Search found 388 matches

by carofe
Sat Mar 11, 2023 12:54 pm
Forum: Personal Investments
Topic: How safe is VMFXX now?
Replies: 107
Views: 19331

Re: How safe is VMFXX now?

VFMMX is a money market mutual fund. Since 2008, by law, they cannot have bonds with maturity longer than 60 days. Banks, on the other hand, can use your savings to buy longer term bonds, but are insured by FDIC.

If Vanguard Fixed Income Group goes bankrupt, you get cash and bonds with maturity less than 60 months corresponding to your shares. You would get the principal back of the securities within 60 days.

I find that as safe if not safer than bank accounts, for uninsured balances.
by carofe
Sat Mar 11, 2023 12:49 pm
Forum: Personal Consumer Issues
Topic: $3000 mattress worth it?
Replies: 97
Views: 10827

Re: $3000 mattress worth it?

Thank you all for your comments.
After reading you comments, and some thinking,
we are kind of settled with getting a firm one from Costco on sale for ~$710, and then getting a fancy topper from tempur-pedic, for a total cost of $1000.

Let’s see how it goes.
by carofe
Fri Mar 10, 2023 9:29 pm
Forum: Personal Consumer Issues
Topic: $3000 mattress worth it?
Replies: 97
Views: 10827

$3000 mattress worth it?

We are shopping for mattresses. Our mattress is like 11 years old.
We are testing mattresses at the stores, and the prices are $2900 + taxes and such, and are not tempur-pedic. However, I see other mattresses at Costco and other places for $900. That's a significant price difference. Is it worth it? Have you tried both price ranges before and you can tell a significant difference in your sleep quality or overall longevity? I have never had any mattress of over +$1K. Thank you!
by carofe
Fri Mar 10, 2023 5:53 pm
Forum: Investing - Theory, News & General
Topic: [Bank failure discussion mega-thread]
Replies: 2482
Views: 214083

Re: [Silicon Valley Bank fails, FDIC takes over]

The WSJ article says SVB bought a lot of long term (10 years) Treasury bonds with their inflow cash, hence the challenge to get the cash back other than selling the bonds at a discount price.

As a matter of comparison, money market funds by regulation since 2008 can only buy bonds with maturity no longer than 60 days. So, in the event of a collapse, you get the actual bonds, and your money back within 60 days when the bonds mature (assuming no defaults).

I am afraid we will see a cascading effect after this.
by carofe
Wed Jul 29, 2020 1:51 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

Found it! I saw that it said that I had two children over 16, which is the opposite (it asked earlier if I had children under 17). I went and realized I was missing the Tax Credit part for kids entirely. Good. :oops:
by carofe
Wed Jul 29, 2020 1:46 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

If you did not submit a 2020 W-4 and your withholding is projected to be the same, any issue must be unrelated to the “new W-4.”. The most likely issue is that you are eligible for a deduction or credit that did not get captured by the IRS tool. Yeah, it must be something like that. The good news is that I used the turbotax withholding estimator: https://turbotax.intuit.com/tax-tools/calculators/w4/, and it tells me that the Federal will end up refunding me $87. That gives me a lot more of peace of mind. The Turbotax calculator asks for things differently, especially for things like retirement, AND includes the state taxes. Both the IRS calculator and Turbotax estimator shows you some details at the end with the deductions, credit, and inc...
by carofe
Wed Jul 29, 2020 1:17 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

Thank you all, at the end it seems that the IRS calculator isn't that good (or intuitive?). The turbotax seems to be a lot better.
by carofe
Wed Jul 29, 2020 1:16 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

By the way, the reason I looked at the w-4 was because my wife, who doesn't work, accepted an offer to be a substitute teachers, which we expect will add less than $200 a month income starting next month. There will be no withholding from this salary because it is so low. However, if you are in the 22% tax bracket, the tax should be $44 per month, so this will increase your tax due unless you increase your withholding. This is a common situation; if you have two jobs, each will withhold as if it were your only job, and you need extra withholding (requested on the W-4, based on the two-job worksheet or the IRS tool) to cover the extra tax when you combine the income from the two. Yup. My wife set it up to withhold as much as it needs. Howev...
by carofe
Wed Jul 29, 2020 1:08 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

Katietsu wrote: Wed Jul 29, 2020 1:03 pm If you did not submit a 2020 W-4 and your withholding is projected to be the same, any issue must be unrelated to the “new W-4.”. The most likely issue is that you are eligible for a deduction or credit that did not get captured by the IRS tool.
Yeah, it must be something like that.
The good news is that I used the turbotax withholding estimator: https://turbotax.intuit.com/tax-tools/calculators/w4/, and it tells me that the Federal will end up refunding me $87. That gives me a lot more of peace of mind. The Turbotax calculator asks for things differently, especially for things like retirement, AND includes the state taxes.
by carofe
Wed Jul 29, 2020 1:05 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

So using the IRS Calculator https://apps.irs.gov/app/tax-withholding-estimator, it says that I will owe next year around $2800 dollars to the Federal Gov't because my company is withholding too little. At the end of that tool there are two lines: Expected tax withholding Anticipated tax obligation How do the tool's numbers compare with your own estimates? It says that I will owe $2,800. Last year I owed only $480 to the federal, and the state refunded few hundreds. Owing $2800 is the difference between the two numbers. How do the two individual numbers (1. expected tax withholding; 2. anticipated tax obligation) compare with your own estimates? This. When you say taxes went up because you owe at the end of the year you are looking at it wr...
by carofe
Wed Jul 29, 2020 12:39 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

By the way, the reason I looked at the w-4 was because my wife, who doesn't work, accepted an offer to be a substitute teachers, which we expect will add less than $200 a month income starting next month.
by carofe
Wed Jul 29, 2020 12:37 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

FiveK wrote: Wed Jul 29, 2020 12:33 pm
carofe wrote: Wed Jul 29, 2020 11:35 am So using the IRS Calculator https://apps.irs.gov/app/tax-withholding-estimator, it says that I will owe next year around $2800 dollars to the Federal Gov't because my company is withholding too little.
At the end of that tool there are two lines:
Expected tax withholding
Anticipated tax obligation

How do the tool's numbers compare with your own estimates?
It says that I will owe $2,800. Last year I owed only $480 to the federal, and the state refunded few hundreds.
by carofe
Wed Jul 29, 2020 12:31 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

The 2020 W4 form has a worksheet to calculate your withholding. It's on another page, so you might not have it if you just have a copy of the first page. If you Google "w4 2020", the first result will be a link to the PDF on the IRS site. You're allowed to put amounts to either increase or decrease the withholding. What I would do is make sure that the bottom-line amount on the form matches last year's paycheck, since you're happy with last year's withholding level This is the PDF: https://www.irs.gov/pub/irs-pdf/fw4.pdf Page 1 doesn't do any math. It just asks you enter a number on (3), and gives you (4c) to add extra withholding for multiple jobs. The other pages are helping you to calculate the extra withholding from multiple ...
by carofe
Wed Jul 29, 2020 12:25 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

The w-4 did in fact change this year, and the tax tables used to calculate withholdings changed with it. That may be whats getting you, but I question the accuracy of the irs calculator. Last year near year end i used it and it gave me a similar result...I ended up with a big refund instead. I could not figure out where the disconnect was though. My suggestion: Pull out your 1040 from last year, look at the numbers and see if anything is changing significantly. If not look at the final tax number after credits are subtracted out. That's a good baseline number to target for this years withholdings. Next pull your pay stub, look at your year to date fed tax withholdings, and add in the expected future withholdings. How does that compare to l...
by carofe
Wed Jul 29, 2020 12:23 pm
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

Re: New 2020 W-4 increases your taxes?

DaftInvestor wrote: Wed Jul 29, 2020 11:44 am if nothing changed why are you refiling a W4? Job change?
No changes.
by carofe
Wed Jul 29, 2020 11:35 am
Forum: Personal Investments
Topic: New 2020 W-4 increases your taxes?
Replies: 22
Views: 10713

New 2020 W-4 increases your taxes?

Hi, I have tried to keep my taxes withholding even with the federal gov't successfully for the last few years. Last year, the W-4 said I had an allowance of 10, and when I filed taxes I was very even with the IRS. The W-4 this year has changed significantly, there is no allowance number to calculate. So using the IRS Calculator https://apps.irs.gov/app/tax-withholding-estimator, it says that I will owe next year around $2800 dollars to the Federal Gov't because my company is withholding too little. Seriously. The tax brackets and deductions laws have not changed much from 2019 to 2020. My income or household situation has not changed at all from 2019 to 2020. How is it that I own few thousands more money by just changing the W-4 form? Have ...
by carofe
Tue Mar 17, 2020 11:15 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in free fall

The SP500 is down YTD 25%, but still the P/E is high: 17. 17.95 according to Shiller's site . Why do you say that that is 'high'? Compared to what? Shiller reports the mean to be 15.78. The current PE is only 14% above that. Indeed. And relative to more recent ranges I would say 18 is a good deal; that of course assumes earnings don’t fall off, which they will shortly. Right, the market is clearly anticipating a major drop in earnings. If prices remained where they are, the PE will rise once earnings drop. Since the optimism has been going on for so long, I would think the TR in the coming decade will be low, so a good price for SP500 would be anything bellow 15. This is assuming the RTM and the long term TR expectation calculation of Bogl...
by carofe
Mon Mar 16, 2020 10:54 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in free fall

The SP500 is down YTD 25%, but still the P/E is high: 17. It is true that the value of stocks are going down but man it was very inflated already, reflecting exaggerated optimism. A couple of years ago, I decided to go conservative with my AA just because of that.
by carofe
Sun Mar 15, 2020 1:19 am
Forum: Personal Consumer Issues
Topic: Anybody here go all-Linux for personal computing?
Replies: 117
Views: 11730

Re: Anybody here go all-Linux for personal computing?

I am glad to see so many people on Linux.
It didn’t use to be like that in the early 2000. There used to be lots of issues with drivers and so many proprietary solutions. Now things are much better.
I tried many distros over the years but the ones I actually settled were gentoo, then debian, and then Ubuntu, which is what I have used for the last 8 years. Regarding DE, I really liked KDE back then, but over the years I learned to appreciate the simplicity of Gnome. I haven’t used KDE for years after I switched.
I guess I am getting older :D.

At work, I was able to use Linux as Desktop for few years but they got rid of all the linuxes and switched everyone to Mac.
by carofe
Sat Mar 14, 2020 10:42 am
Forum: Personal Investments
Topic: Help with Rebalancing during Volatility
Replies: 1
Views: 343

Help with Rebalancing during Volatility

Hi Folks, My Portfolio had a drift of 3%+, so I went ahead and rebalanced. I setup my Investment Plan a while ago to rebalance once a year if the drift is 3%. I haven't rebalanced in more than 12 months. However, it got me thinking. If the purpose of rebalancing in the bonds -> stocks scenario is about managing the risk of not making it (not having enough stocks), is it OK to rebalance in such volatility or should I wait until I see the drift stay for a while, e.g. three months, to declare it a confirmed down? After all, I saw once that authentic crashes last on average 18 months to recover. My portfolio is 70% Vanguard Total Stock Market Admiral, and 30% Vanguard Intermediate Bonds Admiral, with a total of over $100k balance. Around 30 yea...
by carofe
Fri Feb 28, 2020 10:14 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in free fall

The time has come.
I don't if I should rebalance or wait.
by carofe
Mon Mar 18, 2019 6:38 pm
Forum: Personal Consumer Issues
Topic: Visiting Tucson, AZ for 3 days - what to see?
Replies: 46
Views: 3010

Re: Visiting Tucson, AZ for 3 days - what to see?

I live outside Tucson and concur with many of the recommendations, but not visiting Phoenix or Sedona unless you have a week. I've also never had a cracked windshield due to the lousy streets or seen a dust storm in Tucson like they get up in Phoenix. Suggestions: Arizona-Sonora Desert museum Sabino Canyon, hiking and now a tour bus - a million people visit this National Forest site every year Mt. Lemmon for a view and hiking Saguaro National Park, east or west, for hiking and seeing lots of saguaros Bisbee about an 1.5 hour southeast - Queen Mine tour (copper mine), lunch, shopping, with a stop at Tombstone Boot Hill on the way and the tourist-trap town to see the OK Corral shootout show. Titan Missile Museum south of Tucson - not outdoor...
by carofe
Thu Mar 14, 2019 10:52 am
Forum: Personal Finance (Not Investing)
Topic: Yet Another Cash vs Card Thread, Article from 2018
Replies: 4
Views: 862

Yet Another Cash vs Card Thread, Article from 2018

Article from 2018: https://www.valuepenguin.com/credit-cards/credit-card-spending-studies I noticed something interesting that they said about their analysis of that report that says that there was no difference: Of the studies that we surveyed, all but one reported increased spending when credit cards were used instead of cash. However, the findings of this study should be treated with caution, as the researchers used methods that specifically drew attention to the credit card versus cash decision. This increases the likelihood that the participants will be cognizant of their spending habits and therefore less likely to spend regardless of payment method. Furthermore, the timing of the research coincided with the Great Recession (2007‒2009...
by carofe
Sat Mar 09, 2019 9:33 am
Forum: Personal Investments
Topic: Oppenheimer???? Stay out of this or help???
Replies: 29
Views: 3268

Re: Oppenheimer???? Stay out of this or help???

If I were those elders, I would highly appreciate the advise and guidance that somebody like you is giving me, because I can see that there is no gain for you in you advice and it is cost minded. If I were you I would help them, even to move the money to vanguard and even manage it for them. You are their best bet right now and they can see it, because they are unable to do it themselves. I don’t see any problem helping them but please tell them the plain direct truth: the good and bads of investment: fees, risks, rewards, etc..., like a teacher. I help people in my family and I always recommend a target fund as long as it is appropriate because I don’t have time to be on top of the rebalancing and all that. Every time they come to me for a...
by carofe
Sun Mar 03, 2019 8:48 am
Forum: Personal Finance (Not Investing)
Topic: Wow, my paycheck is now at 2015 levels after the "tax cut"
Replies: 19
Views: 3530

Re: Wow, my paycheck is now at 2015 levels after the "tax cut"

I can’t find a reference right now but I think existing mortgage between 750k and 1million before the tax reform are grandfathered in: you can still deduct the interest.
by carofe
Thu Feb 28, 2019 5:09 pm
Forum: Personal Consumer Issues
Topic: [WSJ] Chinese Shares Gain Global Sway Thanks to Index Firm’s Move
Replies: 2
Views: 368

[WSJ] Chinese Shares Gain Global Sway Thanks to Index Firm’s Move

Another interesting article about the effect of Index firms decisions:

MSCI is quadrupling the contribution of stocks listed in Shanghai and Shenzhen in a key index

https://www.wsj.com/articles/chinese-sh ... _lead_pos4
by carofe
Tue Feb 26, 2019 7:44 am
Forum: Personal Investments
Topic: Theory: NOW is the Best Time for Total World Stock
Replies: 159
Views: 32106

Re: Theory: NOW is the Best Time for Total World Stock

I would add (in addition to your logic) that the dollar is and has been very strong in relation to most currencies in both Europe and Asia which have depressed international returns for US investors in dollar denominated currency. An example of this (I believe from memory but I can look it up) was 2015 where global ex-US stock returns in local currency was positive 6% but in dollar denominated currencies was negative 5%. In essence, the strong dollar and continued dollar strength showed up in the form of currency risk. I would also add that your graph from the late 1980s is exaggerated by the same effect - in fact a very weak dollar as it had weakened throughout most of the 1980s. I am not saying you are right or wrong, but currency risk i...
by carofe
Mon Feb 25, 2019 11:06 pm
Forum: Personal Consumer Issues
Topic: Mortgages from the bubble-era
Replies: 2
Views: 964

Re: Mortgages from the bubble-era

The analysis in that article is not very good. Subprime securitized loans are only "dangerous," in the words of the article, if they are thought to be worth more than they actually are. When these loans were new, people thought they were worth face value (otherwise they would not have issued them). But I promise you that no one thinks a 5-years-delinquent mortgage for more than the market value of the property is worth face value. In cases where the borrower stopped paying years ago, the loan is worth close to what you'd get by foreclosing on the house (in many cases, probably less, because documentation is missing or statutes of limitations have run). That is a safe valuation for such a loan. The graphs were removed from industr...
by carofe
Fri Feb 22, 2019 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: Question about career change into software development
Replies: 9
Views: 830

Re: Question about career change into software development

I own a small tech business. In my area the conventional wisdom is that code school graduates are flooding the market, and maybe a third of them are really ready to join the industry. I agree with this as well. The boot camps are flooding the market. If he really wants to be marketable and have a decent salary in the coming decade I recommend he does bachelor degree + master degree in Computer Sciences. I'm a Principal Software Engineer and I do SE interviews at my Company. The people with Bachelor and a general Master Degrees in Computer Sciences are by far the best performing in the interview and at work and the ones getting the jobs when they apply. This has also been the observation of my managers. That being said, most boot camps targ...
by carofe
Thu Feb 14, 2019 5:43 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

Yup, my score went from 770 up to 789 after paying off the credit card regularly to keep the balance low.
by carofe
Mon Jan 28, 2019 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

Thank you all. I'll put a reminder to pay the bill before the statement is generated.
by carofe
Mon Jan 28, 2019 2:15 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

Barsoom wrote: Mon Jan 28, 2019 2:09 pm I have only two credit cards, and both have fairly high balances on them. Still, my credit score that my credit union shows is over 800.

Perhaps it's not the balance that's driving your score? Sometimes, just the number of cards you have can influence the score, as well as how many credit inquiries there were in recent periods.

-B
My credit history is not great and my account mix only has one auto loan for 4.6k and this credit card. However, it is the very first time I see an A- in credit.com regarding my debt usage and that weighs 30%, which is more than credit history and account mix together according to credit.com.
by carofe
Mon Jan 28, 2019 2:10 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

I'm going to start keeping the balance low by making manual payments, especially when close to the bill cut. I'm planning to apply for a mortgage pre-qual in April to start shopping for a house.
by carofe
Mon Jan 28, 2019 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

Remember that paying your statement balance in full is not going to drive your balance to zero as long as you are using your card continuously. The charges you made after the statement was cut are still part of your balance even if they report your balance on the day your auto-pay goes through. You paid what your last statement balance is, but that's not accounting for new charges that are not on your last statement. The easiest thing to do is stop using your card and when your next auto-pay goes through (maybe the one after that, depending on the timing of statements), you will have an actual zero balance. Then see if that makes a meaningful difference in your score. I just paid the card in full manually and I'll try to keep a low balance...
by carofe
Mon Jan 28, 2019 1:57 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

I currently have my Chase Credit card in auto-pay. It has been like that for a really long time. As result, there is always some "balance" in the card but really the statement balance is payed off completely every month. I have been monitoring my Credit Score on Credit.com and I noticed that during those months I spend more, my credit score goes down because I'm using more "debt", but in reality all of it is paid at the end of the month. In fact, since I use YNAB, the whole money is sitting in the bank ready to pay off that credit card at any time. I'm planing to buy a house soon so I really need that score in a good shape. What can I do to avoid this situation beside paying the card more often manually? Should I even c...
by carofe
Mon Jan 28, 2019 1:34 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

Jack FFR1846 wrote: Mon Jan 28, 2019 1:32 pm If you really want to increase your credit score and believe that a balance showing is reducing the score, pay it off early, before the due date. You'll want to pay it before it reports to the credit agencies. So if it's due on the 30th, maybe pay it on the 15th and if you make a big purchase, put in another payment.

If you look on credit karma, it will suggest you pay down whatever card reported the highest balance in the last cycle and suggest you pay it down.
The balances are reported after they are generated regardless if you pay it in full or not?

I never carry a balance on that card, and Chase.com doesn't give you the option to have auto-pay before the due day.
by carofe
Mon Jan 28, 2019 1:33 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Re: Credit Card in Auto-pay affecting Credit Score

According to credit.com, my debt ratio is A-, and the estimate they have is 768. According to Chase.com, the estimate is 770, but when I run the simulator, they say that if I eliminate the balance on my credit card my score remains the same :shock:.
by carofe
Mon Jan 28, 2019 1:28 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card in Auto-pay affecting Credit Score
Replies: 31
Views: 2845

Credit Card in Auto-pay affecting Credit Score

I currently have my Chase Credit card in auto-pay. It has been like that for a really long time. As result, there is always some "balance" in the card but really the statement balance is payed off completely every month. I have been monitoring my Credit Score on Credit.com and I noticed that during those months I spend more, my credit score goes down because I'm using more "debt", but in reality all of it is paid at the end of the month. In fact, since I use YNAB, the whole money is sitting in the bank ready to pay off that credit card at any time. I'm planing to buy a house soon so I really need that score in a good shape. What can I do to avoid this situation beside paying the card more often manually? Should I even ca...
by carofe
Thu Jan 17, 2019 10:13 am
Forum: Investing - Theory, News & General
Topic: John Bogle has died at age 89
Replies: 856
Views: 82113

Re: John Bogle has died at age 89

Condolences to his family. He was a great man, I'm thankful for all his work and legacy for the individual investor.
by carofe
Wed Oct 24, 2018 11:23 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in freefall

I believe that another factor is ruthless cost cutting. Also profit margins are at or near all-time highs. The low hanging fruit has been plucked. The easiest way to grow earnings is to merge with another company and fire redundant employees. As the pointy haired boss in the Dilbert cartoon famously said, "Employees are our most valuable asset, lay some off and the stock price goes up." At some point, even this strategy will exhaust as many US companies operate with essentially skeleton crews. At some point, business schools will have to start teaching about how to grow business again. Love it. Have read articles complaining millennials are less likely to buy homes due to student loans. Just saw one yesterday that said they are l...
by carofe
Wed Oct 24, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in freefall

I believe that another factor is ruthless cost cutting. Also profit margins are at or near all-time highs. The low hanging fruit has been plucked. The easiest way to grow earnings is to merge with another company and fire redundant employees. As the pointy haired boss in the Dilbert cartoon famously said, "Employees are our most valuable asset, lay some off and the stock price goes up." At some point, even this strategy will exhaust as many US companies operate with essentially skeleton crews. At some point, business schools will have to start teaching about how to grow business again. Love it. Have read articles complaining millennials are less likely to buy homes due to student loans. Just saw one yesterday that said they are l...
by carofe
Tue Oct 23, 2018 12:26 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in freefall

I think the real "bad news" is that China is having the perfect storm, slowing down economy with trade tension from US. The trade war are not causing the slowdown but a combination of factors including the trade war. There is nothing Trump can do to stop it.
If China gets into a recession period, the effect will be noticed across EM, Europe and beyond, directly or indirectly.
by carofe
Tue Oct 23, 2018 8:16 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in freefall

Some light reading on Tactical Asset Allocation by our friends @ Vanguard https://personal.vanguard.com/pdf/flgtaa.pdf "Tactical asset allocation (TAA) is a dynamic strategy that actively adjusts a portfolio’s strategic asset allocation (SAA) based on short-term market forecasts.Its objective is to systematically exploit inefficiencies or temporary imbalances in equilibrium values among different asset or subasset classes. Over time, strategic long-term target allocations are the most important determinant of total return for a broadly diversified portfolio. TAA can add value at the margin, if designed with the appropriate rigor to overcome significant risk factors and obstacles unique to the strategy. Our results show that while some...
by carofe
Wed Oct 17, 2018 2:33 pm
Forum: Investing - Theory, News & General
Topic: "Why Jack Bogle Doesn't Own Non-U.S. Stocks"
Replies: 315
Views: 25105

Re: "Why Jack Bogle Doesn't Own Non-U.S. Stocks"

Perhaps someone will clarify: I seem to be in a minority around here in that I do hold international stocks but I am also skeptical/unconvinced that it is going to better help me achieve my goals. I do not see myself removing this allocation but I also am not overly enthusiastic about having it, either. So, how xenophobic does this position make me? Maybe not as xenophobic as someone who has chosen the 100% US route, but maybe just xenophobic enough to still be ashamed of myself for it? If those of you who are far more certain of your position than I am of mine can enlighten me I would appreciate it. Here in the US "xenophobic" has a pretty bad connotation. Why do you classify others in that "category" so quickly becaus...
by carofe
Wed Oct 17, 2018 2:27 pm
Forum: Investing - Theory, News & General
Topic: "Why Jack Bogle Doesn't Own Non-U.S. Stocks"
Replies: 315
Views: 25105

Re: "Why Jack Bogle Doesn't Own Non-U.S. Stocks"

All I can say about this argument is the majority of folks who support U.S. centric only investments are: 1. U.S. raised and 2. Old (80+). Sorry but this thought process is nearly (if ever) recommended by anyone outside of those 2 characteristics. It just proves that no matter how intelligent and innovative bias don't disappear over time. I don't really care how anyone else invests as it is their money, but just object to selective biased beliefs. Many who are vocal market capers somehow justify cutting out 50% of the world markets (about 20-25% equity and bonds). If one is U.S. only and don't truly market cap then those folks should have no problem with another investor who chooses to overweight US SCV or any other sector as they are doin...
by carofe
Thu Oct 11, 2018 2:16 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in freefall

FIREchief wrote: Thu Oct 11, 2018 2:09 pm
RetireBy55 wrote: Thu Oct 11, 2018 2:01 pm Anyone have a hypothesis as to what in the world is causing the drop this week?
One word answer: "fear"

I'm hoping for continued "fear" through December so that my Roth conversions on Jan 2 will be at discount rates.

I wouldn't necessarily call this a drop. "Heavy noise" would be more like it.... 8-)
Maybe just an AI glitch that caused some trading algorithm to sell like crazy. Maybe the AI is actually scanning the investor sentiment in this forum :D
by carofe
Thu Oct 11, 2018 2:07 pm
Forum: Personal Investments
Topic: Very Basic Asset Allocation Help Needed
Replies: 8
Views: 869

Re: Very Basic Asset Allocation Help Needed

You should probably replace the stable fund with the bond index fund to get better return and still low volatility.
by carofe
Thu Oct 11, 2018 11:12 am
Forum: Personal Investments
Topic: Very Basic Asset Allocation Help Needed
Replies: 8
Views: 869

Re: Very Basic Asset Allocation Help Needed

You have 52% Bonds (assuming the Stable Fund is a Bond Fund) and 48% in Stocks.

I think it doesn't look bad at all. If I were you I would probably go 55% Stock/ 45% Bonds and put all my stocks in SP500 to make it even simpler, but it won't make much difference.

You are retiring in 5years. There are good predictions saying that the coming decade will be volatile and with low Net Returns. Whatever you do, I recommend you keep an allocation close to 50%/50% and keep rebalancing to keep the risk at that level. That will keep your money safer and help you to stay invested.
by carofe
Thu Oct 11, 2018 10:56 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684995

Re: U.S. stocks in freefall

I can't believe the PE10 is going any higher. The Earnings will need to grow like weed, or the Price will go down. Speculation can't hold forever. Maybe all those predictions that the coming decade was going to be bumpy with low Net Return are starting to look more real. Anyways, for the first time I feel like my AA is actually good for my risk tolerance. I feel comfortable in these environments. During bull market periods, I wondered many times why I didn't have more in stock, but now I feel it was a good move to keep invested in stock but proceeding with caution. I have an Age-5 in Bonds allocation, and not tilts, simple. Sticking with Bogle's advise is actually working great to keep me from messing with my investments and stay the course...