Bogleheads.org

I'll put a slightly contrarian view to the bulk of the posts in this thread. Concentration is a real risk that is recognized by the SEC distinguishing between diversified and non-diversified mutual funds. For example Vanguard's growth index fund (not the S&P 500 index fund) so frequently is officially declared non-diversified that it lists non-diversification as a specific risk among the notes at the bottom of the fund's description page (underlining mine), Nondiversification risk: To closely track the composition of the fund’s target index, more than 25% of the fund’s total assets may be invested in issuers representing more than 5% of the fund’s total assets. In that case, the fund would be nondiversified under the Investment Company ...

TheGreyingDuke wrote: ↑Wed Mar 22, 2023 6:18 pm How these people get ink at all amazes me!

It's a dirty little secret of the media that they have so many column-inches and minutes of air time (or whatever the digital equivilent) to fill up every single day. They've got to fill it up with something; that's their job. I don't deride the press for having such a job, but it's not something to pay any attention to.

I think emergency funds are more important and a more salient concept the closer you are to living on the financial edge. The closer you are to living paycheck to paycheck, the more you need a cash cushion to prevent you falling over the edge. That typically means the young and the poor. Anecdote. Recently son runs over a rock in family car; $4000 repair bill. Retired, in my 60s with a life-time of employment, credit building, Boglehead type saving and investing, I paid the bill with a credit card and will pay off the card as usual in full with cash in the bank. But when I was 24, if I had had an unexpected (inflation deflated) bill of similar size, I would not have been able to pay it except for the fact that I'd built up about $4k in cash...

Something similar, called Osko, has been here in Australia for 2 or 3 years. You can set it up so that your account is attached to your phone number, i.e. you can give out your bank account number or some other number to receive payment. Transfers take well under a minute to complete. I think it's become widely used here but has in no way eliminated credit cards; I don't see a particular reason why it would.

Actionable for me is that a similar FedNow service at my US bank would make it a bit easier to send small amounts to neices and nephews for gifts.

Look in the search box for vanguard cash plus account. Vanguard has something you can sign up for (may still be in pilot phase) where your brokerage settlement account money is placed with one or more fdic insured banks. That would be a little---and I mean a very little---bit safer than the vanguard money market. As I'm not enrolled in the program, I don't have any further details. But maybe that's the something you're looking for.

Not sure what you're trying to show here. The R^2 is only 0.35, suggesting the chosen model doesn't fit the data particularly well. It's perhaps easier to see by looking at the tab at PV labeled "rolling returns". The lines are the time-series for the data and for the model. You can see the fit is not all that good. Perhaps if you can be clearer on what you're trying to show and why you're trying to show it, you'd get better responses than mine.

The online bank I used in mid-2000s went bust. On the Friday at end of business hours the webpage was replaced by a banner saying (whatever federal agency) was winding up the bank, the bank would be offline over the weekend but open after that, customers had (some number, let's say 6) months to move their money, no customer losses were expected. The webpage was up the following Monday morning, and the bank functioned, as far as I could tell, exactly as it had before, except you got the banner at every login reminding you to move your money. It was no big deal. The feds have wound up banks before, lots of them; the bust bank just doesn't usually make national news. Probably this one made more news than most only because of a combination of t...

How do you invest now? Is going to CDs and Tbills a radical change from how you're invested now, or is CDs and Tbills how you're invested anyway? The investment outlook has always been confusing and worrisome for, say, stocks and bonds. That's just how markets always have been and always will be: there are risks; different risks raise their heads at different times and you don't know when that will happen. You can always tilt your investments so that you're less exposed to one kind of risk, but that always seems to mean that you become more exposed to other kinds of risk. If your investment changes are a radical change from what you do now, I suggest taking a deep breath and thinking it through again from different perspectives. I believe t...

As a result of our similar journeys, I've also been doing a bit of research into super lately as well. So I hate to be 'that guy,' 8-) but I'm surprised to not see Vanguard's super as an option here? They seem to have the ease of asset allocation that you want, along with the low fees (0.56% on non-managed, 0.58% 'Lifecycle'). In my research, and I could be wrong (please correct me if so!), but apart from Uni Super (0.48%), I don't know of a lower-fee fund in Australia barring perhaps an employer's arrangements with a fund. Itchyback, welcome to the forum. This thread looks at Vanguard super. The key is to distinguish a super fund complex's default fund and other optional funds in the complex that you could choose instead of the default. T...

Not that you'll get Weiner's idiosyncratic opinions, but you can come to Bogleheads.org to identify and discuss sample portfolios. I see a lot more sample portfolios discussed here than just the three-fund. And unlike a newsletter, at Bogleheads you can propose your own sample portfolios and invite however much discussion you like.

Not so much for total market type indexes. Only the mergers, but then that's nothing specific to index investing; that's a plain old merger-arbitrage hedge fund alt strategy.

And I thought indexes like S&P, that could be more susceptible to some kind of front running on index changes, had long ago implmented stratgies to mitigate its effect. But I'm not in this area, so don't really know more than I've casually read.

. - If you are worried about foreign exchange risk (and to be honest, in the UK, if you have savings in the UK, an income in the UK (or just the State Pension), home equity in the UK - adding more exposure to GBP seems to be redundant), then you buy a currency hedged equity fund. Regards to calling the US stock market as "overvalued". It's been that way for as long as I can remember. Europe and Japan look cheap, and underperform. Although the US took a real pounding both in the dot com meltdown (2000-03) and the Global Financial Crisis (2008-9 + Eurozone follow on), the US market always seems to bounce back faster. Really like your logic here I suppose dca into US/USD global funds over a long period of time will also diminish cur...

The typical answer is, what do you know that the totality of all other stock market participants don't. Another type of answer is, sure overweight the UK/Europe if you like. But why be complicated about it? Take the global fund and add one other fund to overweight UK, or underweight US if you like that perspective better. I personally wouldn't make that other fund more than 10% of my portfolio, but, of course, it's not my portfolio and only you have to be comfortable enough with your portfolio to be able to hold it through all the inevitable market gyrations you will experience in your investing life. Regarding currency exposure, non-home market stocks is one of the few practical ways an ordinary person can diversify away from their home cu...

1. Are there any good ETF/Mutual funds that can get me exposed to US Treasuries ? Google "intermediate treasury mutual funds". Add "Vanguard" if you want to limit selection to Vanguard funds. 2. Are the yields for US Treasury fixed for the entire duration ? For e.g. 20 yr note yield is fixed for 20 yrs ? If you buy an individual treasury (non-TIP) bond yourself, then the interest rate (coupon rate) is fixed for the life of the bond. If you buy shares in a treasury bond fund, then the interest income is not fixed. When you buy the intermediate treasury bond fund, the fund already has bonds across their target maturity range, e.g. maybe 5--15 years for an intermediate bond fund, that have coupons at the rates prevailing s...

Just do the jury duty. It's not that bad.

Not sure what you mean. VHDG is diversified high growth index fund. You say you have some money invested in VHDG outside of super, and you have your super money invested in what I think is effectively the same fund as VHDG. You have all your money, whether in tax-advantaged or taxable account, invested in the same 90:10 stock:bond balanced fund. Is that right? So I think the overlap is between your taxable and tax-advantaged is 100%, but so what. It makes investing pretty simple to understand, and if 90:10 is the right porfolio for you now, I don't understand the issue that's bothering you.

Personally, I'd stay away from the banks and BT. Just curious, is there a particular reason for this? If they have similar offerings with similar costs I don't see any reasons why they would be an issue, although I am young and naïve :D A general reason is that the for-profit funds from banks and insurance companies were the ones caught making the most egregious breaches of trust in the superannuation royal commission a few years ago. More specifically, the fees appear to be higher (about double) than what you've quoted. I had to search for it, but I find the BTSuper costs page says, APIR Code Investment Option name Administration fees and costs (%)1 Investment fees and costs (%)2 Transaction costs (%)2 BTA3104AU Index International Shares...

trevorshhh wrote: ↑Mon Feb 27, 2023 4:56 pm I think I have the best local credit union in my area, but they have a small ATM network, ...

At least for the ATM network you may want to check if they're part of this credit union CO-OP Network. My CU only has 6 physical branches/ATMs of their own, but they say I "also have access to over 5,000 shared branches and nearly 30,000 free ATMs across the US through the CO-OP Network." They also have a handy online tool where I can put in a location and it shows me all the shared CU branches and ATMs I can use for free.

It may be worth noting that because the FTSE total world index works on market caps of individuals companies, rather than restriction to designated countries, some companies, albeit not many, in these so-called frontier market countries have been in total world when their market cap was big enough. In times past I noticed that La Compañía de Minas Buenaventura, a Peruvian mining company with which I once had a very tangential association, was in total world. I think now it's not and no other Peruvian companies are. The point being that stocks are about businesses, rather than just the countries they're incorporated in. If a public company in a frontier market country gets large enough, it'll be added to total world. The micro-cap companies...

State Department Federal Credit Union because they're easier for an ex-pat to deal with---and overall pretty good as well. In local country I use what was originally a credit union that merged and grew until it's become a B-corp with a banking license. B-corp seems to mean still non-profit but a lot preachier about the environment and other things. Inertia and still having no fees and pretty good deposit rates keeps me there.

It may be worth noting that because the FTSE total world index works on market caps of individuals companies, rather than restriction to designated countries, some companies, albeit not many, in these so-called frontier market countries have been in total world when their market cap was big enough. In times past I noticed that La Compañía de Minas Buenaventura, a Peruvian mining company with which I once had a very tangential association, was in total world. I think now it's not and no other Peruvian companies are. The point being that stocks are about businesses, rather than just the countries they're incorporated in. If a public company in a frontier market country gets large enough, it'll be added to total world. The micro-cap companies ...

Robin1234 wrote: ↑Sat Feb 25, 2023 12:49 am I wonder why is it so expensive to insure against such drops? Why is it not more affordable like term life insurance is? Is VIX options a scam?

While I'm neither an insurance, nor an options expert, I hypothesize the answer is because the insured people don't all drop dead on the same day, whereas market crashes happen to everyone at the same time. The payout profile if you're providing the insurance, i.e. the people taking the other side of the VIX option, is very different between life insurance and the VIX option, hence the price is very different. That's just this layperson's guess.

Will you return to France (or elsewhere in Europe) regularly? If so, I'd keep some in euros wherever you bank now in Europe, however much I thought I'd spend over, say, the next few years.

Otherwise, the bulk of the cash that you plan to invest in the US, convert it when you get it. For a one-time event it's a useless drain of your time and mental energy to worry if the rate will go for you or against you tomorrow.

retiringwhen wrote: ↑Tue Feb 21, 2023 9:57 am Interestingly, in both cases, the benefits all accrue to the MF holders and the risks/costs to the ETF holders.

I'm not sure that was the case when the Vanguard ETFs (Vipers in their original lingo) started. ETF costs are less than an equivilent mutual fund, but they're still not zero. Starting as a share class of an already existing large asset base, instead of starting with a few million in seed assets, allowed Vanguard ETFs to have low costs from the start. Even now, Vanguard's institutional site tells me that VTI is less than 25% of the total pool of assets in total stock market index fund, as one example.

PMarlowe00 wrote: ↑Sun Feb 19, 2023 7:23 pm My portfolio ..., it's strongly tilted towards value stocks. ... Is broadly betting on "value" a sound approach?

Apologies in advance for probably sounding snarkier than I mean to be, but if you've already tilted your stock investments strongly towards value, shouldn't you have already answered that question to your satisfaction?

Bogle detailed his method for a rough prediction in, I think, his book "Common Sense on Mutual Funds" and reviewed his predictions in the first edition of that book in the 10th anniversary edition. Worth reading the 10th anniversary edition. Bogle's method, which may not be original with him, is add together (a) the dividend yield on stocks, (b) growth rate of company earnings, and (c) the effect of changing Price/Earnings ratio, to arrive at a rough prediction of stock returns. It's important to understand our ability to know or constrain each of these terms: (a) completely knowable. Everyone can look up the dividend yield for a total market fund or S&P 500 fund today. Bogle's method seems quite justified, but we have a prob...

On a different subject, stock funds should really be long term investments. If an unexpected vet bill, caused you to need to sell some stocks, I suggest you should prioritize building up a little emergency fund of a couple thousand dollars. You don't have to come up with $2k today; put a couple of hundred in a high yield savings account whenever you can until you've gotten up to a couple of thousand saved and ready to cushion you against unexpected financial blows. If you can, pay unexpected expenses from a little cash cushion, rather than from long term stock investments. Eh. I've seen the argument for investing one's emergency fund in a total market fund of some sort. The argument being that you're probably better off in the long run pro...

Previous advice on the forum suggests you can name yourself as the beneficiary and when you have the child's SSN you can change the beneficiary.

Our children were born outside the US, and the application for a consular record of birth (basically a US birth certificate for those born outside the US) came with an application for a SSN. How odd your brother didn't put in both applications at the same time. Ah well, the first child can be a hectic time. You brother needs to put in the SSN application.

What was the date of that interview w/ Bogle? You realize he had a methodology for making these rough predictions; he didn't just pick 6-7% at that time out of thin air. His rough prediction for stock returns today would plug today's numbers into his methodology and probably would come up with a different prediction for the next 10 years. It would be better to learn and understand the method and its limitations, rather than blindly take an outdated prediction. Bogle detailed his method for a rough prediction in, I think, his book "Common Sense on Mutual Funds" and reviewed his predictions in the first edition of that book in the 10th anniversary edition. Worth reading the 10th anniversary edition. Bogle's method, which may not be ...

stocknoob4111 wrote: ↑Thu Feb 16, 2023 2:13 pm Question - I went through Turbotax FBAR reporting and it said I do not have to report since I don't have $10k or more in any account. However, do I need to report the $5 in interest?

Yes, that sounds right. I've lived in Australia for a while and have always reported the interest from my Australian bank account just by writing the name of the bank and the interest amount on schedule B, then filling out the part at the bottom of schedule B, checking the box for yes I have a foreign account. Of course, there is no 1099: a non-US bank neither knows nor cares about US tax forms. I do have enough in the non-US account that I file the FBAR every year, but if you don't need to, then great, one less thing to do.

You can do the math. In five years when the etfs are 66 thousand and the pension plan is 19.5 thousand (you don't need to project any relative growth), what are your EU percentages then? In eight years, in ten? If the pension plan has home bias investment constraints, not ideal but ok; presumably there are compensating tax advantages to the pension plan. The fact that you have an investing plan, means that if you stick to it, you'll be financially miles ahead of most of your peers. I'd focus on the bigger picture---and my family---and let my investing plan take care of this imbalance.

Robin1234 wrote: ↑Tue Feb 14, 2023 3:01 pm I am amazed someone like Newton could make investment mistakes, like a commoner would.

Newton, "I can calculate the motion of heavenly bodies, but not the madness of people."

Updated to modern parlance, nobody knows nothing.

I doubt the nobility of that era were in aggregate better stock investors than commoners.

What exactly is it that you think would be detrimental to your finances? It's the turmoil in the bond markets lately that has got me thinking about this. While the major US stock indexes have existed for decades - some for more than a century - I don't have the same confidence in a lot of these aggregate international/aggregate bond indexes. Considering that duration is one the most important factors of a bond fund, I fail to see the merit in buying a "diversified" bond fund that does not even say what its ideal duration is. Nobody would buy an individual bond without looking at its duration, then why do bond indexes without a specific duration range exist? A lot of this "diversification", I feel, is actually detrimenta...

Going on past data, which of iShares and Vanguard do you think are less likely to tinker with their fund indexes? You might want to think about this in terms of which company is less likely to change their index funds to the detriment of their existing fund share holders? One exemplary case comes to mind to illustrate a crucial difference between a fund management company with and without shareholders in the management company. iShares built its initial business with ETFs like S&P500, emerging market, etc index funds. Around the mid-2000s iShares needed to lower the cost of its ETFs to compete with Vanguard and State Street. Did it lower the ER on its existing ETFs, benefiting the fund shareholders that had originally invested with it ...

Don't worry. Do nothing. Overwhelmingly likely that Vanguard will do nothing too. And in the unlikely event they do feel the need to do something about your little account, they'll notify you beforehand. On a different subject, stock funds should really be long term investments. If an unexpected vet bill, caused you to need to sell some stocks, I suggest you should prioritize building up a little emergency fund of a couple thousand dollars. You don't have to come up with $2k today; put a couple of hundred in a high yield savings account whenever you can until you've gotten up to a couple of thousand saved and ready to cushion you against unexpected financial blows. If you can, pay unexpected expenses from a little cash cushion, rather than ...

I use HRBlock but assume TurboTax behaves similarly. In the dropdown menu for importing 1099s there are two entries for Vanguard, Vanguard mutual funds and Vanguard brokerage. If you had both types of accounts during 2022, you'll need to import separately for each Vanguard entity. The brokerage uses this document ID number, but the mutual fund still wants your Vanguard account login info.

What happens if you either die before 20 years past the conversion date or live longer than 20 years past the conversion date? Or, for that matter, die before the conversion date?

The last time I bothered to post on security lending for Vanguard's small cap funds was 2020. At that time securities lending income as a percentage of total expenses listed in the annual report (ie not including trading costs) was Small Cap 109% Small Cap Growth 67% Small Cap Value 77% The ratios had been lower in previous years. But it is certainly possible for securities lending to cover most, and even sometimes all, expenses for a low cost Vanguard fund. When I first noticed the lending income, I was just astonished at how large it was. In 2020 just these three funds received $78 million between them in securities lending fees. As others in that thread educated me, the shorting world is just a lot bigger than we buy-and-hold investors g...

I invested in total world fund since its inception, and it used to be a little sport to compare the actual and headlines expense ratios. As total world started with low assets, the change in expense ratio was large and noticable as assets increased. The actual expense ratio was observable as a footnote in the fund annual report, which came out October. In those days the actual expense ratio reported in the footnote was always 5 or 6 basis points below the headline rate, given in say the then current proseptus. This always foreshadowed a lowering of the headline rate in the new prospectus the following February. I posted a graph of the actual expense ratio of total world investor shares vs assets in an old thread , which I repost here as pos...

What tax software do you use? I use HRBlock and where they ask for a drivers license there is a check box to say I have no state issued id. Checking the no state issued id box in the past has not prevented efiling. As I haven't done my tax yet this year, there could always be something new. As for a phone number, I have a google voice number that I put as a contact number. That's always been accepted to efile---and the IRS has never called, neither did the tax software ever want to send a text message to that number. I can't remember if I was able to enter my foreign phone number before I got the google voice number, but I don't recall a phone number ever being given by the tax software as a reason I couldn't efile. I have been unable to ef...

When I go to south america, I see US$ savings accounts that pay one interest rate, usually higher than available in the US, and local currency savings accounts that pay substantially more. So why couldn't an american open a US$ savings account in south america and earn higher rates? For one thing the bank regulations, comsumer protections, and government deposit insurances are lower, i.e. your account is riskier than your account at a US bank. Second, in a lot of these countries it's hard to legally and/or cheaply move US$ in and out of the country. And that's even pre-supposing these non-US banks would accept americans as a customer. Basically the non-US banks that have US$ accounts are some combination of riskier, costlier, and won't tak...

When I go to south america, I see US$ savings accounts that pay one interest rate, usually higher than available in the US, and local currency savings accounts that pay substantially more. So why couldn't an american open a US$ savings account in south america and earn higher rates? For one thing the bank regulations, comsumer protections, and government deposit insurances are lower, i.e. your account is riskier than your account at a US bank. Second, in a lot of these countries it's hard to legally and/or cheaply move US$ in and out of the country. And that's even pre-supposing these non-US banks would accept americans as a customer. Basically the non-US banks that have US$ accounts are some combination of riskier, costlier, and won't take...

You could look at the fact sheet for the FTSE global all cap index, which is the index vanguard's total world fund follows. The fact sheet is updated every month. On page 2 is the country break down; at the bottom on the list is the market cap value for the US and the total for all the index. Divide and there you go. Look at it whenever the mood strikes.

It sounds very much like it's time for you two to see an estate lawyer and set up an estate plan that disposes of all your what happens if one of us dies questions.

My accounts/profile and account settings/accounts and trading/Holding level dividend and capital gains elections

is where you can change where dividends and capital gains go for all your holdings.

I have a bit of AVDV at Vanguard and dividends didn't auto reinvest for a while, but they have been auto reinvesting for a while now, where "a while" means I don't remember exactly how long it took. As AVUV and AVDV started at about the same time, I assume AVUV can reinvest now too.

I don't mind Vanguard not permitting reinvestment of dividends for new and/or low volume etfs. However, it would have been nice if there had been a more explicit or prominent explanation of the restriction. On the page where you can specify what to do with dividends, the reinvest button for the etf was just blanked out with no explanation of why.

A couple of days ago, the H&R Block home tax software was saying that the import was not ready. But as of right now, it successfully performed the download. I needed to have the (downloaded) 1099-R form in order to get the document ID. I hate hate hate this. The stupid document ID is eleven characters long, presented grouped as 4-3-4. It has to be typed without being able to see what you've typed , there's no option to make it visible as you type. It is a mix of uppercase letters and numerals. Nothing says whether or not it's case-sensitive. I put "caps lock" on to be sure. It's broken into 4-3-4 grouping. Nothing says whether you are supposed to try to enter it that way. I guessed that you aren't and typed it as a solid bloc...

I have lived outside US for a couple of decades now. Several years ago Vanguard closed their cash handling account which forced me to find a new bank in the US. I found opening an account with State Department Federal Credit Union to be easy and straightforward to do online from outside the US. I'm in Australia; residence in other selected countries may present more difficulties. But, I suggest your friend give SDFCU a try.

Forgot to say, search for an old post of mine where I asked for feedback about which banks/credit unions were friendly to Americans livings overseas; several more suggestions there to potentially investigate.

You don't need a 1099-INT; just report the interest on your 1040. I live outside the US and have a non-US bank account, from which I, of course, never recieve a 1099. Every year for a couple of decades I've put the interest amount and name of bank in the 1040, and the IRS has never complained.

On the other hand, my US credit union had the 1099-INT available online 2nd week of January.

Yes, discussed upthread somewhere. Short answer: it's the bonds. The 40% comes from restricting bonds to investment grade, i.e. the index cited is the FTSE World Broad Investment Grade bond index. The calculator, which I think is the one discussed upthread, uses an index that includes non-investment grade bonds and, from memory, warrants and other classes of debt instruments excluded from investment grade bond indices. And the world of non-investment grade loans is much larger than you might think, certainly much larger than I thought before the posts upthread. Thanks. But, wouldn't using the larger bond capitalization that includes all bonds (i.e., doesn't restrict to investment grade) be more consistent with holding Sharpe's "market...