Search found 1022 matches

by Scooter57
Sun Nov 17, 2019 10:56 pm
Forum: Investing - Theory, News & General
Topic: Bond fund duration question
Replies: 15
Views: 962

Re: Bond fund duration question

Where did you get the idea that 2% was normal for short term bonds and 4-5% for intermediate bonds? Those are much lower than the rates through most of the past 50 years.
by Scooter57
Sun Nov 17, 2019 10:38 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Value Investors: Time to Back Up the Truck?
Replies: 18
Views: 1499

Re: Small Cap Value Investors: Time to Back Up the Truck?

Small Cap value ain't what it used to be. Many small companies over the past decade or so have stayed private until the venture capitalists who own big chunks of them could make huge amounts taking them public. This often means investors only get to invest in them after the excitement has been worke...
by Scooter57
Sun Nov 17, 2019 2:02 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds getting killed today
Replies: 90
Views: 10891

Re: Long Term Bonds getting killed today

Because of the hunger for yield, a ton of very poor quality corporate debt has been issued over the last few years, with very weak protections for bondholders (covenants.) This is something that knowledgeable people have been flagging as a serious risk that is being overlooked by investors. Isn't t...
by Scooter57
Sun Nov 17, 2019 1:51 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing into bond funds with record low interest rates
Replies: 36
Views: 2889

Re: Rebalancing into bond funds with record low interest rates

if the next twenty years do not look like 1960-1980 then staying in short bonds will cost you a lot in return. How could staying in short bonds cost you a lot in returns when rates for all maturities are so ridiculously low? Right now the spread between the 5 year Treasury and the 30 year is only ....
by Scooter57
Sat Nov 16, 2019 9:09 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market Index Fund
Replies: 25
Views: 2221

Re: Total Bond Market Index Fund

For the buy and hold investor, that rise in NAV is somewhat illusory. When I log onto Vanguard and look at my ladder of brokered CDs, bought last year when their rates surged briefly, I am shown $100,000 CDs listed as being worth, say, $108,000. But when that bond matures, no one is going to give me...
by Scooter57
Sat Nov 16, 2019 9:00 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing into bond funds with record low interest rates
Replies: 36
Views: 2889

Re: Rebalancing into bond funds with record low interest rates

if the next twenty years do not look like 1960-1980 then staying in short bonds will cost you a lot in return. How could staying in short bonds cost you a lot in returns when rates for all maturities are so ridiculously low? Right now the spread between the 5 year Treasury and the 30 year is only ....
by Scooter57
Sat Nov 16, 2019 10:04 am
Forum: Investing - Theory, News & General
Topic: Rebalancing into bond funds with record low interest rates
Replies: 36
Views: 2889

Re: Rebalancing into bond funds with record low interest rates

I would point out that, in more than 30 years of existence, Vanguard's Total Bond Market Index fund has had 4 calendar years with a negative total return. The worst of those was 1994, when it lost 2.66%. I would point out that for more than 30 years bond rates have been dropping from around 18%. Sh...
by Scooter57
Thu Nov 14, 2019 6:13 pm
Forum: Investing - Theory, News & General
Topic: SP500 is very top heavy right now
Replies: 118
Views: 9197

Re: SP500 is very top heavy right now

But aren't we always hearing here that true diversification WILL lead to lower returns?
by Scooter57
Thu Nov 14, 2019 12:57 pm
Forum: Investing - Theory, News & General
Topic: SP500 is very top heavy right now
Replies: 118
Views: 9197

Re: SP500 is very top heavy right now

Here's an interesting article that breaks down how dominated the Vanguard Total Stock Market Index Fund (VTSAX and VTI) is by a very small number of stocks and how most of the thousands of other stocks that make up the index make up such tiny percentage of its total holdings as to make no difference...
by Scooter57
Mon Nov 11, 2019 2:06 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds getting killed today
Replies: 90
Views: 10891

Re: Long Term Bonds getting killed today

Inflation risk is conceptual, and inflation often is calculated including the prices of things we aren't going to have to buy, like housing, or new cars. You put in $1000 and get back $1000 when the bond matures. The NAV loss on a bond fund can be real. You put in $1,000 and you get back $900 when y...
by Scooter57
Sun Nov 10, 2019 9:47 pm
Forum: Investing - Theory, News & General
Topic: If you were forced to pick an alternative asset...
Replies: 101
Views: 6104

Re: If you were forced to pick an alternative asset...

Cruise small town yard sales for undiscovered treasures and collector items that are highly prized on eBay and sell them on eBay. There are collector communities for the oddest cult items--things most people never think of looking up online. Write and indie publish a series of novels on Amazon. Writ...
by Scooter57
Sun Nov 10, 2019 5:28 pm
Forum: Investing - Theory, News & General
Topic: Expected Return For Bond Funds
Replies: 13
Views: 1481

Re: Expected Return For Bond Funds

I wouldn't assume that bond ratings are up to date. The Financial crisis a decade ago showed just how faulty bond ratings could be, and we have no reason to think that is no longer true. Vast numbers of bonds are bought and held by funds and ETFs that follow indexes, without any human analysis of th...
by Scooter57
Sun Nov 10, 2019 4:15 pm
Forum: Investing - Theory, News & General
Topic: Bank of America declares 'the end of the 60-40' standard portfolio
Replies: 88
Views: 15181

Re: Bank of America declares 'the end of the 60-40' standard portfolio

Shouldn't those risks be getting priced in? Big institutions are nervous about bonds. Big institutions are nervous about stocks. Big institutions are nervous about stuffing cash into mattresses. But, you've got to invest somewhere. The idea that everything is priced in is comforting, but not likely...
by Scooter57
Sun Nov 10, 2019 3:59 pm
Forum: Investing - Theory, News & General
Topic: Why no one created a etf of dividend free stocks
Replies: 35
Views: 3385

Re: Why no one created a etf of dividend free stocks

@nisiprius That chart sums up exactly why after 31years with Vanguard I am considering moving my assets elsewhere. They have lost the focus on simplicity that made them so valuable.
by Scooter57
Sun Nov 10, 2019 3:54 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds getting killed today
Replies: 90
Views: 10891

Re: Long Term Bonds getting killed today

If you are purchasing individual bonds for the income stream and holding to maturity, high yielding Credit Union CDs have been a better choice this past year, with rates that have exceeded intermediate term bonds and no risk. They also avoid reinvestment risk for the dividends as they can be automat...
by Scooter57
Sat Nov 09, 2019 9:41 pm
Forum: Investing - Theory, News & General
Topic: Bank of America declares 'the end of the 60-40' standard portfolio
Replies: 88
Views: 15181

Re: Bank of America declares 'the end of the 60-40' standard portfolio

Bear markets for stocks imply recession, whic means earnings drop, the 50%+ of Corporate bonds that are rated BBB (or Baa) with weak covenants get downrated to junk, as there are questions about their issuers being able to keep paying. The hundreds of bond funds and ETFs that hold them have to dump ...
by Scooter57
Sat Nov 09, 2019 4:24 pm
Forum: Investing - Theory, News & General
Topic: Why no one created a etf of dividend free stocks
Replies: 35
Views: 3385

Re: Why no one created a etf of dividend free stocks

Vanguard did offer Tax Advantage accounts a while back that were designed specifically to minimize taxable distributions. Unfortunately, the one I owned changed its charter and became less tax friendly. This required me to sell the fund, which is the last thing you want to do in a Taxable account. S...
by Scooter57
Sat Nov 09, 2019 4:14 pm
Forum: Investing - Theory, News & General
Topic: Morningstar percentile rank - VTSAX, VBAIX, VIIIX etc
Replies: 21
Views: 1332

Re: Morningstar percentile rank - VTSAX, VBAIX, VIIIX etc

Ranking high in return in one given year may just reflect that a fund too more risks and those risks paid off. Vanguard funds tend to avoid the kinds of risk that make a fund #1 one year an at the bottom of the pile the next.
by Scooter57
Sat Nov 09, 2019 4:10 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds getting killed today
Replies: 90
Views: 10891

Re: Long Term Bonds getting killed today

If you're purchasing bonds for the income stream, likely holding until maturity, then the volatility should be of absolutely no concern whatsoever. All that the volatility will do is change the value of the bonds as shown in your portfolio daily. When you purchased the bond, you knew everything abo...
by Scooter57
Fri Nov 08, 2019 2:52 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds getting killed today
Replies: 90
Views: 10891

Re: Long Term Bonds getting killed today

You don't know how many of those Baa rated bonds have deteriorated in quality since they were rated. Those of us who remember 2008 recall that the rating agencies often do not reexamine the ratings of bonds after an initial rating, and that many dangerous loans carried ratings from years before that...
by Scooter57
Fri Nov 08, 2019 1:24 pm
Forum: Investing - Theory, News & General
Topic: Expected Return For Bond Funds
Replies: 13
Views: 1481

Re: Expected Return For Bond Funds

The SEC yield is fine and dandy unless bonds in the fund default. This is an issue with High Yield Bond Funds and could be an issue with funds holding corporate bonds with lower ratings should their ratings drop out of the Investment Grade class.
by Scooter57
Fri Nov 08, 2019 1:16 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds getting killed today
Replies: 90
Views: 10891

Re: Long Term Bonds getting killed today

In theory, I would avoid those corporates, but Vanguard's Total Bond fund is only 26.8% corporate (by my calculation a few months ago), they are high-quality corporates, and I like the addition of commercial mortgage-backed and foreign, which give me additional diversification. Also, the resulting ...
by Scooter57
Wed Nov 06, 2019 10:40 pm
Forum: Investing - Theory, News & General
Topic: Why ever buy & hold a LT treasury?
Replies: 60
Views: 2922

Re: Why ever buy & hold a LT treasury?

I fail to see how anyone could possibly know what their liabilities will be in 30 years. The costs of just about anything that far out is unknowable and there may be liabilities that you can't imagine now. Who budgeted for their mobile phone bill 30 years ago? Who could have imagined they would need...
by Scooter57
Mon Nov 04, 2019 10:15 pm
Forum: Investing - Theory, News & General
Topic: Citizens Bank 5% cash back on everything thru 3/31/20
Replies: 9
Views: 1368

Re: Citizens Bank 5% cash back on everything thru 3/31/20

Citizen's Bank's modus operandi is bait and switch. They offer enticing terms on savings accounts for six months, then the rate drops to nothing while they offer a new differently named savings account with a good rate in their ads, hoping you won't notice that your savings account is now paying alm...
by Scooter57
Mon Nov 04, 2019 11:31 am
Forum: Investing - Theory, News & General
Topic: When DID the stock market recover from 1929?
Replies: 52
Views: 5153

Re: When DID the stock market recover from 1929?

People are forgetting that investors who bought before the run up in 1929 were likely to have bought stock in individual companies many of which went bankrupt during the crash, so that their losses were permanent, no matter what "the market" did. Looking backward at market averages can be very misle...
by Scooter57
Mon Nov 04, 2019 11:07 am
Forum: Investing - Theory, News & General
Topic: Vanguard without Jack Bogle - Allan Roth
Replies: 28
Views: 4405

Re: Vanguard without Jack Bogle - Allan Roth

Vanguard has changed the investing strategy of several funds I have owned over the years in ways that really bothered me. My Utilities fund turned into a dividend fund. My tax managed international fund turned into a developed market fund. The article did not discuss the increasingly shrill marketin...
by Scooter57
Mon Nov 04, 2019 10:42 am
Forum: Investing - Theory, News & General
Topic: Bonds are confusing
Replies: 24
Views: 2449

Re: Bonds are confusing

um, clearly this means the bonds are not corporate or junk bonds or very low rating. and my comment was not stone, 'in general' or on average. Else, looking forward to your detailed description to the OP clarifying 'bonds'. The OP should not be getting all he needs to know about any complex investi...
by Scooter57
Mon Nov 04, 2019 10:39 am
Forum: Investing - Theory, News & General
Topic: Best CD rates thread
Replies: 399
Views: 42772

Re: Best CD rates thread

PSECU posted its rates today and the are, as promised, the same for the 2, 3, and 5 yr CDs.
by Scooter57
Sat Nov 02, 2019 1:48 pm
Forum: Investing - Theory, News & General
Topic: Bonds are confusing
Replies: 24
Views: 2449

Re: Bonds are confusing

Have seen it explained 1000 ways and some explanations are super confusing. Even people who think they are explaining it clearly make it super confusing :D I think for Joe Average, the value in bonds is their lower volatility when the market dives (regardless of their return). Willing to stand corr...
by Scooter57
Sat Nov 02, 2019 11:16 am
Forum: Investing - Theory, News & General
Topic: Holding Gold ETFs Inside (Roth) IRAs or (Roth) 401(k)s
Replies: 4
Views: 601

Re: Holding Gold ETFs Inside (Roth) IRAs or (Roth) 401(k)s

I hold a very small amount of a gold miners ETF, GDX, in my taxable account.. Since it holds stocks not gold, it doesn't raise the taxation issues gold-holding ETFs do. It moves right along with gold and lately almost always moves the opposite direction of the the S&P 500. I bought it mostly for lea...
by Scooter57
Sat Nov 02, 2019 11:04 am
Forum: Investing - Theory, News & General
Topic: 50 Year US Treasury Bond - who is taker?
Replies: 29
Views: 2669

Re: 50 Year US Treasury Bond - who is taker?

Larsm, I think you nailed it.
by Scooter57
Thu Oct 31, 2019 4:10 pm
Forum: Investing - Theory, News & General
Topic: Best CD rates thread
Replies: 399
Views: 42772

Re: Best CD rates thread

I opened a membership/savings account with PSECU, but they told me that the account number will be provided by a regular mail letter (5 days waiting time). without account number/pin I could not set up my online access and i am not able to transfer money. Any way around? thanks Did you get a PDF we...
by Scooter57
Tue Oct 29, 2019 9:57 pm
Forum: Investing - Theory, News & General
Topic: Difficulty lnvesting a Windfall
Replies: 25
Views: 3288

Re: Difficulty lnvesting a Windfall

"A foolish consistency is the hobgoblin of small minds."--Emerson. Think through Pascal's wager. If you don't invest it all now what is the worst that can happen? If you do invest it now what is the worst that can happen? Which outcome would be more devastating? Is the windfall large enough that you...
by Scooter57
Tue Oct 29, 2019 11:58 am
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3606

Re: Stock market index investing - problem of induction?

It would help me if you would expand upon what might cause "if the market dropped 80% and stayed that way for the 10-20 more years." I guess if the global economy collapsed (asteroid strike, a nuclear world war, etc - I'm not trying to be funny) that might do it. It could happen, though if it did I...
by Scooter57
Tue Oct 29, 2019 11:38 am
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3606

Re: Stock market index investing - problem of induction?

Really? I have seen just the opposite. It all depends on what you "really love", I suppose. Most of my friends and significant others loved being musicians, social workers, artists, writers, poets/rappers, zoo keepers, magicians, chefs, community activists, restaurant or night club owners - and non...
by Scooter57
Mon Oct 28, 2019 4:04 pm
Forum: Investing - Theory, News & General
Topic: The Gap Between Large and Small Companies Is Growing. Why?
Replies: 21
Views: 1941

Re: The Gap Between Large and Small Companies Is Growing. Why?

Not only do small start ups get bought up by the bigs, but far more small companies stay off the market, and are owned by private equity in their dramatic growth phase and only go public when they are successful enough to offere IPOs at inflated values. So many public small companies are those that ...
by Scooter57
Mon Oct 28, 2019 11:30 am
Forum: Investing - Theory, News & General
Topic: CapOne CD Rates HIGHER for 1 year VS. 5 year
Replies: 13
Views: 1269

Re: CapOne CD Rates HIGHER for 1 year VS. 5 year

CD rates reflect the financial needs of the institution offering them. CapOne may, for reasons having to do with its unique business situation, need more short term money than long term money. The different profiles of the loan portfolios of various banks and credit unions are what make their CD rat...
by Scooter57
Mon Oct 28, 2019 11:24 am
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3606

Re: Stock market index investing - problem of induction?

That graphic mixes apples and oranges in a way so ridiculous as to deserve no answer. But even if it were true, we are no longer in a period that can be described as "free market economics" given the huge amount of government intervention in markets worldwide since the Financial Crisis and the growi...
by Scooter57
Sun Oct 27, 2019 7:33 am
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3606

Re: Stock market index investing - problem of induction?

"Invest we must," but prudently. Stocks and bonds are just one way of providing for your future. Using your skills and the things you love doing to create side businesses you can continue into your older years not only gives you more control over your income, it may keep you from deteriorating as yo...
by Scooter57
Sat Oct 26, 2019 5:01 pm
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3606

Re: Stock market index investing - problem of induction?

Great time to insert some of the past again. :mrgreen: https://live.staticflickr.com/65535/48953735532_2dac5ce490_c.jpg There will be innovation, new technology, and plenty of profits in the future. Invest accordingly and ride it out. :beer Those numbers are misleading. The S&P 500 Stocks were wort...
by Scooter57
Sat Oct 26, 2019 9:02 am
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3606

Re: Stock market index investing - problem of induction?

The responses so far do seem to confirm the idea that people are basing their strategy on past performance. I personally feel that today's form of super capitalism, with a few companies engulfing others world wide in a highly monopolistic manner, with earnings heavily dependent on financial engineer...
by Scooter57
Thu Oct 24, 2019 6:26 pm
Forum: Investing - Theory, News & General
Topic: A very conservative AA -- but is this advisable?
Replies: 14
Views: 1697

Re: A very conservative AA -- but is this advisable?

Real estate is not generic. How risky it is depends entirely on what he owns and where it is. Some places prices are much more volatile than others. Economies can differ greatly even in towns 50 miles apart. CDs are perfect for older people and have less risk than bonds right now. I totally agree th...
by Scooter57
Wed Oct 23, 2019 3:30 pm
Forum: Investing - Theory, News & General
Topic: Expected returns from vanguard total bond market
Replies: 27
Views: 3847

Re: Expected returns from vanguard total bond market

[ Short sighted. What happens after your 3 year CD expires? Now rates are 1% and you cant lock in that 2% anymore). You can't lock in that 2% with a bond fund either over its duration in a declining rate environment as the higher rate bonds mature and the fund buys ones that yield less. And though ...
by Scooter57
Wed Oct 23, 2019 11:10 am
Forum: Investing - Theory, News & General
Topic: Best CD rates thread
Replies: 399
Views: 42772

Re: Best CD rates thread

Some Qs: - The Nov 1st deadline, is for when you apply to the CD or when you fund it (imagine you use ACH)? - Do CDs allow partial early withdrawal? (with proportional EW penalty) - What is considered a best option? 36, 60 months? 1. I was told by the rep the first time I called PSECU that they don...
by Scooter57
Tue Oct 22, 2019 3:01 pm
Forum: Investing - Theory, News & General
Topic: Best CD rates thread
Replies: 399
Views: 42772

Re: Best CD rates thread

I simply called Vanguard and, after passing the voice verification, told the automated system "Wire" when it asked what I wanted. I was transferred to the wire department. I gave them the PSECU account info, the amount, the accout to draw from, validated my request when it was read back to me, and t...
by Scooter57
Mon Oct 21, 2019 2:56 pm
Forum: Investing - Theory, News & General
Topic: Best CD rates thread
Replies: 399
Views: 42772

Re: Best CD rates thread

Kevin, Thanks for the detailed reply! I live in a region that very rarely qualifies for high rate offers. Depositaccounts.com only shows me national offers, and did not display the PSECU offer to me. So I would have missed this one had it not come up in this discussion. I hope people will continue t...
by Scooter57
Mon Oct 21, 2019 11:51 am
Forum: Investing - Theory, News & General
Topic: Best CD rates thread
Replies: 399
Views: 42772

Re: Best CD rates thread

Question for Kevin M: What do you think about that 5 year 3.00 APY CD that PSECU is offering? My 2024 rung of my CD ladder is complete, but only with CDs that mature in January of 2024, so I am thinking that I might buy a 3% CD 5 year now since the long term rates are so poor and treat it as a 2025 ...
by Scooter57
Mon Oct 21, 2019 11:45 am
Forum: Investing - Theory, News & General
Topic: Best CD rates thread
Replies: 399
Views: 42772

Re: Best CD rates thread

I guess I don't understand what the problem seems to be. Ally said they can't verify my PSECU account but they didn't (can't) put in the two small deposits. They said they were researching the issue and I may have to have PSECU send a letter to Ally. The initial wire transfer from Ally to PSECU wen...
by Scooter57
Mon Oct 21, 2019 11:15 am
Forum: Investing - Theory, News & General
Topic: Expected returns from vanguard total bond market
Replies: 27
Views: 3847

Re: Expected returns from vanguard total bond market

I am SO tired if people talking about how much work it is to buy CDs. If I am making an extra 1% a year on a $250,000 investment in a 3yr 3.25% CD, that will me an extra $7,500. So the hourly rate for that extra "work" is compelling. My transaction with PSECU was complicated because of a typo in my ...
by Scooter57
Mon Oct 21, 2019 10:54 am
Forum: Investing - Theory, News & General
Topic: Assessing the Value of Advice
Replies: 18
Views: 1742

Re: Assessing the Value of Advice

What keeps people in VPAS when the market drops dramatically? They don't build a personal relationship the way higher priced advisors do. They seem to work off scripts. How do they build trust when performance isn't there? The highly paid fee paid advisors my parents turned to as they aged met them ...