "slice-n-dice" type strategies might be too complicated, with too small a prospective benefit, to be worth the effort). Go with a "Total Stock Market" type of investment. Easy, extremely well diversified. If you have access to an international index type of investment, make that 40% or so of the total. This is really, really easy for somebody like you.

What investing options are available in your 401(k)?

Eric E. Haas
by altruistguy
Sat Jan 28, 2012 12:42 pm
Forum: Personal Investments
Topic: Recent Engineering College Grad- Help!
Replies: 50
Views: 4937

Re: Recent Engineering College Grad- Help!

Don't. Put every spare dollar, after establishing an emergency fund, towards your loans. You will gain nothing by borrowing money at 9.7% to invest in the stock market (and that's what investing instead of paying down loans essentially is). Paying down a loan gives you, in essence, the rate of return of its interest rate. I would contribute to your 401k to the match and no further. Save money for an emergency fund and pay down the debt, starting with the 9.7% loan - for purposes of cash flow, you are probably better off making minimum payments on all loans but the highest rate one, and throwing as much as you can towards that one. After one is paid off, your cash flow requirements will decrease, so if you have an emergency you will be in b...
by altruistguy
Tue Jan 24, 2012 6:45 pm
Forum: Investing - Theory, News & General
Topic: Regressions continue to show RPV/RZV are good DFA surrogates
Replies: 29
Views: 7781

Re: Regressions continue to show RPV/RZV are good DFA surrog

I'm not smart enough to know why the Pure Value alphas appear to be so negative. BUT, I do note that those apparent negative alphas aren't statistically significant (at the moment, anyway). Thus, there is a very non-zero possibility that the true alpha has been zero, or even positive. It isn't a useful thing to have a debate about a result which has a p-value of 30% to 40% -- it is just kind of foolish. For the uninformed, "p-value" is essentially the likelihood, given certain assumptions, that the apparent outperformance (or underperformance) was the result of good luck (or bad luck), instead of some systematic factor. The traditional threshold for a confident conclusion is a p-value of less than 0.05, which basically means a le...
by altruistguy
Tue Jan 24, 2012 10:51 am
Forum: Investing - Theory, News & General
Topic: Regressions continue to show RPV/RZV are good DFA surrogates
Replies: 29
Views: 7781

Re: Regressions continue to show RPV/RZV are good DFA surrog

Hello Baw, There have been a number of threads on whether RZV really gives its factor returns. As of a couple of years ago, it looked like it had a pretty steady negative alpha--but then regained almost all of it in a couple of months. Is this a consequence of the smaller number of holdings? It's been stated that a lot of the returns of SV (particularly deep value) are due to a small number of companies that have near-death experiences, but then recover. So it seems that a fund with fewer holdings might modestly underperform the asset class as a whole most of the time (if it didn't own the "right" companies, but have a very large outperformance in those instances when it did. In other words, a skewed distribution relative to the o...
by altruistguy
Tue Jan 24, 2012 9:27 am
Forum: Investing - Theory, News & General
Topic: Regressions continue to show RPV/RZV are good DFA surrogates
Replies: 29
Views: 7781

Regressions continue to show RPV/RZV are good DFA surrogates

. This post updates posts I made about two and four years ago here. Since the results of the analysis are identical, the verbiage is virtually identical. Basically, this post advocates for use of RPV and RZV as surrogates for DFLVX and DFSVX, which most folks don't have access to. 1) Many folks have long rued the inaccessibility of DFA funds and wished that there existed good alternatives available to the general public. The folks at Rydex have provided a good substitute for the DFA US Large Cap Value Portfolio (DFLVX) and the DFA US Small Cap Value Portfolio (DFSVX) since March 2006. Those substitutes are the Rydex S&P 500 Pure Value ETF (RPV) and the Rydex S&P SmallCap 600 Pure Value ETF (RZV), respectively. This post does a three...
by altruistguy
Mon Jan 23, 2012 8:27 pm
Forum: Personal Investments
Topic: New 457(b) Roth
Replies: 6
Views: 800

Re: New 457(b) Roth

Hello,

It looks like a wonderful opportunity.

Do you have anything in a taxable investment account? If so, you could tap that as necessary to help meet ongoing cash-flow needs in order to max out the good deal that is the 457.

Eric E. Haas
by altruistguy
Fri Jul 08, 2011 11:48 am
Forum: Personal Finance (Not Investing)
Topic: Social Security Spousal Benefits Question
Replies: 6
Views: 1609

Slight problem

Hello,

I believe that your wife's plan to switch to her husband's spousal benefit is not possible. It is my understanding that you can start with a spousal benefit and switch to a benefit on your record, but not the other way around. Once you start on your own record, you can't switch to someone else's record.

Eric E. Haas
by altruistguy
Mon May 16, 2011 5:49 pm
Forum: Investing - Theory, News & General
Topic: Using a Remotely Located Financial Planner
Replies: 7
Views: 1436

Can work well; Not for everyone

Hello, As a financial planner/investment advisor who does business this way, I can tell you that it can work. Most of my clients (i.e., all but one) live in different states than do I -- and have never met me. The overwhelming majority of our ongoing communication is by E-Mail, occasionally supplemented by telephone and, very rarely, sending forms by snail-mail. This can work well if you are someone who is comfortable with using electronic forms of communication (your use of the Bogleheads forum is a good clue that this may include you). HOWEVER, if you are somebody who can't imagine yourself trusting anybody whom you haven't looked into the eyes of, or stood on the other side of a mahogany conference table from, then perhaps this isn't for...
by altruistguy
Sun May 15, 2011 8:58 am
Forum: Personal Investments
Topic: Metlife for 1 year should I switch to Vanguard 403b
Replies: 15
Views: 2796

Re: Metlife for 1 year shoud I switch to Vanguard 403b

I am a new teacher and I am early into the retirement savings with Metlife, first year. Is it in my best interest to switch to Vanguard. The Metlife finacial advisor put me into thier aggressive growth alocation. How much money do I need to switch to Vanguard? how much will I pay to switch to Vanguard, and if I call Vanguard will they be able to take care of the transfer for me? Any help would be greatly appreciated. BG Hello Garza, You can, and should, switch to Vanguard. That Metlife "financial advisor" was no advisor at all, they were an insurance salesperson -- and they sold you what is almost certainly a high-cost variable annuity -- with outrageously high mortality and expense fees, outrageously high ongoing management fees...
by altruistguy
Sun May 15, 2011 8:38 am
Forum: Investing - Theory, News & General
Topic: Fee for Financial Planner
Replies: 19
Views: 2290

Re: Fee for Financial Planner

The latter fees are the same for any fund, so he says he is free to choose from any available fund family. As you described it, this person appears to be a snake-oil salesman masquerading as a fiduciary. The alledgedly good news is that all brands of snake-oil he sells are equally efficatious. I recommend not dealing with a snake-oil salesman and avoiding snake-oil completely. In my opinion, anybody in the financial services industry who receives any compensation from anybody except the client -- ever -- must be assumed to be unameliorably conflicted -- and not a fiduciary (i.e., you must assume that they are NOT looking out for your best interest, but rather to enrich themselves at your expense). If they are compensated in any way on the ...
by altruistguy
Sun May 15, 2011 8:12 am
Forum: Investing - Theory, News & General
Topic: Vanguard's "buried" (and redundant) ETFs
Replies: 20
Views: 7729

Some pure speculation ...

Hello folks,

Just speculating here. It may be that Vanguard had to agree to start this big family of S&P ETFs in order to get reasonable licensing terms from S&P when starting VOO (which they had long sought to do -- and for which they fought long and hard in court -- unsuccessfully). Of course, that wouldn't explain why they started the Russell ETFs ...

Anyway, if they only very reluctantly started these funds in the first place (i.e., under external licensing pressure), that might explain why they are only half-heartedly promoting them.

My opinion only -- and again, PURE SPECULATION!

Eric E. Haas
by altruistguy
Sat Feb 26, 2011 1:34 pm
Forum: Personal Investments
Topic: Emerging Markets Fund Recommendation?
Replies: 8
Views: 1506

Vanguard Emerging Markets ...

Hello,

If you must have an emerging markets fund in your plan, than it is hard to beat VEIEX (or better yet, perhaps the Signal Shares version).

If you are aware of a better option, I'm all ears ...

Eric E. Haas
by altruistguy
Sat Feb 26, 2011 1:03 pm
Forum: Personal Investments
Topic: Decisions, Decisions
Replies: 9
Views: 1163

Either Rydex or Vanguard -- depends on what you want ...

Hello EmmaBus,

Not doing any actual research on these particular funds, but off the top of my head:

- If you want the growthiest one, then the Rydex is clearly your man. And, after all, it is the "growthi-ness" that makes a mid-cap stock a mid-cap growth stock in the first place.

- If not, go with the least expensive one, which I presume to be the Vanguard one.

That said, it is difficult for me to imagine a good reason to buy a "mid-cap growth" fund in the first place.

Eric E. Haas
by altruistguy
Wed Feb 23, 2011 9:24 am
Forum: Personal Investments
Topic: 401k Plan- Employer Setup Recommendation- URGENT
Replies: 41
Views: 7850

DFGBX is fine

meckaneck wrote:
Hi Eric- thanks again. One last question, what are your thoughts on including DFA's 5 year Global Fixed Income Portfolio (DFGBX)?
Hello Meckaneck,

For those who have access to it, I think that DFGBX is a fine fund. However, for those who have enough to qualify for admiral shares, it is difficult to turn down the amazingly low expense ratio of VFSUX. For a very detailed rundown of viable investments in this asset class, see here.

Eric E. Haas
by altruistguy
Tue Feb 22, 2011 9:07 am
Forum: Personal Finance (Not Investing)
Topic: Do you factor in future taxes when calculating net worth?
Replies: 24
Views: 6446

After-Tax Asset Allocation

I do all my asset allocation on an after-tax basis. I was convinced many years ago by academic William Reichenstein of Baylor University (see his several papers on this topic here ). I note that he's also written a book about this . I wish that I wasn't convinced that this was the right thing to do. It makes my life much more complicated. But unfortunately, I am convinced that it is the right thing to do. Yes, the above comments about not knowing the future tax rates are correct. HOWEVER: - I am nearly 100% certain that assuming that the tax rate is ZERO, which virtually all investors do by default, is wrong. - I am also nearly 100% certain that whatever I assume for the future blended tax rate is also wrong. However, I am equally certain t...