Search found 8685 matches

by grok87
Mon Jun 17, 2019 4:39 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

I think that it's always time to buy 30-year TIPS for grok87, I actually do have a hurdle rate. I usually don’t buy 30 year tips below 0.5% real yield. When the real yields get close to zero or negative I sell them Interesting; thanks for clarifying. Can you elaborate on your policy for selling at ...
by grok87
Mon Jun 17, 2019 7:46 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

Time to buy 30 year TIPS Or T-bills? Why would one want to buy 30's at 2% real yield? You can change your mind in a few years if the yield curve starts to make more sense. Maybe TIPS are cheap for a good reason. :D For the obvious reason of locking in a real yield for a long time. There is no guara...
by grok87
Mon Jun 17, 2019 7:46 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

Kevin M wrote:
Sun Jun 16, 2019 3:55 pm

I think that it's always time to buy 30-year TIPS for grok87,
I actually do have a hurdle rate. I usually don’t buy 30 year tips below 0.5% real yield. When the real yields get close to zero or negative I sell them
by grok87
Sun Jun 16, 2019 6:53 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

thought it was worth an update. Currently yields: 5 year TIP: 0.35% 10 year TIP: 0.43% 30 year TIP: 0.85% 5 year nominal treasury: 1.83%======> 5 year BEI = 1.48% 10 year nominal treasury: 2.08% =====> 10 year BEI = 1.65% 30 year nominal treasury: 2.59% =====> 30 year BEI = 1.74% ===> 5x5 BEI = 1.82...
by grok87
Sun Jun 16, 2019 6:36 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 28
Views: 6508

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 grok87
Fri Jun 14, 2019 8:10 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 28
Views: 6508

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 grok87
Sun Jun 09, 2019 5:10 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 28
Views: 6508

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

An interesting question is how Money Market funds account for small gains and losses when selling securities before maturity. I tried a number of searches and wasn't able to find much information. It would appear that small losses would simply reduce the income paid out. It's not clear if gains wou...
by grok87
Sun Jun 09, 2019 12:10 pm
Forum: Personal Investments
Topic: 7% callable - Structured Investment/Note
Replies: 30
Views: 2422

Re: 7% callable - Structured Investment/Note

well 3 year puts and calls are available. leaps. i wonder what a roll your own structure using those would look like I don't want to keep repeating, but these are longer dated options than 3y with even higher implied volatility... Anyway, I'm not here to sell these products. I'm just saying that if...
by grok87
Sun Jun 09, 2019 9:48 am
Forum: Personal Investments
Topic: 7% callable - Structured Investment/Note
Replies: 30
Views: 2422

Re: 7% callable - Structured Investment/Note

The reality is you can synthesize these things with option strategies *without* paying some huge margin to brokers. If you don't know who the mug is in the card game ... then you are the mug. And if it's too complicated to understand, it's too complicated to invest in. Not true, unless you can tell...
by grok87
Sat Jun 08, 2019 7:02 pm
Forum: Personal Investments
Topic: 7% callable - Structured Investment/Note
Replies: 30
Views: 2422

Re: 7% callable - Structured Investment/Note

One of the advisor came to me with this investment opportunity. I would like to get some feedback/voices from experienced folks on this forum since I am new to all this. Thanks! A callable Yield Note Coupon: 7%p.a. coupon paid quarterly (1.75% per quarter) Equity Contingency: Based on the worst of ...
by grok87
Sat Jun 08, 2019 6:58 pm
Forum: Personal Investments
Topic: Vanguard moving clients from mutual funds to ETFs?
Replies: 34
Views: 3956

Re: Vanguard moving clients from mutual funds to ETFs?

my theory is they want to pump up the volume of the ETFs so they can produce more juicy tax benefits for the mutual fund holders.
by grok87
Sat Jun 08, 2019 9:09 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 28
Views: 6508

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

SEC 7-day yield of Vanguard Treasury Money Market fund (VUSXX) is 2.33% as of 6/6/2019. That's only down 3 basis points from the high of 2.36%, last seen on 4/5/2019. The fund holds Treasury Bills in the 1-month to 3-month maturity range, with average maturity of 43 days and weighted average life o...
by grok87
Sat Jun 08, 2019 9:06 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

There is an old saying “don’t fight the fed”. I tend to believe the fed will, in the long run, deliver on their inflation target. Perhaps, but the evidence is that the Fed regards its inflation target mostly as a ceiling and is much more willing to undershoot than overshoot. The ECB is even more fi...
by grok87
Sat Jun 08, 2019 5:31 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

Thought it might be worth updating the numbers given the movements this week in the bond market 5 year TIP: 0.24% 10 year TIP: 0.33% 30 year TIP: 0.75% 5 year nominal treasury: 1.85%======> 5 year BEI = 1.61% 10 year nominal treasury: 2.08% =====> 10 year BEI = 1.75% 30 year nominal treasury: 2.57% ...
by grok87
Fri Jun 07, 2019 9:53 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12471

Re: David Swensen Unconventional Success

Considering Unconventional Success was published in 2005, I would be interested in David Swensen's current thoughts regarding asset classes that were more expensive and not as readily available as today. International Bonds and International REITs come to mind. Perhaps international bonds would be ...
by grok87
Fri Jun 07, 2019 6:30 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

Calling TIPS cheap or expensive assumes that you can predict inflation better than the market, and that you think you know the values of the nominal Treasury liquidity price premium (yield discount) and nominal Treasury unexpected inflation yield premium (price discount). Although there are various...
by grok87
Thu Jun 06, 2019 3:58 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

Calling TIPS cheap or expensive assumes that you can predict inflation better than the market, and that you think you know the values of the nominal Treasury liquidity price premium (yield discount) and nominal Treasury unexpected inflation yield premium (price discount). Although there are various...
by grok87
Tue Jun 04, 2019 12:05 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12471

Re: David Swensen Unconventional Success

i think it is interesting to look at the performance since 1/1/2018. kind of an arbitrarybee period i guess. but it feels like from then til now markets have been flattish but increasingly volatile. whereas in the year or so before that they just went straight up. http://quotes.morningstar.com/char...
by grok87
Mon Jun 03, 2019 5:03 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12471

Re: David Swensen Unconventional Success

catchup wrote:
Mon Jun 03, 2019 7:43 am
I think the TIPS protect against unexpected inflation moreso than expected inflation.
Agree
by grok87
Sun Jun 02, 2019 12:51 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are tips expensive? or are they cheap?

FIREchief wrote:
Sat Jun 01, 2019 11:47 pm
grok87 wrote:
Sat Jun 01, 2019 10:39 am
i mostly buy tips for my retirement tips ladder, which is a substitute for the inflation linked pension i don't have. so from that perspective it is a riskless asset.
Same here. Thanks for posting this very interesting thread grok87!
My pleasure
by grok87
Sun Jun 02, 2019 8:20 am
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 68
Views: 6540

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Most investors will optimally hold mostly long-term bonds even at retirement age, since the typical 65-70 year old still has a 20+ year investment horizon. As bonds become a large portion of the portfolio it might be helpful to replace some fraction of the long-term nominal bonds with long-term TIP...
by grok87
Sat Jun 01, 2019 7:26 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

But honestly, i don't see deflation happening in US. Our politicians are too eager to spend. They will be happy to push even larger deficit spending if deflation risk appears. So you're implying that deficit spending is inflationary? Based on what's happened in the aftermath of the great recession,...
by grok87
Sat Jun 01, 2019 7:25 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are TIPS expensive? or are they cheap?

My answer is no. I'm actually going to argue that Tips are cheap. To see why let's start by looking at nominal treasury yields and the implied break-even inflation levels (BEI): 5 year nominal treasury: 1.91%======> 5 year BEI = 1.58% 10 year nominal treasury: 2.12% =====> 10 year BEI = 1.74% 30 ye...
by grok87
Sat Jun 01, 2019 2:03 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are tips expensive? or are they cheap?

dbr wrote: All bonds are expensive now because all interest rates, nominal and real, are historically low. 1+ I believe this to be entirely true. In developed markets there is huge demand for safe yield among the aging and wealthy investing class. This in combination with historically low interest ...
by grok87
Sat Jun 01, 2019 10:41 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are tips expensive? or are they cheap?

jeffyscott wrote:
Sat Jun 01, 2019 10:06 am
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
by grok87
Sat Jun 01, 2019 10:39 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

Re: are tips expensive? or are they cheap?

I think there's a risk-based explanation for what's going on here. In 2008, the market "learned" that fixed-rate U.S. Treasuries are perhaps the safest and most liquid asset class in the world. TIP's not so much. Right now, with concerns about global equity markets, investors are moving into Treasu...
by grok87
Sat Jun 01, 2019 9:13 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 99
Views: 7586

are TIPS expensive? or are they cheap?

Well it's been an interesting week in the bond market. Tips yields have dropped, along with nominal treasuries. Currently yields: 5 year TIP: 0.33% 10 year TIP: 0.38% 30 year TIP: 0.73% So the question is, with yields this low, are tips too expensive? My answer is no. I'm actually going to argue tha...
by grok87
Sat Jun 01, 2019 7:36 am
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12471

Re: David Swensen Unconventional Success

i think it is interesting to look at the performance since 1/1/2018. kind of an arbitrarybee period i guess. but it feels like from then til now markets have been flattish but increasingly volatile. whereas in the year or so before that they just went straight up. http://quotes.morningstar.com/chart...
by grok87
Wed May 29, 2019 6:08 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: REITs Aren't Special
Replies: 124
Views: 14270

Re: Larry Swedroe: REITs Aren't Special

Re REITs Few thoughts, first nothing unique about them basically---well explained by exposure to size, value and term factors. Not as tax inefficient as people generally think --they think NOT because of dividends are ordinary income, but there is virtually no migration (once a REIT always a REIT) ...
by grok87
Mon May 27, 2019 8:50 am
Forum: Investing - Theory, News & General
Topic: 4% withdrawal failed in 1960s. Is that correct?
Replies: 34
Views: 4098

Re: 4% withdrawal failed in 1960s. Is that correct?

4% is a rule of thumb, not a guarantee. Even if it never failed in the past does not mean it will never fail in the future. One reason for not putting too much weight on these studies is that there have not been many independent 30 year periods in the modern era. Using overlapping periods gives the...
by grok87
Sat May 25, 2019 4:15 pm
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 5
Views: 1111

Re: REITS no longer cheap

According to Greenstreet https://www.greenstreetadvisors.com/insights/avgpremnav REITS are now trading at 4% above the NAV of their real estate or at 104%. The long term average is 102%. I'm not changing my asset allocation but it is something i watch. Mostly i would interpret this as a bullish sig...
by grok87
Sat May 25, 2019 12:27 pm
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 5
Views: 1111

Re: REITS no longer cheap

Tdubs wrote:
Sat May 25, 2019 10:12 am
Funny, I was going to post a question about REITs and TREA too. My TIAA 403(b) is closed, but I can buy TREA through a "backdoor," an after-tax retirement annuity.
interesting. i wonder if that's why they are raising expense ratios because they are losing 403b business
by grok87
Sat May 25, 2019 12:00 pm
Forum: Investing - Theory, News & General
Topic: WSJ Article: Think Before You Fish for Bargains in Chinese Stocks
Replies: 50
Views: 3980

Re: Jason Zweig: Counties with faster growing economies of produce lower-not higher-stock market returns

Boy Grok you sure work fast! Thanks! Took a look at the paper you linked. A big point is this: “The correlation between the mean geometric annual real return and mean per capita GDP growth is 0.007 ( p = 0.98) for the top 19 countries for 1970–2002 and 0.005 ( p = 0.99) for the bottom 13 countries ...
by grok87
Sat May 25, 2019 10:45 am
Forum: Investing - Theory, News & General
Topic: WSJ Article: Think Before You Fish for Bargains in Chinese Stocks
Replies: 50
Views: 3980

Re: Jason Zweig: Counties with faster growing economies of produce lower-not higher-stock market returns

https://www.wsj.com/articles/think-before-you-fish-for-bargains-in-chinese-stocks-11558710015?emailToken=3e437a22518fa43db242fe0d5e0f6521bPLKAjcvPTZUJSWgc0LIXK971nYHZOTw9l8K7jnDK0tn4vPj3TbUB5SD14m/Vn0D9GXdPAPDlq1995hyj7FY3m1M0ft3heIUa1U5DeCDgYe7cIX1RpQcd0bxaTE1yRWa&reflink=article_copyURL_share In ...
by grok87
Sat May 25, 2019 9:59 am
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 5
Views: 1111

REITS no longer cheap

According to Greenstreet https://www.greenstreetadvisors.com/insights/avgpremnav REITS are now trading at 4% above the NAV of their real estate or at 104%. The long term average is 102%. I'm not changing my asset allocation but it is something i watch. Mostly i would interpret this as a bullish sign...
by grok87
Sat May 25, 2019 9:16 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: REITs Aren't Special
Replies: 124
Views: 14270

Re: Larry Swedroe: REITs Aren't Special

I have checked out the private reits, Fundrise etc. I don’t like those. The asset quality isn’t as good. The governance and management isn’t as good. Fees are high. They won’t hold up as well in a downturn. I would stick with the high quality public reits or vnq unless you have access to an institu...
by grok87
Fri May 03, 2019 6:06 am
Forum: Personal Investments
Topic: Riskfree 3.00% Yield?!
Replies: 33
Views: 6215

Re: Riskfree 3.00% Yield?!

Munis are not risk free
by grok87
Wed Apr 17, 2019 4:32 pm
Forum: Personal Investments
Topic: Fidelity T Bill Auto-roll,please critique
Replies: 25
Views: 2193

Re: Fidelity T Bill Auto-roll,please critique

Why can't Fidelity give you an easy means of cancelling/modifying your autoroll online? Seems very archaic to have to call to cancel/modify, or am I missing something? 2-3 business days prior to maturing under "Orders" there is a pending order to roll, with a cancel button you can click to cancel i...
by grok87
Wed Apr 17, 2019 9:28 am
Forum: Personal Investments
Topic: Treasury Floating Rate Note-Has its Time Arrived?
Replies: 50
Views: 6468

Re: Treasury Floating Rate Note-Has its Time Arrived?

I'm not an expert either, but Vanguard lists the top FRN in your list as: United States Treas Frn2.53977157% due 1/31/2021 Floating/Variable Coupon - Daily Reset,13WK TBILL + 11.5BP - And the Treasury only lists the spread here, not the HDM: https://www.treasurydirect.gov/instit/annceresult/anncere...
by grok87
Wed Apr 17, 2019 6:32 am
Forum: Personal Investments
Topic: Treasury Floating Rate Note-Has its Time Arrived?
Replies: 50
Views: 6468

Re: Treasury Floating Rate Note-Has its Time Arrived?

thanks for the update. re "irrelevant for the time being"- can you amplify your line of thought? this page shows they last issued with 18bps of extra yield (over the 3 month tbill) https://www.treasurydirect.gov/instit/annceresult/annceresult.htm that seems attractive and is higher than its been fo...
by grok87
Tue Apr 16, 2019 3:23 pm
Forum: Personal Investments
Topic: Treasury Floating Rate Note-Has its Time Arrived?
Replies: 50
Views: 6468

Re: Treasury Floating Rate Note-Has its Time Arrived?

I've tried to sell 5 times in the past few months. The first two times I didn't even get a quote. The last three times I did and submitted a sell order, but it never executed. I finally manage to sell the other day on the 6th attempt. Perseverance pay off! Because there's not really a market for th...
by grok87
Tue Apr 16, 2019 3:15 pm
Forum: Personal Investments
Topic: Fidelity T Bill Auto-roll,please critique
Replies: 25
Views: 2193

Re: Fidelity T Bill Auto-roll,please critique

just be aware you need to call to cancel. I have found that it is just easier to sell the T-bill than to call in advance and cancel. Of course what you do can depend on how rates have changed since you purchased it but T-bills are bought/sold easily. Settlement on T-bills is T+1 so cash is availabl...
by grok87
Tue Apr 09, 2019 4:12 pm
Forum: Investing - Theory, News & General
Topic: REITs vs. Actual Real Estate Returns, 1904-2015
Replies: 18
Views: 1665

Re: REITs vs. Actual Real Estate Returns, 1904-2015

I would have thought reit returns in us to be higher due to their use of leverage.
They almost got wiped out in 08/09 though
by grok87
Sat Apr 06, 2019 7:59 am
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans to Launch Commodities Fund
Replies: 148
Views: 13381

Re: Vanguard Announces Plans to Launch Commodities Fund

Interesting. For those interested here is a link to the monthly bloomberg reports on the commodity index Vanguard will be benchmarking against https://data.bloomberglp.com/promo/sites/12/438594_BCOM-April2019Outlook.pdf from page 18 commodities are still in contango of -3.6% and that has gotten wors...
by grok87
Fri Apr 05, 2019 2:42 pm
Forum: Personal Investments
Topic: Has anyone had any experience with TD Essential and Selective Portfolios?
Replies: 12
Views: 339

Re: Has anyone had any experience with TD Essential and Selective Portfolios?

Just like the title says, I was curious if anyone has experience with this portfolios? After losing my parent a few years ago, I was left a bene IRA around 30k, and I was immediately appointed a advisor when I rolled it over to TD. He suggested since I was a less risky conservative to put it all in...
by grok87
Thu Apr 04, 2019 3:53 pm
Forum: Personal Investments
Topic: 2019 TIPS Auction Schedule Changes
Replies: 5
Views: 410

Re: 2019 TIPS Auction Schedule Changes

It’s interesting. I find it all rather annoying. Not only are they reducing the frequency of 30 year tips auctions but they are moving the reopening one to August when everyone is on vacation! Going out on a limb with a prediction. I expect the August auction to be weak or to “tail” - ie auction yie...
by grok87
Mon Apr 01, 2019 7:10 am
Forum: Investing - Theory, News & General
Topic: Good resources for liability matching
Replies: 21
Views: 1624

Re: Good resources for liability matching

TheTimeLord wrote:
Mon Apr 01, 2019 7:06 am
What are some good resources for liability matching?
What did you want to know?
by grok87
Sat Mar 30, 2019 5:35 pm
Forum: Investing - Theory, News & General
Topic: 10 Year/3 Month Treasuries Inversion
Replies: 100
Views: 8419

Re: 10 Year/3 Month Treasuries Inversion

as others have pointed out, the NY fed has a model to predict recessions based on the 10 yr treasury - 3 month tbill spread. https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf it currently shows a 25% probability of a recession 12 months ahead- i.e. in feb 2020. it w...
by grok87
Sat Mar 30, 2019 3:29 pm
Forum: Personal Consumer Issues
Topic: "The best and worst U.S. states for retirement"
Replies: 275
Views: 26780

Re: "The best and worst U.S. states for retirement"

here's a link to the actual study. https://wallethub.com/edu/best-and-worst-states-to-retire/18592/ I think this is useful because you can see the subrankings for affordability, quality of life and healthcare. for example Minnesota is in the bottom quintile for affordability but is ranked #1 for qua...
by grok87
Sat Mar 30, 2019 7:50 am
Forum: Personal Finance (Not Investing)
Topic: Net Investment Income Tax and SALT deduction cap
Replies: 39
Views: 3855

Re: Net Investment Income Tax and SALT deduction cap

The latest TT update says it Fixed - Form 8960 line 9b worksheet disregards SALT limitation https://ttlc.intuit.com/questions/3169946-turbotax-2018-release-notes-for-windows-personal-tax-software thanks so i found turbotax's post a little confusing. i think they are saying that previously in their ...