Search found 1231 matches

by Oicuryy
Thu Oct 11, 2018 11:30 am
Forum: Investing - Theory, News & General
Topic: Diversifying with a zero-correlation, zero-return volatile asset
Replies: 66
Views: 3512

Re: Diversifying with a zero-correlation, zero-return volatile asset

Or are you saying that there is a fundamental difference between my coin flip and "a zero-correlation, zero-return volatile asset?" This, I think. Imagine some sort of structured product where the annual return was determined by a coin flip. Heads and the annual return is +10%; tails its −10%. You ...
by Oicuryy
Thu Oct 11, 2018 10:17 am
Forum: Investing - Theory, News & General
Topic: Diversifying with a zero-correlation, zero-return volatile asset
Replies: 66
Views: 3512

Re: Diversifying with a zero-correlation, zero-return volatile asset

If you imagine they each start with equal amounts of VBINX (60/40 balanced index), worth exactly $100,000 at the time of the bet, then after the bet is settled one of them owns $99,000 worth of VBINX and the other owns $101,000 worth. That is not an investment it two assets. That is an investment i...
by Oicuryy
Wed Oct 10, 2018 7:24 pm
Forum: Forum Issues and Administration
Topic: My threads or posts.
Replies: 6
Views: 619

Re: My threads or posts.

by Oicuryy
Wed Oct 10, 2018 5:41 pm
Forum: Investing - Theory, News & General
Topic: Diversifying with a zero-correlation, zero-return volatile asset
Replies: 66
Views: 3512

Re: Diversifying with a zero-correlation, zero-return volatile asset

My answer is b) no effect. You have a contract with your friend. The contract cost you nothing. It has an expected value of zero. It will not come due and be settled for at least twenty years. I calculate that there is only about a 6% chance that you will end up owing, or winning, more than $25,000....
by Oicuryy
Mon Oct 01, 2018 4:52 pm
Forum: Investing - Theory, News & General
Topic: Economic reasons for rate increase by the Fed?
Replies: 71
Views: 6105

Re: Economic reasons for rate increase by the Fed?

So I'm curious to hear what are folks' thoughts on how we've been doing from a price stability perspective? The price of a thing is the ratio of the value of the thing to the value of a dollar. If the price of a thing is five dollars, its value is five times the value of a dollar. The Fed does not ...
by Oicuryy
Sat Sep 29, 2018 9:37 am
Forum: Investing - Theory, News & General
Topic: Economic reasons for rate increase by the Fed?
Replies: 71
Views: 6105

Re: Economic reasons for rate increase by the Fed?

What (real-world consequences) would happen if they stopped paying IOER? It looks like free money for the banks, so why not stop paying it Higher inflation, maybe. See this article about who is lending and who is borrowing federal funds. The Federal Funds Market since the Financial Crisis IOER give...
by Oicuryy
Fri Sep 28, 2018 9:16 am
Forum: Investing - Theory, News & General
Topic: Economic reasons for rate increase by the Fed?
Replies: 71
Views: 6105

Re: Economic reasons for rate increase by the Fed?

In a free market, shouldn't banks constantly assess market conditions and adjust their lending standards/criteria and consequently rates they can offer to customers in order to stay competitive and win business from borrowers? They should and they do. Banks freely and independently choose to set th...
by Oicuryy
Thu Sep 27, 2018 11:41 pm
Forum: Investing - Theory, News & General
Topic: Economic reasons for rate increase by the Fed?
Replies: 71
Views: 6105

Re: Economic reasons for rate increase by the Fed?

The economic benefit of the Fed's monetary policy efforts is a stable, predictable value of the dollar. The value of a dollar, like the value of everything else, is determined by supply and demand. The Fed attempts to keep the supply of money growing slightly faster than demand so that the value of ...
by Oicuryy
Mon Aug 27, 2018 11:33 am
Forum: Investing - Theory, News & General
Topic: Nice Explanation of Volatility Drag
Replies: 31
Views: 2499

Re: Nice Explanation of Volatility Drag

The portfolios with same mean expected return but lower expected volatility can be expected to have a greater geometric return. If you limit yourself to portfolios that are on the efficient frontier then there will not be any portfolios that have the same arithmetic mean but different variances. A ...
by Oicuryy
Fri Aug 10, 2018 9:27 am
Forum: Investing - Theory, News & General
Topic: Vanguard Switch to Brokerage Accounts
Replies: 60
Views: 6086

Re: Vanguard Switch to Brokerage Accounts

BUT you can open one of the old accounts if you CALL them and specifically ask for it. Thank you for confirming this. The prospectus for Vanguard mutual funds says you can hold funds directly with Vanguard Group Inc. (mutual fund account) as well as though Vanguard Brokerage Services (brokerage acc...
by Oicuryy
Mon Jul 23, 2018 10:50 am
Forum: Investing - Theory, News & General
Topic: Inflation — Perspectives from Two Centuries, 1800-2016
Replies: 33
Views: 3340

Re: Inflation — Perspectives from Two Centuries, 1800-2016

Inflation is the result of monetary policy. Inflation is an increase in prices caused by a decrease in the value of money. The price of a thing is the ratio of the value of the thing to the value of a dollar. When the value of dollars goes down prices go up. The value of dollars, like the value of e...
by Oicuryy
Sat Jul 21, 2018 10:18 am
Forum: Investing - Theory, News & General
Topic: How does the Fed purchase bonds
Replies: 12
Views: 967

Re: How does the Fed purchase bonds

It is worth noting that the recent "quantitative easing" wasnt the same thing as open market operations. Yes it was. The Fed conducts two types of open market operations, temporary and permanent. QE purchases were permanent open market operations. See this statement from the FRBNY trading desk. It ...
by Oicuryy
Fri Jul 20, 2018 9:12 pm
Forum: Investing - Theory, News & General
Topic: How does the Fed purchase bonds
Replies: 12
Views: 967

Re: How does the Fed purchase bonds

This write-up from the New York Fed is a little dated. But the mechanics of their bond trading haven't changed much.

Open Market Operations

Ron
by Oicuryy
Sat Jul 14, 2018 9:48 pm
Forum: Investing - Theory, News & General
Topic: [Backdoor Roth IRA - Forbes: IRS Unlocks The 'Door' For High-Income Savers]
Replies: 7
Views: 1565

Re: [Backdoor Roth IRA - Forbes: IRS Unlocks The 'Door' For High-Income Savers]

Footnote 269 on page 289 of Conference Report To Accompany H.R. 1 says: Although an individual with AGI exceeding certain limits is not permitted to make a contribution directly to a Roth IRA, the individual can make a contribution to a traditional IRA and convert the traditional IRA to a Roth IRA. ...
by Oicuryy
Thu Jul 12, 2018 4:20 pm
Forum: Investing - Theory, News & General
Topic: Treasury Auction - Nobody Came: "Great T-Bill Massacre"
Replies: 145
Views: 12708

Re: Treasury Auction - Nobody Came: "Great T-Bill Massacre"

Didn't the Fed just raise the Federal Funds rate to 2% in June and signal that there will be one more rate hike in 2018 than what had previously been anticipated? An uptick in T-Bill rates should not be too surprising. It isn't too surprising. https://fred.stlouisfed.org/graph/fredgraph.png?g=krYq ...
by Oicuryy
Tue Jul 10, 2018 2:31 pm
Forum: Investing - Theory, News & General
Topic: Treasury Auction - Nobody Came: "Great T-Bill Massacre"
Replies: 145
Views: 12708

Re: Treasury Auction - Nobody Came: "Great T-Bill Massacre"

The discount rate at today's (7/10/18) 28-day T-bill auction was 1.850%. The bid-to-cover ratio was 3.16.
https://treasurydirect.gov/instit/annce ... 0710_1.pdf

Ron
by Oicuryy
Fri Jul 06, 2018 8:06 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Annuity and GLWB
Replies: 2
Views: 367

Re: Help with Annuity and GLWB

What is the current surrender value? I'm guessing its something like .94*484,539-.8*42,024 = 421,847. By doing so, the pre-tax totals would be: GLWB $263,323 and account value (using the guaranteed minimums): $495,437. I'm pretty sure you won't get both the GLWB withdrawals and the 495,437 account v...
by Oicuryy
Thu Jul 05, 2018 3:07 pm
Forum: Investing - Theory, News & General
Topic: Treasury Auction - Nobody Came: "Great T-Bill Massacre"
Replies: 145
Views: 12708

Re: Treasury Auction - Nobody Came: "Great T-Bill Massacre"

Results of Treasury auctions are posted on the TreasuryDirect web site. https://treasurydirect.gov/instit/annceresult/press/press.htm Results of Federal Reserve open market operations (OMO) are on the New York Fed's web site. Permanent OMO https://www.newyorkfed.org/markets/pomo_landing.html Tempora...
by Oicuryy
Mon Jul 02, 2018 12:18 pm
Forum: Investing - Theory, News & General
Topic: "homemade dividends" from Total Stock Market fund
Replies: 135
Views: 9467

Re: "homemade dividends" from Total Stock Market fund

Here is what the Bogleheads wiki says about the spend-only-the-dividends withdrawal method. If you wish to keep your principal investment amount intact, you might consider using a method where you only spend the dividend and interest income from your investments. The advantage is clear, but like the...
by Oicuryy
Sat Jun 30, 2018 3:55 pm
Forum: Investing - Theory, News & General
Topic: Ownership of Vanguard Funds and Underlying Stocks
Replies: 6
Views: 635

Re: Ownership of Vanguard Funds and Underlying Stocks

Here is a link to a Declaration of Trust for the Delaware statutory trust that Vanguard Total Stock Market Index Fund is a series of. It might not be current but it should give you a sense of what a mutual fund share is. https://www.sec.gov/Archives/edgar/data/36405/000093247109001014/indexfinal.txt...
by Oicuryy
Fri Jun 29, 2018 6:29 pm
Forum: Investing - Theory, News & General
Topic: "homemade dividends" from Total Stock Market fund
Replies: 135
Views: 9467

Re: "homemade dividends" from Total Stock Market fund

Carol88888 wrote:
Fri Jun 29, 2018 2:55 pm
I was wondering how much dividends were affected in the 2008 melt down.
Looks like some serious budget cutting in 2009 and 2010. Graph by me using data from Yahoo.

Image

Ron
by Oicuryy
Fri Jun 29, 2018 11:43 am
Forum: Investing - Theory, News & General
Topic: "homemade dividends" from Total Stock Market fund
Replies: 135
Views: 9467

Re: "homemade dividends" from Total Stock Market fund

Here is a Morningstar growth of $10k chart for VHDYX, VDAIX and VTSMX. VHDYX = VYM = Vanguard High Dividend Yield Index Fund VDAIX = VIG = Vanguard Dividend Appreciation Index Fund VTSMX = VTI = Vanguard Total Stock Market Index Fund http://quotes.morningstar.com/chart/fund/chart?t=VHDYX®ion=usa&...
by Oicuryy
Thu Jun 28, 2018 4:42 pm
Forum: Investing - Help with Personal Investments
Topic: Inflation Rate, isn't it personal?
Replies: 49
Views: 4012

Re: Inflation Rate, isn't it personal?

So we learn from the Atlanta Fed that change in Cost-of-Living and Inflation are not the same thing. Good to know. I just went googling for an explanation of the difference between inflation and cost of living. One of the first things I found was a blog post by an economist at the Atlanta Fed. It i...
by Oicuryy
Wed Jun 27, 2018 4:41 pm
Forum: Investing - Help with Personal Investments
Topic: Inflation Rate, isn't it personal?
Replies: 49
Views: 4012

Re: Inflation Rate, isn't it personal?

For those who have not yet watched the video The Atlanta Fed Explains Inflation here are some excerpts. "When the price level of goods and services goes up over a period of time we call that inflation. Inflation makes every dollar you own buy a smaller percentage of a product or service." "Prices ca...
by Oicuryy
Wed Jun 27, 2018 11:22 am
Forum: Investing - Help with Personal Investments
Topic: Inflation Rate, isn't it personal?
Replies: 49
Views: 4012

Re: Inflation Rate, isn't it personal?

And while you are correct, that inflation is same for all holding a currency since it is the theoretical effect on the purchasing power of a currency, the only thing that really matters are the affects of that inflation. Viewing inflation from your perspective, I assume you would agree that The Fed...
by Oicuryy
Tue Jun 26, 2018 10:26 pm
Forum: Investing - Help with Personal Investments
Topic: Inflation Rate, isn't it personal?
Replies: 49
Views: 4012

Re: Inflation Rate, isn't it personal?

The Federal Reserve Bank of Atlanta has a program named mycpi that offers perhaps a better estimation of your actual inflation. Of course no matter how many factors are used, the rate is still an estimation. The myCPI tool captures the uniqueness of the selection of goods that individuals purchase....
by Oicuryy
Tue Jun 26, 2018 6:01 pm
Forum: Investing - Help with Personal Investments
Topic: Inflation Rate, isn't it personal?
Replies: 49
Views: 4012

Re: Inflation Rate, isn't it personal?

No, inflation, correctly understood, is not personal. Inflation is best understood as an increase in prices due to a decline in the value of dollars . As the value of dollars declines it take more of them to buy something. Prices go up. As investors, we care about the decline in the value of dollars...
by Oicuryy
Sat Jun 23, 2018 4:53 pm
Forum: Personal Finance (Not Investing)
Topic: Are you smarter than my CPA? (IRA issue)
Replies: 17
Views: 2023

Re: Are you smarter than my CPA? (IRA issue)

My guess. 2016 Form 8606 (one of two) Line 1. 5500 3. 5500 14. 5500 2017 Form 8606 (one of two) Line 1. 5500 2. 5500 from 2016 3. 11000 5. 11000 8. 12035 total converted to Roth 9. 12035 10. 0.914 11. 11000 13. 11000 14. 0 no basis left in traditional IRA 16. 12035 17. 11000 18. 1035 also include on...
by Oicuryy
Fri Jun 22, 2018 9:02 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 3582

Re: Is technology the reason for low inflation?

In short, the cause of inflation is an increase in fiat currency supply in our economy, and THAT causes price to go up. Close. Inflation is a decline in the value of money. As the value of money declines it takes more of it to buy stuff. Prices go up. Increasing the supply of money might lower its ...
by Oicuryy
Tue Jun 12, 2018 3:25 pm
Forum: Investing - Theory, News & General
Topic: Imagine a 10 year, 0%, noncallable loan
Replies: 49
Views: 3324

Re: Imagine a 10 year, 0%, noncallable loan

Say I was willing to pay up to 4% APR in interest. I would use the excel present value function like this. =PV(1.04^(1/12)-1,120,-1/120) 1.04^(1/12)-1 is the monthly interest rate corresponding to a 4% APR. 120 is the number of future monthly payments -1/120 is the fraction of my annual salary paid ...
by Oicuryy
Sun Jun 10, 2018 11:00 am
Forum: Personal Finance (Not Investing)
Topic: What does "tap into" the Social Security trust fund mean?
Replies: 29
Views: 2545

Re: What does "tap into" the Social Security trust fund mean?

"Tap into the trust fund" means pay part of Social Security benefits from sources of federal government revenue other than Social Security taxes. Think income taxes and/or treasury bonds.

Ron
by Oicuryy
Thu May 24, 2018 11:02 am
Forum: Personal Finance (Not Investing)
Topic: I need some math help-calculating interest savings
Replies: 31
Views: 1777

Re: I need some math help-calculating interest savings

Total interest on original loan. 360*1157 - 235200 =181320 Total interest on recast loan. 360*959.51 - 194506.99 = 150916.61 I calculate that prepaying 240.49 in principal each month would pay off the recast loan in 242 months. So total interest on recast loan with principle prepayments. 242*1200 - ...
by Oicuryy
Thu May 17, 2018 3:57 pm
Forum: Personal Finance (Not Investing)
Topic: IRMAA automatically determined/updated annually?
Replies: 6
Views: 625

Re: IRMAA automatically determined/updated annually?

As I read
Sec. 1839(i)(5)
, the 2020 IRMAA thresholds are scheduled to be adjusted by the increase, if any, in the CPI from August 2018 to August 2019. The thresholds for 2020 will be published in September 2019. But by then it will be too late to change your 2018 MAGI.

Ron
by Oicuryy
Thu May 17, 2018 11:50 am
Forum: Personal Finance (Not Investing)
Topic: IRMAA automatically determined/updated annually?
Replies: 6
Views: 625

Re: IRMAA automatically determined/updated annually?

Sec. 1839(i)(4)(B)(i) (i) In general.—In applying this subsection for an individual’s premiums in a month in a year, subject to clause (ii) and subparagraph (C), the individual’s modified adjusted gross income shall be such income determined for the individual’s last taxable year beginning in the s...
by Oicuryy
Sat May 12, 2018 6:05 pm
Forum: Forum Issues and Administration
Topic: Found cause of posts getting lost (not posted)
Replies: 13
Views: 1474

Re: Found cause of posts getting lost (not posted)

There is a warning, but it is not particularly eye catching.

Image

Ron
by Oicuryy
Sun Apr 29, 2018 1:49 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 7640

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

dbr wrote:
Sun Apr 29, 2018 1:02 pm
Thanks. In that analysis variance is a quadratic in the return, hence a parabola.
You're welcome. I'm sure nisiprius is right about the name of the curve.

Ron
by Oicuryy
Sun Apr 29, 2018 12:26 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 7640

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

I doubt any of the curves involved on these charts are either hyperbolas or ellipses. Is there some reason the curves should be described by those exact mathematical figures? This guy calls it a parabola and gives an equation for it. http://www.calculatinginvestor.com/2011/06/07/efficient-frontier-...
by Oicuryy
Wed Apr 25, 2018 11:44 am
Forum: Investing - Theory, News & General
Topic: Help poke holes? Roger Ibbotson recommends a Fixed Index Annuity as a partial bond alternative.
Replies: 23
Views: 2046

Re: Help poke holes? Roger Ibbotson recommends a Fixed Index Annuity as a partial bond alternative.

So he wrote an article that pretends to be about "a generic large cap equity FIA" when it is really about backtested results for one specific FIA. I wouldn't go that far. The skeptic in me suspects that the interest crediting method AnnGen created for Ibbotson's paper would (or would have) outperfo...
by Oicuryy
Wed Apr 25, 2018 10:31 am
Forum: Investing - Theory, News & General
Topic: Help poke holes? Roger Ibbotson recommends a Fixed Index Annuity as a partial bond alternative.
Replies: 23
Views: 2046

Re: Help poke holes? Roger Ibbotson recommends a Fixed Index Annuity as a partial bond alternative.

I know there’s one called New Heights 9 from a prominent, large Insurance company. FYI, The NYSE Zebra Edge® Index won Structured Retail Product’s Americas Award 2017 for Proprietary Index of the Year, Americas. The index was developed with Roger Ibbotson and Zebra Capital, and is exclusively avail...
by Oicuryy
Wed Apr 18, 2018 10:19 am
Forum: Investing - Theory, News & General
Topic: Theoretical question. What would happen if 100% of investors are buy and hold.
Replies: 19
Views: 2406

Re: Theoretical question. What would happen if 100% of investors are buy and hold.

What would happen if 100% of investors are buying and holding index funds? Then 100% of stocks would be owned by index funds. Would it still be profitable? Yes. The companies that index funds own would still be profitable and those profits would be passed on to the index funds' shareholders. How wi...
by Oicuryy
Mon Apr 16, 2018 11:53 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4965

Re: How accurately can we measure INFLATION?

The Consumer Price Index (CPI) does not measure inflation. It measures the change in the price of a basket of consumer goods and services. The price of a thing, in dollars, is the ratio of the value of the thing to the value of a dollar. A price of five dollars for some thing means the value of the ...
by Oicuryy
Wed Apr 11, 2018 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: SPIA Return - Am I calculating this correctly?
Replies: 72
Views: 3648

Re: SPIA Return - Am I calculating this correctly?

If the OP has sufficient investment assets, it might work better over the 15 years just to withdraw $4000 per month from a 50/50 (or thereabouts) portfolio. I'd recommend at least a 25X portfolio for confidence, meaning at least $1.2M for this case. That does not look much different from a 44/56 po...