Search found 595 matches

by boggler
Wed Jun 10, 2020 3:09 pm
Forum: Investing - Theory, News & General
Topic: Why is the stock market up? [thread multi-merge]
Replies: 521
Views: 31489

Re: Market makes no sense

To clarify what "market timing" means in this situation, the proposal would be to sell equities now and then reinvest evenly over the next 9 or so months via dollar-cost averaging. In essence, this would be a bet that the market now is priced higher than the average over the next nine months. While I tend to agree philosophically with everything that's been said, I'm still having trouble believing that bet won't come true.
by boggler
Wed Jun 10, 2020 3:04 pm
Forum: Investing - Theory, News & General
Topic: Why is the stock market up? [thread multi-merge]
Replies: 521
Views: 31489

Re: Market makes no sense

The market is forward-looking. What happened does not matter. What is expected to happen matters. To further clarify and make timing all but impossible, what is expected to happen vs. what actually happens is what drives changes in stock prices. Example: Company has a terrible quarter due to Coronavirus shutdown that was unexpected. EPS were $1.00 but were expected to be $1.50. Stock price falls as a result. Market feels that Company's EPS in next quarter will be $1.10. The stock price increases to reflect this expectation. EPS in next quarter are $1.20. Stock price increases as a result of the outperformance. Market feels that Company's EPS in the following quarter will be back to $1.50 as Coronavirus fears subside and things are back to ...
by boggler
Wed Jun 10, 2020 12:05 pm
Forum: Investing - Theory, News & General
Topic: Why is the stock market up? [thread multi-merge]
Replies: 521
Views: 31489

Market makes no sense

After a decade of being a stable, passive investor, I'm tempted to time the market. Can someone help talk me off the ledge? I don't understand how we can have a recession with such massive unemployment, companies going bankrupt and closing stores, a likely virus resurgence leading to further decreases in economic activity, and the stock market at all time highs.
by boggler
Mon Jan 26, 2015 12:41 am
Forum: Investing - Theory, News & General
Topic: Tax efficiency ignoring capital gains
Replies: 6
Views: 1315

Re: Tax efficiency ignoring capital gains

dratkinson wrote: Your example of selling assets every couple of years to generate LTCG is less tax-efficient than just holding the assets. No need to pay taxes if they can be postponed. (Unless you are doing a Roth conversion.)
What if you're going to sell the assets at some point anyway, say for retirement or to buy a house? If you're guaranteed to sell the assets eventually, what implications does this have for tax efficiency?
by boggler
Sat Jan 24, 2015 4:38 pm
Forum: Investing - Theory, News & General
Topic: Tax efficiency ignoring capital gains
Replies: 6
Views: 1315

Tax efficiency ignoring capital gains

I'm trying to understand the concepts of tax efficiency and tax aware asset allocation, and I have a question so that I can make the best decisions for my portfolio: are tax efficiency benefits and recommendations, such as putting bonds in IRAs and international stocks in taxable accounts primarily due to capital gains benefits?

In other words, what tax efficiencies can be achieved if you plan to sell everything you own and buy it back at the end of every year or two? Assuming any gains would be taxed at the long term rate, would it then make sense to put bonds in the taxable account instead since the expected returns are lower?
by boggler
Thu Oct 16, 2014 11:27 pm
Forum: Investing - Theory, News & General
Topic: Wealthfront updates tax loss harvesting software
Replies: 11
Views: 1956

Re: Wealthfront updates tax loss harvesting software

They don't account for the cost of holding the secondary ETF indefinitely. For example, if they switch to an ETF that is higher cost, that cost might end up being paid year after year for 30 years. Similarly, if they switch to an ETF that doesn't perfectly represent the target asset class, such as a fund lacking small caps, that might have a large effect over time.
by boggler
Fri Aug 22, 2014 3:50 pm
Forum: Investing - Theory, News & General
Topic: Fidelity front page: Is that value stock cheap or troubled?
Replies: 9
Views: 1610

Fidelity front page: Is that value stock cheap or troubled?

Saw this on the front page of Fidelity.com. Is there any validity to this? Seems like a bunch of baloney to me, but I figured I should ask since it's featured at the top of their front page.

https://www.fidelity.com/insights/inves ... lue-stocks
by boggler
Mon Jul 14, 2014 4:59 pm
Forum: Investing - Theory, News & General
Topic: VWAP execution - how does it work?
Replies: 3
Views: 1018

Re: VWAP execution - how does it work?

So you're saying that they actually sell in small bits throughout the day and then just tell you they sold at the average? How do they resolve the discrepancy if they happened to sell one lot during a tiny flash crash? Who eats the difference?
by boggler
Mon Jul 14, 2014 3:34 pm
Forum: Investing - Theory, News & General
Topic: VWAP execution - how does it work?
Replies: 3
Views: 1018

VWAP execution - how does it work?

A new post on the Wealthfront blog explains that they are using VWAP execution to diversify concentrated single stock for clients. In other words, when they have a lot of stock to sell, they sell at the average price of the day rather than at a specific time. How is it possible to do such a thing? Don't you have to sell at a specific time?

https://blog.wealthfront.com/everyone-deserves-vwap/
by boggler
Thu Jul 03, 2014 4:55 pm
Forum: Investing - Theory, News & General
Topic: Why is the market portfolio a tangency portfolio?
Replies: 35
Views: 21464

Re: Why is the market portfolio a tangency portfolio?

Why does MPT exist if the best portfolio to hold is simply the market portfolio? In other words, why would anyone break up the portfolio into various asset classes and use MPT to optimize the weighting, rather than just buying a total market fund?
by boggler
Wed Jun 25, 2014 8:47 am
Forum: Investing - Theory, News & General
Topic: Total world investing - "owning the market"
Replies: 23
Views: 3945

Re: Total world investing - "owning the market"

Most in the US also overweight domestic assets because they suspect the market underestimates the risks of foreign investment. US investors may very well be wrong about this, but for foreign investment one has to worry not only about the market, but about the intermediary costs and risks, which are not priced. So an action by a government, a coup, or an election reversal could hit foreign mutual funds harder than the underlying markets. Governments care about access to capital, so they may treat big banks and sovereign wealth bond buyers better than mutual funds owned by peasants like us. We face risks that JP Morgan does not. But banks like JPN effectively set the prices. Plus, we have rule of law protections here that are far from univer...
by boggler
Thu Jun 19, 2014 8:33 am
Forum: Investing - Theory, News & General
Topic: Vanguard website profile - real estate vs stocks
Replies: 4
Views: 769

Re: Vanguard website profile - real estate vs stocks

KyleAAA wrote:Perhaps he has really, really low basic expenses.
According to the article, he does. But this still seems near impossible. How does this sort of thing work, and how can it be so much better than a safe withdrawal rate?
by boggler
Thu Jun 19, 2014 7:47 am
Forum: Investing - Theory, News & General
Topic: Vanguard website profile - real estate vs stocks
Replies: 4
Views: 769

Vanguard website profile - real estate vs stocks

I am 34 now, and I am saving enough in those accounts to put me on track to have about a million in today's dollars in 33 years, assuming a 4% to 5% real return [the after-inflation return]. However, another part of my savings is going into real estate investments so I can create enough of a cash flow so that within two to three years, I will no longer have to rely on a job to cover my basic expenses. From https://retirementplans.vanguard.com/VGApp/pe/EducationNewsCenter?utm_content=sf3322268&utm_medium=spredfast&utm_source=twitter&utm_campaign=Personal+Investor&sf3322268=1#al=false&st=Featured&sst=ALL&articleId=13223&smt=ALL&ps=0&tab=libraryTab&libView=AllTopics&po=10 Thus sounds impossible....
by boggler
Wed Jun 18, 2014 8:51 am
Forum: Investing - Theory, News & General
Topic: Personal Capital equal sector weighting
Replies: 3
Views: 1484

Personal Capital equal sector weighting

Saw this from Personal Capital:
Two of our top experts showed how tactical weighting, compared with market cap weighting, has historically decreased volatility without sacrificing returns. Tactical weighting, or equal-sector weighting, is a hallmark of our investment philosophy at Personal Capital.
Does this have any merit?
by boggler
Sun Jun 08, 2014 5:11 pm
Forum: Investing - Theory, News & General
Topic: Price-weighted index & Dow
Replies: 2
Views: 521

Price-weighted index & Dow

I just discovered that the DJIA is a price-weighted index. To me, this makes no sense. What bearing does the cost of an individual share (or conversely, the number of shares the company decided to split itself up into) have on the weighting the company should have in an index. Isn't this totally arbitrary?

In practice, how are price-weighted indices different from market cap weighted indices? Does one require more trading to track than the other, much like equal weight indices require more trading than market cap weighted indices?
by boggler
Sun Jun 08, 2014 8:43 am
Forum: Personal Investments
Topic: What fund mix replicates VTWSX?
Replies: 6
Views: 1259

Re: What fund mix replicates VTWSX?

Is there a good site that would let you check if, say, 45% SP500, 5% Small cap, 50% Total International behaved similarly to VTWSX?
by boggler
Thu Jun 05, 2014 11:29 am
Forum: Personal Investments
Topic: What fund mix replicates VTWSX?
Replies: 6
Views: 1259

Re: What fund mix replicates VTWSX?

retiredjg wrote:I would use the first link to determine the US to foreign ratio of about 47% US and 53% US. Then I'd break the US portion into 72% large, 19% mid, and 9% small as per the second link.

https://personal.vanguard.com/us/funds/ ... =INT#tab=2

http://www.bogleheads.org/wiki/Approxim ... ock_market

This would result in 33.8% 500 Index, 8.9% mid cap, 3.96% small cap and 53% total international. Actually, I would probably just use round numbers.
Thanks. The data on the second link is 6 years old. Any idea where to get more recent information?
by boggler
Thu Jun 05, 2014 10:51 am
Forum: Personal Investments
Topic: What fund mix replicates VTWSX?
Replies: 6
Views: 1259

What fund mix replicates VTWSX?

My 401k only offers limited fund selection, but includes Vanguard 500 index, Vanguard Mid cap index, Vanguard Small cap index, and Vanguard Total International. I want to replicate VTWSX, Vanguard Total World Stock index. How can I find the proper percentage mix of funds to do this? (There is some data on the wiki, but it's quite old and doesn't apply to these funds.)
by boggler
Mon May 26, 2014 5:12 pm
Forum: Personal Investments
Topic: Purchasing rental property vs. REITs
Replies: 27
Views: 8116

Re: Purchasing rental property vs. REITs

What did you end up deciding? If you bought, how has it been working out for you? Pros/cons?
by boggler
Sat May 03, 2014 8:07 am
Forum: Personal Investments
Topic: Which compensation package to choose re. Social security?
Replies: 15
Views: 1760

Re: Which compensation package to choose re. Social security

On average you will get more money investing it yourself. There will be some subset of cases where you do worse. How much you value the minimum versus the maximum is up to you. I was curious too. So I got all of my and employers contribution history from SS. Ran a portfolio model based on putting the contributions (minus disability portion of SS, which currently makes up 1.8 of current rate of 12.4%) into a "personal account" and applying the return of the S&P 500. I plan to retire at 55, so years 55-62 (and forward), no additional contributions I am just applying the "lowest" S&P 500 average for any 15 year period which is 6.47%. My portfolio would have to generate a whopping return of 1.144% to equal my benefi...
by boggler
Fri May 02, 2014 11:38 pm
Forum: Personal Investments
Topic: Which compensation package to choose re. Social security?
Replies: 15
Views: 1760

Re: Which compensation package to choose re. Social security

If we look at the extra FICA tax as money that could be used to purchase a COLA annuity, does that make the analysis easier? (Is Social security a "good deal" as an annuity?)
by boggler
Fri May 02, 2014 10:56 pm
Forum: Investing - Theory, News & General
Topic: Deciding whether to annuitize
Replies: 14
Views: 1746

Re: Deciding whether to annuitize

Thanks. How do you decide what level of income is required, though? Costs can go up substantially later in life if you live in a nursing home vs. at home, for example.
by boggler
Fri May 02, 2014 10:28 pm
Forum: Personal Investments
Topic: Which compensation package to choose re. Social security?
Replies: 15
Views: 1760

Re: Which compensation package to choose re. Social security

Dale_G wrote:There is no decision process. Salary and the bonus count the same as far as social security is concerned.

Dale
Assume the bonus is not subject to social security tax. This is true for some types of equity or bonus compensation.
by boggler
Fri May 02, 2014 10:17 pm
Forum: Personal Investments
Topic: Which compensation package to choose re. Social security?
Replies: 15
Views: 1760

Re: Which compensation package to choose re. Social security

TomatoTomahto wrote:
tainted-meat wrote:I'm confused as to how the bonus money would not be subject to paying FICA taxes.
Now, if you could arrange to be paid by a hedge fund instead ...

The thread OP pointed to is locked; it was no more actionable than this one. :sharebeer
I can assure you this is quite actionable for me. I want to start by understanding the general decision process around this issue.
by boggler
Fri May 02, 2014 9:51 pm
Forum: Investing - Theory, News & General
Topic: Deciding whether to annuitize
Replies: 14
Views: 1746

Deciding whether to annuitize

What are some good resources and criteria for deciding whether to annuitize or partially annuitize in retirement?
Is it true that if you have enough money, meaning, say, 50x annual expenses, that you don't need to annuitize? Is it fair to say that annuitization is primarily useful for those who haven't saved as much?
by boggler
Fri May 02, 2014 9:09 pm
Forum: Personal Investments
Topic: Which compensation package to choose re. Social security?
Replies: 15
Views: 1760

Which compensation package to choose re. Social security?

If I'm choosing between, say, a salary package of 80k per year with a 25k annual guaranteed bonus, vs. a salary package of 100k with a 5k annual guaranteed bonus, which one should I pick from the perspective of social security? Would I be better with the additional social security earnings of the higher salary, or would I be better if I simply took the higher bonus and invested the tax savings myself?

See this for more context
http://www.bogleheads.org/forum/viewtop ... 0&t=137844
by boggler
Thu Apr 24, 2014 10:51 am
Forum: Personal Investments
Topic: "Rollover IRA" vs "Traditional IRA"
Replies: 12
Views: 3135

Re: "Rollover IRA" vs "Traditional IRA"

Then why do firms like Vanguard bother distinguishing between the two?
by boggler
Thu Apr 24, 2014 10:21 am
Forum: Personal Investments
Topic: "Rollover IRA" vs "Traditional IRA"
Replies: 12
Views: 3135

"Rollover IRA" vs "Traditional IRA"

What's the difference between a "Rollover IRA" and a "Traditional IRA"? You can roll assets from 401k's into either type of account, and you can make tax-deferred contributions to either type of account. Everything I've seen seems to indicate that they are treated the same way. Is there a specific example someone can give that explains why they are different? How do you decide which one is appropriate for you?
by boggler
Tue Apr 22, 2014 1:00 pm
Forum: Investing - Theory, News & General
Topic: Is social security a good investment?
Replies: 33
Views: 3567

Re: Is social security a good investment?

I predict a lock....in less than 3..2..1. It's unactionable - and not only that, but you are comparing apples to oranges. Social Security Old Age Disability Insurance - do you see the word "investment" in any part of the official title of the program? It's actionable to me because I'm trying to understand how much I care about earning social security credits via increased wages vs. the other ways I could be saving for retirement. If you are employed in this country you are legally mandated by law to contribute to OASDI - you don't have an option. Are you planning on working off the books so you could use other methods to save for retirement? I wouldn't advise that - one is an insurance program and one is a savings program. If you...
by boggler
Tue Apr 22, 2014 12:57 pm
Forum: Investing - Theory, News & General
Topic: Is social security a good investment?
Replies: 33
Views: 3567

Re: Is social security a good investment?

Oicuryy wrote:Social Security is not an investment. It is a welfare program funded by a payroll tax. Some people will get more in benefits than they pay in taxes. Others will get less.
Who? And at what rate of return?
by boggler
Tue Apr 22, 2014 12:26 pm
Forum: Investing - Theory, News & General
Topic: Is social security a good investment?
Replies: 33
Views: 3567

Re: Is social security a good investment?

Grt2bOutdoors wrote:I predict a lock....in less than 3..2..1.

It's unactionable - and not only that, but you are comparing apples to oranges. Social Security Old Age Disability Insurance - do you see the word "investment" in any part of the official title of the program?
It's actionable to me because I'm trying to understand how much I care about earning social security credits via increased wages vs. the other ways I could be saving for retirement. I have some flexibility in my compensation structure.

In other words, for a marginal dollar that would go to SS tax, am I better off directing it into an investment account when I have the choice?
by boggler
Tue Apr 22, 2014 11:34 am
Forum: Investing - Theory, News & General
Topic: Is social security a good investment?
Replies: 33
Views: 3567

Re: Is social security a good investment?

sscritic wrote:Most people who ask this question don't know what Social Security includes. Are you asking about all of SS or just one part?

P.S. If you are not careful, this thread will become political and either get locked or disappear.
All the parts, I suppose. I'm interested from the perspective of analyzing how it fits into my portfolio and understanding broadly how it compares to other investment opportunities.
by boggler
Tue Apr 22, 2014 11:24 am
Forum: Investing - Theory, News & General
Topic: Is social security a good investment?
Replies: 33
Views: 3567

Is social security a good investment?

How do bogleheads think about social security?
If, hypothetically, you had a choice over whether to pay into the system, how would you decide whether it's a good idea?
Would you be better off saving the contributions in a Vanguard account?
by boggler
Fri Apr 11, 2014 12:23 am
Forum: Personal Finance (Not Investing)
Topic: Recharacterized backdoor Roth contribution - how to report?
Replies: 2
Views: 472

Re: Recharacterized backdoor Roth contribution - how to repo

You are OK. The code N confirms that you recharacterized the conversion back to a TIRA account and you report the contribution as a TIRA contribution. Just hope your income allows you to deduct that contribution or you will be stuck with a non deductible TIRA contribution. Of course, if that happened you could re convert it again this year as you have met the waiting period to re convert. Do not report the conversion on your 2013 return because the recharacterization results in treating the conversion as if it never occurred, so none of this is taxable. Ttax should take your income and determine if you can deduct the TIRA contribution, but if you cannot then it should be reported as non deductible on Form 8606. If you answer the TTax quest...
by boggler
Thu Apr 10, 2014 11:04 am
Forum: Personal Finance (Not Investing)
Topic: Recharacterized backdoor Roth contribution - how to report?
Replies: 2
Views: 472

Recharacterized backdoor Roth contribution - how to report?

I contributed the max to a traditional IRA last year, then did a backdoor conversion to a Roth, and then decided I would prefer the deduction of the traditional IRA so I recharacterized it. I got a 1099R with code 02 showing the original conversion, and then a 1099R with code N showing the recharacterization.
Did I do this right? How much of this should be taxable? What's the right way to put in turbotax?

Thanks.
by boggler
Tue Apr 08, 2014 3:30 pm
Forum: Investing - Theory, News & General
Topic: If trading is a losing game, how do you explain prop firms?
Replies: 38
Views: 5614

Re: If trading is a losing game, how do you explain prop fir

EMH is folklore and true only in the limit of equilibrium (well, almost by definition true then). To you, who are slow and ungainly to see and act, the market appears in equilibrium all the time (except under extreme circumstances). To others who see and work with more detail, events happen constantly that drive things out of equilibrium, hence profits. Interesting. To those of us who are "slow and ungainly to see and act", exactly what investments do you guarantee will outperform the stock market over the next 25 years. Equilibrium is considered as good, disequilibrium means somebody will turn out to be wrong, and being wrong is a risk, risk is compensated if you can be usually more right than wrong. That's why good market maker...
by boggler
Sun Mar 16, 2014 10:13 am
Forum: Personal Consumer Issues
Topic: Was frugality a mistake? The downsides of saving too much.
Replies: 115
Views: 26490

Re: Was frugality a mistake? The downsides of saving too mu

jackpullo997 wrote:
Leesbro63 wrote: I have zero regrets about not spending more....I'm convinced that more new cars, more travel and a bigger house would not have made me even 1% more happy.
Key statement. And it's important to point out that frugal people get as excited by saving as spenders get from buying a new pair of shoes.
So, in my younger days, spending on a luxury car would have not made me happy, but I think it would have been the more optimal decision.
At this age, those superficial things DO make me happy, so I guess it's better late than never, and it's time to move into fancier digs and start shopping for a $50k car.
Is there any worthy goal that doesn't boil down to happiness?

Perhaps money is linked to that?
by boggler
Sat Mar 15, 2014 7:50 pm
Forum: Personal Consumer Issues
Topic: Was frugality a mistake? The downsides of saving too much.
Replies: 115
Views: 26490

Re: Was frugality a mistake? The downsides of saving too mu

I am 54. I've been a high earner for 30 years and always saved more than half my income. But lived well on the other (post tax) half. But not as well as I could have. I have zero regrets about not spending more....I'm convinced that more new cars, more travel and a bigger house would not have made me even 1% more happy. That being said, some of what the OP stated is becoming a concern. First, I worry that the money ultimately will get whizzed away by my (now 20something) kids or their spouses. Or worse...that leaving them too much will even harm them. My oldest is doing well and I think the money will be a plus for her, someday. My youngest is still a work in progress. I also sometimes resent the fact that there is a hidden tax to success ...
by boggler
Wed Mar 12, 2014 11:16 am
Forum: Investing - Theory, News & General
Topic: Vanguard Personal Advisor Services
Replies: 26
Views: 6531

Re: Vanguard Personal Advisor Services

So, has anyone tried this service?
by boggler
Tue Mar 11, 2014 11:40 pm
Forum: Investing - Theory, News & General
Topic: Deducting margin interest from taxes
Replies: 1
Views: 557

Deducting margin interest from taxes

For example, you can deduct the interest on a margin loan you use to purchase stock. But if you use the margin loan to buy a car, you can't deduct the interest (even though such a loan might still make sense in the right circumstances, given the convenience, low rates and flexible repayment options). Likewise, you couldn't deduct the interest on money borrowed to buy tax-exempt municipal bonds. Per the tax rules, you can deduct margin interest paid from your taxes. However, you can't deduct it if you used to purchase something non-investment related, like a car or house. Isn't money fungible? What determines what you "used" the money for? (Not that I'm advocating taking a margin loan to pay for a car, but in certain circumstances...
by boggler
Tue Mar 11, 2014 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: Buy vs rent no longer relevant?
Replies: 60
Views: 10166

Re: Buy vs rent no longer relevant?

What if you buy a house in cash? How do you do the comparison in this case? Buying a house outright in cash is an unlevered decision, so there is no need to factor in the tax deductions or the cost of the interest. The return from the house is the capital appreciation/depreciation added to the value of the inflation-adjusted imputed rent, adjusting for all the costs (maintenance, property taxes, etc.) In some HCOL areas in the U.S., detailed estimates are not even necessary, because the non-mortgage carrying costs of the house (property taxes are really high, maintenance at 1% of home value, etc.) are higher than the cost it would take to rent an equivalent place. In even more areas, if the purchase is not financed outright in cash, the to...
by boggler
Tue Mar 11, 2014 10:34 am
Forum: Investing - Theory, News & General
Topic: Dividend yield investing
Replies: 3
Views: 768

Dividend yield investing

Came across this post online: I've been investing in dividend growth stocks since 12/31/86 and have achieved an average annual return of 15.244%. The companies I own, pipelines and utilities have just 60% of the volatility of the market or 40% less risk. My account, as of 12/31/2013 is up just a little over 39 times my original investment. I only really look at its progress (or lack thereof) annually. But I'd guess it is now approaching 50 times what I originally invested. Not too bad for a low risk investment approach. My children will eventually enjoy this as beneficiaries. I sincerely hope they do. Does this sound plausible? It seems to me that investing in a total return strategy makes the most theoretical sense, but if this is true, wh...
by boggler
Tue Mar 11, 2014 10:25 am
Forum: Personal Finance (Not Investing)
Topic: Buy vs rent no longer relevant?
Replies: 60
Views: 10166

Re: Buy vs rent no longer relevant?

Caduceus wrote:The idea that "renting is throwing away money" is just misinformation. You can rent the place or you can rent the money (mortgage interest does not contribute to equity).
What if you buy a house in cash? How do you do the comparison in this case?
by boggler
Thu Mar 06, 2014 8:12 pm
Forum: Investing - Theory, News & General
Topic: High expense ratios, risk, and market efficiency
Replies: 5
Views: 668

Re: High expense ratios, risk, and market efficiency

Take real estate as another example. Many posts on this forum have discussed the fact that the majority of risk-adjusted investment return in real estate comes from the actual property management work, and that therefore it doesn't make sense to invest in real estate if you have to pay a lot for property management. Why are we not concerned with this in the case of REIT index funds, though? Certainly some of the REITs are charging very high management fees, while the investors are bearing all the risk. REITs are publicly traded, and in an efficient market, investors will thus pay less for a REIT with high fees than for a REIT with the same assets and gross revenue but low fees. Thus a REIT should offer about the same risk-adjusted return a...
by boggler
Thu Mar 06, 2014 4:37 pm
Forum: Personal Finance (Not Investing)
Topic: High Umbrella Limits - A waste
Replies: 82
Views: 19202

Re: High Umbrella Limits - A waste

Call_Me_Op wrote:
letsgobobby wrote: To Call_Me's point, I can still be sued for $50 million. From my research umbrella up to $5m is relatively easy to obtain and inexpensive. Beyond that gets much more difficult. We all draw the line somewhere.
OK - glad you are admitting that your guideline is arbitrary. I tend to like 2X unprotected net worth. Why? Because I think that is much more likely to make the plaintiff's lawyer go away without targeting my personal assets. However, my guideline is also arbitrary.
Hypothetically, what would you do if your net worth was greater than 100M? Would you be able to get a policy for that amount?
by boggler
Thu Mar 06, 2014 4:36 pm
Forum: Personal Finance (Not Investing)
Topic: High Umbrella Limits - A waste
Replies: 82
Views: 19202

Re: High Umbrella Limits - A waste

There have been many threads about umbrella insurance over the years and they've never ended in agreement about how much is enough. The internet also does not have a clear recommendation. The bottom line is we can each theoretically be sued for any amount of money, so no matter how much you buy you still have some uninsured/uninsurable risk. So the issue becomes where you draw that arbitrary line in the sand. In my opinion, the data you've uncovered, while interesting, don't help me make that decision. If you can find the following data, it could be much more appropriate: HNW individual is found liable for the death/serious injury of an individual/individuals with substantial future earnings power and future medical care costs. What settle...
by boggler
Wed Mar 05, 2014 10:11 pm
Forum: Investing - Theory, News & General
Topic: High expense ratios, risk, and market efficiency
Replies: 5
Views: 668

High expense ratios, risk, and market efficiency

The investment market functions in such a way that investors will only take additional risk if they "expect" to be compensated for it. For example, you invest in stocks vs. bonds because stocks have a higher expected return, but you also recognize that stocks are riskier. A common argument against active management is that the market functions in such a way that the best active managers will extract almost the entire alpha from the investor in the form of additional fees, to the point where the investor is indifferent between investing in the active fund (and getting marginal alpha) and investing in the index. As a result, we typically say that it is better to simply invest in the index, since it has a lower cost. However, when yo...
by boggler
Tue Mar 04, 2014 5:37 pm
Forum: Personal Finance (Not Investing)
Topic: Do billionaires need umbrella insurance?
Replies: 16
Views: 2818

Do billionaires need umbrella insurance?

[See my post below. --admin LadyGeek]

Do billionaires need umbrella insurance? On one hand, if you are the target of a liability claim, you presumably have more than enough assets to cover any reasonable claim. On the other hand, you have such a massive fortune at stake that someone might go after the whole thing in a lawsuit.

If you don't umbrella insurance above a certain level, where is the line?
by boggler
Tue Mar 04, 2014 1:39 pm
Forum: Investing - Theory, News & General
Topic: Personal experience of Wealthfront, Betterment....?
Replies: 38
Views: 15038

Re: Personal experience of Wealthfront, Betterment....?

I have tried Betterment, Wealthfront, and WiseBanyan. I had to invite 10 people to get off of the WiseBanyan waitlist. It took a day to get my invite (and I had to tweet at them) but now I'm set up. Here are my thoughts on the three. The process was easy to fund all three - EFT transfer into your account from your bank. WiseBanyan and Wealthfront have a tool that asks 10 questions to determine a "risk profile." Betterment does investments based on time horizon. The portfolios are all substantially the same and made up of diversified ETF's, and you can adjust the portfolio on each service, so their tools are really more of a guide. Wealthfront touts their tax loss harvesting (WiseBanyan says that they are going to start offering t...
by boggler
Fri Feb 28, 2014 12:37 pm
Forum: Investing - Theory, News & General
Topic: Has anyone seen the Japanese Stock Market?
Replies: 73
Views: 11200

Re: Has anyone seen the Japanese Stock Market?

This is a great example of a negative rebalancing bonus, too. You would have been continuously throwing good money after bad.