Search found 299 matches

by Kelly
Fri Nov 08, 2019 9:15 am
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

I've looked at many VAs. You really need a CFA or experienced CFP to understand these things. Not sure if the guy on the phone at Vanguard could help.
by Kelly
Thu Nov 07, 2019 6:43 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

Fascinating to get an inside view of this. Question: when I run the IRR starting with a $105,000 premium at age 37 (when he bought it) and $825/mo starting at age 65, the IRR is only 2% at age 91. That doesn't strike me as overly generous??? What am I missing. Also, the buyout letter only reference...
by Kelly
Thu Nov 07, 2019 5:35 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

I was hoping that someone would offer a view as to why the insurer wants to get out of it. Thank you stinky. I'll guarantee you that's why the insurer wants out. Until the financial crisis, the insurance company actuaries were giving away guarantees on variable annuities like they were going out of...
by Kelly
Thu Nov 07, 2019 5:13 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

Thanks. This is all very helpful. The difference between the $105,000 premium and the $161,000 surrender is taxable as income unless some of it is 1035'd into something else. The max income base is capped. So the max monthly payment is $825 if started at age 65. The internal rate of return looks te...
by Kelly
Thu Nov 07, 2019 4:48 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

Thanks. This is all very helpful. The difference between the $105,000 premium and the $161,000 surrender is taxable as income unless some of it is 1035'd into something else. The max income base is capped. So the max monthly payment is $825 if started at age 65. The internal rate of return looks te...
by Kelly
Thu Nov 07, 2019 4:20 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

Thanks. This is all very helpful. The difference between the $105,000 premium and the $161,000 surrender is taxable as income unless some of it is 1035'd into something else. The max income base is capped. So the max monthly payment is $825 if started at age 65. The internal rate of return looks ter...
by Kelly
Thu Nov 07, 2019 1:26 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

It's a taxable contract, not an IRA.
by Kelly
Thu Nov 07, 2019 1:21 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Re: Annuity buy out offer

I suspect one or more of your numbers is off. I don’t know which one but ING would not be offering such a rich buyout if the annuity was not “upside down” on ING’s books. Interesting. I have buyout letter. Those are the numbers. The "enhanced surrender adjustment" is $23,863. The cash surrender wit...
by Kelly
Thu Nov 07, 2019 12:56 pm
Forum: Investing - Theory, News & General
Topic: Annuity buy out offer
Replies: 33
Views: 1556

Annuity buy out offer

HI all, I'm helping out a friend on a annuity buyout offer. I'd appreciate any comments on my thinking. In 2007 he put $105,000 into a variable annuity with a guaranteed minimum income benefit (GMIB). It was with ING and is now with Voya. Contract value is now $137,000. He's 51. If he were to exerci...
by Kelly
Tue Oct 08, 2019 2:08 pm
Forum: Investing - Theory, News & General
Topic: Statistics question
Replies: 33
Views: 2776

Re: Statistics question

Doc wrote:
Tue Oct 08, 2019 1:28 pm
Kelly wrote:
Tue Oct 08, 2019 1:18 pm
I was on the other side of the river at Northeastern where I did well in stats but that was 30 yrs ago.
You could have done worse. You could have been at the other end of Mass Ave. :twisted:
Ha! NU IS at the wrong end of mass ave!
by Kelly
Tue Oct 08, 2019 2:07 pm
Forum: Investing - Theory, News & General
Topic: Statistics question
Replies: 33
Views: 2776

Re: Statistics question

Nb. monthly equity returns are not normally distributed and in fact looking backwards do not appear to have followed any known distribution; the PV monte carlo sim has some knobs to turn to account for some aspects of the non-normality observed in historic US equity returns, as do some others. If y...
by Kelly
Tue Oct 08, 2019 1:43 pm
Forum: Investing - Theory, News & General
Topic: Statistics question
Replies: 33
Views: 2776

Re: Statistics question

Mathcracker: with a mean of 5.3, std dev of 9, sample of 5 I get a Pr of 0.089 of having a return equal/less than -0.11. Portfolio visualizer shows a 10th percentile, 5 year return of -0.11. Mathcracker reports Pr 0.01 for a return less than -4 (1st percentile) Pr 0.058 for a return less than -1 (5t...
by Kelly
Tue Oct 08, 2019 1:18 pm
Forum: Investing - Theory, News & General
Topic: Statistics question
Replies: 33
Views: 2776

Re: Statistics question

If I understand correctly, you want to know what the worst 1% and 5% returns could be given a mean return of 5.8% and St Dev 11.4%? If so, you could grab a normal distribution calculator like http://onlinestatbook.com/2/calculators/normal_dist.html And calculate the "below" value of different bad r...
by Kelly
Tue Oct 08, 2019 12:54 pm
Forum: Investing - Theory, News & General
Topic: Statistics question
Replies: 33
Views: 2776

Statistics question

Is it possible to work out what the expected return would be at the 1st and 5th percentile for a portfolio with an expected return and standard deviation of 5.8% and 11.4%? I'd like to calculate those returns expected in 5 and 10 years.

Thankyou
Kelly
by Kelly
Wed Sep 18, 2019 2:07 pm
Forum: Investing - Theory, News & General
Topic: MM vs short term bond index
Replies: 6
Views: 587

Re: MM vs short term bond index

Yield is far from the necessary comparison in selecting one of the above funds. If you need liquidity, MM is the better choice. You face the issue of the bond funds losing value. Money market funds are not likely to do this. What is your investment horizon? Horizon is a lifetime. I over saved when ...
by Kelly
Wed Sep 18, 2019 1:21 pm
Forum: Investing - Theory, News & General
Topic: MM vs short term bond index
Replies: 6
Views: 587

Re: MM vs short term bond index

How would an investor come out behind if they waited for the ST fund to yield more and then switch out of the MM?
by Kelly
Wed Sep 18, 2019 1:08 pm
Forum: Investing - Theory, News & General
Topic: MM vs short term bond index
Replies: 6
Views: 587

MM vs short term bond index

Here's a very un-Boglehead thought Yields on 9/18/19 Total bond mkt index 2.24% ST bond index 1.74% Prime MM 2.06% My question is why would someone hold the ST bond index over the MM? Why not just wait until the ST bond fund yields more than the MM? I also recall (I think) reading Larry Swedroe sayi...
by Kelly
Thu Aug 08, 2019 5:57 pm
Forum: Investing - Theory, News & General
Topic: Problem understanding Port Visualizer factor regression
Replies: 10
Views: 825

Re: Problem understanding Port Visualizer factor regression

Kelly, you are confusing two issues. Small is defined as return on deciles 6-10 minus return on deciles 1-5, so bottom half minus top half (with deciles being determined by NYSE breakpoints). Value is determined by top 30% by BTM minus bottom 30%. But loadings are different. Any loading above 0 sho...
by Kelly
Thu Aug 08, 2019 3:49 pm
Forum: Investing - Theory, News & General
Topic: Problem understanding Port Visualizer factor regression
Replies: 10
Views: 825

Problem understanding Port Visualizer factor regression

Hi All I don't have great understanding of factor regression. These are all small int'l value funds. My understanding is that SMB of >0.5 implies small and HML of >0.3 implies value (think I got that from a Fama Jr article). All these HMLs are showing negative numbers. Can anyone help me understand ...
by Kelly
Thu Aug 08, 2019 7:34 am
Forum: Investing - Theory, News & General
Topic: International value exposure
Replies: 5
Views: 846

Re: International value exposure

Thanks I've been following the port below taken from Bill Bernstein's Four Pillars book (pg 272) since I read it in 2002. I added int'l small and int'l small value after reading his Rational Expectations book (2014) US LC 10% US LV 10% US SCV 11% REIT 5% TOTAL INT'L 5% EMER MKT 4% INT'L LV 8% INT'L ...
by Kelly
Wed Aug 07, 2019 2:57 pm
Forum: Personal Finance (Not Investing)
Topic: Looking for life insurance needs calculator
Replies: 3
Views: 155

Looking for life insurance needs calculator

Can anyone point to a detailed like insurance needs calculator? There's lots out there designed facilitate sales. For example, I've not seen any that ask for children's social security survivor benefits. Are their any with that are conflict free?

Thank you

Kelly
by Kelly
Tue Aug 06, 2019 10:16 am
Forum: Investing - Theory, News & General
Topic: International value exposure
Replies: 5
Views: 846

International value exposure

Hi All For years I've been in Vanguard International Value (VTRIX). I just noticed that iShares came out with an int'l value ETF (IVLU) that has a higher value loading and cost less. Here's a factor regression that I barely understand. https://tinyurl.com/y5rwz54u My first take is that I should swit...
by Kelly
Wed Jul 24, 2019 4:47 pm
Forum: Investing - Theory, News & General
Topic: Question about portfolio visualizer regression
Replies: 2
Views: 252

Question about portfolio visualizer regression

Hi All I trying to help a friend whose 401k is all American Funds. Among her choices, I'm trying to find the fund that would be closest to a total stock market index like VTISX. My understanding of the regression is poor. I'm hoping a more mathematically inclined member can offer their opinion. Here...
by Kelly
Tue Jul 23, 2019 6:38 am
Forum: Investing - Theory, News & General
Topic: Changes to Morningstar Website?
Replies: 143
Views: 10545

Re: Changes to Morningstar Website?

My own cynical belief is that removed the compare feature under pressure from active funds. I always compared those funds with indexes with the expectant results.
by Kelly
Thu Jun 06, 2019 7:58 am
Forum: Investing - Theory, News & General
Topic: Rational that ret portfolios should grow more conservative?
Replies: 20
Views: 1790

Re: Rational that ret portfolios should grow more conservative?

Excellent points, all. Thanks for the help in understanding this.

Kelly
by Kelly
Wed Jun 05, 2019 6:16 pm
Forum: Investing - Theory, News & General
Topic: Rational that ret portfolios should grow more conservative?
Replies: 20
Views: 1790

Re: Rational that ret portfolios should grow more conservative?

.....the reason I bring this up is that the ever more bond heavy allocation over life is popular outside TR Price as well. I've known several firms that practiced this. After reading Pfau's book How Much Can I Spend in Retirement (based mainly on historical returns) , I don't know why that's been th...
by Kelly
Wed Jun 05, 2019 2:07 pm
Forum: Investing - Theory, News & General
Topic: Rational that ret portfolios should grow more conservative?
Replies: 20
Views: 1790

Rational that ret portfolios should grow more conservative?

I know Vanguard target date funds ultimately end up at 30/70 7 years after target date. TR Price has their bond portion growing to 80% 30 years after target date. Kitces and Pfau published their argument for a rising equity glide path about 6 years ago. The idea is that a high bond allocation early ...
by Kelly
Mon Jun 03, 2019 11:07 am
Forum: Investing - Theory, News & General
Topic: Using beta to prioritize stock sales?
Replies: 12
Views: 665

Re: Using beta to prioritize stock sales?

No worries! I did make me think about what beta really meant.
by Kelly
Mon Jun 03, 2019 9:12 am
Forum: Investing - Theory, News & General
Topic: Using beta to prioritize stock sales?
Replies: 12
Views: 665

Re: Using beta to prioritize stock sales?

I multiplied the stock correlation by its standard deviation. How does this metric relate to beta? Thanks for the help Dave G. What is interesting (to me, anyway) is that the beta of the portfolio of stocks is 0.7. I would expect it's historical return to be lower than the market. Yet it's much high...
by Kelly
Wed May 29, 2019 2:27 pm
Forum: Investing - Theory, News & General
Topic: Using beta to prioritize stock sales?
Replies: 12
Views: 665

Re: Using beta to prioritize stock sales?

Case is sensitive to sales. Their expected tax bill is only $750 state and fed. Adding a $5000 LTCG would cause the tax bill to go up by $1000. The increase is due to more SS being pulled into the tax formula.
by Kelly
Wed May 29, 2019 1:24 pm
Forum: Investing - Theory, News & General
Topic: Using beta to prioritize stock sales?
Replies: 12
Views: 665

Using beta to prioritize stock sales?

Hi All I'm helping a relative who was loaded up on stocks when they were at Wells Fargo. 25% of their 50/50 allocation is in 16 stocks with a 100% total unrealized gain. We'd like to trade these for total stk mkt index. To prioritize sales I've multiplied each stocks beta by its portfolio weight. We...
by Kelly
Mon May 06, 2019 8:43 am
Forum: Investing - Theory, News & General
Topic: Tax efficiency Fidelity v. Vanguard total stk mkt
Replies: 8
Views: 1039

Re: Tax efficiency Fidelity v. Vanguard total stk mkt

livesoft wrote:
Sun May 05, 2019 6:30 pm
Thanks for the link. I see that the calculation is bogus.
Interesting. What part of the formula is bogus. Here's more detail https://admainnew.morningstar.com/webhe ... iency.html
by Kelly
Sun May 05, 2019 6:21 pm
Forum: Investing - Theory, News & General
Topic: Tax efficiency Fidelity v. Vanguard total stk mkt
Replies: 8
Views: 1039

Re: Tax efficiency Fidelity v. Vanguard total stk mkt

livesoft wrote:
Sun May 05, 2019 6:15 pm
What is this tax cost ratio that you wrote about? And how is it calculated? Maybe the calculation is bogus to start with?
https://www.morningstar.com/articles/30 ... -fund.html
by Kelly
Sun May 05, 2019 6:08 pm
Forum: Investing - Theory, News & General
Topic: Tax efficiency Fidelity v. Vanguard total stk mkt
Replies: 8
Views: 1039

Tax efficiency Fidelity v. Vanguard total stk mkt

Hi All Fidelity total mkt index (FSKAX) has a 5 year tax cost ratio (lost annually to taxes at highest tax rate) of 0.89% vs 0.63% for Vanguard. The Fidelity fund has $64B and Vanguard (VTSAX) $804B. What causes the difference in tax loss? And, can we assume that their new no cost fund (FZROX) will ...
by Kelly
Sun Apr 28, 2019 9:02 am
Forum: Investing - Theory, News & General
Topic: TIPs vs total return portfolio in retirement
Replies: 27
Views: 2652

Re: TIPs vs total return portfolio in retirement

If you believe a committee of three have "downgraded" the future behavior of markets and inflation with the result that a portfolio today spent at 3% has a 15% chance of running out of money before or at thirty years, then you would be a fool to base your retirement on a withdrawals from a 60/60 po...
by Kelly
Sun Apr 28, 2019 6:54 am
Forum: Investing - Theory, News & General
Topic: TIPs vs total return portfolio in retirement
Replies: 27
Views: 2652

Re: TIPs vs total return portfolio in retirement

Using a total return portfolio and the 3% rule... Also,I realize that the total return portfolio (60/40) would only yield an 85% chance of success. The 3% rule isn’t a thing. It is not based on anything that I am aware of, other than pessimism for the sake of pessimism, or a basis for bragging abou...
by Kelly
Sat Apr 27, 2019 4:21 pm
Forum: Investing - Theory, News & General
Topic: TIPs vs total return portfolio in retirement
Replies: 27
Views: 2652

TIPs vs total return portfolio in retirement

I think I'm missing something in my understanding of retirement funding. Hoping someone can clear this up. According to Wade Pfau's article, approx $1M is needed for a 30 year, $40,000 per year TIPS ladder. https://retirementresearcher.com/building-retirement-income-tips-ladder/ Using a total return...
by Kelly
Tue Apr 23, 2019 4:20 pm
Forum: Investing - Theory, News & General
Topic: Can a fund/ETF increase its ER?
Replies: 8
Views: 503

Can a fund/ETF increase its ER?

Hi All We all know that Schwab offers ETFs at 1 basis point less than Vanguard. Fidelity has some funds at zero ER. We also know that these are loss leaders and investors in them should expect sales calls. I've read that these smaller funds may have more tracking error. Other than that, is there a r...
by Kelly
Mon Mar 04, 2019 8:56 am
Forum: Personal Finance (Not Investing)
Topic: Interaction of capital gains and ordinary income question
Replies: 11
Views: 519

Re: Interaction of capital gains and ordinary income question

Agree with the stacking. However, is there potentially another way to look at it. For example, if you knew the $10K in LTCG's was coming in the year and if you could have chosen to reduce your IRA distribution by $10K (such that the capital gain would have been taxed at zero), but did not, then is ...
by Kelly
Mon Mar 04, 2019 7:34 am
Forum: Personal Finance (Not Investing)
Topic: Interaction of capital gains and ordinary income question
Replies: 11
Views: 519

Re: Interaction of capital gains and ordinary income question

retiredjg wrote:
Mon Mar 04, 2019 7:25 am
How much of the capital gains are long term?
Good point. All long term.
by Kelly
Mon Mar 04, 2019 7:18 am
Forum: Personal Finance (Not Investing)
Topic: Interaction of capital gains and ordinary income question
Replies: 11
Views: 519

Interaction of capital gains and ordinary income question

Assume a couple has both IRA distribution and capital gains that puts total taxable income $10,000 over the top of the 12% bracket. What is considered the amount over the top of the bracket? Is it the capital gain taxed at 15% or the IRA distribution taxed at 22%?

Thank you

Kelly
by Kelly
Sat Jan 19, 2019 4:30 pm
Forum: Personal Investments
Topic: Any bond gurus?
Replies: 13
Views: 1278

Re: Any bond gurus?

It seems like you are trying to find characteristics of this fund to dissuade your friend from investing with EJ, but I doubt a bond fund with reasonable credit quality and duration and expense ratio is going to produce a compelling reason. If he really wants to stay with EJ, I'd consider letting i...
by Kelly
Sat Jan 19, 2019 3:27 pm
Forum: Personal Investments
Topic: Any bond gurus?
Replies: 13
Views: 1278

Re: Any bond gurus?

OP why not do a Portfolio Visualizer using the funds previously mentioned. and explain to him that the additional fees will make his results even worse. sometimes pictures are more effective than words. I've only used that tool to look at value loading. Will any of the regression models allow me to...
by Kelly
Sat Jan 19, 2019 1:37 pm
Forum: Personal Investments
Topic: Any bond gurus?
Replies: 13
Views: 1278

Re: Any bond gurus?

I did review it's holdings via M* and yes, I hate the fact that he's likely paying AUM. For that matter, I hate EJ, RJ, LPL and the rest of them!
There's no load.
by Kelly
Sat Jan 19, 2019 12:10 pm
Forum: Personal Investments
Topic: Any bond gurus?
Replies: 13
Views: 1278

Any bond gurus?

Hi All The saddest moment this week was Jack's passing. The second saddest moment was when I realized I couldn't get an elderly friend away from Edward Jones. He doesn't do computers and wants to be able to walk to the EJ office. He wants more in bonds and EJ is pitching Bridge Builder Core Bond (BB...
by Kelly
Mon Oct 22, 2018 12:57 pm
Forum: Investing - Theory, News & General
Topic: Indexed variable annuity question
Replies: 3
Views: 446

Re: Indexed variable annuity question

Ok. I got it now. Not surprising that over 6 year rolling period from 2000 thru 2017 the product under performed the SP 500 and balanced index.
by Kelly
Mon Oct 22, 2018 9:15 am
Forum: Investing - Theory, News & General
Topic: Indexed variable annuity question
Replies: 3
Views: 446

Indexed variable annuity question

I hate annuities as much as the next guy. I'm convinced that they're designed to deceive. I can usually uncover the lies quickly. This one has me stumped. This Lincoln Level Advantage brochure shows an index return of $95,040 and a "Lincoln Level Advantage" value of $103,880 at the end of two years....
by Kelly
Sun Sep 23, 2018 5:50 pm
Forum: Personal Investments
Topic: How much is too much in one stock?
Replies: 13
Views: 1673

How much is too much in one stock?

Hi All I just completed moving all of my in-laws funds from Wells Fargo to Vanguard. They are in their 80's with father in-law in cognitive decline. After re-working what I could without tax implications, they now hold a 50/50 portfolio (the bond fund fills their IRAs). One third of their savings is...
by Kelly
Sun Sep 16, 2018 9:06 am
Forum: Personal Finance (Not Investing)
Topic: Looking for paper on loan repay vs saving
Replies: 1
Views: 160

Looking for paper on loan repay vs saving

Hi All I'm not having much luck finding an academic paper that investigates the problem of repaying loans quickly vs investing. I'm interested in the interaction between interest on a declining (loan) vs increasing (investing) account value. I know that repaying the loan is a guaranteed return. Thou...