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by pascalwager
Thu Jul 09, 2020 1:29 am
Forum: Investing - Theory, News & General
Topic: Expectations of factor investing from a factor regression
Replies: 46
Views: 2419

Re: Expectations of factor investing from a factor regression

I understand that emerging markets diversify thanks to their lower correlation to developed markets, but what risk exposures do they have that diversifies them in a standard BH equity portfolio? Is there a factor based explanation or is it the geopolitical risk you mentioned? Since inception of VT,...
by pascalwager
Wed Jul 08, 2020 10:48 pm
Forum: Investing - Theory, News & General
Topic: Expectations of factor investing from a factor regression
Replies: 46
Views: 2419

Re: Expectations of factor investing from a factor regression

Option C: 40% Total world (VT) 30% US SCV (VIOV) 30% Emerging markets (VWO) low cost, decent factor diversification, decent geopolitical diversification I understand that emerging markets diversify thanks to their lower correlation to developed markets, but what risk exposures do they have that div...
by pascalwager
Sat Jul 04, 2020 4:37 pm
Forum: Investing - Theory, News & General
Topic: A Must Listen! Dr. Burton Malkiel is my guest on the "Bogleheads on Investing" podcast.
Replies: 84
Views: 6884

Re: A Must Listen! Dr. Burton Malkiel is my guest on the "Bogleheads on Investing" podcast.

I got the impression that he's not against bonds for someone who's willing to take a total return approach (creating your own dividends) for redemptions as opposed to the traditional approach of depending on bonds interest for living expenses.
by pascalwager
Sat Jul 04, 2020 3:09 am
Forum: Investing - Theory, News & General
Topic: 2 and 3 fund funders - sticking soley with Total Bond?
Replies: 49
Views: 4313

Re: 2 and 3 fund funders - sticking soley with Total Bond?

I'm a retiree and have TBM, an IT-TIPS fund, and an LT-TIPS fund. The overall duration equals my SS live expectancy. In one account, TBM is my only reasonable choice; otherwise, I might not own it. Holding only TBM by itself doesn't make sense to me, unless your life expectancy is around six to seve...
by pascalwager
Tue Jun 30, 2020 11:42 am
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

I completed the five ETF purchases today and everything worked out to perfection. I used market orders and the shares calculator and ended up with $34 remaining in cash. I may whittle that down by buying one more share of something. After every purchase, the cash updated immediately and so did my po...
by pascalwager
Mon Jun 29, 2020 2:41 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

I sold mutual fund SWISX today about 38 minutes before market closing. I followed some similar ETFs all day to be sure the daily gain didn't exceed 1.41%--my criterion for selling. I didn't want to generate any overall net, realized, taxable short-term gains on the year. This was the first time I've...
by pascalwager
Sun Jun 28, 2020 3:20 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

Its another layer of complexity for me and if my understanding that clients of PAS will be required to use them it will most likely be a deal breaker. I’m already uncertain about PAS as it is. ire-r I don't think it is a complexity. It is an unfamiliarity. Driving a car is very very complex. I'm no...
by pascalwager
Sun Jun 28, 2020 3:07 pm
Forum: Investing - Theory, News & General
Topic: Finding Middle Ground on the LMP
Replies: 95
Views: 4790

Re: Finding Middle Ground on the LMP

OP, I am also using a similar approach with a bit of a twist.... I have a cash flow spreadsheet projecting out my expenses (core+discretionary) and income through age 90. Based on this, it seems like once SS begins at 70, I will have minimal need to tap my portfolio. I have built an LMP portfolio (...
by pascalwager
Sun Jun 28, 2020 11:52 am
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

Of course, with mutual funds you can buy in dollar amounts and not just in share amounts. Most people on this forum buy in dollar amounts. One can sell mutual funds in dollar amounts or in share amounts. Schwab has a calculator that does allow you to effectively buy in dollar amounts by converting ...
by pascalwager
Fri Jun 26, 2020 8:13 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

When you place your order to sell some mutual fund shares, the order is NOT executed right away and thus creates no cash to buy other things right away. You actually won't even know the exact amount of cash the that mutual fund order to sell will create for you until after the order is executed (if...
by pascalwager
Fri Jun 26, 2020 5:39 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

I'm probably going to forever avoid ETFs after what I learned today from Schwab, and I definitely would never have gotten into investing if ETFs had been the only investment vehicle in 1995. I talked with three licensed brokers today and they told me that trades settle whether or not there's suffic...
by pascalwager
Fri Jun 26, 2020 3:57 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

I'm probably going to forever avoid ETFs after what I learned today from Schwab, and I definitely would never have gotten into investing if ETFs had been the only investment vehicle in 1995. I talked with three licensed brokers today and they told me that trades settle whether or not there's suffici...
by pascalwager
Wed Jun 24, 2020 11:06 pm
Forum: Investing - Theory, News & General
Topic: A bond duration glide path for retirement investing
Replies: 53
Views: 3070

Re: A bond duration glide path for retirement investing

If you will be spending your portfolio at a roughly constant rate over the next 10 years, the average duration to the expenditure is 5 years. You may not make it to 87, or you may live longer, so a ten-year duration makes more sense to me as an average. You need to consume 1 year from now, 2 years ...
by pascalwager
Wed Jun 24, 2020 7:01 am
Forum: Investing - Theory, News & General
Topic: A bond duration glide path for retirement investing
Replies: 53
Views: 3070

Re: A bond duration glide path for retirement investing

I don't question the concept, but the curve itself surprises me. The SS tables show a life-expectancy of ten (10) years for a 77 year-old, but the OP curve shows about five (5) years duration. If you will be spending your portfolio at a roughly constant rate over the next 10 years, the average dura...
by pascalwager
Wed Jun 24, 2020 6:53 am
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

I ,too, am trying to evaluate ETF’s as a complete novice. I’ve changed to the brokerage platform at Vanguard which really seemed to be a non event. Maybe changing from mutual funds to ETF’s is another. The advisor at PAS is fairly insistent that I make the change to ETF’s. It’s a topic to be covere...
by pascalwager
Tue Jun 23, 2020 7:47 pm
Forum: Investing - Theory, News & General
Topic: A bond duration glide path for retirement investing
Replies: 53
Views: 3070

Re: A bond duration glide path for retirement investing

I don't question the concept, but the curve itself surprises me. The SS tables show a life-expectancy of ten (10) years for a 77 year-old, but the OP curve shows about five (5) years duration. If you will be spending your portfolio at a roughly constant rate over the next 10 years, the average dura...
by pascalwager
Tue Jun 23, 2020 7:03 pm
Forum: Investing - Theory, News & General
Topic: A bond duration glide path for retirement investing
Replies: 53
Views: 3070

Re: A bond duration glide path for retirement investing

I don't question the concept, but the curve itself surprises me. The SS tables show a life-expectancy of ten (10) years for a 77 year-old, but the OP curve shows about five (5) years duration.
by pascalwager
Tue Jun 23, 2020 5:52 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

Yes, ETF's are more tax efficient, although for traditional Boglehead index funds the differences are negligible. If you are using the opportunity to get out of actively managed funds, yes, this can make a more significant difference. One thing to consider is future tax loss harvesting. Since ETF's...
by pascalwager
Tue Jun 23, 2020 5:39 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

Yes, ETF's are more tax efficient, although for traditional Boglehead index funds the differences are negligible. For some very specific funds (like Schwab's S&P500 or Total Stock Market) I've found this to be true -- cap gains distributions are generally several times smaller than dividend distrib...
by pascalwager
Tue Jun 23, 2020 6:31 am
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 234
Views: 48529

Re: Bill Sharpe's preferred portfolio

BTW, I have always loved your avatar! I assume that cute cat is yours? Best, Maestro G Her name is Gracie. She’s gray (hence the name) and white with a perfect milk mustache. She was born in a barn on a farm in 2007 and rescued/catnapped at four weeks old by a friend of my mother when the mean farm...
by pascalwager
Mon Jun 22, 2020 9:58 am
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

Where do you watch the real-time pricing? Schwab has 15-minute prices.
by pascalwager
Sun Jun 21, 2020 9:25 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

Account: US and intl large value and small-cap, and emerging markets.

The account is $562k (down from $697k in January) and the new funds will be 14% of the account.

I'm going to wait until the distributions ex-date before acting--probably around the 26th.
by pascalwager
Sun Jun 21, 2020 3:39 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

Re: ETF Novice

Keep it simple. Why 5 funds? Plus most index mutual funds are tax efficient enough to not worry about it. I have an old five-fund DFA portfolio and I'm not allowed to purchase new DFA shares. A while back I finally rebalanced from US into the Schwab Intl Index Fund (EAFE benchmark), but now I'd lik...
by pascalwager
Sun Jun 21, 2020 3:04 pm
Forum: Personal Investments
Topic: ETF Novice
Replies: 42
Views: 2273

ETF Novice

I'm going to be doing an exchange at Schwab--from one mutual fund into five new funds in a taxable account. I noticed that all of the ETF versions of the new funds show a history of zero capital gains. Is this an obvious reason to avoid the mutual fund version and, instead, purchase ETFs? All of the...
by pascalwager
Thu Jun 18, 2020 8:37 pm
Forum: Investing - Theory, News & General
Topic: Cash in lieu of bonds
Replies: 55
Views: 4852

Re: Cash in lieu of bonds

Bucket approach, I gather. Might work--lots of stable cash.

My approach in retirement is different: Total return, 55/45, declining bonds duration to match my life expectancy, $10k cash buffer--but I have an adequate pension.
by pascalwager
Thu Jun 18, 2020 8:11 pm
Forum: Investing - Theory, News & General
Topic: Value Premium- Does it really exist
Replies: 28
Views: 2078

Re: Value Premium- Does it really exist

Value didn't seem like it failed me until recently. As of late last year, my DFA US large value fund had beaten the S&P 500 index starting in June 1995.

Yeah, now it does seem to be failing. Dropped like a rock and may never recover, I suppose. What have you done for me lately, large value?
by pascalwager
Thu Jun 18, 2020 8:01 pm
Forum: Personal Investments
Topic: USAA to Charles Schwab - not happy
Replies: 43
Views: 3449

Re: USAA to Charles Schwab - not happy

I'm mainly at Vanguard, but I've had a five-fund, now six-fund, taxable account at Schwab since 1995. No problems, good service, and I do avoid the transaction-fee funds. I assume anyone would! Some of the Schwab funds have higher turnover rates and I also avoid those in taxable, but that wouldn't a...
by pascalwager
Wed Jun 17, 2020 9:48 pm
Forum: Investing - Theory, News & General
Topic: CALPERS Needs 7% Return
Replies: 58
Views: 6973

Re: CALPERS Needs 7% Return

"I’m guessing you probably are making out better than the guy who took the 401(k)." Maybe not if CA pensions end up "on the chopping block" as the last governor stated would happen during the next recession, and he probably wasn't expecting a pandemic. There is no lawful method for the “chopping bl...
by pascalwager
Tue Jun 16, 2020 11:51 pm
Forum: Personal Investments
Topic: International stock exposure...is up to 40% necessary?
Replies: 71
Views: 4795

Re: International stock exposure...is up to 40% necessary?

First off, thanks for all the great feedback here! I’ve been working on optimizing my 401k portfolio, thanks to some great feedback and comments on here. Primarily I’m getting out of my current target date fund and moving to lower cost index funds. Right now I’m thinking of the following allocation...
by pascalwager
Tue Jun 16, 2020 11:08 pm
Forum: Personal Investments
Topic: Ditching International
Replies: 274
Views: 15677

Re: Ditching International

I've been investing 50% intl since 1995 and here are some results from PV for intl asset classes which I own: $10k became $105.1k for US market $28.5k for global market ex-US $31.3k for intl value $46.2k for intl small cap Last year or so I sold off all of my tax-sheltered intl to get down to 30%, b...
by pascalwager
Tue Jun 16, 2020 6:32 pm
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 234
Views: 48529

Re: Bill Sharpe's preferred portfolio

Here's a link to an article about RISMAT by Joe Tomlinson (financial planner). He refers to it as a financial economics textbook and lists some asset allocation practices which might appear suspect to someone inclined toward total market investing. The linked article also provides a couple of intere...
by pascalwager
Mon Jun 15, 2020 11:06 pm
Forum: Investing - Theory, News & General
Topic: CALPERS Needs 7% Return
Replies: 58
Views: 6973

Re: CALPERS Needs 7% Return

I believe I qualify as being an employee of the government of California. Of course, I am not speaking in that capacity here, but it is relevant to this thread. I am not covered by CALPERS -- in fact, when I was hired, I was allowed to choose between being eligible for a pension and having a saving...
by pascalwager
Mon Jun 15, 2020 9:09 pm
Forum: Investing - Theory, News & General
Topic: CALPERS Needs 7% Return
Replies: 58
Views: 6973

Re: CALPERS Needs 7% Return

I believe I qualify as being an employee of the government of California. Of course, I am not speaking in that capacity here, but it is relevant to this thread. I am not covered by CALPERS -- in fact, when I was hired, I was allowed to choose between being eligible for a pension and having a saving...
by pascalwager
Sun Jun 14, 2020 11:30 pm
Forum: Investing - Theory, News & General
Topic: Any reason for 5% cash in a long-term portfolio?
Replies: 58
Views: 4849

Re: Any reason for 5% cash in a long-term portfolio?

If the stock market closed for six months, the cash might be useful. Are you keeping this cash in your mattress? If stock market is closed for 6 months, what makes you think you could get cash out of your MM fund, or even your bank account? I only have a nominal amount in my MMF now anyway (moved i...
by pascalwager
Sun Jun 14, 2020 7:57 pm
Forum: Investing - Theory, News & General
Topic: Any reason for 5% cash in a long-term portfolio?
Replies: 58
Views: 4849

Re: Any reason for 5% cash in a long-term portfolio?

The main reason I have cash (FDIC insured) is in case the stock market closes down for a protracted period, or permanently. And if things get real bad, the cash will help ease the transition into permanent, abject poverty. I've set up my spreadsheet with the cash included (0.7%, not including end-of...
by pascalwager
Sun Jun 14, 2020 4:07 pm
Forum: Investing - Theory, News & General
Topic: Any reason for 5% cash in a long-term portfolio?
Replies: 58
Views: 4849

Re: Any reason for 5% cash in a long-term portfolio?

When I write that I'm 60/40 stocks/bonds it's shorthand for saying 60/40 stocks/fixed income. The 40 can consist of savings, CDs, Treasuries, TIPS, I and EE bonds. What I have is a target quality (high) and duration (intermediate). Cash is like a high-quality, zero-duration bond. If you take a simi...
by pascalwager
Sun Jun 14, 2020 4:03 pm
Forum: Investing - Theory, News & General
Topic: Any reason for 5% cash in a long-term portfolio?
Replies: 58
Views: 4849

Re: Any reason for 5% cash in a long-term portfolio?

Maybe a better question would be "Is there any reason a person would LIKE to have 5% cash in a long term portfolio"? The answer to that is certainly yes, because lots of people do. I am completely lost as to why an investor would have cash specifically, distinct from any variety of fixed income inv...
by pascalwager
Fri Jun 12, 2020 1:19 am
Forum: Investing - Theory, News & General
Topic: 2020 and Capital Gains distributions?
Replies: 4
Views: 583

Re: 2020 and Capital Gains distributions?

I recently re-balanced a taxable stock funds account that hadn't been touched since Q4 2011. This provided me with a lot of realized losses to cover another change in another taxable account which produced realized gains. I still have a sizable chunk of net realized losses if more taxable changes ar...
by pascalwager
Fri Jun 12, 2020 1:01 am
Forum: Investing - Theory, News & General
Topic: Any reason for 5% cash in a long-term portfolio?
Replies: 58
Views: 4849

Re: Any reason for 5% cash in a long-term portfolio?

If the stock market closed for six months, the cash might be useful.
by pascalwager
Wed Jun 10, 2020 9:02 pm
Forum: Investing - Theory, News & General
Topic: 5% or 10% band?
Replies: 29
Views: 2390

Re: 5% or 10% band?

We're retired. 50/45/5 port with a 4 % AWR. We start the year with 5% of port (10% of FI) in CASH. Once per year we sell stocks a/o bonds to refill our CASH bucket to 5% of port. If our port is still 5% out of balance (45/55 or 55/45) we rebalance back to 50/50. This seems pretty solid to me, and s...
by pascalwager
Tue Jun 09, 2020 10:26 pm
Forum: Investing - Theory, News & General
Topic: 5% or 10% band?
Replies: 29
Views: 2390

Re: 5% or 10% band?

I use a 20% band--based on a study. So, at 55/45 target AA, I'd rebalance at 66/34 or 44/56. The latter occurred back a couple months. That would be, roughly, the "10% band" folks are referring to here. With regard to AA, I believe, most folks view it as additive instead of the more common general-...
by pascalwager
Tue Jun 09, 2020 9:33 pm
Forum: Investing - Theory, News & General
Topic: 5% or 10% band?
Replies: 29
Views: 2390

Re: 5% or 10% band?

I use a 20% band--based on a study. So, at 55/45 target AA, I'd rebalance at 66/34 or 44/56. The latter occurred back a couple months.
by pascalwager
Sun Jun 07, 2020 4:38 pm
Forum: Investing - Theory, News & General
Topic: Wall Street bets international stocks will top US equities in 2020 after a decade-long slump
Replies: 189
Views: 16376

Re: Wall Street bets international stocks will top US equities in 2020 after a decade-long slump

We just saw a 36% drop from ATHs in March/April, and it wasn't international that rebounded the strongest despite their more reasonable PE. People poured into quality, which is the US market. I wouldn't suggest using a 2-3 month period and extrapolating anything meaningful from that. By your measur...
by pascalwager
Sun May 31, 2020 9:42 pm
Forum: Investing - Theory, News & General
Topic: Index Investing and the U.S.-China Great Power Struggle
Replies: 54
Views: 3009

Re: Index Investing and the U.S.-China Great Power Struggle

I've developed some specific concerns about China recently (share dilution, trade conflicts, etc.). At one point I was ready to exit China investing, but I determined that China is only 2.4% of my overall portfolio (stocks and bonds). If it rises above 3%, I might take action to reduce it, such as e...
by pascalwager
Sun May 31, 2020 1:19 am
Forum: Personal Finance (Not Investing)
Topic: Calculating Capital Gains Taxable Amount
Replies: 22
Views: 1464

Re: Calculating Capital Gains Taxable Amount

I figured out my error when using the average cost method. I was using the total fund cost basis rather than the cost basis for the proceeds shares. So, I no longer think there are different average cost method versions, just one as far as I know.
by pascalwager
Sat May 30, 2020 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Capital Gains Taxable Amount
Replies: 22
Views: 1464

Re: Calculating Capital Gains Taxable Amount

I did the transactions and checked the Schwab realized gains and calculations as follows: Gains = Proceeds - cost basis The cost basis was greater than the proceeds, so the gains were negative, both long-term and short-term. Does that mean the transactions won't be taxed? You must have had some sha...
by pascalwager
Sat May 30, 2020 4:52 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Capital Gains Taxable Amount
Replies: 22
Views: 1464

Re: Calculating Capital Gains Taxable Amount

What is your cost basis method for the fund ? If you didn't select one, what is the default method. Often it is average cost basis. When were the shares purchased.........are they covered or non-covered........the broker will report the cost basis of the sold shares to you and IRS if covered. The b...
by pascalwager
Fri May 29, 2020 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Capital Gains Taxable Amount
Replies: 22
Views: 1464

Re: Calculating Capital Gains Taxable Amount

I'll have to step away from this thread because I do not really understand how you could have a capital loss in all of these funds if you initially bought them 25 years ago have not really bought more shares except for reinvesting dividends and minor rebalancing until 2011. Things just don't make d...
by pascalwager
Thu May 28, 2020 9:36 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Capital Gains Taxable Amount
Replies: 22
Views: 1464

Re: Calculating Capital Gains Taxable Amount

But which fund did you sell with average cost per share below the selling price? I consider bonds in taxable to be tax inefficient for me and they take away room for stocks in taxable that I can do tax-loss harvesting. OTOH, maybe bonds will drop and they can be tax-loss harvested in the near futur...
by pascalwager
Thu May 28, 2020 9:30 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Capital Gains Taxable Amount
Replies: 22
Views: 1464

Re: Calculating Capital Gains Taxable Amount

But which fund did you sell with average cost per share below the selling price? I consider bonds in taxable to be tax inefficient for me and they take away room for stocks in taxable that I can do tax-loss harvesting. OTOH, maybe bonds will drop and they can be tax-loss harvested in the near futur...