Search found 7381 matches

by Doc
Wed Aug 23, 2017 5:03 pm
Forum: Investing - Theory, News & General
Topic: Wash rule, ETFs and index funds
Replies: 11
Views: 795

Re: Wash rule, ETFs and index funds

The target date fund is not substantially identical to an individual ETF security that is used in part to construct the target date fund. I wouldn't worry about hypothesized "wash sales" involving mutual funds unless it's the same fund. The IRS certainly isn't worried about it. IRS Publication 564:...
by Doc
Wed Aug 23, 2017 2:53 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans To Launch Total Corporate Bond ETF
Replies: 23
Views: 1983

Re: Vanguard Announces Plans To Launch Total Corporate Bond ETF

I would consider it. I don't like the MBS in total bond, and I switched some of my treasury allocation over to CDs. I keep roughly 50-60% corporates, and 40-50% treasury/CDs in my tax advantaged. I do a similar thing as far as the MBS and Treasury/corporate split but stick to short and medium term ...
by Doc
Wed Aug 23, 2017 2:44 pm
Forum: Investing - Theory, News & General
Topic: Wash rule, ETFs and index funds
Replies: 11
Views: 795

Re: Wash rule, ETFs and index funds

But I do get the sense from tiny glimpses into the priorities of the over-worked and under-staffed IRS that things have generally devolved into the "honor system" in reporting wash sales not picked up by brokerages — much more so than most other reporting requirements. Once upon a time in America t...
by Doc
Wed Aug 23, 2017 1:52 pm
Forum: Investing - Theory, News & General
Topic: Wash rule, ETFs and index funds
Replies: 11
Views: 795

Re: Wash rule, ETFs and index funds

... but I think the cost basis accounting requirements that brokerages and mutual fund companies must comply with give many a false sense of security. You are wise to be alert to the issue of the interaction among multiple accounts. (Then again, while I intend to scrupulously follow the wash sale r...
by Doc
Wed Aug 23, 2017 8:59 am
Forum: Investing - Theory, News & General
Topic: Mike Piper and CDs
Replies: 40
Views: 3876

Re: Mike Piper and CDs

CDs are a very nice source of income and they're safe. But they're going to be useless to you in a brutal bear market if you need liquidity to rebalance. Absolutely correct. I have enough Treasuries either as funds or actual notes to handle rebalancing in a 50% stock market decline. I would conside...
by Doc
Wed Aug 23, 2017 8:41 am
Forum: Investing - Theory, News & General
Topic: Mike Piper and CDs
Replies: 40
Views: 3876

Re: Mike Piper and CDs

And of course it need not be all or nothing. I currently have no CDs. I might go to "some CDs" for fixed income. Wouldn't go to all CDs anyway, partially for the reasons you give. For that part of our bond portfolio that I don't ever anticipate using in a stock market crash or some other emergency ...
by Doc
Wed Aug 23, 2017 8:28 am
Forum: Investing - Theory, News & General
Topic: Mike Piper and CDs
Replies: 40
Views: 3876

Re: Mike Piper and CDs

For those of you searching for more liquidity when the market tanks, consider purchasing some cds with call risk. You not only can pick up some additional yield over non callable cds, but also the federal reserve will encourage the financial institution to give you your money back by lowering their...
by Doc
Tue Aug 22, 2017 5:28 pm
Forum: Investing - Theory, News & General
Topic: Mike Piper and CDs
Replies: 40
Views: 3876

Re: Mike Piper and CDs

Instead, it makes more sense to determine the characteristics that you prefer and accept the good and bad that comes with your choice. A CD will never go down in value and often offers a yield premium over Treasuries. However, you also have to be willing to move your money around between different ...
by Doc
Tue Aug 22, 2017 5:17 pm
Forum: Investing - Theory, News & General
Topic: Vanguard changed their way of computing PE ratios
Replies: 11
Views: 1260

Re: Vanguard changed their way of computing PE ratios

Just to be clear though, views do diverge on which methodology is the best, and the Morningstar's way has its supporters, this is a topic where lively debate occurred in the past. I have yet to read a convincing case for the M* way, but well, this is just me... M* has several "say what's" in their ...
by Doc
Tue Aug 22, 2017 4:36 pm
Forum: Investing - Theory, News & General
Topic: Vanguard changed their way of computing PE ratios
Replies: 11
Views: 1260

Re: Vanguard changed their way of computing PE ratios

I don't understand. Morningstar does it one way, S&P (and Prof. Shiller) does it another way, and Vanguard was using a third formula. Long story short, Morningstar's way makes very little sense and is due to historical reasons, while S&P's way makes much more sense, and Vanguard's way, although a ta...
by Doc
Tue Aug 22, 2017 3:25 pm
Forum: Investing - Theory, News & General
Topic: New Schwab U.S. Aggregate Bond ETF (SCHZ)
Replies: 41
Views: 7194

Re: New Schwab U.S. Aggregate Bond ETF (SCHZ)

I believe they suspended new purchases of SWLBX in February and they may have transitioned previous SWLBX holders to SWAGX already. It's been a while since I looked at the fund but they are winding down SWLBX for discontinuation and ramping up SWAGX to replace it if I recall correctly. EDIT: It loo...
by Doc
Tue Aug 22, 2017 3:08 pm
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

Getting back to the topic (XIRR - Non-reinvested dividends), in general, the result of the XIRR spreadsheet function is not the same when distributions are reinvested and when distributions are taken in cash. It is possible to construct examples where they are the same. If the yield is constant the...
by Doc
Tue Aug 22, 2017 10:16 am
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans To Launch Total Corporate Bond ETF
Replies: 23
Views: 1983

Re: Vanguard Announces Plans To Launch Total Corporate Bond ETF

So how does this work? The authorized participant buys X shares of Vanguard Short-Term Corporate Bond ETF (VCSH), Y shares of Vanguard Intermediate-Term Corporate Bond ETF (VCIT), and Z shares of Vanguard Long-Term Corporate Bond ETF (VCLT) and trades them for 100 shares of the new ETF? And this som...
by Doc
Tue Aug 22, 2017 6:05 am
Forum: Investing - Theory, News & General
Topic: New Schwab U.S. Aggregate Bond ETF (SCHZ)
Replies: 41
Views: 7194

Re: New Schwab U.S. Aggregate Bond ETF (SCHZ)

acanthurus wrote:
Mon Aug 21, 2017 3:46 pm
With a billion in AUM and the portfolio established it should track quite well now.
$1 billion in six months. Congrats Schwab!
by Doc
Tue Aug 22, 2017 5:59 am
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

I don't make any assumption about a constant rate of return. I use the results of the XIRR spreadsheet function as is The XIRR function is bases on a constant rate of return. That's the way the classic discounted cash flow equations are based on. When you try to compare the XIRR constant average re...
by Doc
Sun Aug 20, 2017 10:46 am
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

I left out seconds. Apparently a leap second was added at the end of 2016 so there were 31,622,401 seconds in the year. So, maybe I'm being hasty in saying we can all agree on how many minutes, hours, and days there are in the year 2016. Oicuryy might say there are 366 + 1 / 86,400 days. You also p...
by Doc
Sat Aug 19, 2017 7:52 pm
Forum: Investing - Theory, News & General
Topic: Here is a criticisim of active management I don't get
Replies: 24
Views: 2262

Re: Here is a criticisim of active management I don't get

Etc... He's grossly oversimplifying the market as if all stock floats were static and all investors were making their money capital gains and dividends. His model of the stock market is a spherical horse running in a frictionless world: I don't disagree. I just think he addressed (hedged) the idea ...
by Doc
Sat Aug 19, 2017 6:48 pm
Forum: Investing - Theory, News & General
Topic: Here is a criticisim of active management I don't get
Replies: 24
Views: 2262

Re: Here is a criticisim of active management I don't get

Etc... He's grossly oversimplifying the market as if all stock floats were static and all investors were making their money capital gains and dividends. His model of the stock market is a spherical horse running in a frictionless world: I don't disagree. I just think he addressed (hedged) the idea ...
by Doc
Sat Aug 19, 2017 6:43 pm
Forum: Investing - Theory, News & General
Topic: Bond fund SEC yield
Replies: 13
Views: 1511

Re: Bond fund SEC yield

clown wrote: ↑Sat Aug 19, 2017 12:26 am I thought the SEC requires the disclosure of the SEC Yield, and also a prospectus before an investor is allowed to buy a fund. https://www.bogleheads.org/wiki/Collect ... ent_Trusts Collective investment trusts are not registered investments with the SEC and ...
by Doc
Sat Aug 19, 2017 5:27 pm
Forum: Investing - Theory, News & General
Topic: Here is a criticisim of active management I don't get
Replies: 24
Views: 2262

Re: Here is a criticisim of active management I don't get

Notice his conflation of the market return and the return from investment for the participants in the market. That's the problem with Sharpe's formulation. It is subtle and it didn't matter much when indexing was one passive (using passive here as an antonym to control rather than active) minority ...
by Doc
Sat Aug 19, 2017 4:15 pm
Forum: Investing - Theory, News & General
Topic: Here is a criticisim of active management I don't get
Replies: 24
Views: 2262

Re: Here is a criticisim of active management I don't get

The stronger criticism is the Sharpe claim which asserts that all investors investment weighted in an index must get the aggregate performance of the index. Sharpe is more subtly wrong in that he ignores all the ways money can go sideways. Sharpe is not "wrong", he hedged. If "active" and "passive"...
by Doc
Sat Aug 19, 2017 3:50 pm
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

My comments were not about your formula, but about whether the result of the XIRR spreadsheet function is the same as the total return when there are no intermediate cash flows. I tend to avoid esoterica, such as adjusting the results of a standard function, like the XIRR spreadsheet function, to g...
by Doc
Sat Aug 19, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: IVLU for international value exposure [iShares Edge MSCI Intl Value]
Replies: 11
Views: 1074

Re: IVLU for international value exposure

I overweight value and small-cap, but I have posted several times that I don't overweight value internationally, because the options are too expensive. I severely underweight Foreign Large Blend on the basis that it is filled with international firms that are all competing in the same market as the...
by Doc
Fri Aug 18, 2017 1:40 pm
Forum: Investing - Theory, News & General
Topic: Why do brokerage transactions take 2 business days to settle?
Replies: 9
Views: 1293

Re: Why do brokerage transactions take 2 business days to settle?

A couple of things. One is that settlement time generally doesn't prevent you from buying something with the unsettled funds. You just can't withdraw or usually sell the new asset. Actually you can sell the new asset but you can't make a habit of it. That's Schwab's policy, but might not be the sam...
by Doc
Fri Aug 18, 2017 11:29 am
Forum: Investing - Theory, News & General
Topic: Why do brokerage transactions take 2 business days to settle?
Replies: 9
Views: 1293

Re: Why do brokerage transactions take 2 business days to settle?

A couple of things. One is that settlement time generally doesn't prevent you from buying something with the unsettled funds. You just can't withdraw or usually sell the new asset. Actually you can sell the new asset but you can't make a habit of it. Good-faith violations occur when you buy a secur...
by Doc
Thu Aug 17, 2017 3:43 pm
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

In other words, the Total Return is independent of the cash flows. However, the total return of an account in a fund is generally not the same as the Total Return reported for the fund if the fund account was opened after the starting date or closed before the ending date of the period of the Total...
by Doc
Thu Aug 17, 2017 5:54 am
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

Total Return Expressed in percentage terms, Morningstar's calculation of total return is determined by taking the change in price, reinvesting, if applicable, all income and capital gains distributions during the period, and dividing by the starting price . http://www.morningstar.com/InvGlossary/to...
by Doc
Wed Aug 16, 2017 4:59 pm
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

Whoa! This is just wrong. "Total Annualized Return" is the "Internal Rate of Return". And further their value depends only on the cash flows, not on the formula or functions used to compute them. We've now come full circle. That's what I thought in the past. Your examples of different reinvestment ...
by Doc
Wed Aug 16, 2017 10:04 am
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

Doc, please note that in the three cases from my previous post the dividend amount is the same. Only the reinvestment prices differ. This causes different number of shares to be purchased in each case; which, one year later, makes the ending values differ. Finally, these different ending values are...
by Doc
Tue Aug 15, 2017 5:06 pm
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

There is some confusion about the difference in "Internal Rate of Return" and the "Growth of $10k" charts we are all familiar with. From Microsoft Office Support the XIRR function Description Returns the "internal rate of return" for a schedule of cash flows that is not necessarily periodic. To calc...
by Doc
Mon Aug 14, 2017 2:41 pm
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

Doc wrote:
Mon Aug 14, 2017 1:53 pm
Now I have to figure this out myself. Will report back.
Image

This is not the same thing that #cruncher was doing. He was investing dividends in another fund not spending them.
by Doc
Mon Aug 14, 2017 1:53 pm
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

FactualFran wrote:
Mon Aug 14, 2017 1:48 pm
In my experience, the XIRR of a fund account with dividends taken in cash is not the same as the Total Return reported by the fund.
Darn I was hoping #cruncher would chime in. Now I have to figure this out myself. Will report back.
by Doc
Mon Aug 14, 2017 10:22 am
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 43
Views: 3683

Re: XIRR - Non-reinvested dividends

Yes, it is a withdrawal from the fund. Sometimes someone will post that their fund's return does not match Vanguard's return number. The immediate question to the poster is "what did you do with dividends?". If the answer is "I spent them!" then the mystery is solved. That's a fund withdrawal. The ...
by Doc
Mon Aug 14, 2017 8:39 am
Forum: Investing - Theory, News & General
Topic: Vanguards online fraud policy - remember username -iPhone App?
Replies: 16
Views: 1964

Re: Vanguards online fraud policy - remember username -iPhone App?

If I type the first 2 letters of my name in a Chrome browser it fills out the name. I never have my browser auto fill names or passwords for financial sites. So have I broken Vanguard's rules?
by Doc
Mon Aug 14, 2017 8:34 am
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 55
Views: 4847

Re: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)

BTW, do you mean that because the GSEs are in receivership their notes have an explicit government guarantee? Because they've always maintained their implicit guarantee - that is, that they are too big and important for the government to allow them to fail. And indeed they were. I picked keep up th...
by Doc
Sun Aug 13, 2017 9:14 am
Forum: Investing - Theory, News & General
Topic: "Bonds: Ballast for your portfolio"
Replies: 45
Views: 5583

Re: "Bonds: Ballast for your portfolio"

That may be true, but I have yet to read about people actually looking at the CPI index, at the time, and see how its fluctuations affected TIPS values (coupons and face value). At the time of the Lehman crisis the poor performance of TIPS relative to nominal Treasuries the liquidity issue was gene...
by Doc
Sun Aug 13, 2017 8:06 am
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 55
Views: 4847

Re: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)

Doc, look a bit closer. The chart shows over a 5% return over the last 5 years. The horizontal axis is Jul 2012, Jul 2013.... I pulled it right off the Vanguard website. Sorry for the confusing axis labels. Yeh, I woke up at about 3 am and realized that was not 5 days last month. My bad' I think a ...
by Doc
Sat Aug 12, 2017 6:15 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 55
Views: 4847

Re: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)

The Dan wrote:
Sat Aug 12, 2017 2:49 pm
OK, but has that mattered? Comparing the 5-year returns of the indexed version (VSIGX) to the active version (VFIUX)
Your chart appears to be for 5 days not 5 years.

That said what happened in the last 5 years matters little. The bond market has been atypical since Lehman.
by Doc
Sat Aug 12, 2017 2:37 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 55
Views: 4847

Re: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)

The Dan wrote:
Sat Aug 12, 2017 1:26 pm
What's not to like?
The index they use and the inability to get any benefit from "curve riding" because they have to buy sevens as well as tens and have to sell when the index says not when the market says.
by Doc
Sat Aug 12, 2017 2:27 pm
Forum: Investing - Theory, News & General
Topic: Options as a Tax Loss Harvesting Tool
Replies: 16
Views: 1235

Re: Options as a Tax Loss Harvesting Tool

Going back to having the example where you sell SPY & then buy an option on SPY...my point was that because it is considered nonequity then it is different that if he had sold shares of GM & then bought option on GM. I'm not sure what all those differences are. I'm getting option data from CBOE and...
by Doc
Sat Aug 12, 2017 12:58 pm
Forum: Investing - Theory, News & General
Topic: Options as a Tax Loss Harvesting Tool
Replies: 16
Views: 1235

Re: Options as a Tax Loss Harvesting Tool

The NASDAQ article in my original post seems to indicate (in the section under "Harvesting ETF Losses") that an index ETF such as SPY and an option on the index itself such as SPX would create a wash sale. But I'm not a tax guy either so.... :? A partner at Deloitte suggested to us a three-step pro...
by Doc
Sat Aug 12, 2017 12:51 pm
Forum: Investing - Theory, News & General
Topic: Options as a Tax Loss Harvesting Tool
Replies: 16
Views: 1235

Re: Options as a Tax Loss Harvesting Tool

If my mistake isn't easy to explain, don't bother. But I am curious as to where I got off track I don't think you made a mistake. Selling 100 shares of GM at a loss and buying an option to buy 100 shares of GM within 30 produces a wash sale. Selling 100 shares of SPY at a loss and buying the 100 sh...
by Doc
Sat Aug 12, 2017 10:42 am
Forum: Investing - Theory, News & General
Topic: Options as a Tax Loss Harvesting Tool
Replies: 16
Views: 1235

Re: Options as a Tax Loss Harvesting Tool

Your example was for SPY. I believe that a call option for an index etf is treated differently than for an individual stock. The option would cover a multiple of 100 shares & you'd have to sell the exact number to match the option OR pro-rate which shares were part of the wash sale (I believe). I d...
by Doc
Sat Aug 12, 2017 10:29 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2584

Re: Why is Vanguard Short Term Treasury fund rated BBB credit quality?

I also see 1-3 years at 39% and 3-5 years at 18%, which makes the 2.3 years reasonable. But the 38.7% doesn't square with Morningstar's 0.36% in cash. From the annual report January 31, 2017 Average Effective Maturity: 2.3 years <1 yr: 9.0% 1-3 years: 63.0% 3-5 years: 25.4% + 5 years: 2.6% Same mat...
by Doc
Fri Aug 11, 2017 7:23 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 55
Views: 4847

Re: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)

You get the ability to "ride the yield curve" which an index fund cannot do. And you can sometimes convert ordinary income into LTCG. A fund "rides the yield curve". The intermediate term version of the fund in question buys 10, 7 and 5 year notes and sells them when they reach 3 years of maturity....
by Doc
Fri Aug 11, 2017 5:04 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 55
Views: 4847

Re: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)

I think I'd rather just hold Treasuries myself if that's the exposure I wanted, but okay. There's definitely a market for this stuff. That's interesting. You would do that even if you wanted to maintain a similar duration bond portfolio, for a small portion of your portfolio (I imagine you would us...
by Doc
Fri Aug 11, 2017 4:53 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2584

Re: Why is Vanguard Short Term Treasury fund rated BBB credit quality?

Yes, that's what I meant. Vanguard gives some information about the Market Liquidity Fund on its website, not sure how much Morningstar could learn from it or from other sources. It's not up to Morningstar to convert some funds Market Liquidity Fund to a bond rating equivalent. They just use an ave...
by Doc
Fri Aug 11, 2017 4:23 pm
Forum: Investing - Theory, News & General
Topic: Options as a Tax Loss Harvesting Tool
Replies: 16
Views: 1235

Re: Options as a Tax Loss Harvesting Tool

acanthurus wrote: I'm kind of hoping an accountant clicks on this thread and can educate me
This is probably too far in the weeds for most accountants.

I'll stay with my two pair trades: Sell xyz.1 and buy short bonds in taxable and sell intermediate bonds buy xyz.2 in tax advantaged. Reverse in 30 days.
by Doc
Fri Aug 11, 2017 1:18 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2584

Re: Why is Vanguard Short Term Treasury fund rated BBB credit quality?

If they know that it's junk, then they could put the proper overall rating in, such as BBB. If they don't know if it's junk or not, then they could put in "Not Rated", maybe with a short explanation. If by they you mean Morningstar - they don't know if it is junk because it is not rated. It is not ...
by Doc
Fri Aug 11, 2017 11:54 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2584

Re: Why is Vanguard Short Term Treasury fund rated BBB credit quality?

rkhusky wrote: If they are labeling safe short term cash or other investments as very risky, then how can you differentiate from a fund that truly has very risky investments? I agree. Using the Morningstar report in this case could lead to making the wrong decision. If you're careful, maybe you wou...