Search found 588 matches

by KSActuary
Sat May 30, 2020 9:23 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Among the common sector funds I looked at, health care, utilities and consumer staples had the lowest volatility and relatively low correlations among each other. Theoretically, it would seem beneficial to include such sectors in the equity side of this portfolio. Indeed, backtesting since 2003 sug...
by KSActuary
Fri May 22, 2020 2:55 pm
Forum: Personal Investments
Topic: Annuity?
Replies: 38
Views: 2526

Re: Annuity?

Not predicting a disaster but these accounts are back by the carrier's general assets and I believe that these could be impaired in the future should RE falter and interest rates remain low. I am very familiar with moving stable value funds when changing recordkeepers for 401k plans where the insure...
by KSActuary
Fri May 22, 2020 1:26 pm
Forum: Personal Investments
Topic: Annuity?
Replies: 38
Views: 2526

Re: Annuity?

Stable value funds are the insurance company's answer to a money market and most who invest in them do not understand what backs these funds. Most don't even know that an insurance company is involved. I know many plan participants who have blindly invested their entire 401k account in these funds d...
by KSActuary
Fri May 22, 2020 10:43 am
Forum: Personal Investments
Topic: Annuity?
Replies: 38
Views: 2526

Re: Annuity?

Stable Value funds in 401k plans are next for the storm.
by KSActuary
Fri May 22, 2020 9:40 am
Forum: Personal Investments
Topic: Annuity?
Replies: 38
Views: 2526

Re: Annuity?

Just bought a 2%, 3yr MYGA from Mass Mutual in our IRA's. Little downside if you know you won't need the money for the period. It is basically just like a CD, but surrender charges are a lot worse than early withdrawal penalties. In my case 7% of the balance withdrawn. You're allowed 10% withdrawal...
by KSActuary
Fri May 22, 2020 9:36 am
Forum: Personal Investments
Topic: Annuity?
Replies: 38
Views: 2526

Re: Annuity?

bberris wrote:
Fri May 22, 2020 5:31 am
KSActuary wrote:
Thu May 21, 2020 10:22 pm
Your banker is getting a spiff for recommending you to the in-house broker. 'nuf said.
As do brokers who broker CDs.
Yes, yield stripping is very prevalent in CDs and online bond sales.
by KSActuary
Fri May 22, 2020 9:35 am
Forum: Personal Investments
Topic: Annuity?
Replies: 38
Views: 2526

Re: Annuity?

HEDGEFUNDIE wrote:
Thu May 21, 2020 10:57 pm
KSActuary wrote:
Thu May 21, 2020 10:22 pm
Your banker is getting a spiff for recommending you to the in-house broker. 'nuf said.
Doesn’t automatically make it a bad deal.
Completely agree. More of a comment on the relationship, not the product, per se.
by KSActuary
Thu May 21, 2020 10:22 pm
Forum: Personal Investments
Topic: Annuity?
Replies: 38
Views: 2526

Re: Annuity?

Your banker is getting a spiff for recommending you to the in-house broker. 'nuf said.
by KSActuary
Thu May 21, 2020 11:29 am
Forum: Personal Investments
Topic: Growth fund mutual fund vs. Total stock market index
Replies: 15
Views: 728

Re: Growth fund mutual fund vs. Total stock market index

Recent outperformance by most growth assets is in the range of 2% - 3% per year versus total stock market. Long term, it is in the 1% - 1.5% range. Which trend will continue is difficult to judge so just continue holding both. TBCIX has a short history (2016) as it is a recent addition to the TRP sh...
by KSActuary
Thu May 21, 2020 9:08 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs World Performance
Replies: 195
Views: 12105

Re: S&P500 vs World Performance

Yeah, why don't we invest only in the Nasdaq 100? I mean look at the performance! Especially the last 10 years. Or this year where it has a positive return in a bear market. Why should I invest in the inferior SP500? Invest in both, we did. The difference between a global approach to investing vers...
by KSActuary
Thu May 21, 2020 9:05 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs World Performance
Replies: 195
Views: 12105

Re: S&P500 vs World Performance

I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner. Good luck with that. Investing in something until it is not the winner literally means you'll sell after it underperforms. The point is I've been in the S&P 500 for 20 years and it has been the clear winner....
by KSActuary
Tue May 19, 2020 8:51 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

This appears to be the preferred strategy as Exposure remains, just the dent is decreased if the market turns down. The original risk parity approach that had widespread commercial success was the All Weather strategy which supposedly only leveraged the fixed income side to be in parity with the vol...
by KSActuary
Tue May 12, 2020 1:29 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

QQQ has crushed every other major index except the S&P 500 since 2011 which it has beat handily. Some exposure to it would be reasonable.
by KSActuary
Tue May 12, 2020 9:26 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

A variable strategy where the VIX is introduced into the allocation would appear to provide some value.
by KSActuary
Mon May 11, 2020 10:54 am
Forum: Investing - Theory, News & General
Topic: So bottom is probably behind us....right?
Replies: 709
Views: 63134

Re: So bottom is probably behind us....right?

The worst case scenario is the meltdown of capitalism completely. As it currently exists in the US, a meltdown of capitalism and subsequent restructuring would be a good thing. Without going P & R, what substitute system would work better for a country of 330 million? I always like to hear and bett...
by KSActuary
Mon May 11, 2020 10:05 am
Forum: Investing - Theory, News & General
Topic: Vanguard May 7 Webcast
Replies: 19
Views: 1830

Re: Vanguard May 7 Webcast

Lower starting point for markets resulting in higher overall annual average returns for next 10 years. I hope international begins to perform as that will make for a more rational market. I am not holding my breath.
by KSActuary
Mon May 11, 2020 10:01 am
Forum: Personal Finance (Not Investing)
Topic: defined benefit plan
Replies: 22
Views: 1536

Re: defined benefit plan

A cash balance plan is a defined benefit plan that gained prominence when many of the larger corporate plans began to convert to 401k plans. A cash balance plan communicates its benefit in the form of a lump sum versus a monthly benefit to make it appear more consistent with the 401k environment tha...
by KSActuary
Mon May 11, 2020 9:57 am
Forum: Personal Finance (Not Investing)
Topic: Should we create a testamentary trust for $6M estate?
Replies: 198
Views: 8911

Re: Should we create a testamentary trust for $6M estate?

A couple points. The revocable trust will save you money because it will be drafted to take advantage of twice the current estate tax limit. After your both deceased, there may be an irrevocable trust which will need a separate tax id number. Income produced by the irrevocable trust not paid to the ...
by KSActuary
Mon May 11, 2020 9:26 am
Forum: Personal Finance (Not Investing)
Topic: Funding a personal revocable living trust
Replies: 5
Views: 282

Re: Funding a personal revocable living trust

Revocable trusts use the SSN of the primary grantor. Irrevocable trusts need a TIN as it is a separate tax entity. Move your bank accounts or, at least, find someone at your bank who knows something.
by KSActuary
Mon May 11, 2020 9:24 am
Forum: Investing - Theory, News & General
Topic: Anyone know the returns of the best hedge funds last 5,10, 20 years?
Replies: 13
Views: 901

Re: Anyone know the returns of the best hedge funds last 5,10, 20 years?

Hedge funds are the wrong way to describe what the OP may be asking as there are plenty of other investors who have outsized returns that do not fit the hedge fund definition. Probably one of the more successful groups of traders would be former prop traders where they trade their own wealth and may...
by KSActuary
Sun May 10, 2020 10:39 pm
Forum: Personal Finance (Not Investing)
Topic: defined benefit plan
Replies: 22
Views: 1536

Re: defined benefit plan

Sounds like a cash balance arrangement given the bond strategy?
by KSActuary
Sun May 10, 2020 10:35 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up wife after devorce
Replies: 45
Views: 5907

Re: Setting up wife after devorce

While the split sounds amicable, I would pay the couple grand to have a good attorney provide oversight to the agreement.
by KSActuary
Sun May 10, 2020 10:32 pm
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 2980
Views: 528509

Re: What are you up YTD? [Year To Date]

VTI doesn't necessarily suck, its just a different allocation.
by KSActuary
Sun May 10, 2020 10:28 pm
Forum: Investing - Theory, News & General
Topic: So bottom is probably behind us....right?
Replies: 709
Views: 63134

Re: So bottom is probably behind us....right?

Everyone has become is a prognosticator during times like this , but if you ask anyone “ do you believe that stock market will be higher in 5 -10 years ?” Most would say “yes” . So, why to waist time on fear manger and concentrate on long term steady investing? Because economic news headlines like ...
by KSActuary
Sun May 10, 2020 8:32 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

I think that, in the context of this thread, too many may believe that we need full 1% drops in rates to get the desired effect as in prior, higher interest rate structures. At these low rates, much smaller changes in rates are necessary to support the strategy overall. I believe that one must have ...
by KSActuary
Sun May 10, 2020 4:47 pm
Forum: Personal Investments
Topic: Any love for DFA?
Replies: 38
Views: 3242

Re: Any love for DFA?

binx99: As you know, DFA was a leader in promoting factor funds. You can read my thoughts about factor investing here: FACTOR INVESTING Best wishes. Taylor Jack Bogle's Words of Wisdom: "By and large I do not approve of factor funds." All passive low cost index funds are merely tools for use in you...
by KSActuary
Sun May 10, 2020 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: defined benefit plan
Replies: 22
Views: 1536

Re: defined benefit plan

I have never seen a professional organization, except some of the larger law firms (100's of lawyers), where an actual pension was paid over someone's lifetime. I am a small sample but I interact with a lot of service providers who support these strategies and I believe their experience is similar. ...
by KSActuary
Sun May 10, 2020 4:36 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Technology Fund
Replies: 82
Views: 3413

Re: Vanguard Technology Fund

All of us use the very products that these companies create but many will not invest in to a greater degee because we do not believe that it will continue. Funny. Tell me, are you investing in airlines like United, American, and Delta above and beyond their market weights? No? So you think commerci...
by KSActuary
Sun May 10, 2020 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: defined benefit plan
Replies: 22
Views: 1536

Re: defined benefit plan

Yes. Most professional corporations that utilize these strategies stack 401k match, profit sharing and deductible defined benefit contributions to limit taxes and defer income for the high paid partners. Amazingly, most of the high paid partners are all about the same age (old) and thus will be leav...
by KSActuary
Sun May 10, 2020 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: defined benefit plan
Replies: 22
Views: 1536

Re: defined benefit plan

These arrngement are not common except in the most profitable of small businesses where the ownership is small. It is merely a tax shelter. Because ERISA and its regulations require that each participant's accrued/earned benefit to date must be fully funded or there should be an effort underway to g...
by KSActuary
Sun May 10, 2020 1:10 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Technology Fund
Replies: 82
Views: 3413

Re: Vanguard Technology Fund

All of us use the very products that these companies create but many will not invest in to a greater degee because we do not believe that it will continue. Funny.
by KSActuary
Sun May 10, 2020 12:48 pm
Forum: Personal Investments
Topic: My Employer, Walmart, Is Now Offering A Roth 401k Option In 2020..
Replies: 49
Views: 3022

Re: My Employer, Walmart, Is Now Offering A Roth 401k Option In 2020..

Congrats on your savings rate and commitment to doing well for yourself. People like yourself is what makes this whole thing work.
by KSActuary
Sun May 10, 2020 12:45 pm
Forum: Investing - Theory, News & General
Topic: The advice you give vs the approach you use
Replies: 36
Views: 2131

Re: The advice you give vs the approach you use

If a family member or friend comes to you and asks - “how should I invest for retirement?” - what is your typical response? Assume the person has no existing knowledge about investing but is sincere, lives below their means, and will likely follow your advice if it’s easy. How much does this advice...
by KSActuary
Sun May 10, 2020 12:41 pm
Forum: Personal Finance (Not Investing)
Topic: defined benefit plan
Replies: 22
Views: 1536

Re: defined benefit plan

A defined benefit plan is a favorite tool for significantly increasing deductible expenses of a small employer because defined benefit plans do not have the same contribution limits as defined contribution plans. Defined benefit plans are governed by ERISA and must comply with all nondiscriminatory ...
by KSActuary
Sun May 10, 2020 12:19 pm
Forum: Investing - Theory, News & General
Topic: Dragon Portfolio
Replies: 8
Views: 707

Re: Dragon Portfolio

This is not a passive approach unless the definition of passive is oaying someone else to manage the various components.
by KSActuary
Sun May 10, 2020 11:41 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

See tylers post on negative convexity. Still huge gains remain: https://portfoliocharts.com/2019/05/27/high-profits-at-low-rates-the-benefits-of-bond-convexity/ I believe the better argument is that, at lower interest rates, can a downward move result in a full 1% drop? Bond convexity is just expan...
by KSActuary
Fri May 08, 2020 10:39 am
Forum: Non-US Investing
Topic: Forecast new COVID wave in Autumn and dollar cost averaging
Replies: 11
Views: 1616

Re: Forecast new COVID wave in Autumn and dollar cost averaging

I don't believe that scientists have a very good track record regarding the disease. While a second wave is likely, timing investments based on the predictions of when it will start will not correlate with the move in the market. I would be more worried about the election as it appears to have some ...
by KSActuary
Fri May 08, 2020 10:32 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Saw Jeremy on CNBC this morning. Based on his comments, 2021 is looking pretty good which I do not have as much faith in but he is the expert. As to a move up in rates, blind faith in any investment strategy, especially in this dynamic of a market, requires that you are prepared to accept the draw d...
by KSActuary
Fri May 08, 2020 10:28 am
Forum: Investing - Theory, News & General
Topic: Can't believe how ridiculously expensive Shopify is [Stock]
Replies: 65
Views: 4378

Re: Can't believe how ridiculously expensive Shopify is [Stock]

We sold SHOP in the 640's. A great story and have held and sold twice now. First from Q4 2018 and now starting in early March.

Installing Zoom room as we speak into the office. Have been impressed so far and most of our clients don't want to come to the office anymore which is fine with me.
by KSActuary
Fri May 08, 2020 8:39 am
Forum: Personal Investments
Topic: My Robo Advisor Experiences
Replies: 6
Views: 1050

Re: My Robo Advisor Experiences

Great information. Thanks for the heads-up to Backend Backtesting. Another great resource. It will be interesting to watch the Vanguard effort and see if they put real resources behind it to improve service.
by KSActuary
Thu May 07, 2020 2:47 pm
Forum: Personal Investments
Topic: Hidden fees with FA? First post in possible longer discussion
Replies: 9
Views: 776

Re: Hidden fees with FA? First post in possible longer discussion

The statement regarding rate of return is very clear that the net return is net of all fees except for certain fees they have no control over. An FA will never report a rate of return that does not include all fees. The FA will use point to point asset values and recognize any cash flow within the t...
by KSActuary
Thu May 07, 2020 2:08 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Anyone else growing increasingly concerned by this rally? It just seems a little too good to be true given the damage done by the Cornavirus. I'm still very much in this strategy but we're pretty much where we were a year ago on SPX, but the outlook is pretty bleak. "The stock market is not the eco...
by KSActuary
Thu May 07, 2020 9:48 am
Forum: Personal Investments
Topic: Please help me get out of international
Replies: 64
Views: 3318

Re: Please help me get out of international

Husker, its not about performance, its about being diversified. Seriously, for your allocation, you are underweight international which is a good thing since international has lagged for the last 10 years. Here's your three choices: Sell and put in S&P 500 Sell and put in small cap growth and mid ca...
by KSActuary
Thu May 07, 2020 8:44 am
Forum: Personal Investments
Topic: Hidden fees with FA? First post in possible longer discussion
Replies: 9
Views: 776

Re: Hidden fees with FA? First post in possible longer discussion

The key here is what benchmark are they using and is it appropriate. If it is appropriate and they have been beating it and using a passive approach you couldn't beat it then the fees really don't matter. As a matter of principle, the calculation they are performing to arrive at performance is net o...
by KSActuary
Wed May 06, 2020 10:24 pm
Forum: Personal Investments
Topic: Wonky 401K expense ratios
Replies: 17
Views: 895

Re: Wonky 401K expense ratios

https://www.schwab.com/public/schwab/investing/investment_help/investment_research/mutual_fund_research/mutual_funds.html?path=%2FProspect%2FResearch%2Fmutualfunds%2Ffees.asp%3Fsymbol%3DJFIVX This is the summary sheet from Schwab where they likely offer your same funds in their variable annuity. Loo...
by KSActuary
Wed May 06, 2020 12:55 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 4962
Views: 430817

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

As it's been said a hundred times now, the main concern with this UPRO/TMF strategy is that LTT will reverse the trend since the 80's and begin their descent downward as they did in the 1970's. Using VIX in this strategy (such as VXX or VIXY) to displace some of the treasury risk feels kind of like...
by KSActuary
Wed May 06, 2020 12:54 pm
Forum: Personal Investments
Topic: Wonky 401K expense ratios
Replies: 17
Views: 895

Re: Wonky 401K expense ratios

The 31 bps fee for the MassMutual product is most likely the base M&E charge for the group annuity chassis and is separate from the investment options.. When we take over group annuity products, we have always seen that the fee expense shown for the separate/sub-account is the total fee as it must b...
by KSActuary
Wed May 06, 2020 12:03 pm
Forum: Personal Investments
Topic: Wonky 401K expense ratios
Replies: 17
Views: 895

Re: Wonky 401K expense ratios

Its a wrap approach so the total fee is 0.30%
by KSActuary
Wed May 06, 2020 11:06 am
Forum: Personal Finance (Not Investing)
Topic: Car Purchase - Financing vs Down Payment, GAP Insurance, Extra Warranties
Replies: 58
Views: 2000

Re: Car Purchase - Financing vs Down Payment, GAP Insurance, Extra Warranties

These car threads are train wrecks. Someone asks a question and people feel compelled to provide their subjective oratory regarding the supposed appropriateness of buying something that may include having some fun. Car buying is a great topic to discuss here as many have great insights into some of ...