Search found 796 matches

by Rob Bertram
Fri Oct 13, 2017 2:29 pm
Forum: Investing - Help with Personal Investments
Topic: Need help with current market (voo,vti)
Replies: 48
Views: 1975

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: Investing - Help with Personal Investments
Topic: Need help with current market (voo,vti)
Replies: 48
Views: 1975

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: 270

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: 1175

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: 1005

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: Investing - Help with Personal Investments
Topic: Aggressive portfolio: most weight to emerging markets
Replies: 9
Views: 924

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: Investing - Help with Personal Investments
Topic: Where should I put my money?
Replies: 15
Views: 1486

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: 1153

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: 6149

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: Investing - Help with Personal Investments
Topic: which way to save?
Replies: 18
Views: 1567

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: 1230

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: 1230

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: 3375

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: 899
Views: 188179

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: 899
Views: 188179

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: 899
Views: 188179

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: 899
Views: 188179

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: 899
Views: 188179

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 exerci...
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: 899
Views: 188179

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: 1437

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: 4494

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: 4494

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: 4494

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...
by Rob Bertram
Tue Aug 23, 2016 4:58 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 4494

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

And also, wouldn't the cost of carry eat up a smaller proportion of your yield since both your yield is higher and you are less leveraged in a longer term Treasury? It nets out to not making a difference because they both lie on the same capital asset line. Since both portfolios have the same Sharp...
by Rob Bertram
Tue Aug 23, 2016 4:20 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 4494

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

One thing I'm not quite clear on with your portfolio, and maybe this belongs in the other thread. Why high leverage on short term treasuries instead of moderate on more intermediate term? As I understand it, and you made a statement to this affect, leveraging Treasuries effectively increases their ...
by Rob Bertram
Tue Aug 23, 2016 11:51 am
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 4494

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

We might have to agree to disagree about factor tilting. William Sharpe proved that under simplified market assumptions the market portfolio (cap weighted) is the one and only super-efficient portfolio from a mean-vairance perspective. This is the core reason why Bogleheads advocate total market ind...
by Rob Bertram
Mon Aug 22, 2016 4:26 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 4494

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

For moderate levels of leverage, you can likely achieve a factor tilt by using an ETF while keeping S&P 500 futures for your stock position and treasury futures for your bonds. You do, however, get into practical limitations where factor ETFs have higher maintenance margin than your futures. In ...
by Rob Bertram
Mon Aug 22, 2016 11:41 am
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 41
Views: 4494

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

I am surprised that no one has yet mentioned Ayres and Nalebuf's article Mortgage Your Retirement and book Lifecycle Investing: A New, Safe, and Audacious Way to Improve the Performance of Your Retirement Portfolio . Our fellow forum member Market Timer was a case study in the book. Ayres and Nalebu...
by Rob Bertram
Mon Aug 22, 2016 8:18 am
Forum: Investing - Help with Personal Investments
Topic: Ultra aggressive index portfolio for a 30 yo with high risk tolerance?
Replies: 47
Views: 5103

Re: Ultra aggressive index portfolio for a 30 yo with high risk tolerance?

Hmm, I see. If S&P500 gets in a downturn like Nikkei, it might be quite painful as only maybe your kids will experience the stocks recovering. But hey, we still get the dividends, right? As others have pointed out, the economies of developed nations are a lot more linked now than before. If one...
by Rob Bertram
Sun Aug 21, 2016 8:00 pm
Forum: Investing - Help with Personal Investments
Topic: CD vs Short Term Inv Grade Bond
Replies: 12
Views: 1998

Re: CD vs Short Term Inv Grade Bond

The 3.5% return is due to interest rates dropping. If you hold a bond fund with SEC yield of 1.53%, you will get roughly the 1.53% if interest rates stay the same. If interest rates drop, you will get a little more. If interest rates rise, you will get less. With a CD, you will get whatever rate is ...
by Rob Bertram
Sun Aug 21, 2016 7:07 pm
Forum: Investing - Help with Personal Investments
Topic: Ultra aggressive index portfolio for a 30 yo with high risk tolerance?
Replies: 47
Views: 5103

Re: Ultra aggressive index portfolio for a 30 yo with high risk tolerance?

UK 1972-74, stock market dropped over 80% in real terms on a total return basis. No invasions, coups-- just plain bad macroeconomic management and trade union problems. But one should have just bought the dip and kept holding into long term fortune (over decades), correct? Also, this is not an issu...
by Rob Bertram
Sat Aug 20, 2016 4:44 pm
Forum: Investing - Theory, News & General
Topic: When will a brokerage cancel buy orders?
Replies: 13
Views: 1359

Re: When will a brokerage cancel buy orders?

boglerocks wrote:I'm surprised my wanting to leave GTC orders open indefinitely is such a surprise. ... The cash in my account got close to zero once...

I believe that is the exact reason why people don't leave GTC orders open indefinitely.
by Rob Bertram
Sat Aug 20, 2016 11:05 am
Forum: Investing - Help with Personal Investments
Topic: Is my backtesting flawed?
Replies: 8
Views: 1022

Re: Is my backtesting flawed?

As many have said, looking at only one period is not nearly large enough. There have been several periods where the stock market has been flat for 10-20 years. One of the longest bull markets has been from 1980 - 2000, and that is distorting any backtesting that you are doing. The following chart ( ...
by Rob Bertram
Fri Aug 19, 2016 3:17 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 899
Views: 188179

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

I would expect it to work the same for drawdown, but with contributions just being negative. I don't expect to be levered during drawdown though. I plan on hitting a target and letting the portfolio just delever itself to 1x and then maintain. That is one approach. Construct a portfolio for extreme...
by Rob Bertram
Fri Aug 19, 2016 2:09 pm
Forum: Investing - Theory, News & General
Topic: How to create a bond proxy?
Replies: 11
Views: 954

Re: How to create a bond proxy?

There isn't much difference between a 10-year bond and the IEF or TLH funds. You might be splitting hairs. If you move to a barbell approach, then you are essentially rebalancing a 2-fund portfolio. I think the reason that most people aren't commenting on this thread is because very few people consi...
by Rob Bertram
Fri Aug 19, 2016 12:43 pm
Forum: Investing - Theory, News & General
Topic: How to create a bond proxy?
Replies: 11
Views: 954

Re: How to create a bond proxy?

From what I understand from your question, you want to create a bond portfolio that has fixed duration and is currently targeted towards that of a 10-year treasury. Your approach is to create a "barbell" portfolio where half of your money is in a long-term treasury fund, the other half is ...
by Rob Bertram
Fri Aug 19, 2016 11:10 am
Forum: Investing - Help with Personal Investments
Topic: Borrowing money to invest. Good idea?
Replies: 68
Views: 5444

Re: Borrowing money to invest. Good idea?

So at what interest rates would you all feel comfortable carrying debt, whether in the form of a mortgage, car loan, or what have you? Or to put it another way, at what additional interest payment would you be willing to stretch out payments? For example, paying for life insurance, you can pay annu...
by Rob Bertram
Fri Aug 19, 2016 9:05 am
Forum: Personal Finance (Not Investing)
Topic: What is 4 more years of work worth? (Retirement Question)
Replies: 38
Views: 4381

Re: What is 4 more years of work worth? (Retirement Question)

It sounds like your friend has more than enough saved to continue his same lifestyle in retirement. There is no financial reason to continue working. We can always work more, save more, and accumulate more wealth. However, there is a point when people have enough money to meet their needs. At this p...
by Rob Bertram
Fri Aug 19, 2016 8:34 am
Forum: Investing - Help with Personal Investments
Topic: Is my backtesting flawed?
Replies: 8
Views: 1022

Re: Is my backtesting flawed?

As other people have pointed out, backtesting has several disadvantages, so take any result you find with a high amount of skepticism. In addition to the other comments from posters, consider the following: ⋅ You are ignoring risk and only focusing on returns. You could, for example, lever...
by Rob Bertram
Thu Aug 18, 2016 5:46 pm
Forum: Investing - Help with Personal Investments
Topic: What does a Boglehead do if we experience inflation
Replies: 30
Views: 3390

Re: What does a Boglehead do if we experience inflation

What does your investment policy statement say to do? I don't have a special clause for inflation, so I'm going to stay the course and take the returns that the market gives.
by Rob Bertram
Thu Aug 18, 2016 5:27 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Advice Needed for 61 Yr Old
Replies: 12
Views: 882

Re: Asset Allocation Advice Needed for 61 Yr Old

Withdrawal rates around 3-4% are what we currently believe are reasonably sustainable. From your $230,000, a 3% withdrawal is about $575/month.
by Rob Bertram
Thu Aug 18, 2016 5:20 pm
Forum: Investing - Help with Personal Investments
Topic: Ultra aggressive index portfolio for a 30 yo with high risk tolerance?
Replies: 47
Views: 5103

Re: Ultra aggressive index portfolio for a 30 yo with high risk tolerance?

There are ways to dial your risk up higher than 100% stocks or factor tilting. But you really need to assess your need, willingness, and ability to take on risk.
by Rob Bertram
Tue Aug 16, 2016 8:29 pm
Forum: Investing - Help with Personal Investments
Topic: Borrowing money to invest. Good idea?
Replies: 68
Views: 5444

Re: Borrowing money to invest. Good idea?

When financing rates are as low as 0.5%, paying 4% to borrow is criminal. There are plenty of other discussions on borrowing to invest if you search. Here are two recent topics: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=196723 https://www.bogleheads.org/forum/viewtopic.php?f=10&t...
by Rob Bertram
Tue Aug 16, 2016 4:35 am
Forum: Investing - Theory, News & General
Topic: Fixed income strategy
Replies: 17
Views: 2180

Re: Fixed income strategy

No, REITs are stocks. When you buy a total market stock fund, you also get REITs. Not all stocks move in the same direction. But concentrating in a specific sector is the opposite of diversification and does not reduce risk which is the point of adding fixed income to a portfolio. Many people want t...
by Rob Bertram
Sun Aug 14, 2016 10:06 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 899
Views: 188179

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

Here are the cliff notes : Nisiprius has a thread called Does higher volatility make long-term bonds + stocks better than intermediate-term bonds + stocks? . He shows that bonds with different duration have the same risk-adjusted returns, so one can convert a stock/long-term bond portfolio to a stoc...
by Rob Bertram
Sat Aug 13, 2016 11:26 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 899
Views: 188179

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

2) Have you thought about modeling without continuous contributions? Seems like it would have greater drawdown/more volatility. So I answered the direct question above. (Yes, I did my core modeling without continual contributions.) And I did some modeling to see how much more I can leverage with co...
by Rob Bertram
Sat Aug 13, 2016 9:12 am
Forum: Investing - Help with Personal Investments
Topic: ROTH IRA Question
Replies: 13
Views: 1562

Re: ROTH IRA Question

I have a slightly different question. Let me tweak your example a bit: - existing $50,000 Rollover IRA with -- $48,000 of rollover money -- $2,000 of nondeductible contributions To facilitate a backdoor Roth in this example, I would have to 1. put the $48,000 of rollover money in a separate account...
by Rob Bertram
Fri Aug 12, 2016 4:04 pm
Forum: Investing - Help with Personal Investments
Topic: ROTH IRA Question
Replies: 13
Views: 1562

Re: ROTH IRA Question

Sadly, it is not that simple. You can create as many IRA accounts as you want. The IRS only looks at the total across all of your IRA accounts. If you have an existing deductible amount in any IRA, then your conversion is prorated based on your total IRA balance. Here is an example: You have an exis...
by Rob Bertram
Fri Aug 12, 2016 2:18 pm
Forum: Investing - Help with Personal Investments
Topic: ROTH IRA Question
Replies: 13
Views: 1562

Re: ROTH IRA Question

Yes, you can do a non-deductible IRA contribution and then do a Roth conversion. One thing to consider is if you have an existing traditional (deductible) IRA balance.
by Rob Bertram
Thu Aug 11, 2016 9:59 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 899
Views: 188179

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

Thanks to the OP for an interesting thread. Are the stock index futures used S&P 500 futures? If you believe in international diversification, should you add stock index futures from other markets, use the Eurostoxx 50, FTSE 100, and Nikkei? They are all accessible from Interactive Brokers, I b...