Search found 823 matches

by Rob Bertram
Thu Oct 24, 2019 9:57 pm
Forum: Personal Investments
Topic: Maxing out tax advantaged accounts?
Replies: 7
Views: 820

Re: Maxing out tax advantaged accounts?

Hopefully you did the math around taxes and Roth vs Traditional 401k contributions. If not, check to see which makes the most sense for you. Usually, it is Trad. Having some funds liquid in a taxable can be convenient if you have a surprise expense. Otherwise, I would completely fill up your tax-adv...
by Rob Bertram
Thu Oct 24, 2019 11:22 am
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 2532

Re: Leveraging Investment with Pledged Asset Loan

So, it seems to me that if I am to leverage up my position in a stock index fund by borrowing at 2-3% that it does make sense to hold some bonds or interest bearing cash sufficient to cover a couple years of expenses or so to draw down on in the case of a market downturn so that I am not selling st...
by Rob Bertram
Wed Oct 23, 2019 3:45 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 2532

Re: Leveraging Investment with Pledged Asset Loan

Agreed that borrowing to buy bonds is a losing strategy when the yield curve is inverted/flat. On the other hand, it is still a good risk mitigation in terms of portfolio diversification. If the stock market tanks in a year, there will likely be a corresponding flight to quality.
by Rob Bertram
Tue Oct 22, 2019 7:37 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 2532

Re: Leveraging Investment with Pledged Asset Loan

Have you considered using futures? You get the most competitive financing rates. I thought futures didn't include dividends, since the future is only about the price index level? Is that not right? So you get a more competitive financing rate but lose ~2% of the total return? If you are someone who...
by Rob Bertram
Tue Oct 22, 2019 9:48 am
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 2532

Re: Leveraging Investment with Pledged Asset Loan

Have you considered using futures? You get the most competitive financing rates. We have a few different threads on building a leveraged portfolio. I suggest searching and reading through some of the conversations. Maybe post again and let us know your thoughts. Futures are an interesting option bu...
by Rob Bertram
Mon Oct 21, 2019 6:27 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 2532

Re: Leveraging Investment with Pledged Asset Loan

If I could paraphrase what Tyler Aspect said, pick a portfolio that you are comfortable with the risk characteristics, then leverage to taste. This is essentially the Capital Asset Pricing Model (CAPM) . https://upload.wikimedia.org/wikipedia/commons/e/e1/Markowitz_frontier.jpg Assume that equities ...
by Rob Bertram
Mon Oct 21, 2019 5:25 pm
Forum: Personal Investments
Topic: Priotized Investments wiki - for a Microsoft Employee
Replies: 16
Views: 1957

Re: Priotized Investments wiki - for a Microsoft Employee

Does anyone have advice on these funds in the 401k? It might be useful in the wiki to discuss how they could/should fit into a portfolio. PIMCO All Asset All Authority (PAUIX) Expense 3.01% gross 2.94% net 39% turnover PIMCO Inflation Response Multi-Asset Fund (PIRMX) Expense 1.33% gross 1.1% net 3...
by Rob Bertram
Sat Oct 19, 2019 3:11 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 2532

Re: Leveraging Investment with Pledged Asset Loan

The bond discussion might be somewhat nuanced. With an inverted/flat yield curve, it doesn't make sense to borrow at a short-term rate and hold bonds at an intermediate rate. An argument could be made for long-term treasuries diversifying the heavy stock position. As has been said by many people, in...
by Rob Bertram
Sat Oct 19, 2019 2:45 pm
Forum: Personal Investments
Topic: Priotized Investments wiki - for a Microsoft Employee
Replies: 16
Views: 1957

Re: Priotized Investments wiki - for a Microsoft Employee

401k : I believe that after-tax in-plan Roth conversions is #8 on his list. In-plan Roth conversions (aka Mega Backdoor Roth) make sense for anyone who would otherwise invest that money. It doesn't matter what state income tax you pay. Your only other option is a taxable account. Microsoft matches ...
by Rob Bertram
Fri Oct 18, 2019 5:04 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 2532

Re: Leveraging Investment with Pledged Asset Loan

Have you considered using futures? You get the most competitive financing rates. We have a few different threads on building a leveraged portfolio. I suggest searching and reading through some of the conversations. Maybe post again and let us know your thoughts.
by Rob Bertram
Thu Oct 17, 2019 5:47 pm
Forum: Personal Investments
Topic: Foolish Mistake with 401K Contributions
Replies: 3
Views: 1045

Re: Foolish Mistake with 401K Contributions

You might need to edit your post and be more specific. For example, if your employer contributes a percentage of your income, then how does getting a raise change that? They are contributing the same percentage against a larger number. Do they contribute in the next year or something? Or do they hav...
by Rob Bertram
Thu Oct 17, 2019 8:34 am
Forum: Personal Investments
Topic: I'm an indexer, but should I be buying my companies discounted stock?
Replies: 42
Views: 3223

Re: I'm an indexer, but should I be buying my companies discounted stock?

As most people have mentioned, take advantage of the 15% price discount that your ESPP offers. Sell when the shares vest, even if it means taking short-term capital gains on that 15%. Re-invest the cash according to your investment policy which sounds like a 3-fund mix of total-market index funds.
by Rob Bertram
Wed Sep 11, 2019 12:33 pm
Forum: Personal Investments
Topic: How to Invest Down Payment Money for Child? 18 Years Out
Replies: 10
Views: 922

Re: How to Invest Down Payment Money for Child? 18 Years Out

A lot can happen in 18 years. He might be in a very different situation where renting is a better choice. If this is your money, invest it according to your IPS and revisit when you are closer to the actual event. If it is his money, he should invest according to his IPS. So, maybe a Money Market F...
by Rob Bertram
Wed Sep 11, 2019 7:54 am
Forum: Personal Investments
Topic: How to Invest Down Payment Money for Child? 18 Years Out
Replies: 10
Views: 922

Re: How to Invest Down Payment Money for Child? 18 Years Out

A lot can happen in 18 years. He might be in a very different situation where renting is a better choice. If this is your money, invest it according to your IPS and revisit when you are closer to the actual event. If it is his money, he should invest according to his IPS.
by Rob Bertram
Thu Aug 08, 2019 5:30 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

If anyone has any pressing questions, please send me a private message as I do not check the forum regularly. Happy investing!
by Rob Bertram
Thu Aug 08, 2019 5:24 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

've been doing a fair bit of research as well and have found the same problem. I haven't been able to find answers as to why, but the return for treasury futures is very different than when I look at regular treasury returns in PortfolioVisualizer. For a simple look, you can go to MacroTrends and s...
by Rob Bertram
Mon Oct 01, 2018 8:32 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

Rob, thanks for this thread. It’s fascinating. Do you have estimates on the portfolio that would make sense to start using low amounts of leverage with a small amount of capital? I’m not sure I would do it, but I’m curious what it looks like. My apologies for a slow response. I have been busy with ...
by Rob Bertram
Sat Jan 27, 2018 8:15 pm
Forum: Personal Investments
Topic: New member portfolio planning question
Replies: 5
Views: 389

Re: New member portfolio planning question

To be honest, asset allocation doesn't matter when you first start investing/saving. The important thing is that you save. Any fluctuation in market value of your investments will be dwarfed by your regular contributions. So to answer your first question, don't worry about the difference between the...
by Rob Bertram
Sat Jan 27, 2018 7:34 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off mortgage with Roth IRA?
Replies: 23
Views: 2713

Re: Pay off mortgage with Roth IRA?

As others have said, raiding your Roth IRA to pay down your mortgage early is a terrible idea. And in a similar vein, paying extra on your mortgage before filling up your Roth space is essentially the same thing. The tax advantages of putting money into a 401k or an IRA are so good that we generally...
by Rob Bertram
Sat Jan 27, 2018 7:05 pm
Forum: Personal Investments
Topic: Can I still contribute to my employer 2017 401k?
Replies: 6
Views: 613

Re: Can I still contribute to my employer 2017 401k?

Nope, I believe that the only option you had was to contribute through paycheck deferrals during 2017. If you want to invest that money, you can put it into a taxable account. Index funds like the total stock market and total international stock market are extremely tax efficient.
by Rob Bertram
Fri Jan 26, 2018 8:12 am
Forum: Personal Investments
Topic: portfolio rebalance
Replies: 7
Views: 626

Re: portfolio rebalance

Shen1127, you might be asking a different question. This is what we hear: Question: Can I draw a red line with my green pen from Vanguard? Answer: No, but Vanguard has red pens that you can use. Follow-up: I want to use my green pen. The target date funds have a specific glide path which means that ...
by Rob Bertram
Mon Jan 22, 2018 6:19 pm
Forum: Personal Investments
Topic: Am I being greedy?
Replies: 51
Views: 7309

Re: Am I being greedy?

Greedy might be the wrong word. But you might be investing for the wrong reasons if you don't have a plan to take money off the table once you've hit a certain level. Though, I definitely agree with dialing the risk up to the max while in the accumulation phase. I'm leveraged, so 240% equities here....
by Rob Bertram
Sun Jan 14, 2018 11:49 am
Forum: Personal Investments
Topic: Using Tax Exempt Dividends to Fund IRA?
Replies: 5
Views: 433

Re: Using Tax Exempt Dividends to Fund IRA?

It does not matter. Money is fungible. Put $100 of earned income into your checking account. Now add $100 of tax-exempt bond dividends to the same checking account. You are now up to $200. When you write a check for $50 from your checking, does it matter where the funds originally came from? Nope. W...
by Rob Bertram
Wed Jan 03, 2018 1:46 pm
Forum: Personal Investments
Topic: What strategy do you use to reduce sequence of returns risk in retirement?
Replies: 117
Views: 10169

Re: What strategy do you use to reduce sequence of returns risk in retirement?

I do not believe that anything negates sequence of returns risk. You can try to mitigate worst possible outcomes by reducing your withdrawals, however. For example, you can't prevent car crashes from happening, but you can try to mitigate the outcome if one were to happen by driving responsibly and ...
by Rob Bertram
Mon Dec 18, 2017 11:01 am
Forum: Investing - Theory, News & General
Topic: Diversification: Is there any way to produce the same returns with less risk?
Replies: 52
Views: 6400

Re: Diversification: Is there any way to produce the same returns with less risk?

Total market funds are the best diversification that you can get ex-ante. And certainly, diversify between major asset classes (e.g., stocks, bonds) that have positive expected return. Keeping to market capitalization weights will give you the highest risk-adjusted return (ex-ante). If the return is...
by Rob Bertram
Thu Dec 07, 2017 12:20 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

Yeah, the 2-year note futures have been fairly stagnant. I can check my history, but I believe that they are flat or at a slight loss year to date. Note that they are doing exactly what I want: providing an uncorrelated asset to the portfolio with a positive expected return. And, I agree, the portfo...
by Rob Bertram
Tue Dec 05, 2017 2:05 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

Awesome read! It is very much in line with this thread. I really do hope that leveraged portfolios becomes more popular. If one of the robo-advisers would offer leveraged portfolios as an investment option, I would definitely stop my manual stuff and move it over to their service. Rolling futures is...
by Rob Bertram
Fri Oct 13, 2017 2:29 pm
Forum: Personal Investments
Topic: Need help with current market (voo,vti)
Replies: 48
Views: 3723

Re: Need help with current market (voo,vti)

Yes, there are so many different letters to choose! The only three that you should care about are: VTI (Vanguard total stock), VXUS (Vanguard ex-US total stock), and BND (Vanguard total bond). Spend some time reading the 3-fund portfolio wiki article. https://www.bogleheads.org/wiki/Three-fund_portf...
by Rob Bertram
Fri Oct 13, 2017 1:51 pm
Forum: Personal Investments
Topic: Need help with current market (voo,vti)
Replies: 48
Views: 3723

Re: Need help with current market (voo,vti)

Markets hit new highs on average every 18 days. So if you think VTI and such are going to not go up, you'd want to invest sometime in the next couple weeks, otherwise, you'll simply be at yet another market high on average and you will never invest. Let me show that I put my money where my mouth is...
by Rob Bertram
Fri Oct 13, 2017 12:37 pm
Forum: Personal Finance (Not Investing)
Topic: University Mortgage options
Replies: 1
Views: 427

Re: University Mortgage options

Tenants in Common (TIC) sounds like a huge headache and possibly a bad deal for you if the house appreciates. If you are looking to leverage more, borrowing more against your house might be an expensive way to go. With $500k in taxable, I would suggest looking at margin rates or (even better) implie...
by Rob Bertram
Tue Oct 10, 2017 7:32 am
Forum: Personal Finance (Not Investing)
Topic: Mint - Issues with showing my account details
Replies: 15
Views: 2855

Re: Mint - Issues with showing my account details

I've been using Mint since 2013 (or maybe 2012--I can't remember). It frequently (every 3-4 months) doubles or triples accounts. I notice it mostly on investment/retirement accounts and rarely on credit cards. In the beginning, I didn't mind manually closing the extra accounts, but it does get annoy...
by Rob Bertram
Mon Oct 09, 2017 11:51 am
Forum: Personal Finance (Not Investing)
Topic: Pay off mortgage or invest?
Replies: 10
Views: 2148

Re: Pay off mortgage or invest?

I agree with the other posters: Invest.
  1. Make sure that you have an adequately sized emergency fund.
  2. Max your tax-advantaged space (401k, IRA for you and wife).
  3. Put the surplus into a tax-efficient fund in a taxable account.
by Rob Bertram
Fri Oct 06, 2017 12:50 pm
Forum: Personal Investments
Topic: Aggressive portfolio: most weight to emerging markets
Replies: 9
Views: 1722

Re: Aggressive portfolio: most weight to emerging markets

I completely agree with all the posters that concentrating risk in a volatile asset is a terrible approach for increasing returns and that looking at return without considering risk is also a poor plan. So if an investor like the OP is willing to increase his risk for a reasonable expected increase ...
by Rob Bertram
Fri Oct 06, 2017 11:54 am
Forum: Personal Investments
Topic: Where should I put my money?
Replies: 15
Views: 2244

Re: Where should I put my money?

"Money Market: $52,000 at 1.2% , contributing $1300/mo. Debt: $107,000 mortgage at 3.625 " Mortgage :happy Thank you for your response! Mortgage is shared with someone who cannot contribute more and I would prefer to keep things as equal as possible. House is not a forever home and will probably be...
by Rob Bertram
Fri Sep 29, 2017 4:48 pm
Forum: Personal Finance (Not Investing)
Topic: Should my wife start a 401k
Replies: 25
Views: 2025

Re: Should my wife start a 401k

Your wife is correct. You get way more bang for the buck by saving in a pre-tax (aka "Traditional") 401k than paying down the mortgage early. You're well into the 25% federal tax bracket. Plus, I've heard that California taxes are somewhat steep, so you are probably paying 35% tax for every marginal...
by Rob Bertram
Sun Sep 24, 2017 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: Spouse Money Management
Replies: 94
Views: 9054

Re: Spouse Money Management

Let's be very clear about this as the thread title "Spouse" confuses the situation. She is your girlfriend and not your wife. And there is a reason for that. You haven't agreed on any long-term goals, dreams, or aspirations. Until that happens, you shouldn't be co-mingling expenses. If you are livin...
by Rob Bertram
Sun Sep 17, 2017 10:11 pm
Forum: Personal Investments
Topic: which way to save?
Replies: 18
Views: 2035

Re: which way to save?

Welcome to the forum! Your first priority should be to create a small emergency fund, say $1000 for now. Slowly grow it to something that can sustain 3-6 months of expenses. Roth space is limited. You have a lot of time for your money to grow tax-free, so fill up your Roth IRA first. If you can save...
by Rob Bertram
Wed Sep 13, 2017 5:06 pm
Forum: Personal Finance (Not Investing)
Topic: Using investment funds for Home purchase
Replies: 13
Views: 1771

Re: Using investment funds for Home purchase

There is a mega thread (that I started) which discusses the benefits of using leverage as a viable way of fine-tuning your risk. I could link it if you'd like, but I won't make you read through the 1800 posts. From a mathematical perspective, owing money to a bank is no different from owing money to...
by Rob Bertram
Tue Sep 12, 2017 1:29 pm
Forum: Personal Finance (Not Investing)
Topic: Using investment funds for Home purchase
Replies: 13
Views: 1771

Re: Using investment funds for Home purchase

How much money do you have in your taxable account? If it is over $100k, a strong argument could be made to take out a margin loan or to switch to an e-mini S&P500 futures contract in order to benefit from favorable borrowing rates. At least, that would enable you to have a down payment without taki...
by Rob Bertram
Mon Sep 11, 2017 5:05 pm
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal -> Before retirement Age
Replies: 35
Views: 4985

Re: Variable Percentage Withdrawal -> Before retirement Age

That is the question. If I follow the VPW methodology, how do I cover the years before 67 years old? A) Allocate 30K per year between 57 to 67 and start using VPW at 57. Reserve 300K. VPW portfolio = 1.2 million B) Allocate 60K per year between 57 to 67 and start using VPW at 67. VPW portfolio = 90...
by Rob Bertram
Tue Sep 05, 2017 11:04 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

Wow, it's been a lot longer since I've posted an update than I thought. Sorry for that. The portfolio is doing great. For all the complexity, it is fundamentally a 40% US stock / 60% US treasury portfolio leveraged 6x. To me, it feels a little riskier than a 100% stock portfolio, but the returns are...
by Rob Bertram
Sat Jan 28, 2017 11:31 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

You don't need to do the insane leverage ratios that I've chosen: I would encourage people just starting out to begin with something much lower as they haven't truly experienced a bear market to understand their risk tolerance. Aren't you just starting out yourself? You haven't experienced a bear m...
by Rob Bertram
Sat Jan 28, 2017 11:12 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

Finally went thru' the thread. Very good discussion. You mentioned financing rate for futures as Libor 3 month in couple of places. I think it is true for equity futures (Libor + small spread), but for bonds it should be Implied Repo Rate. Otherwise with current Libor rates, your leverage could be ...
by Rob Bertram
Sat Jan 28, 2017 11:00 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

Good to see you post in this thread again Rob. How's the portfolio doing with the current economic whip-sawing, first in stock and now in treasuries? Good question. I haven't checked recently except to roll my futures positions. Even then, I didn't pay close attention to the total balance. Yields h...
by Rob Bertram
Fri Dec 02, 2016 6:46 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

That is a very good question, frejd. Here are my observations: Don't let the pursuit of perfect be the enemy of good: At the core, the model is a 40% total-stock / 60% intermediate-treasury portfolio leveraged to taste. Transforming the bonds from intermediate to short-term was an exercise of keepin...
by Rob Bertram
Thu Aug 25, 2016 4:03 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 930
Views: 251544

Re: Should I use margin to buy a balanced fund?

Conversation continued from Time Diversification - bottom line, what do you do? . I think we might be going down two different paths. My comments are around a balanced portfolio of stocks and bonds. Transitioning a portfolio from intermediate-term bonds to short-term bonds is an exercise in aligning...
by Rob Bertram
Thu Aug 25, 2016 11:07 am
Forum: Personal Consumer Issues
Topic: Another socal housing post, can we afford this, what should we do?
Replies: 11
Views: 1751

Re: Another socal housing post, can we afford this, what should we do?

If you are happy with where you are now, I'd suggest staying with your current arrangement. Selling a house is expensive, and expect that the market will be down when you need to sell. So buy once if you can, when you need to. If you plan on starting a family, it will be few years before you need to...
by Rob Bertram
Wed Aug 24, 2016 2:37 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 5551

Re: Time Diversification - bottom line, what do you do?

I believe that this is the paper I remember from this post.

edit: As we are drifting from the OP's topic, I've moved my comments to my thread on leverage.
by Rob Bertram
Wed Aug 24, 2016 12:16 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 5551

Re: Time Diversification - bottom line, what do you do?

I think we might be going down two different paths. My comments are around a balanced portfolio of stocks and bonds. Transitioning a portfolio from intermediate-term bonds to short-term bonds is an exercise in aligning the Sharpe ratio. I might have confused you, the goal was not to synthesize a hig...
by Rob Bertram
Tue Aug 23, 2016 7:27 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 5551

Re: Time Diversification - bottom line, what do you do?

The portfolio with short-term bonds is still less sensitive to interest rate changes. This is the part I question. A $1000 notional bond of a specific duration geared at 1x will be less effected by a change in yield than a $2000 notional bond geared at 2x. Obviously the hit from a yield hike will b...