Search found 115 matches

by jbaron
Wed May 17, 2017 7:29 pm
Forum: Investing - Theory, News & General
Topic: TIPS Roll Return .6%?
Replies: 3
Views: 823

Re: TIPS Roll Return .6%?

I calculate this roll return on my own tips investments (I maintain a sort of 7-10 year TIPS ladder that I continually roll into the new 10 year) and currently, my own calculated yield bump from rolling down the yield curve is about 0.5%, so yes, 0.6% sounds reasonable. BTW, I simplify (or make a lo...
by jbaron
Sat Sep 03, 2016 4:31 pm
Forum: Investing - Theory, News & General
Topic: Social Security Consulting?
Replies: 26
Views: 3976

Re: Social Security Consulting?

We are in somewhat the same boat: retired in our mid 50s, with substantial pre-tax IRA balances to (eventually) convert and decent SS that will kick in at age 70. As our investments are substantially indexed, we are also in the envious position of being able to capitalize on the ACA tax rebates, as ...
by jbaron
Mon Aug 25, 2014 7:36 pm
Forum: Personal Investments
Topic: Callable municipal bonds
Replies: 6
Views: 733

Re: Callable municipal bonds

Thanks guys. Special thanks to BigJohn for his experience.
by jbaron
Mon Aug 25, 2014 1:01 pm
Forum: Personal Investments
Topic: Callable municipal bonds
Replies: 6
Views: 733

Callable municipal bonds

Greetings all! I have a few municipal bonds in my portfolio. They were all issued before the credit crisis, and were, at the time, of longish term. Beginning in 2016, most of them become callable over the subsequent couple of years. Generally, they have coupons of 4%-5%, so they clearly pay above ma...
by jbaron
Sat Apr 19, 2014 11:18 pm
Forum: Investing - Theory, News & General
Topic: Bond mutual fund vs individual bonds
Replies: 35
Views: 7932

Re: Bond mutual fund vs individual bonds

The financial definition of "risk" is the chance that an actual return will be different than an expected return. If your horizon is exactly ten years, and you purchase a ten year, zero coupon bond (or zero coupon TIPS bond, if you care about inflation) then by definition, your risk is zero, because...
by jbaron
Thu Jan 16, 2014 2:55 pm
Forum: Investing - Theory, News & General
Topic: In retirement, best to have all rIRA or both rIRA and tIRA?
Replies: 13
Views: 1879

Re: In retirement, best to have all rIRA or both rIRA and tI

Estimating taxes in retirement is more difficult than might be anticipated because of (federal only!) taxation of social security benefits. One's income (employment income versus social security income) may very well go down by a good margin, but one's marginal tax rate...? Maybe not so much, especi...
by jbaron
Sat Feb 09, 2013 11:20 pm
Forum: Personal Investments
Topic: Best of Bad 401k options
Replies: 3
Views: 1274

Re: Best of Bad 401k options

You have a good stock fund, a good bond fund, and a 3% match. Sounds quite good to me.
by jbaron
Mon Oct 08, 2012 1:09 pm
Forum: Personal Investments
Topic: Anyone else track their overall fees?
Replies: 25
Views: 1672

Re: Anyone else track their overall fees?

Rather than tracking fees as a percentage of assets, it is much more enlightening to track fees as a percentage of expected returns, or, if you are currently withdrawing some "safe" (or other) percentage of your portfolio, as a percentage of those withdrawals. That is when the 0.6% expense for DLS o...
by jbaron
Fri May 25, 2012 7:42 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Spartan Inflation Protected Bond Index
Replies: 31
Views: 9413

Re: Fidelity Spartan Inflation Protected Bond Index

That TIPS issue is always mispriced - at least compared to where it should be - because it's the last TIPS issue until you get to 2040, and there's relatively little on the near side either. We happen to own quite a bit of it because it's the year in which we expect to purchase an SPIA, but the yiel...
by jbaron
Mon Apr 30, 2012 1:06 pm
Forum: Investing - Theory, News & General
Topic: [Poll] My philosophy on SPIAs
Replies: 65
Views: 4721

Re: [Poll] My philosophy on SPIAs

I think that the annuity decision is inherently quantitative and cannot reasonably be treated by comparing advantages with disadvantages. How much does it cost, and how much can you expect to get back? An SPIA is insurance, just like homeowner's insurance. Most people don't ask how much they "expec...
by jbaron
Mon Apr 09, 2012 1:03 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 130057

Re: Valuation-based market timing with PE10 can improve retu

I could not access the paper either, so not of much use to me.
by jbaron
Tue Apr 03, 2012 11:56 pm
Forum: Investing - Theory, News & General
Topic: Will TIPS really protect you if inflation takes off?
Replies: 62
Views: 8714

Re: Will TIPS really protect you if inflation takes off?

The problem - the big problem - that I have with this discussion is that it proceeds from the premise that the price of the investment is what matters - that is, do TIPS prices track some measure of inflation, or don't they? I do not believe that that question is the correct question to be asking. T...
by jbaron
Mon Apr 02, 2012 10:28 pm
Forum: Investing - Theory, News & General
Topic: Will TIPS really protect you if inflation takes off?
Replies: 62
Views: 8714

Re: Will TIPS really protect you if inflation takes off?

This is the easiest question ever asked on this forum. NO. If rampant inflation were to take place one of two things would happen. TIPS would be defaulted upon, and if they weren't you would be paid in worthless currency. People who believe TIPS are the investment to hedge against inflation will be...
by jbaron
Thu Mar 29, 2012 6:27 pm
Forum: Investing - Theory, News & General
Topic: Counting SS in AA
Replies: 11
Views: 979

Re: Counting SS in AA

The problem is not the usage of Social Security as part of an asset allocation, the problem is planning retirement based on an asset allocation rather than something more concrete. IMHO.
by jbaron
Thu Mar 29, 2012 3:49 pm
Forum: Investing - Theory, News & General
Topic: "How Much Should Retirees Stake in TIPS?"
Replies: 7
Views: 1532

Re: "How Much Should Retirees Stake in TIPS?"

I think that she loses all of her credibility when she states that the "aggressive" portfolio of a new retiree contains (only) 33% fixed income.
by jbaron
Wed Mar 28, 2012 11:05 pm
Forum: Personal Investments
Topic: Stable Value Fund vs. Total Bond Index Fund for 401K
Replies: 27
Views: 3102

Re: Stable Value Fund vs. Total Bond Index Fund for 401K

It is difficult to believe that anyone thinks stable value funds are for real, that they offer a free lunch. My guess would be that they manage risk to achieve a particular return, and that they are stable until they are not. Come on, people!
by jbaron
Tue Mar 13, 2012 6:38 pm
Forum: Investing - Theory, News & General
Topic: Social Security Earnings History
Replies: 4
Views: 824

Social Security Earnings History

Suppose that one stops working at 50, and the Social Security website says that, assuming no future income, he'll have a monthly payment of $2000 when he's 70. In five years, after five years of no income but with 5 years of inflation totalling (say) 15%, will the 70-year payout be $2000, or $2300? ...
by jbaron
Mon Feb 27, 2012 12:07 am
Forum: Investing - Theory, News & General
Topic: Monthly TIPS update for those interested
Replies: 41
Views: 4224

Re: Monthly TIPS update for those interested

I'm no slouch at the bond market, but I have to say that I couldn't get through the article. Too technical, too much jargon, too many facts, and not easy to follow from A to B. Who understands all of that, other than quants other than me?
by jbaron
Wed Feb 15, 2012 10:53 pm
Forum: Investing - Theory, News & General
Topic: Dividend Taxation Effects on Tax-Efficient Fund Placement
Replies: 62
Views: 4193

Re: Dividend Taxation Effects on Tax-Efficient Fund Placemen

Now once you have determined your annualized effective tax rate for your personal situation, which is no easy task, you determine which asset is more efficient by multiplying the effective annualized tax rate by the estimated annual pre-tax return on the asset. The greater number should go in the t...
by jbaron
Tue Feb 14, 2012 6:57 pm
Forum: Personal Investments
Topic: Talk to me like I'm stupid: REIT's in a taxable
Replies: 16
Views: 3192

Re: Talk to me like I'm stupid: REIT's in a taxable

I have written many posts on this. Something can always be identified as a disadvantage for any tax strategy. I have REITs in both a taxable and tax advantage account and it is no problem. I have written numerous times before that I have both clients and friends who have retired early and are prese...
by jbaron
Mon Feb 13, 2012 6:12 pm
Forum: Investing - Theory, News & General
Topic: 30 year TIPs auction- real yield of 0.8%???
Replies: 52
Views: 5252

Re: 30 year TIPs auction- real yield of 0.8%???

I am also in quite a bit - the rate is what the rate is.

Jeff
by jbaron
Sun Feb 12, 2012 8:14 pm
Forum: Investing - Theory, News & General
Topic: Rates on Annuities
Replies: 70
Views: 13069

Re: Rates on Annuities

The notion of "waiting to purchase" until rates go up is nothing if not market timing. I am (frankly) amazed that people think that there's a free lunch here - that only if the purchaser "waits a while," the deal will be better. For a 70 year old, how long is too long to wait? What if rates continue...
by jbaron
Sat Feb 11, 2012 1:22 pm
Forum: Investing - Theory, News & General
Topic: Rates on Annuities
Replies: 70
Views: 13069

Re: Rates on Annuities

I agree with Dick Purcell on this, that a low interest rate environment is the best time to purchase an SPIA. I also noticed that in Bob90245's original graph, the Y axes do not scale to zero together. I'd also imagine that for different ages (70 instead of 65, for example), the axis mismatch is mor...
by jbaron
Sun Feb 05, 2012 4:28 pm
Forum: Investing - Theory, News & General
Topic: What's the Use of Wond'rin'?
Replies: 7
Views: 1290

Re: What's the Use of Wond'rin'?

Very nice.
by jbaron
Sat Feb 04, 2012 12:52 am
Forum: Personal Investments
Topic: How much did you lose due to rollovers ?
Replies: 35
Views: 3188

Re: How much did you lose due to rollovers ?

I liquidated the stock funds in the old 401k, bought stock in the rollover Ira with cash that was just sitting around, and the had the cash part of our AA (and part of the bond allocation, admittedly) tied up in th check. So we were on target with the stock allocation, but light on the bond allocati...
by jbaron
Thu Jan 26, 2012 2:39 pm
Forum: Personal Investments
Topic: Further Diversification?
Replies: 12
Views: 1005

Re: Further Diversification?

That is a $60,000,000 asset allocation, with $10,000,000 in 50/50 stocks/bonds, $100,000,000 in real estate, and ($50,000,000) in the mortgage Perhaps a more realistic example would be Joe Schmoe, who has $400,000 in 50/50 stocks/bonds and a $300,000 mortgage on a $400,000 home. That would be $200,0...
by jbaron
Thu Jan 26, 2012 1:20 pm
Forum: Personal Investments
Topic: Further Diversification?
Replies: 12
Views: 1005

Re: Further Diversification?

Unless you believe that the bond portion of your portfolio is going to pay 6.5%, it'd probably be wise to pay down the mortgage on the rental. (Unless you may give it back to the bank, that is.) And while the mortgage is outstanding, it should be counted as a negative bond in your asset allocation. ...
by jbaron
Sun Jan 15, 2012 2:12 pm
Forum: Investing - Theory, News & General
Topic: why not TIPS??
Replies: 77
Views: 7008

Re: why not TIPS??

There is an inflation premium and a liquidity premium, and they work in opposite directions. If you think that you believe that there's no inflation premium based on the fact that the real TIPS yield is equal to the nominal treasury yield minus your expected rate of inflation, what you really believ...
by jbaron
Fri Jan 06, 2012 1:13 am
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

mslaw: Yes, I have bought and sold both TIPS and regular treasuries via Fidelity. I maintain my own limited "ladders" in each. Doc: I really believe that Fidelty DOES not publish <0 rates, versus CAN not publish those rates. This has been explained to me twice; they do not want to be in the position...
by jbaron
Thu Jan 05, 2012 7:00 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

Skill and patience are required here. I have, in the past, generally made a "first go" at an order (again, with Fidelity) about 1/3 of the way from, say, bid to offer, thereby reducing the spread by about 65%. Often, it works, and the order is accepted - sometimes quickly, sometimes after 5 minutes,...
by jbaron
Thu Jan 05, 2012 5:03 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

4/32 compares well with what I saw at Fidelity, even when the spreads were online, as I was seeing 2-3 times that number. On the long end, the spreads were always higher than at the short end. Yesterday, the spreads on the long TIPS were a full point at Fidelity, twice what you were quoted at Vangua...
by jbaron
Wed Jan 04, 2012 2:42 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

I definitely feel your pain. Determining the reasonableness of prices is a big deal now, though in fairness, I have only ever used the quoted prices on Fidelity.com, and not compared them to other sources. (I always assumed that the spreads enforced reasonableness, and in my buying and selling, I've...
by jbaron
Wed Jan 04, 2012 1:33 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

I'm not sure that the book is particularly relevant. When I execute a TIPS trade with Fidelity, the entity on the other side of the trade is not someone from the book, it is Fidelity. Bond trading - even government bond trading - does not work like stock trading. There are no middlemen or exchanges ...
by jbaron
Wed Jan 04, 2012 1:06 pm
Forum: Investing - Theory, News & General
Topic: Too much ownership of one ETF
Replies: 9
Views: 671

Re: Too much ownership of one ETF

Thanks. Out of curiousity, what do you use to rationalize your exception?
by jbaron
Wed Jan 04, 2012 12:47 pm
Forum: Investing - Theory, News & General
Topic: Too much ownership of one ETF
Replies: 9
Views: 671

Too much ownership of one ETF

How much is too much to own of an ETF? For example, if an ETF has a capitalization of about $300 million, and average daily trading volume of about $1 million, is $100K of ownership too much? What factors would you consider before making such a relatively large investment?

Thanks,

Jeff
by jbaron
Wed Jan 04, 2012 12:37 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

It is not high price volatility - my nightly pricing doesn't show that at all; it shows exactly what I'd expect. It really is the "we don't advertise bonds with negative yields" thing - I've asked (and complained) more than once about this, and my recorded spreads don't show anything out of the ordi...
by jbaron
Tue Jan 03, 2012 7:17 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

I do have an old, professional bond background. In general, I use the word "point" to be a unit of price, or spread, and the phrase "basis point" to be a measure of yield. I know that some people use "basis point" to be a measure of price as well, as you do, but I was taught (at good old Salomon Bro...
by jbaron
Tue Jan 03, 2012 6:30 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

(.. with the 10-year-ish bonds, is about 0.3 or 0.4 points) /quote] The WSJ spread on the Jan 2021 is 4/32nds. Are you talking yield spread? If it's price spread will you give us the phone number of your broker? :) I use Fidelity. When I sold some 7 year TIPS back in September, the ASK was 111.4688...
by jbaron
Tue Jan 03, 2012 6:01 pm
Forum: Investing - Theory, News & General
Topic: TIPS Secondary Market Quotes
Replies: 41
Views: 1958

Re: TIPS Secondary Market Quotes

I occasionally trade TIPS at Fidelity, and I track bid/ask spreads as well as where I place my market orders and the execution that I get. In the 3 or 4 trades that I've had to do so by calling reps, I've not found that the spread is any wider than it's been in the past, which (with the 10-year-ish ...
by jbaron
Sun Dec 11, 2011 3:31 pm
Forum: Investing - Theory, News & General
Topic: Weimar Inflation Causes.
Replies: 34
Views: 3023

Re: Weimar Inflation Causes.

Printing money for/and war reparations. There is an excellent book on this subject - When Money Dies.

Jeff
by jbaron
Sun Dec 04, 2011 11:11 pm
Forum: Investing - Theory, News & General
Topic: Portfolio Software Recommendation?
Replies: 16
Views: 2013

Re: Portfolio Software Recommendation?

I also use Fund Manager, but it's not really for the feint of heart, especially if you venture past vanilla stocks and ETFs. There is a not insignificant learning curve.
Jeff
by jbaron
Fri Nov 04, 2011 6:34 pm
Forum: Investing - Theory, News & General
Topic: Question for bogleheads with custom portfolio spreadsheets
Replies: 8
Views: 991

Re: Question for bogleheads with custom portfolio spreadshee

What is the nature of your asset allocation - is it 3 buckets (equity/intl equity/fixed income) or 13 buckets? What is the nature of your security holdings (1 or 2 buckets on average, or 5 or 6 buckets on average)? And, have you farted around with the numbers at all to see what happens if you only a...
by jbaron
Wed Nov 02, 2011 5:35 pm
Forum: Personal Investments
Topic: Long-Term Treasuries and IPS
Replies: 21
Views: 1953

Re: Long-Term Treasuries and IPS

OP: If someone handed you an inheritance invested as per your IPS, would you sell it to cash and then have this same conversation, or would you just keep it? Lots of "already invested" people have the same dilemma (myself very included) but it doesn't seem like there's a real rish to the exits to st...
by jbaron
Wed Nov 02, 2011 4:41 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing with Bonds (but without Bond Funds)
Replies: 11
Views: 998

Re: Rebalancing with Bonds (but without Bond Funds)

There are many issues with doing this. I'm an engineer, and I maintain 4 small ladders (int tsys, int tips, long term tsys, and long term tips) but it takes a lot of bookkeeping just to know where you are. Among the issues: 1. Bonds are worth what their prices indicate, not $100, so different bonds ...
by jbaron
Tue Nov 01, 2011 6:57 pm
Forum: Personal Investments
Topic: Long-Term Treasuries and IPS
Replies: 21
Views: 1953

Re: Long-Term Treasuries and IPS

I have long term treasuries and TIPS (and intermediate ones of each as well) in my IPS, in roughly equal amounts. I maintain rough ladders with 4 or 5 or 6 issues of each (but not every issue of each) and roll them over when new TIPS are issued, or when the various treasury issues are no longer the ...
by jbaron
Wed Oct 19, 2011 6:24 pm
Forum: Investing - Theory, News & General
Topic: Citi pays $285 million to settle securities fraud complaint
Replies: 8
Views: 833

Re: Citi pays $285 million to settle securities fraud compla

For me, the worst part of the entire episode is that Citi did not admit guilt. If constructing and selling securities fraudulently does not make for guilt, then what exactly does make for guilt? And does anyone even care anymore?

Jeff
by jbaron
Tue Oct 04, 2011 7:01 pm
Forum: Personal Investments
Topic: What if Eurozone dissolves?
Replies: 18
Views: 2193

LH wrote: imo you underestimate the potency of the canadian military..... Moose born troops can be fearsome.
Canada will be the 51st state of the union, and to many people's chagrin, Mexico the 52nd! Much smaller borders that way, and the now unemployed US military could go after some Mexican drug lords!
by jbaron
Tue Oct 04, 2011 6:32 pm
Forum: Personal Investments
Topic: What if Eurozone dissolves?
Replies: 18
Views: 2193

When European economic output decreases by 25%, and the world plunges into a recession that rivals that of the 30's, the question of indices will be the least of our worries. At least the US can produce its own food, and is separated from the rest of the world by water!

Jeff
by jbaron
Tue Oct 04, 2011 6:09 pm
Forum: Investing - Theory, News & General
Topic: Asset Allocation - Vanguard Small Cap Index is 29% Mid Cap
Replies: 8
Views: 2085

Why would anyone rely on Morningstar for an analysis of what you own rather than your own brain? Indices are just not that complicated, and for a task that you'll probably only do every once in a while, understanding the index behind the Vanguard Small funds, and how those funds differ from the DFA ...