Search found 7862 matches

by jeffyscott
Wed Jun 19, 2019 4:38 pm
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

Whereas the answer 'I just don't want to spend it', since it's not rational itself, could not IMO lead to any general conclusion about rational asset allocation. I would rephrase that as "there is nothing that I want to spend it on". I don't see that as irrational. Wasn't Mr. Bogle in that very cat...
by jeffyscott
Wed Jun 19, 2019 10:31 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

Whereas the answer 'I just don't want to spend it', since it's not rational itself, could not IMO lead to any general conclusion about rational asset allocation. I would rephrase that as "there is nothing that I want to spend it on". I don't see that as irrational. Wasn't Mr. Bogle in that very cat...
by jeffyscott
Wed Jun 19, 2019 8:33 am
Forum: Investing - Theory, News & General
Topic: short term treasury ETFs a money market account substitute?
Replies: 17
Views: 1011

Re: short term treasury ETFs a money market account substitute?

I use ICSH ETF (ishares ultra short bond fund) for part of my Emergency Fund. The advantage of ICSH is that the 2.73% yield is pretty close to the 2.79% yield of Vanguard Short Term Fund (VCSH), but the interest rate risk of ICSH is significantly lower because the average duration is less than 6 mo...
by jeffyscott
Tue Jun 18, 2019 2:40 pm
Forum: Investing - Theory, News & General
Topic: Ukraine Makes Up 43% of Total World Bond?
Replies: 11
Views: 2115

Re: Ukraine Makes Up 43% of Total World Bond?

The national debt has been paid off, too. They have US government at -0.2%.
by jeffyscott
Tue Jun 18, 2019 1:28 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 116
Views: 8810

Re: are TIPS expensive? or are they cheap?

I base that on the 2006 Swedroe's book where the break point for buying TPS vs. nominals was 2% real. Why base something on a metric that was created (somehow) using data that omits the most recent 13 years of new, post-publication data? That is a substantial lot of data. Over the life of TIPS here...
by jeffyscott
Tue Jun 18, 2019 12:16 pm
Forum: Investing - Theory, News & General
Topic: Should I abandon the Total International Stock Index Fund for greener pastures?
Replies: 110
Views: 9309

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

If I were making this change, I would do it by first just moving the 40% to international growth and then sell foreign when or if it rises above 40%, but buy only if it falls below the new target of 30% or whatever.
by jeffyscott
Mon Jun 17, 2019 5:44 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 116
Views: 8810

Re: are TIPS expensive? or are they cheap?

Regarding Tbills, although short-term TIPS aren't the screaming deal they were late last year, when I dabbled, like the nominal yield curve, the real yield curve is inverted at the short end: https://i.postimg.cc/3NdYBDxw/Screenshot-2019-06-16-TIPS-Yield-Seasonal-Adjustment.png (The Estimated Real ...
by jeffyscott
Mon Jun 17, 2019 5:22 pm
Forum: Investing - Theory, News & General
Topic: Should I abandon the Total International Stock Index Fund for greener pastures?
Replies: 110
Views: 9309

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

glass3 wrote:
Mon Jun 17, 2019 1:02 pm
Right now, my advisor...
What does your advisor say about all this?
Why are you paying an advisor, if you don't want to follow the advice?
by jeffyscott
Mon Jun 17, 2019 2:38 pm
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

It seems like the OP is making the assumption that any event that caused a catastrophic, non-recoverable loss for stocks would also lead to a catastrophic loss in the bond market. This assumption is not necessarily true. The 2008 financial crisis could have fit this criteria if the government and t...
by jeffyscott
Mon Jun 17, 2019 10:09 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

Maybe this is a reason that large portfolios should include bonds: http://i.imgur.com/Hg8n9qC.png https://www.economicshelp.org/blog/12309/concepts/diminishing-marginal-utility-of-income-and-wealth/ Losses hurt more than gains help (or whatever the opposite of "hurt" is :?: ), even at high levels of...
by jeffyscott
Mon Jun 17, 2019 9:37 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

... It sounds like we're using risk differently. You seem to think that temporary volatility comprises real risk that is to be avoided. I'm saying that with low spending there simply isn't much to be avoided in this case. People keep pointing out that these people will simply spend more - which obv...
by jeffyscott
Mon Jun 17, 2019 8:51 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

Thanks everyone for the replies! I appreciate it a lot. Livesoft seems to be the only one that didn't give a behavioral reason which is really what I was looking for. Sorry if that was not clear. I don't think choosing to avoid risk is "behavioral" any more than choosing to take unnecessary risks i...
by jeffyscott
Sun Jun 16, 2019 11:22 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

Thanks everyone for the replies! I appreciate it a lot. Livesoft seems to be the only one that didn't give a behavioral reason which is really what I was looking for. Sorry if that was not clear. I don't think choosing to avoid risk is "behavioral" any more than choosing to take unnecessary risks i...
by jeffyscott
Sun Jun 16, 2019 9:20 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 145
Views: 9523

Re: Why do large personal portfolios include bonds?

You could just as well look at it the opposite way, if one has far more than needed why have stocks at all, since there is no need to own them and take the risk? Going all stocks is assuming that the unlikely is impossible. It's true that bonds don't pay much, but I've heard that they do when you ha...
by jeffyscott
Sat Jun 15, 2019 3:46 pm
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 86
Views: 8392

Re: How safe are pensions in the U.S.?

I can't comment as to exactly why the situation is different in your state. It's probably a combination of factors. You did say that 23% of payroll was being directed toward retirement benefits where you are. Up until 5 years ago, the number was 18% for CalSTRS members. Perhaps, over many years, 5%...
by jeffyscott
Sat Jun 15, 2019 11:36 am
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 86
Views: 8392

Re: How safe are pensions in the U.S.?

My point remains. Governments and MEPS are using 7-8% rate of return assumptions for funding. So those funding numbers are way overstated if you think 7-8% is too high. This is because they DISCOUNT at the assumed rate of return in plan assets Corporations use around 4.0% for funding as that is the...
by jeffyscott
Sat Jun 15, 2019 11:32 am
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 86
Views: 8392

Re: How safe are pensions in the U.S.?

I can't comment as to exactly why the situation is different in your state. It's probably a combination of factors. You did say that 23% of payroll was being directed toward retirement benefits where you are. Up until 5 years ago, the number was 18% for CalSTRS members. Perhaps, over many years, 5%...
by jeffyscott
Sat Jun 15, 2019 10:39 am
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 86
Views: 8392

Re: How safe are pensions in the U.S.?

My point remains. Governments and MEPS are using 7-8% rate of return assumptions for funding. So those funding numbers are way overstated if you think 7-8% is too high. This is because they DISCOUNT at the assumed rate of return in plan assets Corporations use around 4.0% for funding as that is the...
by jeffyscott
Sat Jun 15, 2019 10:27 am
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 86
Views: 8392

Re: How safe are pensions in the U.S.?

The CalSTRS system does have inflation protection and benefits are likely higher than for people in many other states. However, the cost of living in certain parts of California is hard for many to wrap their heads around as well. So, just add a zero at the end of whatever number you think is reaso...
by jeffyscott
Sat Jun 15, 2019 7:55 am
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 86
Views: 8392

Re: How safe are pensions in the U.S.?

I agree with this comment. I’m a member of CalSTRS so I'm familiar with its situation more than other systems. While it is true that this (CalSTRS) system is under-funded at the moment, that doesn’t tell the whole picture. 5 years ago, these were the approximate contribution rates: Employers: 8% Em...
by jeffyscott
Fri Jun 14, 2019 8:53 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 28
Views: 6585

Re: Why is Vanguard Treasury Money Market yield so high?

Here's a thought. It may be a mistake to look only at the Treasury yields for the last 7 days. If the fund holds a 3-month Treasury to maturity, just before it matures it will be earning the daily accreted income based on the yield three months ago. So maybe I should average the last three months o...
by jeffyscott
Fri Jun 14, 2019 2:43 pm
Forum: Investing - Theory, News & General
Topic: The Case Against ETFs
Replies: 193
Views: 8415

Re: A "case" against mutual funds

But testy exchange in another thread did get me thinking of a potential "case" against mutual funds . The "case" involves the complex and secretive business arrangements that govern mutual funds when bought through brokerages and advisors . There's that, but there is also the mysterious (to me anyw...
by jeffyscott
Fri Jun 14, 2019 10:56 am
Forum: Investing - Theory, News & General
Topic: The Case Against ETFs
Replies: 193
Views: 8415

Re: The Case Against ETFs

The whole share issue multiples for each additional fund in your portfolio (if you have a Boglehead 3 fund, you’ll have a fraction for each fund every time you invest, assuming you follow your AA). Plus, you’re out more than that amount because you’re missing out on compounding. It’s similar to Bog...
by jeffyscott
Fri Jun 14, 2019 7:39 am
Forum: Investing - Theory, News & General
Topic: The Case Against ETFs
Replies: 193
Views: 8415

Re: A "case" against mutual funds

But testy exchange in another thread did get me thinking of a potential "case" against mutual funds . The "case" involves the complex and secretive business arrangements that govern mutual funds when bought through brokerages and advisors . There's that, but there is also the mysterious (to me anyw...
by jeffyscott
Thu Jun 13, 2019 6:50 pm
Forum: Investing - Theory, News & General
Topic: The Case Against ETFs
Replies: 193
Views: 8415

Re: The Case Against ETFs

It absolutely did happen. In addition, Vanguard posted the discount to NAV for the ETF nightly, and it showed clearly that there was an unprecedented difference during that time. And when it finally resolved, and the ETF price and the underlying NAV returned to more normal difference, it was the ET...
by jeffyscott
Thu Jun 13, 2019 5:59 pm
Forum: Investing - Theory, News & General
Topic: The Case Against ETFs
Replies: 193
Views: 8415

Re: The Case Against ETFs

So, when Vanguard was allowing redemptions of VBTLX at 6% higher than what BND was selling for during the days detailed in the thread I linked to, they were just ripping themselves off because they were redeeming shares in the mutual fund using the wrong prices for the underlying assets? What you’r...
by jeffyscott
Thu Jun 13, 2019 6:51 am
Forum: Investing - Theory, News & General
Topic: How safe are pensions in the U.S.?
Replies: 86
Views: 8392

Re: How safe are pensions in the U.S.?

Public sector pensions are not protected by PBGC. Their relative security varies widely, depending on the location and whether it is a city, county, or state pension. There are several examples of places where promises outstrip the localities ability to pay since they can only raise taxes so far. D...
by jeffyscott
Wed Jun 12, 2019 3:04 pm
Forum: Investing - Theory, News & General
Topic: CD vs Treasury Spread
Replies: 13
Views: 1965

Re: CD vs Treasury Spread

Relative to the short end of the curve, keep in mind the fixed purchase date structure of CDs if your only purchasing new (usually commission free vs purchasing on the open market where there are commissions to be paid). Banks offer CDs with future purchase dates that start the clock ticking for in...
by jeffyscott
Wed Jun 12, 2019 8:39 am
Forum: Investing - Theory, News & General
Topic: Expense Ratio for Employer 401K High?
Replies: 12
Views: 767

Re: Expense Ratio for Employer 401K High?

..it looks like the biggest mark-up are the target dated funds. Yeah, I think when I looked at the prospectus they had an add on of 0.10 for the target date in addition to the underlying fund ERs. So those seem like a particularly bad choice. FWIW, American Funds Growth and Income is rated "silver"...
by jeffyscott
Wed Jun 12, 2019 7:07 am
Forum: Personal Consumer Issues
Topic: 15K CAR with comfortable seats and quiet
Replies: 51
Views: 3925

Re: 15K CAR with comfortable seats and quiet

As others have noted VWs tend to be quiet. Our old Jetta was. Recently had a brief test drive of a Fusion and it was very comfortable for us and seemed quiet. We are pretty fussy about seats, with the seat depth being a big issue. If you look at the CR annual auto issue, you can find their noise rat...
by jeffyscott
Tue Jun 11, 2019 2:31 pm
Forum: Investing - Theory, News & General
Topic: CD vs Treasury Spread
Replies: 13
Views: 1965

Re: CD vs Treasury Spread

Does anyone know of a website that tracks the spread between brokered CD's and equivalent Treasuries? With the quasi-inversion, the 5 year is sitting at 2.72%, while CD's are at about 3.5%, a .78% spread. That seems like a lot for the same duration risk and credit risk. CD's would seem to be a slam...
by jeffyscott
Tue Jun 11, 2019 10:54 am
Forum: Investing - Theory, News & General
Topic: Expense Ratio for Employer 401K High?
Replies: 12
Views: 767

Re: Expense Ratio for Employer 401K High?

You need to go by the ticker, American funds has a bunch of share classes, with different ERs. It appears her employer and the "guy" picked the worst possible one. The R1 share class (RAETX) has 1.5% ER: https://www.morningstar.com/funds/XNAS/RAETX/quote.html On the filings tab there you can open th...
by jeffyscott
Mon Jun 10, 2019 12:29 pm
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 11997

Re: Insights From a Long Call With Vanguard Reps Today

Not sure how you can disagree with objective facts. Vanguard had charged the same for Admiral and ETF in the past, now they don't. That doesn't meant that Vanguard "changed how expenses are assigned". It means that the expenses associated with managing the ETF share classes have fallen below the ex...
by jeffyscott
Mon Jun 10, 2019 11:27 am
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 11997

Re: Insights From a Long Call With Vanguard Reps Today

Well, they said "encouraging", so it's really just semantics. What's clear is that they changed how expenses are assigned recently to the benefit of the ETF investors. Until recently the expense ratios were the same between Admiral shares and ETFs, Vanguard chose to change that. I will disagree wit...
by jeffyscott
Mon Jun 10, 2019 6:12 am
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 11997

Re: Insights From a Long Call With Vanguard Reps Today

Well, they said "encouraging", so it's really just semantics. What's clear is that they changed how expenses are assigned recently to the benefit of the ETF investors. Until recently the expense ratios were the same between Admiral shares and ETFs, Vanguard chose to change that. And, yes, clearly it...
by jeffyscott
Sun Jun 09, 2019 10:48 am
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 11997

Re: Insights from Vanguard

Is it a misconception, though? I believe that Vanguard can choose how to allocate expenses to the different share classes, to at least some extent. I posted the following in another discussion of ETF vs. mutual fund ERs, perhaps you have an explanation as to why in one case the difference in expens...
by jeffyscott
Sun Jun 09, 2019 8:23 am
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 11997

Re: Insights from Vanguard

... Vanguard is clearly pushing ETFs. It’s very unlikely they’ll lower the ERs on the mutual funds to match the lower prices of their corresponding ETFs (e.g. 0.07% for VTMGX, 0.05% for VEA). ... Vanguard does not raise or lower expense ratios, regardless of whether they would prefer their customer...
by jeffyscott
Sat Jun 08, 2019 11:11 am
Forum: Personal Consumer Issues
Topic: Best verizon mvno for little to no data.
Replies: 20
Views: 1492

Re: Best verizon mvno for little to no data.

Life is Good: is there anyway to do autopay with tracphone or do you have to go on ebay every year and renew.....trying to get on autopilot with investments and the phone to simplify :) I think it is possible, but don't know details. My son uses tracfone and I believe he has some sort of autopay ar...
by jeffyscott
Sat Jun 08, 2019 7:41 am
Forum: Investing - Theory, News & General
Topic: US stocks still look better than anywhere else
Replies: 100
Views: 7558

Re: US stocks still look better than anywhere else

Factually speaking the US should outperform all the developed world economies over the coming decades. The US Will have working age population grow about 0.5% annually through 2050. Japan, China, and EU will see theirs plunge anywhere from 1% to 2% annually. Those economies will have trouble stavin...
by jeffyscott
Fri Jun 07, 2019 3:53 pm
Forum: Investing - Theory, News & General
Topic: US stocks still look better than anywhere else
Replies: 100
Views: 7558

Re: US stocks still look better than anywhere else

Short summary of the article: Past performance indicates future results, therefore buy high and sell low. Yes. This is my whole concern. International has sucked in the recent PAST. Big deal right? Humans love to cultivate patterns in the past. Yet in the PRESENT I have been closing my eyes and pre...
by jeffyscott
Thu Jun 06, 2019 4:22 pm
Forum: Investing - Theory, News & General
Topic: US stocks still look better than anywhere else
Replies: 100
Views: 7558

Re: US stocks still look better than anywhere else

Why has the US outperformed International specifically? One word: Tech. or FANG Let's look at one of the major factors in the FANG growth and outperformance story: Silicon Valley. Silicon Valley: high desirability weatherwise, lots of capital flowing, capable of commanding top tier engineering tale...
by jeffyscott
Thu Jun 06, 2019 2:58 pm
Forum: Investing - Theory, News & General
Topic: How do you keep track of individual bonds' present value?
Replies: 6
Views: 528

Re: How do you keep track of individual bonds' present value?

Fidelity shows present value based on secondary market. As does Schwab, and I assume it would be the same with any broker. I use what they show as the market value for Treasuries, TIPS, and CDs. In the past I had a small amount of T-bills at TD and just used the value that they listed, even though ...
by jeffyscott
Thu Jun 06, 2019 2:43 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Funds at Vanguard, vs. Other Brokerage
Replies: 4
Views: 586

Re: Vanguard Funds at Vanguard, vs. Other Brokerage

Is there an advantage to owning Vanguard funds in an account held at Vanguard, vs. owning the same Vanguard funds in an account held at another brokerage (e.g. Ally Invest, Fifth Third Securities or Fidelity)? Yes, the advantage is no transaction fees for Vanguard mutual funds at Vanguard. Most oth...
by jeffyscott
Thu Jun 06, 2019 12:11 pm
Forum: Investing - Theory, News & General
Topic: What is the rationale for cash in your portfolio?
Replies: 36
Views: 2580

Re: What is the rationale for cash in your portfolio?

Schwab's rationale is earning interest on your cash since that's how they make money off their roboadvisor. Yes, but the service should not be expected to be free. So, Schwab apparently believes investors prefer the cost of the service to be paid indirectly in this way (or at least act as if this w...
by jeffyscott
Thu Jun 06, 2019 9:40 am
Forum: Investing - Theory, News & General
Topic: US stocks still look better than anywhere else
Replies: 100
Views: 7558

Re: US stocks still look better than anywhere else

While American outperformance continues to defy history, the rest of the world remains trapped in a bear market. https://www.bloomberg.com/news/articles/2019-06-04/u-s-stocks-still-look-better-than-anywhere-else?srnd=premium Stock markets around the globe, excluding the U.S., remain 25% below the p...
by jeffyscott
Thu Jun 06, 2019 9:23 am
Forum: Investing - Theory, News & General
Topic: What is the rationale for cash in your portfolio?
Replies: 36
Views: 2580

Re: What is the rationale for cash in your portfolio?

Schwab's rationale is earning interest on your cash since that's how they make money off their roboadvisor. Yes, but the service should not be expected to be free. So, Schwab apparently believes investors prefer the cost of the service to be paid indirectly in this way (or at least act as if this w...
by jeffyscott
Thu Jun 06, 2019 7:49 am
Forum: Investing - Theory, News & General
Topic: US stocks still look better than anywhere else
Replies: 100
Views: 7558

Re: US stocks still look better than anywhere else

While the headline is: U.S. Stocks Still Look Better Than Anywhere Else , the final sentence is: Did the U.S. really avert the usual fate that befalls countries after a major crisis, or has it merely postponed it? Does the article actually make a case that US stocks still look better? It seems to me...
by jeffyscott
Wed Jun 05, 2019 7:58 am
Forum: Investing - Theory, News & General
Topic: Difference between Bank Savings Account vs. Money Market
Replies: 13
Views: 1453

Re: Difference between Bank Savings Account vs. Money Market

A bank account would be covered by FDIC insurance. I don't know what "Alliance Financial" is, though. It does not appear to be a bank. But I see something call US Financial Alliance, with a 2.5% rate here: https://www.usalliance.org/banking-products/high-dividend-savings, which is a credit union, so...
by jeffyscott
Mon Jun 03, 2019 10:48 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 116
Views: 8810

Re: are tips expensive? or are they cheap?

Maybe both TIPS and nominals are expensive, given that ~2.35% is available on 1-6 mo. t-bills and brokered CDs are 2.4% and above for any term :?: yes but brokered cds have il-iquidity risk and state taxes True, but I'd not looking to trade them and would hold in an IRA. So partly due to this discu...
by jeffyscott
Sun Jun 02, 2019 6:43 pm
Forum: Investing - Theory, News & General
Topic: [Longevity effects of The Great Depression on investing]
Replies: 25
Views: 1389

Re: [Longevity effects of The Great Depression on investing]

Kevin M wrote:
Sun Jun 02, 2019 4:33 pm
jeffyscott wrote:
Sun Jun 02, 2019 2:59 pm
NBER has one recession from August 1929 to March 1933 and a second from May 1937 to June 1938: https://www.nber.org/cycles.html
As shown in the graph posted just above.
Somehow, I missed that you had listed the dates :oops: .