Search found 8240 matches

by Phineas J. Whoopee
Thu Jun 20, 2019 1:52 pm
Forum: Investing - Theory, News & General
Topic: Why are 1 month t-bill rates low?
Replies: 10
Views: 1019

Re: Why are 1 month t-bill rates low?

Please allow me to address some misconceptions expressed upthread. The Federal Funds Rate , FFR, is a target rate for creditworthy banks lending among themselves overnight, which includes over weekend. The Fed neither charges nor pays it. The FFR does strongly influence short-term Treasury yields, b...
by Phineas J. Whoopee
Thu Jun 20, 2019 1:32 pm
Forum: Personal Investments
Topic: Confused with the markets
Replies: 35
Views: 2392

Re: Confused with the markets

... Bond markets have been bid up so high that yields are now tiny, and yet equities are still booming. Aren't these two events normaly mutually exclusive? ... No, they are not, although that's a common misunderstanding encouraged by much of the financial press. US intermediate-term investment grad...
by Phineas J. Whoopee
Thu Jun 20, 2019 12:25 pm
Forum: Investing - Theory, News & General
Topic: Investing in Multiple Streams of Income? (NOT get rich quick)
Replies: 81
Views: 5374

Re: Investing in Multiple Streams of Income? (NOT get rich quick)

... I entirely agree with you, but just to play devil's advocate a bit, not one of those people got where they were via the 'Boglehead' way. The devil's advocate is appointed to make the case against an argument somebody else is making . Who argued that highly financially successful business people...
by Phineas J. Whoopee
Wed Jun 19, 2019 3:23 pm
Forum: Investing - Theory, News & General
Topic: What rating bonds are considered investment grade ?
Replies: 21
Views: 1095

Re: What rating bonds are considered investment grade ?

andrew99999 wrote:
Tue Jun 18, 2019 10:32 pm
...
Anyway, could someone tell me what rating bonds are considered "investment grade" ?
Is it AA and up?
...
Agreeing with previous posters about investment grade, I'd simply like to point out that AA- and up is sometimes called high grade.

PJW
by Phineas J. Whoopee
Wed Jun 19, 2019 3:19 pm
Forum: Personal Investments
Topic: International fund pricing
Replies: 2
Views: 212

Re: International fund pricing

Fair value pricing is always in play. It might be that the closing price in the security's market plus later foreign exchange fluctuations result in a conclusion that the price already is fair, and it might not, in the judgement of the firm doing the pricing. If, for example, a company like Anglo A...
by Phineas J. Whoopee
Wed Jun 19, 2019 3:05 pm
Forum: Personal Finance (Not Investing)
Topic: COBRA continuation: is it real?
Replies: 5
Views: 666

Re: COBRA continuation: is it real?

In New York State, under its laws, the additional eighteen months comes with a number of conditions. If they're satisfied then it's an option.
PJW
by Phineas J. Whoopee
Wed Jun 19, 2019 2:58 pm
Forum: Personal Investments
Topic: Tempted to market time bond fund
Replies: 15
Views: 1217

Re: Tempted to market time bond fund

Over time the return from bonds, and thus bond funds, is from their coupon payments. Yes, they fluctuate in price, but that's not a long-term source of return, because as bonds approach maturity their market prices must, of necessity, approach their face values. Who would pay much more, or accept mu...
by Phineas J. Whoopee
Wed Jun 19, 2019 2:26 pm
Forum: Investing - Theory, News & General
Topic: Modified Dutch Auction?
Replies: 8
Views: 641

Re: Modified Dutch Auction?

Does your son, who chose the stock, want to sell it? What would he want to buy with the proceeds?
PJW
by Phineas J. Whoopee
Wed Jun 19, 2019 2:11 pm
Forum: Investing - Theory, News & General
Topic: Investing in Multiple Streams of Income? (NOT get rich quick)
Replies: 81
Views: 5374

Re: Investing in Multiple Streams of Income? (NOT get rich quick)

... I entirely agree with you, but just to play devil's advocate a bit, not one of those people got where they were via the 'Boglehead' way. The devil's advocate is appointed to make the case against an argument somebody else is making . Who argued that highly financially successful business people...
by Phineas J. Whoopee
Tue Jun 18, 2019 7:49 pm
Forum: Investing - Theory, News & General
Topic: Should I abandon the Total International Stock Index Fund for greener pastures?
Replies: 110
Views: 9305

Re: Should I abandon the Total International Stock Index Fund for greener pastures?

I have a question for people on both sides of this issue. What would it take to change your mind? Or to put it scientifically, what would it take to falsify your theory ? ... With respect to me, your question is flawed, because my international holdings are not meant to enhance my portfolio's retur...
by Phineas J. Whoopee
Tue Jun 18, 2019 4:04 pm
Forum: Investing - Theory, News & General
Topic: Should I abandon the Total International Stock Index Fund for greener pastures?
Replies: 110
Views: 9305

Re: Should I abandon the Total International Stock Index Fund for greener pastures?

... It said that the annualized return of global stocks, going back 2,000 years , was around 6% not counting inflation. Since 1926 the S&P has averaged about 10% -- with an average 3% annual inflation included. So they asked: Why has the US outperformed 2,000 years of global returns by one percent,...
by Phineas J. Whoopee
Tue Jun 18, 2019 3:40 pm
Forum: Investing - Theory, News & General
Topic: Indexes all up - Total Market down?
Replies: 9
Views: 1481

Re: Indexes all up - Total Market down?

As linked upthread by MrBobcat, the reason is the fund paid out a distribution. Stock fund distributions come directly out of net asset value.

If a reader finds that surprising they may wish to have a look at our wiki article Dividends.

PJW
by Phineas J. Whoopee
Tue Jun 18, 2019 3:28 pm
Forum: Forum Issues and Administration
Topic: Length Limit on Quotes
Replies: 7
Views: 381

Re: Length Limit on Quotes

I would be against a limit, although I make an effort to include only the portions I'm responding to, properly attributed. Occasionally I'll leave all of it there, either because it forms a unified whole or because I'm worried about having my head bitten off. I also take the trouble to make sure sep...
by Phineas J. Whoopee
Tue Jun 18, 2019 3:04 pm
Forum: Investing - Theory, News & General
Topic: Am I a Boglehead?
Replies: 31
Views: 2458

Re: Am I a Boglehead?

Considering that John Bogle himself engaged in several practices (e.g. tactical asset allocation, market timing) and made some recommendations along the way that don't fit the 'Boglehead dogma' (e.g. 5% allocation to gold), I'm not sure that he was truly a Boglehead himself. Surely you know by now ...
by Phineas J. Whoopee
Tue Jun 18, 2019 2:55 pm
Forum: Investing - Theory, News & General
Topic: Should I abandon the Total International Stock Index Fund for greener pastures?
Replies: 110
Views: 9305

Re: Should I abandon the Total International Stock Index Fund for greener pastures?

I have a question for people on both sides of this issue. What would it take to change your mind? Or to put it scientifically, what would it take to falsify your theory ? ... With respect to me, your question is flawed, because my international holdings are not meant to enhance my portfolio's retur...
by Phineas J. Whoopee
Tue Jun 18, 2019 2:45 pm
Forum: Investing - Theory, News & General
Topic: Bonds question
Replies: 19
Views: 1438

Re: Bonds question

Short term interest rates are determined by the fed funds rate or the LIBOR; which is set by the Fed. The Federal Reserve System , the Fed, sets a target for the Federal Funds Rate , FFR, but does not set the London Interbank Offered Rate . The participants determining the LIBOR may take some cues ...
by Phineas J. Whoopee
Tue Jun 18, 2019 2:08 pm
Forum: Investing - Theory, News & General
Topic: Should I abandon the Total International Stock Index Fund for greener pastures?
Replies: 110
Views: 9305

Re: Should I abandon the Total International Stock Index Fund for greener pastures?

Is it possible to have too much diversification in a mutual fund? This is just an anecdotal observation, but it seems like the Total International Stock index never seems to fire on all cylinders because if one area of the index is doing well, there's another area of the index that does poorly, whi...
by Phineas J. Whoopee
Mon Jun 17, 2019 9:31 pm
Forum: Personal Investments
Topic: What percentage of total portfolio in REIT's do you have? Why?
Replies: 125
Views: 6084

Re: What percentage of total portfolio in REIT's do you have? Why?

0% right now. That's because a REIT index fund has not had a decent-sized RBD in a while. If VNQ had a great RBD, then I would move 5% of the portfolio into it for a few hours or days. Then sell it all. It is very ironic that the person with the highest post count on the Bogleheads is a market trad...
by Phineas J. Whoopee
Mon Jun 17, 2019 4:07 pm
Forum: Investing - Theory, News & General
Topic: Bonds question
Replies: 19
Views: 1438

Re: Bonds question

urizaf wrote:
Mon Jun 17, 2019 4:02 pm
So how come inverted yield curve always comes before recession?
It doesn't, nor do recessions always follow inverted yield curves.

Where are you getting your information you're asking about in these threads?

PJW
by Phineas J. Whoopee
Mon Jun 17, 2019 3:58 pm
Forum: Personal Investments
Topic: What percentage of total portfolio in REIT's do you have? Why?
Replies: 125
Views: 6084

Re: What percentage of total portfolio in REIT's do you have? Why?

I didn't sell during the crash, but as soon as my holding was back to even, I sold. So even nisiprius has dealt with anchoring bias . :wink: What is "anchoring bias"? thanks j :D Anchoring or focalism is a cognitive bias where an individual relies too heavily on an initial piece of information offe...
by Phineas J. Whoopee
Mon Jun 17, 2019 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: losing medicaid, needing to go on affordable care act
Replies: 13
Views: 1424

Re: losing medicaid, needing to go on affordable care act

Everything you asked about is based on Modified Adjusted Gross Income, MAGI, but that can be a little confusing because the modifications are different for different programs.

For Affordable Care Act purposes here's the MAGI definition.

PJW
by Phineas J. Whoopee
Sun Jun 16, 2019 6:45 pm
Forum: Personal Consumer Issues
Topic: Is it a waste of money having your furnace checked every year?
Replies: 75
Views: 10635

Re: Is it a waste of money having your furnace checked every year?

Chiming in late, but nonetheless for readers other than OP, who seems to have sensibly capitulated two years ago : Of course it's a waste of money, if by spring it ends up not having killed you and your family with carbon monoxide during the winter. Anyhow, even if it did do that, one's family woul...
by Phineas J. Whoopee
Sun Jun 16, 2019 6:09 pm
Forum: Personal Consumer Issues
Topic: Is it a waste of money having your furnace checked every year?
Replies: 75
Views: 10635

Re: Is it a waste of money having your furnace checked every year?

Chiming in late, but nonetheless for readers other than OP, who seems to have sensibly capitulated two years ago : Of course it's a waste of money, if by spring it ends up not having killed you and your family with carbon monoxide during the winter. Anyhow, even if it did do that, one's family would...
by Phineas J. Whoopee
Fri Jun 14, 2019 1:51 pm
Forum: Investing - Theory, News & General
Topic: ETF / NAV / Underlying stocks question
Replies: 5
Views: 426

Re: ETF / NAV / Underlying stocks question

What if the underlying price of the asset (stock) is under / over priced? Who determines the price? Is it based on the current market value? Yes, it's the current market value, which is the most recent price at which the most eager seller and most eager buyer transacted. There is no central stock p...
by Phineas J. Whoopee
Thu Jun 13, 2019 6:48 pm
Forum: Personal Investments
Topic: New here-question on changing brokers
Replies: 10
Views: 334

Re: New here-question on changing brokers

Well that really bothers me because the guy at VG is no newbie. Why would he not do this? If some of your investments are “proprietary” funds, the VG person is right. “You” should sell the funds at EJ that the VG rep told you to liquidate. Then VG can do an ACAT for you. If I may, for current and f...
by Phineas J. Whoopee
Thu Jun 13, 2019 6:27 pm
Forum: Personal Investments
Topic: New here-question on changing brokers
Replies: 10
Views: 334

Re: New here-question on changing brokers

Well that really bothers me because the guy at VG is no newbie. Why would he not do this? You are also right to be suspicious of Vanguard, just as with any financial services provider, but I have nothing to add to what I wrote, unless you have a more specific question. I repeat my suggestion to pho...
by Phineas J. Whoopee
Thu Jun 13, 2019 6:21 pm
Forum: Personal Investments
Topic: New here-question on changing brokers
Replies: 10
Views: 334

Re: New here-question on changing brokers

Hi Elle06, and welcome to the forum. You are right to be suspicious about Edward Jones, but their advice to you in this matter was sound. The conventional method is to have the receiving firm make the arrangements. If you transfer the assets in kind, as the term is, rather than liquidating them your...
by Phineas J. Whoopee
Wed Jun 12, 2019 4:29 pm
Forum: Personal Investments
Topic: Triple Levered Retirement Accounts?
Replies: 9
Views: 1189

Re: Triple Levered Retirement Accounts?

Poster HEDGEFUNDIE is attempting to provide an existence proof that math isn't math . If in his own individual case, whether or not he provides his brokerage statements, it happens to work out with a gain, then, well, his triumphant conclusion will be that math isn't math. You may wish to follow the...
by Phineas J. Whoopee
Tue Jun 11, 2019 1:10 pm
Forum: Personal Investments
Topic: Bond interest rates
Replies: 9
Views: 1045

Re: Bond interest rates

Thank you very much for the helpful replies, I never actually thought of how the Fed executes on raising/lowering the interest rates when they announce it, this was super helpful. Am I correct in assuming that the Fed can only control one part of the bond market (e.g government bonds )? Corporate a...
by Phineas J. Whoopee
Tue Jun 11, 2019 12:31 pm
Forum: Investing - Theory, News & General
Topic: Bond fund distribution, NAV reduction
Replies: 7
Views: 580

Re: Bond fund distribution, NAV reduction

I understand that when a equity fund pays a dividend, the NAV is reduced accordingly. Does the same reduction in the NAV happen with a bond fund? I was reading the following from the wiki and if I understand it correctly the answer is no? It depends on the fund. Some accrue dividends daily and pay ...
by Phineas J. Whoopee
Tue Jun 11, 2019 12:15 pm
Forum: Investing - Theory, News & General
Topic: [Why did my fund suddenly drop in value?]
Replies: 227
Views: 181078

Re: [Why did my fund suddenly drop in value?]

... That is interesting, so if you remove the market noise, who assigns the drop due to the distribution ? There is no central pricing authority, therefore there is nobody to assign any such thing. Uninformed investors can get taken advantage of by those who understand the dividend dynamic. That's ...
by Phineas J. Whoopee
Mon Jun 10, 2019 2:44 pm
Forum: Investing - Theory, News & General
Topic: AA : willingness, ability, need
Replies: 24
Views: 1835

Re: AA : willingness, ability, need

The need part is pretty straightforward to me: taking on equity risk earns a premium, and you need money. All the "need" portion says - to me at least - is that you should take on as much equity risk as you can afford to, given your future cash flow needs and emotional fortitude. With a long enough...
by Phineas J. Whoopee
Mon Jun 10, 2019 1:35 pm
Forum: Personal Finance (Not Investing)
Topic: Checks without my account number
Replies: 39
Views: 3856

Re: Checks without my account number

Temporal Adventurer wrote:
Mon Jun 10, 2019 1:31 pm
...
On the other hand, perhaps that's a feature rather than a bug. Is a check payee permitted to make an ACH pull from the payer's account?
...
Yes. That's specifically what Congress wrote into the Check 21 Act of 2003.

PJW
by Phineas J. Whoopee
Mon Jun 10, 2019 1:10 pm
Forum: Investing - Theory, News & General
Topic: Index filter false market cap?
Replies: 13
Views: 665

Re: Index filter false market cap?

What's a false market cap ? Did somebody make an error in the multiplication? Or does it mean you personally disagree with the share price the most eager buyer and most eager seller most recently traded at? If it's that you're talking about part and parcel of capital markets . They're based on disag...
by Phineas J. Whoopee
Mon Jun 10, 2019 12:41 pm
Forum: Investing - Theory, News & General
Topic: AA : willingness, ability, need
Replies: 24
Views: 1835

Re: AA : willingness, ability, need

This is what I did, and a couple of years later I answered some questions about it.

For the record, I think an age-based asset allocation approach will be far more practical for most investors to commit to and carry out.

PJW
by Phineas J. Whoopee
Mon Jun 10, 2019 11:34 am
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15382

Re: The logical fallacy behind "Bonds Are For Safety"

... Loss aversion is one of them. Further, loss aversion has some mathematical basis (i.e. a 50% loss requires a 100% gain to break-even ). What precisely is the distinction between: 50% of $100; and 100% of $50? PJW Say you lose 50% of $100. You now have $50. Now let's say the market immediately h...
by Phineas J. Whoopee
Mon Jun 10, 2019 11:12 am
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15382

Re: The logical fallacy behind "Bonds Are For Safety"

willthrill81 wrote:
Sun Jun 09, 2019 1:10 pm
...
Loss aversion is one of them. Further, loss aversion has some mathematical basis (i.e. a 50% loss requires a 100% gain to break-even).
What precisely is the distinction between: 50% of $100; and 100% of $50?

PJW
by Phineas J. Whoopee
Sat Jun 08, 2019 1:37 pm
Forum: Investing - Theory, News & General
Topic: indexers buying negative interest bonds
Replies: 26
Views: 2469

Re: indexers buying negative interest bonds

Large institutions which have few other choices to store assets buy them. Sometimes there are, in specific countries, requirements that some bid on at least a portion of issues to retain their preferred access . Try to imagine Apple, Inc., attempting to make payroll from thousands of FDIC-insured $2...
by Phineas J. Whoopee
Sat Jun 08, 2019 12:52 pm
Forum: Personal Investments
Topic: Guaranteed income stream options?
Replies: 14
Views: 1107

Re: Guaranteed income stream options?

A single premium immediate annuity could come close to providing the 5% your brother wants. I'm seeing around $4,213 per month for a 50 year old male living in Texas (for life). 20 year period certain would be $5,616 per month. However, it isn't totally tax-free (he won't pay taxes on the return of...
by Phineas J. Whoopee
Fri Jun 07, 2019 2:04 pm
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 11997

Re: Insights from Vanguard

... Vanguard is clearly pushing ETFs. It’s very unlikely they’ll lower the ERs on the mutual funds to match the lower prices of their corresponding ETFs (e.g. 0.07% for VTMGX, 0.05% for VEA). ... Vanguard does not raise or lower expense ratios, regardless of whether they would prefer their customer...
by Phineas J. Whoopee
Fri Jun 07, 2019 1:46 pm
Forum: Investing - Theory, News & General
Topic: Why does the stock market grow faster than the economy?
Replies: 28
Views: 4180

Re: Why does the stock market grow faster than the economy?

Why did it, you mean, over some measured period of time? We can't know does, nor will. The stock market represents only a portion of economic activity. That means its changes can be different than the changes over the whole economy, national or global, higher or lower. Occasionally, of course, over ...
by Phineas J. Whoopee
Fri Jun 07, 2019 1:20 pm
Forum: Personal Investments
Topic: Bonds and Investing
Replies: 31
Views: 3420

Re: Bonds and Investing

... Thank you for this explanation. So do bond fund managers at Vanguard buy and hold the bond until it matures? That is not typical of bond funds, although there are a few that use such a strategy. Holding to maturity frequently will reduce bond fund returns, as opposed to selling them to money ma...
by Phineas J. Whoopee
Fri Jun 07, 2019 1:03 pm
Forum: Personal Investments
Topic: Bonds and Investing
Replies: 31
Views: 3420

Re: Bonds and Investing

It might help to think about this. To recover from a -54% loss, a portfolio must grow 117% . To recover from a -35% loss, it must "only" grow 54% . A balanced portfolio dampens the volatility of stocks and also dampens the impact of the usually lower long-term returns of bonds. OP: Please read our ...
by Phineas J. Whoopee
Fri Jun 07, 2019 12:45 pm
Forum: Personal Investments
Topic: How can an individual borrow money from say Germany to use in US?
Replies: 1
Views: 330

Re: How can an individual borrow money from say Germany to use in US?

You're referring to what's called the carry trade . It can be legitimate, but foreign exchange markets are huge, leveraged, can move rapidly, and there's no protection. No quarter is asked, and none is given. I wouldn't want to risk my home or small business on its working out in my favor over the l...
by Phineas J. Whoopee
Fri Jun 07, 2019 12:23 pm
Forum: Investing - Theory, News & General
Topic: Bond index funds at risk due to BBB investment grade corporate bonds?
Replies: 10
Views: 945

Re: Bond index funds at risk due to BBB investment grade corporate bonds?

Everyone here realizes, I hope, that over the longer term a lower bond price combines with a higher Yield to Maturity, YTM, in a way that's not harmful.
PJW
by Phineas J. Whoopee
Fri Jun 07, 2019 12:11 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15382

Re: The logical fallacy behind "Bonds Are For Safety"

The definitional fallacy behind "Bonds Are For Safety:"

Safety is an emotive word, not a financial term of art. Let's stop using it on this forum.

PJW
by Phineas J. Whoopee
Wed Jun 05, 2019 3:48 pm
Forum: Investing - Theory, News & General
Topic: Dividends: The Basics
Replies: 6
Views: 892

Re: DIVIDENDS: THE BASICS

Bonds pay interest, stocks pay dividends. The primary difference is how they are taxed. Also, credit unions say they pay dividends. The IRS says they pay interest. Go with the IRS . Credit unions pay dividends. Congress wrote the law such that those dividends are taxed the same way as if they were ...
by Phineas J. Whoopee
Wed Jun 05, 2019 3:43 pm
Forum: Investing - Theory, News & General
Topic: Dividends: The Basics
Replies: 6
Views: 892

Re: DIVIDENDS: THE BASICS

No need to shout. Stocks themselves pay dividends, and bonds themselves pay coupons. Mutual funds, at least in the US, are organized under corporate law, therefore even bond funds pay dividends. Congress wrote the law such that bond fund dividends are taxed as if they were bond coupons. Stock fund n...