Search found 7353 matches

by Doc
Wed Aug 16, 2017 10:04 am
Forum: Investing - Theory, News & General
Topic: XIRR - Non-reinvested dividends
Replies: 16
Views: 1319

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: 16
Views: 1319

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: 16
Views: 1319

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: 16
Views: 1319

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: 16
Views: 1319

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: 15
Views: 1557

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: 53
Views: 4505

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: 5336

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: 53
Views: 4505

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: 53
Views: 4505

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: 53
Views: 4505

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: 1200

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: 1200

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: 1200

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: 1200

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: 2506

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: 53
Views: 4505

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: 53
Views: 4505

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: 2506

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: 1200

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: 2506

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: 2506

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...
by Doc
Fri Aug 11, 2017 10:18 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

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

Vanguard also uses their own style box methodology not Morningstar's. So what are you going to use to compare a Vg fund to a Schwab or Fidelity fund? I suggest that you use the same metric for all of them. And that would be Morningstar even if you think it has some things you don't like. If Morning...
by Doc
Fri Aug 11, 2017 8:15 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

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

OK, that might be true. But if Morningstar shows BBB for this fund, then maybe I should be careful about using Morningstar reports to make decisions. Vanguard also uses their own style box methodology not Morningstar's. So what are you going to use to compare a Vg fund to a Schwab or Fidelity fund?...
by Doc
Fri Aug 11, 2017 8:09 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

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

I haven't looked at the annual report, but http://portfolios.morningstar.com/fund/ ... ture=en-US doesn't show any short positions. Am I missing something? Vanguard is showing 38.7% under 1 year. It's a 1-5 fund. That screams derivatives to me. https://personal.vanguard.com/us/funds/snapshot?FundId...
by Doc
Fri Aug 11, 2017 7:58 am
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 53
Views: 4505

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

grok87 wrote:Not sure about any sort of guarantee on the non-agency stuff- also they are being re-named pls= private label securities
Way back when we had a mortgage, we were required to pay a mortgage insurance fee as well as the interest. May be a thing that is long gone.
by Doc
Fri Aug 11, 2017 7:52 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

Re: Why is VANGUARD SHORT TERM TREASURY fund rated BBB credit quality?

FWIW, Vanguards ratings aren't their own, but that of major ratings agencies as describe ... The problem comes from the nonrated securities like MM funds. Vg's MM account may be Treasury MM not Prime MM but M* has to treat it as nonrated because in fact the MM fund itself is not rated. Similar prob...
by Doc
Fri Aug 11, 2017 6:53 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

Re: Why is VANGUARD SHORT TERM TREASURY fund rated BBB credit quality?

If Vanguard's website (linked earlier) is correct, then wouldn't this be a failure of Morningstar's process? Fund companies supply data to Morningstar in some kind of standardized format. That format may be different than the fund uses for itself. You can 't assign "blame" to either party. If a fun...
by Doc
Fri Aug 11, 2017 6:34 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

Re: Why is VANGUARD SHORT TERM TREASURY fund rated BBB credit quality?

Thank you David. That is my understanding also but you did a much better job of expressing it.
by Doc
Fri Aug 11, 2017 6:31 am
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 53
Views: 4505

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

no they are not corporates. they would be pools of mortgages that are without any sort of backing- be it federal (GNMA) or government-sponsored-enterprise (GSE = Fannie/Freddie) My understanding or maybe misunderstanding. GNMAs are motgage pools guaranteed by US. GSE mortgage pools do not have a US...
by Doc
Thu Aug 10, 2017 5:56 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 53
Views: 4505

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

non-agency MBS would not be government I didn't pose the question well. Actually I messed it up completely. Let me try again. Are non-agency MBS corporates? The reason I get confused is that agency MBS is government but not agency MBS is securitized which is a different category from corporate. Or ...
by Doc
Thu Aug 10, 2017 5:11 pm
Forum: Investing - Theory, News & General
Topic: Options as a Tax Loss Harvesting Tool
Replies: 16
Views: 1200

Re: Options as a Tax Loss Harvesting Tool

My understanding is you are then free to re-purchase the stock/ETF immediately after entering the option contact with the new share's cost basis being the same as the market price with no wash sale adjustment (since the wash sale cost basis adjustment all went towards the option contract). Getting ...
by Doc
Thu Aug 10, 2017 4:03 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

Re: Why is VANGUARD SHORT TERM TREASURY fund rated BBB credit quality?

Morningstar Style Box This is a proprietary Morningstar data point. The Morningstar Style Box is a nine-square grid that provides a graphical representation of the "investment style" of stocks and mutual funds. For stocks and stock funds, it classifies securities according to market capitalization ...
by Doc
Thu Aug 10, 2017 3:53 pm
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1133

Re: Does VG Compound Interest?

So if I am TBM’s fund accountant making that daily accrual, how do I do it? Do I have to accrue interest payable for only those bonds whose next coupon payment date is before the next payment to fund holders? Or do I have to accrue interest payable for each of the 8174 bonds in my portfolio and if ...
by Doc
Thu Aug 10, 2017 2:22 pm
Forum: Investing - Theory, News & General
Topic: Options as a Tax Loss Harvesting Tool
Replies: 16
Views: 1200

Re: Options as a Tax Loss Harvesting Tool

Doesn't work. The IRS has remained mute on what substantially identical is when mutual funds are involved. Not the same with stocks. There are published "rules". The sale of a stock and an option to buy the same stock are substantially identical. See for example http://fairmark.com/capgain/wash/wsop...
by Doc
Thu Aug 10, 2017 12:26 pm
Forum: Investing - Theory, News & General
Topic: What Percentage CASH are you?
Replies: 90
Views: 5910

Re: What Percentage CASH are you?

0.19% but almost all of that is to secure a small credit line so I can't really spend it.
by Doc
Thu Aug 10, 2017 12:24 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

Re: Why is VANGUARD SHORT TERM TREASURY fund rated BBB credit quality?

Using two sources is in general a bad idea especially if one of the sources is the fund company itself. Every fund company has some flexibility in how they calculate the data. At least using a single source like Morningstar the calculations are consistent for different fund providers. That's what I...
by Doc
Thu Aug 10, 2017 11:01 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1133

Re: Does VG Compound Interest?

Sure, but these coupons are not all paid the day before fund distribution date. They may be paid at various days all during the month. What happens to that cash until fund distribution date? Right but you didn't ask about actual cash payments received by the fund you asked about accruals. Actual ca...
by Doc
Thu Aug 10, 2017 10:44 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

Re: Why is VANGUARD SHORT TERM TREASURY fund rated BBB credit quality?

With every secondary source of data I've used often enough, I've repeatedly seen misleading info and errors. Including both Morningstar and S&P. If making an important decision, I suggest using two sources. Ideally, one source would be the fund company, such as Vanguard, or for index funds, the ind...
by Doc
Thu Aug 10, 2017 10:35 am
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 53
Views: 4505

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

Good point, but the investment grade funds are only about half corporates VFIDX Intermediate IG Guv 14.5% Corp 69.6% Securitized 13.9% Source Morningstar. thanks. i was looking at the short term one... The short fund is only 22% guv (17% Treasuries) Part of the difference is in the securitized. Are...
by Doc
Thu Aug 10, 2017 8:31 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1133

Re: Does VG Compound Interest?

There is no cash to reinvest until the coupon is actually paid. The accrued interest on a bond is not compounded by the bond issuer either.
by Doc
Thu Aug 10, 2017 8:24 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Short Term Treasury fund rated BBB credit quality?
Replies: 32
Views: 2506

Re: Why is VANGUARD SHORT TERM TREASURY fund rated BBB credit quality?

Probably due to cash. Morningstar treats all FI with maturities less than 1 year as cash. And cash has no credit rating. The way M* computes a funds overall credit rating is to weight each position by the probability of default which means a small position with a low or no credit rating can have a s...
by Doc
Thu Aug 10, 2017 8:09 am
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 53
Views: 4505

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

grok87 wrote:Good point, but the investment grade funds are only about half corporates
VFIDX Intermediate IG

Guv 14.5%
Corp 69.6%
Securitized 13.9%

Source Morningstar.
by Doc
Thu Aug 10, 2017 7:56 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1133

Re: Does VG Compound Interest?

There is no cash flow to invest with an accrual. An accrual is an accounting method to account for that part of the interest that you have already earned but that won't get paid until the coupon date or when/if the bond is sold before maturity.
by Doc
Wed Aug 09, 2017 11:37 am
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 4881

Re: Should TBM Be Your Only Bond Fund?

If you are still worried about something worse. If the market is do dysfunctional that spreads widen to 15% on an internationally recognized cash equivalent backed in the full faith and credit of a government with the power to just print money ... I wasn't thinking of the spreads but more just the ...
by Doc
Wed Aug 09, 2017 11:28 am
Forum: Investing - Theory, News & General
Topic: What determines the shape of the yield curve?
Replies: 43
Views: 2725

Re: What determines the shape of the yield curve?

A retail bond investor who is not aware of this could be skinned alive by overpaying for a bond of a specific maturity, thinking it was a fair price because its YTM matched the yield curve, while the seller was selling him a bond of higher duration than the average duration of bonds used to calcula...
by Doc
Wed Aug 09, 2017 10:54 am
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 4881

Re: Should TBM Be Your Only Bond Fund?

If in a liquidity crisis you need to rebalance, do it on margin, pay a few months interest at worst, and sell EDV when the market clears. I have enough trouble from Mrs. Doc just buying into a falling market at all. If she found out I was doing it on margin all would be lost not only in the market....
by Doc
Wed Aug 09, 2017 10:22 am
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 4881

Re: Should TBM Be Your Only Bond Fund?

You can make the argument then that long dated treasury strips (Vanguard's EDV) are likely the best investment since they are the most volatile. They also have a decent return because of all the duration risk. You get the most bang for your small bucks. You are more knowledgeable in the detail than...
by Doc
Wed Aug 09, 2017 10:07 am
Forum: Investing - Theory, News & General
Topic: What determines the shape of the yield curve?
Replies: 43
Views: 2725

Re: What determines the shape of the yield curve?

I've underline the key word, in that text. I've underlined the key word(s) in that test. :D Treasury Yield Curve Methodology [...] The Treasury's yield curve is derived using a quasi-cubic hermite spline function. Our inputs are the Close of Business (COB) bid yields for the on-the-run securities. ...