Search found 1863 matches

by Johno
Sat Apr 09, 2016 11:29 am
Forum: Investing - Theory, News & General
Topic: Has the inflation risk premium fallen? Is it now negative?
Replies: 22
Views: 4117

Re: Has the inflation risk premium fallen? Is it now negative?

The paper includes: Inflation compensation = expected inflation + inflation risk premium + other factors The nominals - TIPS spread would be a good reflection of the market's inflation expectations and, for fans of efficient markets, as good an estimate as you're going to get, if not for the inclus...
by Johno
Sat Apr 09, 2016 10:53 am
Forum: Investing - Theory, News & General
Topic: Are you planning to leave an "estate"?
Replies: 74
Views: 10297

Re: Are you planning to leave an "estate"?

It seems to me that any responsible retirement investment plan would leave a good bit of capital at the end as a cushion. Unless most of your retirement assets will be annuitized. Yes I think the attitude toward annuities tends to clarify this question. If someone is opposed to annuities because 'i...
by Johno
Sat Apr 09, 2016 10:22 am
Forum: Investing - Theory, News & General
Topic: Are Bogleheads too conservative?
Replies: 135
Views: 19063

Re: Are Bogleheads too conservative?

So stocks crashed and burned for a very extended period of time some 200 years ago. And bonds crashed and burned for a very extended period of time some 60 years ago. The latter appeared to be a very direct consequence of WW-II, and something like that could blow in our faces AT ANY TIME. Again, I ...
by Johno
Wed Apr 06, 2016 9:07 pm
Forum: Investing - Theory, News & General
Topic: Mr. Bogle and Global Corruption Crackdown
Replies: 32
Views: 5670

Re: Mr. Bogle and Global Corruption Crackdown

(5) The U.S. has the strongest financial institutions and shareholder protections in the world. This one must be a late April fools joke..... It's an arrogant and incorrect assumption. There are a string of countries with strong financial regulations, no doubt with each country having lower or high...
by Johno
Wed Apr 06, 2016 8:31 pm
Forum: Investing - Theory, News & General
Topic: [DOL Rule on Fiduciary Standard is Released]
Replies: 105
Views: 8999

Re: Thoughts on ObamaRule?

The only negative I can see - and it is tough calling this a negative - is that advisers will be more inclined to ignore the small investor. Right now the only way a small investor is profitable is for him to be fleeced; if he can't legally be fleeced he will be ignored. Or charged higher fees just...
by Johno
Wed Apr 06, 2016 5:43 pm
Forum: Investing - Theory, News & General
Topic: Which individual countries hold the most promise for future investment gains?
Replies: 86
Views: 8579

Re: Which individual countries hold the most promise for future investment gains?

If 'promise for future investment gains' means expected return, it should in theory be highest in the riskiest places you can find, so frontier markets (Nigeria, Pakistan, etc) or riskiest so called emerging ones (Russia, Egypt, etc). If it means risk adjusted return it should in theory be equal eve...
by Johno
Wed Apr 06, 2016 5:03 pm
Forum: Investing - Theory, News & General
Topic: Interactive Brokers (Best Kept Secret)
Replies: 129
Views: 43894

Re: Interactive Brokers (Best Kept Secret)

Should dividends be factored into these calculations? My understanding is that the S&P 500 futures don't pay dividends, so if you convert a 100% SPY position to a 2% futures and 98% cash you're capital should remain the same, but you'd be missing out on ~2.09% annually in dividends. If you put the ...
by Johno
Tue Mar 29, 2016 5:36 pm
Forum: Investing - Theory, News & General
Topic: How have your homes as investments done?
Replies: 212
Views: 22570

Re: How have your homes as investments done?

The source of real estate returns accrue primarily from the rental income (or imputed rent for homeowners) and capital appreciation. Buying a bigger personal residence involves consumption of the entirety of that marginal imputed rent, historically the major source of returns for most housing marke...
by Johno
Tue Mar 29, 2016 5:20 pm
Forum: Investing - Theory, News & General
Topic: 3% annuity costs a little more than a CPI-U adjusted one
Replies: 17
Views: 3088

Re: 3% annuity costs a little more than a CPI-U adjusted one

The Internal Rate of Return (IRR) [1] is low for all three. But, in my opinion, it is worst for the CPI-indexed annuity. Type Cost IRR ------------ ------- ----- Fixed 186,075 2.1% $1,000/mo 3% Increase 258,796 2.0% $1,000/mo yr 1, $1,030/mo yr 2, $1,060.90/mo yr 3, etc. [2] CPI Indexed 251,347 -0....
by Johno
Tue Mar 29, 2016 8:56 am
Forum: Investing - Theory, News & General
Topic: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs
Replies: 249
Views: 44688

Re: Michael Kitces says IRS auditors disapprove of Backdoor Roth IRA's

Sorry if this has already been asked, but out of curiosity, what would be the statute of limitations on audits if the backdoor were deemed to fall afoul of the step transaction doctrine? Would it be only three years since we're not understating income, or would it be unlimited since it could be con...
by Johno
Mon Mar 28, 2016 8:31 pm
Forum: Personal Finance (Not Investing)
Topic: CD Rates dropping?
Replies: 24
Views: 3879

Re: CD Rates dropping?

Naturally, the 5 year treasury rate is only one factor. The reasons for spread itself are probably difficult to untangle. In theory it is not that difficult. In practice... In a technically sense we really don't care about the 5 year treasury bill. It is a good quick and dirty proxy and has a causa...
by Johno
Mon Mar 28, 2016 1:23 pm
Forum: Personal Finance (Not Investing)
Topic: CD Rates dropping?
Replies: 24
Views: 3879

Re: CD Rates dropping?

It should not be surprising that 5 year CD rates have fallen since the medium-term treasury rates have recently fallen. According to the Daily Treasury Yield Curve the current 5 year rate is 1.39 (3/24/16). This is similar to the rate in Jan. 2015 and higher then the rate at the end of Jan. 2015 (1...
by Johno
Mon Mar 28, 2016 10:25 am
Forum: Investing - Theory, News & General
Topic: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs
Replies: 249
Views: 44688

Re: Michael Kitces says IRS auditors disapprove of Backdoor Roth IRA's

I think 'much ado about nothing' is rising in the ranks of most relevant posts on this thread as it goes on. In my view there's a quite high chance the 'two step' or 'backdoor' will be be disallowed by legislation before many more years. It's been formally proposed by the current administration to d...
by Johno
Sun Mar 27, 2016 5:03 pm
Forum: Investing - Theory, News & General
Topic: TIPS Anyone?
Replies: 92
Views: 11153

Re: TIPS Anyone?

great discussion :) as per liquidity, i think there's two different ideas: liquidity for us (i'd like something to trade $5MM per day to accomodate my $40k trade. so i'd be 0.8% of the day's volume....i'm thinking maybe i want more than $5MM per day as minimum). then there's liquidity for big insti...
by Johno
Sun Mar 27, 2016 4:34 pm
Forum: Personal Finance (Not Investing)
Topic: CD Rates dropping?
Replies: 24
Views: 3879

Re: CD Rates dropping?

Perhaps I was asleep, but I just noted at Synchrony Bank the 5 Year CD went from 2.25% to 2%. Is this a general trend recently? They have been at 2.25% for a LONG time. I checked Ally and they are also at 2% for 5 years. Not what I expected for 2016. The best direct 5yr CD rate now on bankrate.com ...
by Johno
Sun Mar 27, 2016 1:56 pm
Forum: Personal Finance (Not Investing)
Topic: Home too small
Replies: 45
Views: 5763

Re: Home too small

Talk to people who have done a major remodel and see how it affected their lives. Universally the answers will be *bad*. (I have never, ever heard the answer be "good".) The stress both during and after construction (when you find the inevitable problems caused by bad construction) are not worth it...
by Johno
Sat Mar 26, 2016 4:08 pm
Forum: Personal Consumer Issues
Topic: Question: Should we sue the cable company?
Replies: 26
Views: 5046

Re: Question: Should we sue the cable company?

What does your homeowner's insurance company tell you to do? There's the question to ask. If your homeowner's insurance pays all expenses, losses, hotel bills minus deductible, then you would be looking for the deductible from the cable company. Wouldn't his insurance costs increase on the next ren...
by Johno
Wed Mar 23, 2016 8:24 am
Forum: Investing - Theory, News & General
Topic: What is the point of a dividend?
Replies: 92
Views: 9084

Re: What is the point of a dividend?

Summary: Total buybacks have been greater than total dilution (employee stocks) for US market index in the recent years. But SOME of your money is going to employees via stock options instead of to you. In fact, I submit you lose MORE to options than you do to taxes via dividends. Right but I don't...
by Johno
Wed Mar 23, 2016 7:52 am
Forum: Investing - Theory, News & General
Topic: The Rarely Noted "Real Returns"
Replies: 45
Views: 6521

Re: The Rarely Noted "Real Returns"

Now I don't think everyone should track real returns constantly... it is a pain and inflation is going to affect all of us the same ... I'm not sure this is accurate. For example, in high inflation times, a homeowner with an advantageous 30-year mortgage may fare better than a Manhattan renter who ...
by Johno
Tue Mar 22, 2016 9:29 pm
Forum: Investing - Theory, News & General
Topic: How have your homes as investments done?
Replies: 212
Views: 22570

Re: How have your homes as investments done?

Again, you have to consider the avoided rent in calculating the return. Even if you posit that 'the market would have paid the rent', financial asset investments I guess you mean, you still have to count that effect. I'm amazed by the long string of posts of people saying 'the price return of the h...
by Johno
Tue Mar 22, 2016 10:06 am
Forum: Investing - Theory, News & General
Topic: How have your homes as investments done?
Replies: 212
Views: 22570

Re: How have your homes as investments done?

I suppose if you take avoided rent as a credit, you should take mortgage payments as a debit and look at actual cash transacted when buying and selling, not the so-called price. To calculate it correctly you have to have to take into account all significant relevant items: purchase price, value now...
by Johno
Tue Mar 22, 2016 9:31 am
Forum: Investing - Theory, News & General
Topic: What is the point of a dividend?
Replies: 92
Views: 9084

Re: What is the point of a dividend?

Whats the point? You get your dividend money and your fund falls by an equivalent amount. Then you are taxed on your so called "earnings", when your net worth is unchanged. Can anyone explain why these things even exist. Just sell some of your fund if you want the cash. What am I missing here? Ther...
by Johno
Tue Mar 22, 2016 8:38 am
Forum: Investing - Theory, News & General
Topic: How have your homes as investments done?
Replies: 212
Views: 22570

Re: How have your homes as investments done?

Bought my home in 1981 for $127,000 when the 30 yr fixed rate was 18.6%. Following several refinances we are thinking of downsizing. It is now worth close to $700k (no mortgage). I know there are constant disagreements here about 'home as investment' but after providing shelter, happy memories, tax...
by Johno
Mon Mar 21, 2016 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Wells Fargo - Large Banks or Smaller Banks
Replies: 39
Views: 4985

Re: Wells Fargo - Large Banks or Smaller Banks

Actually in comparison, the poor service (and errors) I received at Vanguard were completely shocking to me after having had no trouble at Wells Fargo for so long. The exact same with me. I have accounts with Wells and BOA and have always received great service. I keep minimal balances there too. O...
by Johno
Mon Mar 21, 2016 10:59 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle [may have said] TIPS give you "income risk"
Replies: 58
Views: 6480

Re: Jack Bogle [may have said] TIPS give you "income risk"

I avoid TIPS because I believe the it the purpose of STOCKS to keep up with inflation, not bonds. Companies can increase prices to match inflation, increasing profits. Bonds are for ballast (price stability and small upward mobility) when stocks go down (which happens in a flight to quality, when i...
by Johno
Sun Mar 20, 2016 9:01 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle [may have said] TIPS give you "income risk"
Replies: 58
Views: 6480

Re: Jack Bogle says TIPS give you "income risk"

One potential problem with putting TIPS in one's tax-deferred account is that, at withdrawal, the interest isn't exempt from state and local taxation despite being a Treasury issue that's normally exempt from those taxes. Good point. Of course this also is true for any Treasury fund, such as the fa...
by Johno
Sat Mar 19, 2016 10:40 pm
Forum: Personal Finance (Not Investing)
Topic: giving car to child
Replies: 12
Views: 2686

Re: giving car to child

I am familiar with gifting. Yes I am married and the car has a trade in of ~ 17k or private ~18k. We live in NJ so what I need to know when I sign the bill of sale my child will register in their name. I am guessing that they ask the price? What record keeping will I need if any? As mentioned, you ...
by Johno
Fri Mar 18, 2016 10:38 am
Forum: Investing - Theory, News & General
Topic: Cost of $1000 per Month Inflation-Adjusted Income?
Replies: 67
Views: 11515

Re: Cost of $1000 per Month Inflation-Adjusted Income?

SUMMARY OF WHAT I HAVE LEARNED SO FAR 1. Longevity. There is about 20% chance for a Male aged 60 to live to 90 or beyond. 1% chance to live to 100 or beyond. Slightly higher for Female. Higher still for at least one of a couple. For 99% confidence, plan to age 100 (40 years). 2. Inflation. Current ...
by Johno
Thu Mar 17, 2016 3:03 pm
Forum: Investing - Theory, News & General
Topic: How have your homes as investments done?
Replies: 212
Views: 22570

Re: How have your homes as investments done?

Purchase price: $250k 17 years ago Current value as of last week: $848,775k :D Cool 7.5% interest. ;-) Shouldn't the return be calculated net of interest paid on the loan, and perhaps property taxes? A return calculation that includes only the price change of the house and the expenses of owning it...
by Johno
Thu Mar 17, 2016 9:06 am
Forum: Personal Finance (Not Investing)
Topic: Should I disclaim an inheritance on behalf of minor children?
Replies: 44
Views: 6629

Re: Should I disclaim an inheritance on behalf of minor children?

My two elementary-school age children are set to share an inheritance with their aunt and uncle (my late husband's siblings) when their great uncle dies. (He's in his 90s now and his mental health is failing.) He has assets of around $400K. I'm guessing that after taxes and other costs, the kids' t...
by Johno
Wed Mar 16, 2016 8:25 pm
Forum: Investing - Theory, News & General
Topic: How have your homes as investments done?
Replies: 212
Views: 22570

Re: How have your homes as investments done?

Where does one get the current value of their home? Im using Zillow but it is not an accurate representation since it does not know any updates done to a home, and city assessment seems low Zillow is IMO the best of the 'instant estimates' but none are entirely reliable if you don't otherwise know ...
by Johno
Wed Mar 16, 2016 5:19 pm
Forum: Investing - Theory, News & General
Topic: How have your homes as investments done?
Replies: 212
Views: 22570

Re: How have your homes as investments done?

The price return on our house last 23 yrs is around 7% nominal. Interestingly I found a price for the house from 1940 and the return since then is in the same ballpark, a little higher in nominal terms, inner NYC area. As others have mentioned that's not the whole picture because we avoided paying r...
by Johno
Fri Mar 11, 2016 11:16 pm
Forum: Investing - Theory, News & General
Topic: Are we in a bubble?
Replies: 38
Views: 7392

Re: Are we in a bubble?

Johno wrote: “The appropriate measure of the real yield of a 30 yr bond is the *future 30 yr expectation* of inflation, as you say yourself in your parenthetic comment, not trailing inflation over the last year. I think this has come up before? And…I don't think it's that useful to respond to this ...
by Johno
Fri Mar 11, 2016 5:53 pm
Forum: Investing - Theory, News & General
Topic: Are we in a bubble?
Replies: 38
Views: 7392

Re: Are we in a bubble?

Using this rationale, the 30 year Treasury bond is not likely in a bubble. In the past 145 years, the ” real” long –dated bond yield (the 30 year, not the 10 year) has averaged about 2.0%. At a recent “nominal” yield of 2.7 % with a year- over- year (Y-o-Y) increase in inflation of 1.4%, the “real”...
by Johno
Fri Mar 11, 2016 1:57 pm
Forum: Investing - Theory, News & General
Topic: New Yorker: Is Passive Investing Actively Hurting the Economy?
Replies: 36
Views: 7103

Re: New Yorker: Is Passive Investing Actively Hurting the Economy?

Discussions of how passive investing hurts the markets or economy tend to be based on the false premise that either (in the most fantastically naive version) it would ever mean *all* money passive managed, or in the more realistic case where passive might be a majority of the money, that activist sh...
by Johno
Fri Mar 11, 2016 1:26 pm
Forum: Investing - Theory, News & General
Topic: where is the fee hiding?
Replies: 16
Views: 2898

Re: where is the fee hiding?

There's not really enough information in your post for an observer to determine where a fee, if present, is hiding. I had a friend who invested through another big name wealth management firm. He insisted he was only paying 1% in fees. In his case, the additional fees were embedded in the ERs of th...
by Johno
Fri Mar 11, 2016 10:46 am
Forum: Investing - Theory, News & General
Topic: Are we in a bubble?
Replies: 38
Views: 7392

Re: Are we in a bubble?

One inevitable effect of an actual bubble is subsequent oversensitivity to bubbles. Also I'd say it's questionable whether the situation going into 2008 was a bubble in the stock market which is generally what's referred to here as a 'bubble'. It was bubble in housing, low rated mortgages, and relat...
by Johno
Thu Mar 10, 2016 10:45 am
Forum: Investing - Theory, News & General
Topic: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs
Replies: 249
Views: 44688

Re: Michael Kitces says IRS auditors disapprove of Backdoor Roth IRA's

For a government $19 trillion in debt, we seem very confident that the IRS will never change its mind about going after this. The statute of limitations for the IRS to object is 3yrs, unless it's fraud. The statute of limitations remains open if a tax return is not filed. Why in this context would ...
by Johno
Thu Mar 10, 2016 10:26 am
Forum: Investing - Theory, News & General
Topic: What to do if bonds have negative returns?
Replies: 70
Views: 10936

Re: What to do if bonds have negative returns?

anyway it's hard to see a situation where banks or brokerages are going to lend outright to individuals at negative mortgage or margin rates. Actually some European mortgages are floating rate, and consequently have floated negative at this point: But it isn’t all bad. Some Danes with floating-rate...
by Johno
Wed Mar 09, 2016 11:11 am
Forum: Investing - Theory, News & General
Topic: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs
Replies: 249
Views: 44688

Re: Michael Kitces says IRS auditors disapprove of Backdoor Roth IRA's

For a government $19 trillion in debt, we seem very confident that the IRS will never change its mind about going after this. In 30 years, there is going to be hundreds of millions, if not billions of dollars in questionable ROTH earnings. What do you think the cost of IRS audits will be in 30 year...
by Johno
Wed Mar 09, 2016 11:04 am
Forum: Personal Finance (Not Investing)
Topic: Life Insurance for person with false "Alcoholic" diagnosis
Replies: 100
Views: 12768

Re: Life Insurance for person with false "Alcoholic" diagnosis

Going to counseling is obvious not going to be beneficial for him if he doesn't have a problem. It is likely he doesn't (other than being inexperienced with alcohol). But counseling probably isn't going to get him insurance either. It might make the insurance issue worse ("Well, Mr. Frank, if you d...
by Johno
Wed Mar 09, 2016 10:30 am
Forum: Investing - Theory, News & General
Topic: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs
Replies: 249
Views: 44688

Re: Michael Kitces says IRS auditors disapprove of Backdoor Roth IRA's

For a government $19 trillion in debt, we seem very confident that the IRS will never change its mind about going after this. In 30 years, there is going to be hundreds of millions, if not billions of dollars in questionable ROTH earnings. What do you think the cost of IRS audits will be in 30 year...
by Johno
Wed Mar 09, 2016 10:16 am
Forum: Investing - Theory, News & General
Topic: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs
Replies: 249
Views: 44688

Re: Michael Kitces says IRS auditors disapprove of Backdoor Roth IRA's

That was a very vague "A couple of people had problems". It didn't say what else they were audited for. I'm not scared of an audit. I do worry that the loophole will get closed. However, as the article notes, there really hasn't been any sort of successful tax policy changes in quite some time. I'm...
by Johno
Wed Mar 09, 2016 9:06 am
Forum: Investing - Theory, News & General
Topic: What to do if bonds have negative returns?
Replies: 70
Views: 10936

Re: What to do if bonds have negative returns?

... Perhaps other readers of this thread are clear on the point of debt management in a negative return environment. I am not. Three different actions were proposed (none of which were refuted in the posts that followed): 1. Pay off debt. 2. Refinance debt. 3. Go further in debt. Since these option...
by Johno
Tue Mar 08, 2016 10:33 am
Forum: Personal Finance (Not Investing)
Topic: Life Insurance for person with false "Alcoholic" diagnosis
Replies: 100
Views: 12768

Re: Life Insurance for person with false "Alcoholic" diagnosis

I think part of the issue in such discussions is always the cultural fashion to go into 'ordinary folks v the man' mode about how companies do their business with individuals. The insurance company has no obligation in a free market to spend disproportionate resources researching the 'true story of ...
by Johno
Mon Mar 07, 2016 4:05 pm
Forum: Personal Finance (Not Investing)
Topic: Life Insurance for person with false "Alcoholic" diagnosis
Replies: 100
Views: 12768

Re: Life Insurance for person with false "Alcoholic" diagnosis

Drinking enough to need medical attention the next day is called binge drinking, and is one of the forms of alcoholism. The next time he does that, he could easily walk in front of a bus. The insurance company is trying to protect itself. I don't think that insurance companies care about the 'binge...
by Johno
Mon Mar 07, 2016 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: FICO Score??
Replies: 69
Views: 8229

Re: FICO Score??

First, have you obtained your three free credit reports from annualcreditreport.com? Examine them for anything that might be negative - it could be an error and you may need to dispute it. Then I suggest paying the fee to get an official FICO score from myFICO. CreditKarma is not a FICO score altho...
by Johno
Mon Mar 07, 2016 10:11 am
Forum: Investing - Theory, News & General
Topic: why do investors prefer cash dividends
Replies: 372
Views: 41604

Re: why do investors prefer cash dividends

fortyofforty As you are in fact stating the ONLY logic is a behavioral benefits, which for some people are real, but none the less not rational from economic perspective. That's what's in the literature Psychology and affirmation are a large part of the Boglehead community. We all pat each other on...
by Johno
Mon Mar 07, 2016 9:16 am
Forum: Personal Finance (Not Investing)
Topic: FICO Score??
Replies: 69
Views: 8229

Re: FICO Score??

@cherijoh, I just disagree. I've spent thirty years on earth now paying my bills, rent, student loan debt (when relevant) on time or ahead of time -- all of this for some [OT comment removed by moderator JDDS] group of big companies to say "You know what? That's just a fair job, bogleguy. But let's...
by Johno
Sat Mar 05, 2016 12:35 pm
Forum: Personal Finance (Not Investing)
Topic: Bonus taxed at 44.46%?
Replies: 39
Views: 11888

Re: Bonus taxed at 44.46%?

If your marginal tax rate is 28%, add 7.5% FICA and 9% NJ state tax. Gets you to 44% pretty quick. . Just to reiterate and partly correct myself. The applicable NJ marginal tax rate here would probably be 6.37% or less (I earlier said 6.5%). We know it's not the top (8.97%) rate because that applie...