Search found 24 matches

by DWSwildcat
Mon Jan 23, 2017 6:41 pm
Forum: Personal Investments
Topic: Appropriate to Use EDV in Taxable account?
Replies: 2
Views: 1700

Appropriate to Use EDV in Taxable account?

Years ago I considered using EDV in a taxable account but several people convinced me it wasn't a good choice. They said EDV paid "Phantom income" i.e. income not received but taxed as though it were received, had a lot of unrealized capitol gains, and usually sold for a premium. However, I checked the vanguard website and Morningstar today, it appears EDV makes distributions each quarter when they rebalance and is exactly for the amount of the phantom income you didn't receive but will be taxed upon. Also, the Vanguard site shows a negative $0.50 in unrealized appreciation and only sells for an $0.80 premium. I can't see any reason to not buy EDV for a taxable account. Am I missing something.
by DWSwildcat
Wed Apr 04, 2012 9:45 pm
Forum: Investing - Theory, News & General
Topic: Iowa farmland vs. S&P, 1950-2011
Replies: 39
Views: 6742

Re: Iowa farmland vs. S&P, 1950-2011

Athada,
Check out my analysis on the Permanent Portfolio website. I did much the same analysis using Nebraska Farmland dat.

http://gyroscopicinvesting.com/forum/in ... pic=2316.0

One thing that's important to realize is that farmland is a great counterbalance to stocks. From your chart (and my analysis) farmland performed great at exactly the same times the stock market tanked (1970's and 2000's). Farmland and stocks have a zero correlation to each other and farmland also has a 94% correlation to inflation.
by DWSwildcat
Wed Sep 14, 2011 3:46 pm
Forum: Investing - Theory, News & General
Topic: Military Investing
Replies: 125
Views: 65468

Kudos! Wonderful you do this for your troops. Especially like the advice on the Penfed cash back card. I always encouraged my troops to get the same card. 5% cash back on gas and 1.5% on everthing else can't be beat. I'd put all my charges on that card then get back $500 every Novermber. When My troops saw my year end Penfed check, that they all signed up. That was my Christmas present to my guys.

You might also want to mention the Space A travel option. That's another way to save your people a buttload of money.
by DWSwildcat
Fri Sep 09, 2011 8:55 pm
Forum: Personal Investments
Topic: Using TIPS/Long Bonds in place of cash
Replies: 5
Views: 1142

I just plugged the numbers into Simba's spreadsheet a minute ago and I see 67% Tips and 33% VUSTX would have posted 2 losses in 40 years (-3.3% in 1973 and -0.31% in 1994). Overall from 1972 this would have returned 7.76%. TIPS posted losses 5 times but in 4 of those years, VUSTX's positive return more than made of for TIPS negative return.

My intellect says you guys are probably right - what you say seems reasonable - but Simba results seem to indicate pretty stable returns.

I'm not sure what to make of this. Backtesting is good and well but I'm not sure I could expect the same performance going forward.
by DWSwildcat
Fri Sep 09, 2011 7:11 pm
Forum: Personal Investments
Topic: Using TIPS/Long Bonds in place of cash
Replies: 5
Views: 1142

Using TIPS/Long Bonds in place of cash

I don’t like the idea of putting the cash portion of my portfolio into a Money market, CD or short term treasury fund since yields are so freakishly low. I am looking for ways to get a little higher return without too much volatility. As a thought experiment, for the cash portion of the portfolio, how about putting your cash in TIPS (or say 2/3 in TIPS (VIPSX) and 1/3 in investment grade long term corp bonds.) I think this would be only slightly more volatile than money in a Treasury money market fund but it would seem you would get a lot more of a return. If yields stay about where they are, I assume TIPS would return about 3% (current rate of CPI) and LT corporates would yield about 5%. If yields and inflation rise a percent or two, I ass...
by DWSwildcat
Sat Jun 11, 2011 12:39 am
Forum: Investing - Theory, News & General
Topic: Treasuries, GNMAs, corporates and a U.S. debt default
Replies: 48
Views: 5014

Amazingly, I was just about to post the same question when I saw Eureka's post.

THe best solution I can think of off the top of my head is for my bond allocation to be half VWESX (long term investment grade - 98%corp bonds) and half into LTT with VUSTX. I doubt anyone could truly be devastated by this allocation under any circumstance.

I have to laugh when I see people claim the US "Can't" default. It can. Not saying they will - I think it's unlikely - but remember, other countries have defaulted.
by DWSwildcat
Thu Jun 02, 2011 12:31 am
Forum: Investing - Theory, News & General
Topic: John T. Reed - "TIPS Won't Protect You from Inflation a
Replies: 17
Views: 2786

As an FYI, Here is another article that says the same thing. Finding two articles with a certain viewpoint doesn't guarentee their validity but it certainly does give credense to the idea. TIPS: The U.S. Treasury offers securities where yields and principal get adjusted regularly for the rate of inflation. In a hyperinflation, price changes can be so rapid that the principal and/or yield adjustment would lag enough so as to make the adjustments worthless. The reporting lag in calculating the adjusting CPI index—if it even could be calculated—still would wipe out investors, unless the Treasury became particularly creative and began benchmarking to spot gold or such, but nothing like that is in place. http://www.shadowstats.com/article/hyperi...
by DWSwildcat
Wed Jun 01, 2011 11:22 pm
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

fredflinstone

I didn't short any treasuries but I'll keep the idea in my back pocket. Sometimes I just toss out an idea to the boglehead crowd to get some honest feedback. I always appreciate comments or even criticism. That's how you learn and develop perspective.
by DWSwildcat
Tue May 31, 2011 9:22 am
Forum: Investing - Theory, News & General
Topic: Precious Metals in Your Portfolio
Replies: 42
Views: 4639

In this article, John T Reed expalins why any govt indexed bond (Like a TIP) will lose big if hyperinflation occurs.

http://www.johntreed.com/costofliving.html

I can't access the credit Suisse referenced mentioned above so I am still very skeptical stocks hold up well during hyperinflation. I have read in several sources the German market stood at 26,000,000 in Nov 1923. Considering the inflation rate was in the trillions, I don't see how stocks were able to retain any value.
by DWSwildcat
Sun May 29, 2011 12:47 pm
Forum: Investing - Theory, News & General
Topic: Precious Metals in Your Portfolio
Replies: 42
Views: 4639

patrick I didn't do a good job of explaining TIPS. You are correct the principle value of the TIP changes with CPI changes. Still TIPS do not adjust in real time (semiannually) therefore offer virtually no protection against hyperinflation. I'm curious why you claim stocks held up well during the Weimar episode. Everything I've read indicates the vast majority of stocks go down a lot during hyperinflation due to all the economic chaos. If you have some data or can indicate some reference that says otherwise, I would like to see it. BTW I do not think hyperinflation is likely. However, people like Ron Paul, Marc Faber, Jim Rogers, along with several Austrian school economists think hyperinflation is possible or probable. Therefore as a prude...
by DWSwildcat
Sun May 29, 2011 2:53 am
Forum: Investing - Theory, News & General
Topic: Precious Metals in Your Portfolio
Replies: 42
Views: 4639

rushnp774 TIPS rates are adjusted 2 times each year. For the sake of argument, assume TIPS rates are adjusted on 1 Jan and 1 july. Suppose on 31 Dec the Inflation rate is 1%. That means for the next 6 months TIPS will be paying, say 1.5%. Suppose the inflation rate starts moving up so that by 1 July it is running at 50%. At this point, TIPS will adjust their rate to say 50.5%. In hyperinflation, the inflation rate goes parabolic so that let's say it's running at 200% by year's end. During the first half of the year you are getting 1% on your TIP but are losing between 1% and 50% due to inflation. During the second half of the year, you are making 50.5% on your TIP but still losing well over 50% to inflation. TIPS are good investments for de...
by DWSwildcat
Sun May 29, 2011 2:27 am
Forum: Investing - Theory, News & General
Topic: Are we entering a period of disinflation?
Replies: 21
Views: 3540

Bongleur

You really think owning long term treasuries and bonds are a good idea? I sold all my bonds/govt debt 2 years ago. With a $14T Federal debt you feel safe owning these instruments? You are either the most patriotic person I've met or you have no appreciation for the financial mess we're in. In order to get out of the jam the govt is in [color=darkred]--economic policy remarks deleted--.[/color]
by DWSwildcat
Sun May 29, 2011 1:55 am
Forum: Investing - Theory, News & General
Topic: Precious Metals in Your Portfolio
Replies: 42
Views: 4639

rushnp774 TIPs are a good way to protect yourself from mild inflation but it's a fact that TIPS lose all value in a hyperinflationary scenario. That right, a 100% wipeout. After about 10 hours searching for the best online precious metal dealer, I think the top choice is Goldmart. It's rated A- by the Better Business Bureau. They sell 1 oz gold Krugarrands for $29.99 over the spot price which works out to be about a 1.9% premium. Tulving may have slightly lower prices but they have no BBB rating and from some of the precious metal forums I've read, not great customer service. Gainesville Coins are A+ rated and slightly higher priced. Go to their websites and compare for yourself (just Google the company names) Keep in mind that, due to high...
by DWSwildcat
Sat May 28, 2011 11:22 pm
Forum: Investing - Theory, News & General
Topic: Precious Metals in Your Portfolio
Replies: 42
Views: 4639

rushnp774, I used to think you way you do until recently. However, I came to realize I was well diversified in in stocks but had virtually no exposure to hard assets (land, precious metals, oil, Ag commodities). If high inflation hits, hard assets are about the only things that won't be wiped out. That's why I'm diversifying into hard assets. Precious metals are part of my allocation to hard assets. Eventually they may constitute 10% of my portfolio. BTW TIPS are worthless in the face of hyperinflation. Think about it: TIPS are not adjusted in real time, they are adjusted twice per year which is far too slow to keep pace with hyperinflation. I've snooped around the internet and found reputable precious metal dealers (Better Business Bureau ...
by DWSwildcat
Sat May 28, 2011 5:07 pm
Forum: Investing - Theory, News & General
Topic: Are we entering a period of disinflation?
Replies: 21
Views: 3540

Depression versus Hyperinflation

letsgobobby Parts of the economy are slumping badly, such as housing, which could take down the banking sector and lead to a Depression. On the other hand, with the govt dropping rates to zero and buying trillions of US debt, if US govt creditors decide to dump their holdings, there could be hyperinflation. I am not convinced either event will happen but since there is clearly a nonzero chance of either happening, I try to keep 1/3 of my money in cash (to protect against depression type event), 1/3 in hard asset type funds to protect against hyperinflation (Vanguard Energy fund, an Agribusiness Stock ETF, and I'm slowly moving some money into the vanguard Precious Metal and Mining fund) and 1/3 in diversified stock index funds (Total Stock ...
by DWSwildcat
Sat May 28, 2011 4:37 pm
Forum: Investing - Theory, News & General
Topic: Precious Metals in Your Portfolio
Replies: 42
Views: 4639

Precious Metals in Your Portfolio

I've been considering adding some gold/silver to my portfolio as a hedge against inflation and/or possible hyperinflation. I'm curious if other Bogleheads own gold and silver and if so, what percentage of your portfolio is in precious metals. Would gold/silver be a good hedge against hyperinflation?
by DWSwildcat
Tue Apr 05, 2011 12:43 am
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

Gsmith
Agree with your take.

Considering the Fed has been purchasing 70% of treasury bonds in QE2, it will be extremely interesting to see what happens on 30 Jun when QE2 ends. There's a good chance rates could spike then.

It's possible rates could somehow stay low over the coming decade but the odds are strongly against it. If rates do rise dramatically, bondholders will be taken to the cleaners.
by DWSwildcat
Mon Apr 04, 2011 8:52 pm
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

Re: Investing in inverse bond ETF's

The 30-year treasury is currently trading at a yield of about 4.5%. The bond market clearly is not particularly worried about default risk or inflation risk. What makes you think your judgement is superior to the collective judgement of tens of thousands of professional bond buyers and sellers? I used to think I could predict the future direction of the stock market and bond market. Not anymore.[/quote] Fred I don't think my judgement is better than anyone else's. Me, like all good Bogleheads are well diversified in PAPER assets. I have no exposure to hard assets. That's worrisome to me (apparently nobody else on this board is worried) because in high inflation periods, paper assets crash. Therefore, I'm trying to find some way to diversity...
by DWSwildcat
Mon Apr 04, 2011 5:40 pm
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

[i]Stocks historically do ok in periods of inflation and interest rates going up.

I believe when the US had "stagflation", stocks slightly outperformed bonds.

In hyperinflation, stocks do ok and massively outperform bonds.[/i]

GLENNC
Gadzooks! You really think stocks do well in a rising interest rate environment? Hardly. In the inflationary 1970s stocks and bonds were the two worst investments. Hard assets were the top investment and handily beat inflation.
by DWSwildcat
Mon Apr 04, 2011 5:03 pm
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

Tramper Al

I have already harvested all my losses from 2008 and 2009. I've already moved my IRA to short term funds. My fund allocation is well diversified the way I (and most Bogleheads) would like. Still, I am 100% in paper assets and paper assets may come apart much like what happened in the 1970s or worse. Normally I would buy some commodities or hard assets but these assets are all in bubbles right now. That's why I'm trying to figure out some way to hedge my paper assets.

Parking say, 20% of my money (or some such percentage) in TIPS isn't much of a hedge. I suppose I could go 100% in TIPS but that doesn't like a very well balanced portfolio to me.
by DWSwildcat
Mon Apr 04, 2011 3:49 pm
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

Trapper Al

You're right - I could sell off some of my stock index funds but I don't like to get stuck with a big tax bill. Besides, even if I did sell some funds I'd still be 100 long in my position with no hedge.

Frankly I'm scared some nasty inflation rises/stock sell offs could happen that would threaten my retirement funds. Any ideas what to do?
by DWSwildcat
Mon Apr 04, 2011 3:29 pm
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

[quote="gsmith"]Morningstar has some excellent videos and commentary why these should never be held for more then a couple days.

I agree with the videos: 99% of inverse ETF's don't work because of their volatility. However, the inverse [u]treasury[/u] ETF's have far less volatility. Check out the Proshares 7-10 Inverse treasury ETF. The average volatility for this fund was 7% for the past 5 years. The average volatiity for inverse stock ETF's is in the 40-60% range. That's why, at least for this one ETF, an inverse treasury ETF can make sense.
by DWSwildcat
Mon Apr 04, 2011 2:08 pm
Forum: Investing - Theory, News & General
Topic: Investing in inverse bond ETF's
Replies: 38
Views: 5981

Investing in inverse bond ETF's

First off, my entire portfolio is in Vanguard Index funds. However, I'm becoming more and more alarmed about our looming debt crisis. If inflation and interest rates spike up, stocks will drop and bonds will get killed. I've read a number of books lately trying to find some way to hedge my long positions in stock indexes. Several authors argue for 1) gold, 2) silver, 3)commodities, 4) oil, 5) real estate. However, each of these assets are in a bubble (even real estate - just look at farmland prices). Lately Ive been intrigued by inverse ETFs that short Treasury bonds. Considering we are at 60 year lows for treasury yields there seems to be a floor to keep downside risk low while the sky's the limit on the upside rise in interest rates and b...
by DWSwildcat
Sat Feb 05, 2011 11:37 pm
Forum: Investing - Theory, News & General
Topic: Yearly stock sector returns
Replies: 2
Views: 769

Yearly stock sector returns

I'm trying to do some research on year by year stock sector returns covering the past 80 years or so. Years ago I found some good data on the internet but now I can't seem to find anything. If possible I'd like to see data on small caps, large caps, emerging markets, bonds, money market, etc. Can anyone help me out?

Thanks in advance!!