Search found 7226 matches

by Doc
Thu Jul 20, 2017 10:05 am
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 76
Views: 2164

Re: Risk, Return, and Rebalancing

I nevIer said "always safe." I said that the longer the holding period, the lesser the risk of losing money, which is historically true. That may be technically true because of the effects of compounding over time. But the dispersion of final compounded returns does not decline with time ...
by Doc
Thu Jul 20, 2017 9:24 am
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 76
Views: 2164

Re: Risk, Return, and Rebalancing

CULater wrote:Anyone who suggests that holding stocks long-term is a sure-fire approach to realizing higher returns with less risk is simply nuts, is mathematically illiterate, or is a financial advisor.

:thumbsup
by Doc
Wed Jul 19, 2017 5:22 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 76
Views: 2164

Re: Risk, Return, and Rebalancing

Treasuries generally have a high negative correlation to equities in a flight to quality situation like a stock market crash or sometimes even only in a correction. That's not really true. In 2008 the stock market crashed and bonds tanked, for instance. The question was "what bond sector"...
by Doc
Wed Jul 19, 2017 4:20 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 76
Views: 2164

Re: Risk, Return, and Rebalancing

Doc wrote: "It would not surprise me that if you did a regression on this data for the total time period you would find only a small negative correlation if any at all. But if you look at many of the shorter time periods of the chart you get a different story. Just look at the areas where the ...
by Doc
Wed Jul 19, 2017 3:28 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 76
Views: 2164

Re: Risk, Return, and Rebalancing

I really would like to know if there is a fixed income asset class which in recent decades has had a highly negative correlation with U.S. equities. Depends on your time frame. Treasuries generally have a high negative correlation to equities in a flight to quality situation like a stock market cra...
by Doc
Wed Jul 19, 2017 2:46 pm
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 76
Views: 2164

Re: Risk, Return, and Rebalancing

Not sure which correlation you guys are looking at. This is the historical rolling 3-year correlation, which is generally oscillating around a slightly negative value. This correlation question is highly susceptibility to the question being asked. Are we addressing bonds in general or Treasuries in...
by Doc
Wed Jul 19, 2017 2:38 pm
Forum: Investing - Theory, News & General
Topic: morningstar X-ray international AA could be better
Replies: 1
Views: 198

Re: morningstar X-ray international AA could be better

1) the % international is based on your total portfolio not the % of equities which is a better way to calculate your international AA (US/F+1)^-1 = Fraction foreign eg: (36/13+1)^-1=0.2653 where 36 is US and 13 is Foreign (I can do that in my head, at least in the morning. :happy ) Alternatively t...
by Doc
Wed Jul 19, 2017 10:08 am
Forum: Investing - Theory, News & General
Topic: Risk, Return, and Rebalancing
Replies: 76
Views: 2164

Re: Risk, Return, and Rebalancing

By maintaining a fixed asset mix via rebalancing, one hopes to maintain a relatively constant drawdown or variability of periodic portfolio returns. No. Risk is variability. It means that whatever you are measuring can be more or less than than what you predicted/calculated. When you think of "...
by Doc
Mon Jul 17, 2017 5:40 pm
Forum: Investing - Theory, News & General
Topic: New Schwab U.S. Aggregate Bond ETF (SCHZ)
Replies: 31
Views: 5781

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

Schwab gave up on the active TBM fund and replaced it with an index fund just recently. The TBM index ETF was introduced some 6 years ago. I think both have a very slightly lower ER than the Vg competition. I don't use a TBM fund except for a very small amount at Schwab and Fido as a dividend accumu...
by Doc
Mon Jul 17, 2017 1:14 pm
Forum: Investing - Theory, News & General
Topic: New Schwab U.S. Aggregate Bond ETF (SCHZ)
Replies: 31
Views: 5781

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

Was useful to run across this, thanks. Have some $$ at Schwab I'm looking to place and SCHZ was on the list to consider. 2008 was a while ago. I agree with in_reality's comments. Nisi's chart is from an active bond fund that is in the process of being liquidated in favor of an index fund. It has no...
by Doc
Sun Jul 16, 2017 6:39 am
Forum: Investing - Theory, News & General
Topic: Market vs Limit order
Replies: 46
Views: 2598

Re: Market vs Limit order

When selling with a small spread, I place a marketable limit order. For example, if I see 90.40-90.43, I'll just place the order to sell at $90.40 and eat the three cents. Similarly, I would buy at 90.43 I would do something similar except that I might move the sell order down by a penny to try to ...
by Doc
Sat Jul 15, 2017 7:19 am
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

And we are back to my original question: If I sell $100 worth of AAPL and immediately buy $50 worth of AAPL and $50 worth of GOOG, am I triggering the WSR for half of my assets, or are you saying that AAPL+GOOG is not substantially identical to AAPL ? You are triggering a wash sale for 50 shares. T...
by Doc
Fri Jul 14, 2017 4:51 pm
Forum: Investing - Theory, News & General
Topic: Owning 3 Index funds vs ETFS ?
Replies: 24
Views: 1834

Re: Owning 3 Index funds vs ETFS ?

I just this morning finished the first estimate of how much ROTH conversion I can take this year and remain below the 85% SS taxable bracket. Now THAT, I spend a lot of time thinking about (89% tIRA, 11% Roth). You youngens have a different outlook than us old far foggies. (25% taxable, 25% ROTH, 5...
by Doc
Fri Jul 14, 2017 4:43 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

Vanguard's ETF are different from all the others, being defined as share class of mutual funds. Similar type comment in SPDR® S&P 500 ETF SPY annual report. Units are issued and redeemed by the Trust only in Creation Unit size aggregations of 50,000 Units. Such transactions are only permitted o...
by Doc
Fri Jul 14, 2017 4:36 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

Doc wrote: But if I did I would have no concern replacing IVV with VOO. IVV market cap 88 million, VOO 67 million - 24% or 31% different depending on which way one looks. IVV ~500 stocks, VOO ~1000 stocks - 50% or 100% different depending on which way one looks. I think you mean VV (Large Cap) ther...
by Doc
Fri Jul 14, 2017 1:21 pm
Forum: Investing - Theory, News & General
Topic: Owning 3 Index funds vs ETFS ?
Replies: 24
Views: 1834

Re: Owning 3 Index funds vs ETFS ?

^^ I fully admit I'm somewhat of a geek when it comes to this, so don't discount that I am putting in more work to understand the intricacies than someone who feels fine (and is fine!) with a hands-off approach. However, costs matter, and taxes are but one of the costs, so it does add up. By choosi...
by Doc
Fri Jul 14, 2017 1:07 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

If you are trying to claim a distinction between a traditional Mutual Fund and an Exchange Traded Fund you are really deep into speculation in my opinion. Then I have to doubt you have an intimate understanding of what an ETF is. The question is whether the IRS treats traditional mutual fund differ...
by Doc
Fri Jul 14, 2017 11:47 am
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

If you are trying to claim a distinction between a traditional Mutual Fund and an Exchange Traded Fund you are really deep into speculation in my opinion. Then I have to doubt you have an intimate understanding of what an ETF is. The question is whether the IRS treats traditional mutual fund differ...
by Doc
Fri Jul 14, 2017 10:37 am
Forum: Investing - Theory, News & General
Topic: Owning 3 Index funds vs ETFS ?
Replies: 24
Views: 1834

Re: Owning 3 Index funds vs ETFS ?

I use ETFs to tax gain harvest. That's interesting. Is this because you are young and poor (i.e. low marginal tax rate) and you want to increase your cost basis, taking your cap gains now (at lower marginal rates) to reduce the amount of future capital gains? I am old and collecting SS and I period...
by Doc
Fri Jul 14, 2017 10:14 am
Forum: Investing - Theory, News & General
Topic: Owning 3 Index funds vs ETFS ?
Replies: 24
Views: 1834

Re: Owning 3 Index funds vs ETFS ?

I use ETFs to tax gain harvest. Since there is no wash sale to be concerned about there, I sell ETFs intra-day and buy the same shares back seconds later at usually the same price. This is not possible with mutual funds, but I am able to stay invested in the same funds which I find cool. I've used ...
by Doc
Fri Jul 14, 2017 8:46 am
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

Doc wrote: The way things are going I won't be doing any TLH in the foreseeable future. Well, I'm happy to do TLH because I have carryover losses in the five-figure range (thanks to starting my taxable portfolio in 2007). If the IRS called me on a wash sale between two ETFs, it would a) mean nothin...
by Doc
Thu Jul 13, 2017 4:18 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

The IRS never specified a quantitative definition of "substantially". Right, but when they do have an example it is generally like selling a stock and buying a call on the exact same stock. There is absolutely no risk. In the IRS descriptions "substantially" refers to the fact t...
by Doc
Thu Jul 13, 2017 2:46 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

OK you made me find my own source. "Does Tax Loss Harvesting “Almost” Substantially Identical Mutual Funds And ETFs Trigger A Wash Sale Problem?" In former IRS Publication 564, the Service acknowledged that “ ordinarily, shares issued by one mutual fund are not considered to be substantial...
by Doc
Thu Jul 13, 2017 6:20 am
Forum: Investing - Theory, News & General
Topic: Mutual Fund Cash Composition
Replies: 4
Views: 281

Re: Mutual Fund Cash Composition

Geologist wrote:Consequently, I would agree with other posters that you should ignore it in your asset allocation.

The problem only becomes significant if the fund is using a very large amount of derivatives like some of the Pimco managed bond funds.
by Doc
Thu Jul 13, 2017 6:05 am
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

The only reason why, up to now, the IRS has not gone after the $100 investor is that it is not worth it. They didn't go after overseas accounts for more than 50 years either What source do you have for "The only reason"? Are they going after a Wealthfront? If they were we would know about...
by Doc
Wed Jul 12, 2017 5:01 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

In fact, I can bring a certain blend of securities to the ETF issuer, obtain ETF shares in exchange (and vice versa), and the IRS calls this a redemption in kind, which is prima facie evidence that ETF shares and underlying securities are one and the same. Let's try it from that viewpoint. The ETF ...
by Doc
Wed Jul 12, 2017 11:10 am
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

I have a lot of doubts about your "no doubts". Creation units involve the purchase or sale of individual securities that make up the fund. That's WAY different than buying and selling the finished product. That's not correct. Creation units involve the exchange of basket of securities for...
by Doc
Wed Jul 12, 2017 9:52 am
Forum: Investing - Theory, News & General
Topic: Morningstar Portfolio Manager
Replies: 5
Views: 406

Re: Morningstar Portfolio Manager

There are sites that test the servers for you like

http://www.isitdownrightnow.com/

but run the test several times since I was getting different results every few minutes Tuesday morning for Morningstar before it finally settled down.
by Doc
Wed Jul 12, 2017 9:49 am
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

S&P 500 and Russell 1000, they certainly have a case if held in ETF form. I assume that by "they" you mean the IRS. Unlike many other types of securities, the IRS has not given clear guidelines about what would be viewed as substantially identical if a mutual fund is sold and another ...
by Doc
Wed Jul 12, 2017 7:12 am
Forum: Investing - Theory, News & General
Topic: Non index ETFs from Vanguard
Replies: 2
Views: 409

Non index ETFs from Vanguard

"Actively run ETFs could be a new industry trend"

http://www.marketwatch.com/story/vangua ... 2017-07-12
by Doc
Tue Jul 11, 2017 9:44 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

If the IRS was going to claim that an S&P 500 was substantially identical to a Russell 1000 we would know about it already. Is a Ford and a Chevy substantially identical if they are both trucks? Not.
by Doc
Tue Jul 11, 2017 4:53 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

I have seen first hand deep discussions on this, with fund accountants and IRS auditors. This would be an issue for them. They would expect you to provide a good chunk of documentation proving that there was not a substantial overlap between the 2. While this was for RICs, this suggests it would ap...
by Doc
Mon Jul 10, 2017 3:51 pm
Forum: Investing - Theory, News & General
Topic: ETF - open secret - cap gains tax loophole
Replies: 74
Views: 5623

Re: ETF - open secret - cap gains tax loophole

As an aside, if one fund used a full replication strategy and another used sampling, I doubt they would be substantially identical. I read some opinion in the past that suggested just having different Board of Directors might be enough to make tow funds/etfs substantially identical. Selling a secur...
by Doc
Mon Jul 10, 2017 9:34 am
Forum: Investing - Theory, News & General
Topic: Talk me out of long term bonds
Replies: 26
Views: 1967

Re: Talk me out of long term bonds

Someone may be able to comment on whether or not that duration is real. I think I remember some distortions in munis associated with call provisions. Note the average maturity is 17-18 years. If you look at muni's on Vanguard's "Find CDs and Bonds" screen you can see yield to call and yie...
by Doc
Mon Jul 10, 2017 8:28 am
Forum: Investing - Theory, News & General
Topic: VTI versus SCHB [Vanguard Total Stock vs. Schwab US Broad Mkt]
Replies: 18
Views: 1847

Re: VTI versus SCHB [Vanguard Total Stock vs. Schwab US Broad Mkt]

F150HD wrote:Always seems the font on M* is so tiny sometimes harder to find things there, or is it just me?

{Ctrl +} solves that problem with Windows 10.
by Doc
Mon Jul 10, 2017 8:10 am
Forum: Investing - Theory, News & General
Topic: "Bond wipeout has just begun"???
Replies: 84
Views: 11329

Re: "Bond wipeout has just begun"???

but I suppose I was referring more to interest - because the holding of a total bond fund are consistently changing/rotating , your interest received will continue to increase in a rising rate environment. With a single bond, you're locked into a fixed interest payment based on the rate when you pu...
by Doc
Sun Jul 09, 2017 2:15 pm
Forum: Investing - Theory, News & General
Topic: "Bond wipeout has just begun"???
Replies: 84
Views: 11329

Re: "Bond wipeout has just begun"???

Is anyone else much less concerned about the relatively minor losses in an intermediate duration bond fund than they are about the implications for rising bond yields on the equity side of things? If the risk-free rate goes up a lot, and corporate borrowing costs go up, I'm more worried about what ...
by Doc
Sun Jul 09, 2017 2:02 pm
Forum: Investing - Theory, News & General
Topic: "Bond wipeout has just begun"???
Replies: 84
Views: 11329

Re: "Bond wipeout has just begun"???

The rate of BND tends to adjust rather quickly to a changing rate environment, and the NAV price doesn't go down (or up) by more than a few percentage points, and for more than a few months. 1) The rate of BND tends ? to adjust. No it must adjust on a minute by minute basis. That's the nature of bo...
by Doc
Sun Jul 09, 2017 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: Do you pay federal taxes in the Intermediate-Term Treasury?
Replies: 9
Views: 582

Re: Do you pay federal taxes in the Intermediate-Term Treasury?

That might help me. I am thinking about using in place of the total bond fund. I am in the 15% federal bracket and in MO there is a 6% state tax. I pay most of my taxes to the state. This is a taxable account. I am thinking about Total Stock and Intermediate-Term Treasury Hello neighbor. In the 25%...
by Doc
Sun Jul 09, 2017 9:58 am
Forum: Investing - Theory, News & General
Topic: "Bond wipeout has just begun"???
Replies: 84
Views: 11329

Re: "Bond wipeout has just begun"???

On the other hand, bond funds such as Vanguard Total Bond are constantly selling and buying new bonds of all types. The major difference is that you might see a temporary decline in face value of the Total Bond shares, but history suggests that a relatively quick recovery is likely. I don't underst...
by Doc
Sun Jul 09, 2017 6:49 am
Forum: Investing - Theory, News & General
Topic: plus and minus signs on sweep transactions VG Brokerage account
Replies: 7
Views: 641

Re: plus and minus signs on sweep transactions VG Brokerage account

livesoft wrote:I think the "sweep" is just Purgatory that money going in and out of settlement account has to spend time in. Sometimes it never makes it to the settlement account, too.

:thumbsup
by Doc
Sun Jul 09, 2017 6:46 am
Forum: Investing - Theory, News & General
Topic: "Bond wipeout has just begun"???
Replies: 84
Views: 11329

Re: "Bond wipeout has just begun"???

If the bond fund was receiving new money and buying new issues, technically you are correct there would not be a constant duration/maturity like with an individual bond. However, as long as the manager was consistent with the mandate, the duration would not change that much and neither would the di...
by Doc
Sat Jul 08, 2017 6:33 pm
Forum: Investing - Theory, News & General
Topic: "Bond wipeout has just begun"???
Replies: 84
Views: 11329

Re: "Bond wipeout has just begun"???

:wink: Match your bond holdings to the bond fund's duration and then ride it out. In practice, how does one actually do this? I understand in a vague way that if a bond has a duration of N years, you should hold it N years? If you hold it for N years you get the ~exact return you thought you would g...
by Doc
Sat Jul 08, 2017 4:30 pm
Forum: Investing - Theory, News & General
Topic: "Bond wipeout has just begun"???
Replies: 84
Views: 11329

Re: "Bond wipeout has just begun"???

TropikThunder wrote:Well who's bright idea was it to buy LT Treasuries when the Fed has been telegraphing four FFR increases between Dec 2016 and Dec 2017?

Mario Draghi in a perverse sort of way.

It's a liquidity thing.
by Doc
Sat Jul 08, 2017 11:37 am
Forum: Investing - Theory, News & General
Topic: plus and minus signs on sweep transactions VG Brokerage account
Replies: 7
Views: 641

Re: plus and minus signs on sweep transactions VG Brokerage account

Probably has to do with your bank balance being an asset on your balance sheet but a liability on the bank's. Just uncheck the "display sweep" box on the transaction tab and forget about it. I just record MM assets as cash which eliminates a lot of confusion because it takes an extra day t...
by Doc
Fri Jul 07, 2017 5:00 pm
Forum: Investing - Theory, News & General
Topic: Stocks and Bonds both declining.
Replies: 60
Views: 5108

Re: Stocks and Bonds both declining.

How many of you have sold bond funds at a loss in order to rebalance into equities that have lost as well? That is, have losses in bond funds prevented you from rebalancing as called for in your IPS? I finished building my ten year TIPS ladder in the spring of '08 and I sold each and every issue in...
by Doc
Fri Jul 07, 2017 4:52 pm
Forum: Investing - Theory, News & General
Topic: Stocks and Bonds both declining.
Replies: 60
Views: 5108

Re: Stocks and Bonds both declining.

I'm thinking again that TRSY 10 is just an inch away from selling at a 3% yield in the secondary market. Assuming that one year is an inch in the constant maturity chart below I think it is more like 2 inches away. OK an inch and a half maybe. :D https://s23.postimg.org/9rjlulnaz/Ten_year_yield_cur...
by Doc
Fri Jul 07, 2017 3:55 pm
Forum: Investing - Theory, News & General
Topic: Stocks and Bonds both declining.
Replies: 60
Views: 5108

Re: Stocks and Bonds both declining.

Ok, so what is the correlation time frame and the data domain you use for long term. I don't make any investment decisions based on quantitative correlation factors. If someone is making a recommendation or expressing some opinion on cause and effect I will look at his data and to see in it makes s...
by Doc
Fri Jul 07, 2017 3:19 pm
Forum: Investing - Theory, News & General
Topic: Stocks and Bonds both declining.
Replies: 60
Views: 5108

Re: Stocks and Bonds both declining.

saltycaper wrote:... it's possible for interest rates to go up without inflation going up. (I took this to include "without inflation going up as much" too.) I think the answer to that is "yes".

Agreed.
by Doc
Fri Jul 07, 2017 3:17 pm
Forum: Investing - Theory, News & General
Topic: Stocks and Bonds both declining.
Replies: 60
Views: 5108

Re: Stocks and Bonds both declining.

How long is long term ? Long term enough and Japan capitalizes as much as the US. I'm just addressing the correlation metric not economic or market trends. If you are using daily numbers and a time period of less than say three months it is short term. If you are using monthly numbers and a time pe...

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