Search found 2329 matches

by gmaynardkrebs
Sat Mar 23, 2024 3:47 pm
Forum: Investing - Theory, News & General
Topic: Are TIPS funds useless?
Replies: 25
Views: 4233

Re: Are TIPS funds useless?

Purchased at auction and held to maturity, TIPS have no downside risk and unlimited upside protection in nominal dollars. How can that be useless?
by gmaynardkrebs
Wed Mar 13, 2024 5:00 pm
Forum: Personal Consumer Issues
Topic: Laptop problem
Replies: 12
Views: 1050

Re: Laptop problem

Yes. I my case, I did a "hard restart." I removed the battery, unplugged the power cord, and pressed the start button to discharge the capacitors. Then I reinstalled the battery, plugged it in, and held down the start button for 20 seconds until it started up. If it keeps happening, a possible cause is a failing battery. Good luck
by gmaynardkrebs
Sun Dec 03, 2023 7:44 am
Forum: Investing - Theory, News & General
Topic: William Bernstein on TIPS, asset allocation, and four deep risks
Replies: 189
Views: 30434

Re: William Bernstein on TIPS, asset allocation, and four deep risks

Besides solving the alleged phantom income "problem" in taxable accounts, with the ETFs you don't have to mess with bond premium/discount amortization, which it took me a while to figure out and does require some elections to the IRS. Bit of a PIA...
by gmaynardkrebs
Wed Aug 23, 2023 11:23 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2953
Views: 623583

Re: Now that long TIPS have cracked 2.00% again I will…

Our expenses over the next five years or so will largely be paid out of our taxable investments. I'd be happy to shift that money from the current mix of money market, CDs, and t-bills into a short ladder of TIPS, but I haven't been willing to take on the annoyance of tax reporting for TIPS in taxable. Does this annoyance exist if you hold at a brokerage? Isn't it all sorted out for you on your 1099? The numbers are correctly sorted out on my Vanguard 1099, including the calculation of bond premium and/or bond discount, assuming that applies. Where it might get a bit tricky – and I'm not a tax expert -- but my basic understanding is that you do have to make an election to the IRS about whether you will report the premium/discount yearly or...
by gmaynardkrebs
Tue Aug 22, 2023 10:56 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2953
Views: 623583

Re: Now that long TIPS have cracked 2.00% again I will…

William Million wrote: Tue Aug 22, 2023 10:39 pm People asked why I care about 3% for backing up the truck.

Over 3% long, I don't believe it matters if it's tax sheltered or normal investment - it's a great deal. Before 3%, it matters where you put the TIPS.
1% of $1M matters a lot to most everyone. 3% of $1k doesn’t matter to anyone.
by gmaynardkrebs
Tue Aug 22, 2023 10:29 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2953
Views: 623583

Re: Now that long TIPS have cracked 2.00% again I will…

I keep telling myself that I should buy more TIPS. It feels like the right thing to do, but I have trouble pulling the trigger. Part of the problem is having been unpleasantly surprised by the behavior of the TIPS fund I had bought a few years ago; it didn't really protect against inflation as I expected it to, because increases in real rates whacked the value of its' holdings. I do have a few short-term individual TIPS, though even there the six-year one has lost 10% in nominal value since I bought it. Much of the angst I feel on this comes from starting to recognize how variation in real rates can impact TIPS just as variation in nominal rates can impact standard bonds. The concept of a 30-year ladder of individual TIPS sounds attractive...
by gmaynardkrebs
Tue Aug 22, 2023 12:56 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2953
Views: 623583

Re: Now that long TIPS have cracked 2.00% again I will…

RationalWalk wrote: Tue Aug 22, 2023 12:33 pm Tell me this. I bought a bunch of TIPs a whileback when real yield was about 0.6%. Now that the RY is a juicy 2%+ does it make any sense to sell the ones I have, taking a loss, to lock into the new ones?
I'm not sure about the tax loss aspect in a taxable account, but in a 401k or IRA, it makes sense if you want to lock in a longer duration at today's higher yield. You are getting today's higher yields now on the current value of your TIPS.
by gmaynardkrebs
Sun Nov 06, 2022 7:19 pm
Forum: Investing - Theory, News & General
Topic: Time to reconsider Nobel Laureates Fama & French 3 Factor Model?
Replies: 58
Views: 5138

Re: Time to reconsider Nobel Laureates Fama & French 3 Factor Model?

bobcat2 wrote: Fri Nov 04, 2022 1:01 pm
jbriar wrote: Fri Nov 04, 2022 12:10 pm The nobel laureate economists Fama and French ...
Fama is a Nobel laureate. French is not a Nobel laureate.

BobK
Technically, neither won a Nobel prize, but Fama did win the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
by gmaynardkrebs
Mon Oct 03, 2022 12:57 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2953
Views: 623583

Re: If long TIPS hit a real yield above 2.0% I will…

Gerard wrote: Mon Oct 03, 2022 12:44 pm I see Tips some with a higher coupon and higher price than others with near maturity dates.
Any pros or cons to buy higher coupon or lower?
Some of the really low coupons are almost STRIPS, which I prefer, as it's almost a pure play. I also look for a lower bond factor, to minimize deflation risk. Somewhat of a balancing act.
by gmaynardkrebs
Mon Oct 03, 2022 12:50 pm
Forum: Investing - Theory, News & General
Topic: TSP G Fund rate 3.00% (Nov 2023)
Replies: 231
Views: 38397

Re: TSP G Fund rate 3.00% (June 2022)

TSP G fund rate for October 2022: 3.375% (Booooo!) I hope this is wrong (got it from TSPFolio). I was expecting >3.75% and hoping for very close to 4%. That was last month's rate. There is no way it has not gone up. It's one of the changes with the de-contented TSP website, there isn't a dated monthly announcement of the loan rate any longer and there is no "as of" date displayed on the page that replaced it. Monday Oct 3 is the first business day of October; perhaps it will update by Tuesday morning. Based on SSA "Nominal Interest Rates on Special Issues," which appears to line up with the TSP G, the rate for October 2022 is 4%; For Sept it was 3.375. https://www.ssa.gov/oact/progdata/newIssueRates.html
by gmaynardkrebs
Mon Oct 03, 2022 12:01 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2953
Views: 623583

Re: If long TIPS hit a real yield above 2.0% I will…

vineviz wrote: Mon Oct 03, 2022 10:55 am
McQ wrote: Sun Oct 02, 2022 9:40 pm Last, there is a confound: any development that pushed TIPS yields to 3.0% would probably also make stocks a screaming buy—kind of like late 2008.
Thanks for making this crucial point.

It is basically inconceivable that the expected 10-year return of stocks would ever routinely be less than the real yield of 10-year TIPS.

This would require investors being willing to pay a huge premium in order to own a MORE risky assets, something we've maybe only experienced in our worst stock bubbles (e.g. 1929 and 1999).
Investors might think that stocks are far less risky than they actually are. I believe that’s been the case for quite some time, actually.
by gmaynardkrebs
Tue Sep 27, 2022 9:21 am
Forum: Investing - Theory, News & General
Topic: [60 year old - anxiety over market downturn]
Replies: 181
Views: 22189

Re: [60 year old - anxiety over market downturn]

The other 1/3 is in a whole life policy. (And while I would never buy it again, I only realized how bad it was after 16 years. By that point, the worst of it was behind me. 4.2% isn't a bad return for fixed income. It's the only part of my portfolio that's not registering a loss!) Well, your death benefit is down by 8.6% YOY in constant dollars. That comment sort of highlights that no form of wealth has been spared this year. I don’t think that applies to TIPS held to maturity. For my daughters IRA account, I bought some 30 year TIPS with a “real” rate of about .79%, a rate which I was happy to get at the time, and still am. Even though it is “down” now, I find it hard to consider that a loss. I feel I’m getting exactly what I bargained fo...
by gmaynardkrebs
Tue Sep 27, 2022 7:25 am
Forum: Investing - Theory, News & General
Topic: [60 year old - anxiety over market downturn]
Replies: 181
Views: 22189

Re: [60 year old - anxiety over market downturn]

exodusNH wrote: Tue Sep 27, 2022 5:19 am The other 1/3 is in a whole life policy. (And while I would never buy it again, I only realized how bad it was after 16 years. By that point, the worst of it was behind me. 4.2% isn't a bad return for fixed income. It's the only part of my portfolio that's not registering a loss!)
Well, your death benefit is down by 8.6% YOY in constant dollars.
by gmaynardkrebs
Sun Sep 25, 2022 8:55 am
Forum: Investing - Theory, News & General
Topic: [60 year old - anxiety over market downturn]
Replies: 181
Views: 22189

Re: [60 year old - anxiety over market downturn]

doc2547 wrote: Thu Sep 22, 2022 7:40 am I have been a Boglehead for years and rarely post anything. I know the philosophy of being a member, however does anybody else out there feel like I do about our large losses this year and worry about our retirements being curtailed.I have stayed the course for my entire investing 35 years , but this market stings. Any thoughts or words of inspiration out there.

[Topic title edited for clarity by moderator oldcomputerguy]
What asset allocation strategy have you employed? If you've been reasonably diversified along BH allocation advice, I'd definitely stay the course, which has served you well. In any event, now is not the time to make big changes, because emotions are running high.
by gmaynardkrebs
Fri Sep 23, 2022 11:13 am
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2953
Views: 623583

Re: If long TIPS hit a real yield above 2.0% I will…

I'm all in @ 2% 15+ year. So will a lot of people, so act quickly.
by gmaynardkrebs
Tue Aug 09, 2022 9:17 am
Forum: Personal Investments
Topic: Why won't Vanguard's website remember my computer? (Always uses phone TFA)
Replies: 39
Views: 2884

Re: Why won't Vanguard's website remember my computer? (Always uses phone TFA)

Same issue with Firefox on Windows laptop. Been happening for a while. My impression is that it happens often after recent Firefox updates, like it's a new computer. I wonder also if it IP changes from my internet provider have some role in this as well.
by gmaynardkrebs
Thu Aug 04, 2022 4:38 pm
Forum: Investing - Theory, News & General
Topic: Watch out for hidden risk tolerance assumptions in SWR claims
Replies: 182
Views: 12751

Re: Watch out for hidden risk tolerance assumptions in SWR claims

vineviz wrote: Thu Aug 04, 2022 4:30 pm
willthrill81 wrote: Thu Aug 04, 2022 4:07 pm
vineviz wrote: Thu Aug 04, 2022 3:59 pm It might seem counter intuitive, but being alive and broke is much worse than being dead and rich.
Considering that millions in the U.S. and many more millions across the world are both alive and broke, I think that they would disagree.
To get a balanced survey, you must include those who are dead and rich.
Even then, you'd have to adjust for significantly over-sampling of zombies, most of whom work at at home, often at night, and are thus more likely to answer the phone than mainstream deceased.
by gmaynardkrebs
Thu Aug 04, 2022 1:31 pm
Forum: Investing - Theory, News & General
Topic: Watch out for hidden risk tolerance assumptions in SWR claims
Replies: 182
Views: 12751

Re: Watch out for hidden risk tolerance assumptions in SWR claims

It seems rather odd to insist on, say, a 95% success rate for money lasting 30 years when the odds of a 65-year-old even being alive in 30 years is only 10%. So even with Peter Lynch's 7% withdrawal, which some call "unrealistic", your odds of being a broke 95-year-old are only somewhere around 5% to 10%. It's sort of like insisting that airplanes be 100% safe when you are more likely to die driving to the airport. Yes, but who wants to be the unlucky 95 year old who outlived their money? I agree and under the best of circumstances, the healthcare costs at age 95 year old have got to be much, much higher than at 65 or 70, even if one is not in a nursing home. Seems to me one would want to plan for a "fat tail" of income...
by gmaynardkrebs
Mon Jul 04, 2022 3:07 pm
Forum: Personal Investments
Topic: Best % of VAIPX (Inflation Protected Fund) at age 68?
Replies: 20
Views: 2137

Re: Best % of VAIPX (Inflation Protected Fund) at age 68?

However, what really sticks out about your portfolio is the extremely low 10% equity allocation. That is off the efficient frontier, and is both riskier and lower yielding than a portfolio containing more stocks. See: https://ikeikokwu.com/2012/04/09/the-efficient-frontier/ The point of minimum risk is probably around 25% equities, and greater expected returns at the same risk level a an all-bond portfolio is around 30% (which is where most of the "target date income" type funds live). I would consider gradually adding more equities over the course of the year to get yourself up to 25%. More stock is effectively adding inflation protection by increasing your expected returns. If the OP's aim is to preserve his current wealth in t...
by gmaynardkrebs
Wed Jun 29, 2022 1:26 pm
Forum: Investing - Theory, News & General
Topic: Is there a limit to the percentage of my portfolio that should be in inflation protected instruments?
Replies: 109
Views: 10436

Re: Is there a limit to the percentage of my portfolio that should be in inflation protected instruments?

Instead of holding TIPs, I rely on having a high stock allocation to outpace inflation. Stocks had such a great decade that it would take a lot of inflation to erase that progress. If I were older, might get something more stable than stocks, but not necessarily TIPs. I don't think TIPs make sense to people still deep in the accumulation phase who have a stomach for risk. If a formula was devised for how much TIPs one should hold, I imagine it should include the person's age or years until retirement. Even for a younger person, I think TIPS do make sense as part of a liability matching portfolio. Not sure I like the phrase having a "stomach for risk" -- gamblers have that -- but your objectively measured capacity to bear the risk...
by gmaynardkrebs
Wed Jun 29, 2022 1:01 pm
Forum: Investing - Theory, News & General
Topic: Is there a limit to the percentage of my portfolio that should be in inflation protected instruments?
Replies: 109
Views: 10436

Re: Is there a limit to the percentage of my portfolio that should be in inflation protected instruments?

TheTimeLord wrote: Wed Jun 29, 2022 12:34 pm The main reason I am asking is I realized TIPS are sort of the flavor of the day investment and I don't want to get carried away just because they are today's trendy investment.
They've been my flavor of the day for over 20 years! Having lived through the inflation of the 70s and 80s, I remember how scary that was -- and I was young then! Could be a little PTSD in that, but what's going on now means that it's not ALL PTSD. Pretty much all of my bonds are in TIPS or TIPS funds now.
by gmaynardkrebs
Sat Jun 18, 2022 3:37 pm
Forum: Personal Investments
Topic: Is it ever worth waiting on taxable to fund tax-advantaged accounts?
Replies: 7
Views: 748

Re: Is it ever worth waiting on taxable to fund tax-advantaged accounts?

freyj6 wrote: Sat Jun 18, 2022 3:18 pm
gmaynardkrebs wrote: Sat Jun 18, 2022 3:11 pm
freyj6 wrote: Sat Jun 18, 2022 2:45 pmAre there any complexities here beyond the fact that stocks are slightly more likely to go up than down over a given time period?
If that were a "fact," investing would be an easy game.
That is a fact, historically speaking. In fact, because bear markets tend to be shorter and steeper (on average), stocks are going up much more often than they're going on.

@Everyone else - Thanks. I guess I'm overthinking it.
The number of independent 20 year rolling cycles for the US stock market since 1870 is not great.
I hope that what you say will happen, but I don't consider it a "fact."
by gmaynardkrebs
Sat Jun 18, 2022 3:11 pm
Forum: Personal Investments
Topic: Is it ever worth waiting on taxable to fund tax-advantaged accounts?
Replies: 7
Views: 748

Re: Is it ever worth waiting on taxable to fund tax-advantaged accounts?

freyj6 wrote: Sat Jun 18, 2022 2:45 pmAre there any complexities here beyond the fact that stocks are slightly more likely to go up than down over a given time period?
If that were a "fact," investing would be an easy game.
by gmaynardkrebs
Sat Jun 18, 2022 2:58 pm
Forum: Investing - Theory, News & General
Topic: what does it mean to say "money flowed into stocks"?
Replies: 33
Views: 3599

Re: what does it mean to say "money flowed into stocks"?

It means you are spending too much time watching CNBC. It's nonsense.
by gmaynardkrebs
Mon Jun 13, 2022 10:10 am
Forum: Investing - Theory, News & General
Topic: What does "on sale" mean? [for an investment]
Replies: 23
Views: 1737

Re: What does "on sale" mean? [for an investment]

Reminds me of the question a lot of people asked during the GFC, "where did all the money go"? Answer is nowhere...it's just that a lot of people decide that certain assets are worth a lot less than they thought they were worth a while back.
by gmaynardkrebs
Thu Jun 09, 2022 6:10 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4685309

Re: U.S. stocks in free fall

freyj6 wrote: Thu Jun 09, 2022 4:37 pm Probably true, but again I'm surprised. It's weird to see something like Vanguard Total World seemingly having the same sensitivity to bad news as speculative assets.
They used to say there is no such thing as a stock market, just a market of stocks. Today, it's just two stocks, Risk-on Corp and Risk-off Corp.
by gmaynardkrebs
Sun Jun 05, 2022 3:29 pm
Forum: Personal Consumer Issues
Topic: Opinions on high end appliances
Replies: 119
Views: 12321

Re: Opinions on high end appliances

We have a Garland commercial stove that came with the house. Would never pass code today, but it blows away the fancy Viking and similar. Is it safe? Well after 40 years we’re still alive. As far as cooking, There is no substitute for BTUs .If you can get a commercial installer who knows what he is doing, and preclear everything with the safety code inspectors — a must— you’ll be amazed by the results. Yes, it is a bitch to clean, and the hood is immense, but I could never go back.
by gmaynardkrebs
Sun Jun 05, 2022 3:01 pm
Forum: Investing - Theory, News & General
Topic: Are Stocks Undervalued Yet? NO according to Mark Hulbert
Replies: 10
Views: 2558

Re: Are Stocks Undervalued Yet? NO according to Mark Hulbert

They are seriously undervalued if you think todays low interest rates can or will continue.
by gmaynardkrebs
Sun Jun 05, 2022 2:42 pm
Forum: Investing - Theory, News & General
Topic: Did recent market down and inflation change your retirment plan?
Replies: 81
Views: 8207

Re: Did recent market down and inflation change your retirment plan?

I moved $100k from treasury mm to VIPSX, betting that that inflation will be somewhat higher than expected, because that’s the central banks path of least resistance.
by gmaynardkrebs
Sat May 21, 2022 3:00 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Municipal Money Market VMSXX [0.03%]
Replies: 651
Views: 124004

Re: Vanguard Municipal Money Market VMSXX [0.03%]

Kevin M wrote: Sat May 21, 2022 1:54 pm
gmaynardkrebs wrote: Sat May 21, 2022 8:12 am
Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
Not really the same thing, are they?

Image

Apples to oranges comparison?

Not saying you shouldn't use the fund, just that it's not a cash equivalent, which the money market funds are.

Kevin
Tangerines vs oranges.
by gmaynardkrebs
Sat May 21, 2022 12:27 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Municipal Money Market VMSXX [0.03%]
Replies: 651
Views: 124004

Re: Vanguard Municipal Money Market VMSXX [0.03%]

anon_investor wrote: Sat May 21, 2022 12:22 pm
gmaynardkrebs wrote: Sat May 21, 2022 12:21 pm
Kookaburra wrote: Sat May 21, 2022 10:09 am
gmaynardkrebs wrote: Sat May 21, 2022 8:12 am
Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
It’s peculiar how savings/MM yields are always viewed through a “real” lens, while stocks and often bonds are viewed through a “nominal” lens.
TIPS.
What duration?
Build a ladder.
by gmaynardkrebs
Sat May 21, 2022 12:25 pm
Forum: Personal Investments
Topic: What's the Largest Percentage of Your Portfolio You'd Have in An Active Fund??
Replies: 96
Views: 8842

Re: What's the Largest Percentage of Your Portfolio You'd Have in An Active Fund??

RubyTuesday wrote: Tue May 17, 2022 7:12 pm
Taylor Larimore wrote: Tue May 17, 2022 6:29 pm Bogleheads:

If I knew of an active fund with the low-cost and diversification of an index fund--I would be happy to consider it -- but I don't.

Best wishes
Taylor
Jack Bogle's Words of Wisdom(2005): "Of the 355 equity funds in 1970, fully 233 of those funds have gone out of business. Only 24 outpaced the market by more than 1% a year. These are terrible odds."
Taylor,

Many of Vanguard’s relatively low cost fixed income funds are actively managed, for example Vanguard Inflation-Protected Securities Fund Admiral Shares (VAIPX). It has an expense ratio if 0.10%.
SCHP for me.
by gmaynardkrebs
Sat May 21, 2022 12:21 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Municipal Money Market VMSXX [0.03%]
Replies: 651
Views: 124004

Re: Vanguard Municipal Money Market VMSXX [0.03%]

Kookaburra wrote: Sat May 21, 2022 10:09 am
gmaynardkrebs wrote: Sat May 21, 2022 8:12 am
Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
It’s peculiar how savings/MM yields are always viewed through a “real” lens, while stocks and often bonds are viewed through a “nominal” lens.
TIPS.
by gmaynardkrebs
Sat May 21, 2022 8:12 am
Forum: Investing - Theory, News & General
Topic: Vanguard Municipal Money Market VMSXX [0.03%]
Replies: 651
Views: 124004

Re: Vanguard Municipal Money Market VMSXX [0.03%]

Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
by gmaynardkrebs
Thu May 19, 2022 4:49 pm
Forum: Investing - Theory, News & General
Topic: 10Y TIPS May Re-Opening
Replies: 73
Views: 8727

Re: 10Y TIPS May Re-Opening

jeffyscott wrote: Thu May 19, 2022 4:40 pm
gmaynardkrebs wrote: Thu May 19, 2022 2:36 pm
jeffyscott wrote: Thu May 19, 2022 2:27 pm But the rest of the TIPS went down also. Maybe that's a reaction to the auction results?

Maybe demand was light due to the low yields just before?

I skipped it for that reason, but then went and bought a couple shorter term ones, after I saw the post here about the auction yield. Got about 0.2% on a 2030 and marginally positive yield on a 2028 (with a high coupon).
The 20 is about 5 basis points higher than the 30 -- I don't recall seeing that for a while.
For whatever reason, the real yield curve rates don't show that. The 30 year is about 12 bp higher than 20.
Jeff, FWIW, source is my Bloomberg terminal, showing the 30Y at .63% and the 20 at .75 at 4:59 pm EDST.
by gmaynardkrebs
Thu May 19, 2022 4:14 pm
Forum: Investing - Theory, News & General
Topic: If Valuation doesn't matter, what does?
Replies: 668
Views: 46766

Re: If Valuation doesn't matter, what does?

patrick wrote: Thu May 19, 2022 4:05 pm
gmaynardkrebs wrote: Thu May 19, 2022 9:36 amIt's broader than the Fed Put alone. The "Stocks for the Long Run" narrative has become so deeply embedded in the minds of of 401K/passive investors that they don't pay attention to valuations anymore.
Hardly. Even here on bogleheads there is plenty of market timing discussion, including based on various metrics. Pretty much anywhere else that discusses investments has an even greater amount of timing discussion than we do.
Bogleheads are so typical of the American public.
by gmaynardkrebs
Thu May 19, 2022 2:36 pm
Forum: Investing - Theory, News & General
Topic: 10Y TIPS May Re-Opening
Replies: 73
Views: 8727

Re: 10Y TIPS May Re-Opening

jeffyscott wrote: Thu May 19, 2022 2:27 pm But the rest of the TIPS went down also. Maybe that's a reaction to the auction results?

Maybe demand was light due to the low yields just before?

I skipped it for that reason, but then went and bought a couple shorter term ones, after I saw the post here about the auction yield. Got about 0.2% on a 2030 and marginally positive yield on a 2028 (with a high coupon).
The 20 is about 5 basis points higher than the 30 -- I don't recall seeing that for a while.
by gmaynardkrebs
Thu May 19, 2022 12:31 pm
Forum: Investing - Theory, News & General
Topic: If Valuation doesn't matter, what does?
Replies: 668
Views: 46766

Re: If Valuation doesn't matter, what does?

Are you saying the market will go up simply because the market “has” gone up? But haven’t we seen that this only works until it doesn’t, in all the great bubbles in the past? And isn’t there always a plausible “excuse” that allows people to keep a straight face? It’s this “excuse” that I’m searching for…. A simple answer as discussed by some above, is that the excuse has been the “Fed Put”. But we’ve seen spiking inflation for over a year….Why is it taking this long to understand the Fed has no choice? Is there another excuse hiding out there? I should have made it clearer, I was just answering how it could make sense to someone. It could be the "Lost Decade" for stocks as WSJ suggested the other day. Got it. And thanks for point...
by gmaynardkrebs
Thu May 19, 2022 12:16 pm
Forum: Investing - Theory, News & General
Topic: If Valuation doesn't matter, what does?
Replies: 668
Views: 46766

Re: If Valuation doesn't matter, what does?

Maybe outside this message board. Other people may be looking for an excuse that says why the market will never crash, but not Bogleheads. We don't have a keep a straight face while saying something stupid like "This market will keep going up because..." Yet, there is no other rational explanation for investing at all-time high valuations. Time and again, you, HomerJ, point at the worst periods in history to justify your actions. I'm pretty much a perma-bear, but even I have to admit that even if the market crashes terribly, some one could rationally, perhaps persuasively, believe that at some point in the future the high valuations of today may turn out to have been justified, and those who bought at the peaks will recover their...
by gmaynardkrebs
Thu May 19, 2022 9:36 am
Forum: Investing - Theory, News & General
Topic: If Valuation doesn't matter, what does?
Replies: 668
Views: 46766

Re: If Valuation doesn't matter, what does?

But this time, there doesn't appear to be any reason that people can point to for why buying the SP500 (at upper percentile valuation levels) makes any sense..... Yet, as a world investment community, we're doing it anyway.... Does this not strike anyone else as odd....? Not odd at all: "This too shall pass..." Said by either King Solomon or Salomon Brothers, can't remember. Shorthand for BTFD. Are you saying the market will go up simply because the market “has” gone up? But haven’t we seen that this only works until it doesn’t, in all the great bubbles in the past? And isn’t there always a plausible “excuse” that allows people to keep a straight face? It’s this “excuse” that I’m searching for…. A simple answer as discussed by so...
by gmaynardkrebs
Thu May 19, 2022 7:53 am
Forum: Investing - Theory, News & General
Topic: If Valuation doesn't matter, what does?
Replies: 668
Views: 46766

Re: If Valuation doesn't matter, what does?

But this time, there doesn't appear to be any reason that people can point to for why buying the SP500 (at upper percentile valuation levels) makes any sense..... Yet, as a world investment community, we're doing it anyway.... Does this not strike anyone else as odd....? Not odd at all: "This too shall pass..." Said by either King Solomon or Salomon Brothers, can't remember. Shorthand for BTFD. Are you saying the market will go up simply because the market “has” gone up? But haven’t we seen that this only works until it doesn’t, in all the great bubbles in the past? And isn’t there always a plausible “excuse” that allows people to keep a straight face? It’s this “excuse” that I’m searching for…. A simple answer as discussed by so...
by gmaynardkrebs
Wed May 18, 2022 2:05 pm
Forum: Investing - Theory, News & General
Topic: If Valuation doesn't matter, what does?
Replies: 668
Views: 46766

Re: If Valuation doesn't matter, what does?

CraigTester wrote: Wed May 18, 2022 1:27 pm But this time, there doesn't appear to be any reason that people can point to for why buying the SP500 (at upper percentile valuation levels) makes any sense..... Yet, as a world investment community, we're doing it anyway....
Does this not strike anyone else as odd....?
Not odd at all: "This too shall pass..." Said by either King Solomon or Salomon Brothers, can't remember. Shorthand for BTFD.
by gmaynardkrebs
Thu May 12, 2022 12:22 am
Forum: Personal Investments
Topic: Buying TIPS vs. TBills/Notes on Secondary Market
Replies: 20
Views: 1688

Re: Buying TIPS vs. TBills/Notes on Secondary Market

The "deflation adjustment" section in the IRS pub I linked to above appears to apply to securities held at the end of the year and those sold during the year, even though the deflation example given is for a sale. If I'm reading this wrong, hopefully someone will chime in. (Talking about individual TIPS.) That's the way I read it too. Example 9. Assume the same facts as in Example 8, except that you bought the debt instrument for $9,831 on January 6 of Year 9, when the inflation-adjusted principal amount was $12,050.10, and sold the debt instrument on March 1 of Year 9, when the inflation-adjusted principal amount was $12,011.20. Because the OID calculation for Year 9 ($12,011.20 − $12,050.10) produces a negative number (negative...
by gmaynardkrebs
Wed May 11, 2022 3:28 pm
Forum: Personal Investments
Topic: Buying TIPS vs. TBills/Notes on Secondary Market
Replies: 20
Views: 1688

Re: Buying TIPS vs. TBills/Notes on Secondary Market

rbrb wrote: Wed May 11, 2022 12:55 pm Thank you so much, and sorry for my bad math.

Just curious, if the inflation rate goes down and the value of the TIPS goes down from the prior year, do you post a loss? The taxing structure of TIPS (in a taxable account) makes it really unattractive.
IIRC, some years back, the Vanguard TIPS fund VAIPX treated the YOY deflation adjustment as a return of capital. No tax consequences. For a TIPS bond in a taxable account, deflation reduces the "bond factor" (accumulated inflation since issuance). If memory serves, it does not generate a tax loss or deduction. I'm pretty sure I'm right about this, but I'm not a tax maven, just going by memory over the last 20 years or so with my TIPS holdings.
by gmaynardkrebs
Sun May 08, 2022 9:23 pm
Forum: Investing - Theory, News & General
Topic: What is the bull case for nominal bonds right now?
Replies: 113
Views: 14194

Re: What is the bull case for nominal bonds right now?

There is much bearish sentiment in the air about this asset class, so it would be good to hear the other side. I don't find "because I hold stocks" to be a persuasive bull case because that's not even about the bonds themselves. I am not bullish on bonds by any means but I do wonder if there is an opportunity in nominal bonds. We might be experiencing peak inflation right now. Thus, I am reluctant to do a nominals for TIPS switch in my portfolio now. There is a lot I don't know, I am wary of perhaps doing more harm than good to my portfolio by making changes now. My thinking is to wait this out, my portfolio was built with inflation risk in mind though I regret that I didn't own more TIPS. If my portfolio was good enough to battl...
by gmaynardkrebs
Sun May 08, 2022 12:54 pm
Forum: Investing - Theory, News & General
Topic: What is the bull case for nominal bonds right now?
Replies: 113
Views: 14194

Re: What is the bull case for nominal bonds right now?

There is much bearish sentiment in the air about this asset class, so it would be good to hear the other side. I don't find "because I hold stocks" to be a persuasive bull case because that's not even about the bonds themselves. I am not bullish on bonds by any means but I do wonder if there is an opportunity in nominal bonds. We might be experiencing peak inflation right now. Thus, I am reluctant to do a nominals for TIPS switch in my portfolio now. There is a lot I don't know, I am wary of perhaps doing more harm than good to my portfolio by making changes now. My thinking is to wait this out, my portfolio was built with inflation risk in mind though I regret that I didn't own more TIPS. If my portfolio was good enough to battl...
by gmaynardkrebs
Sun May 08, 2022 11:45 am
Forum: Investing - Theory, News & General
Topic: What is the bull case for nominal bonds right now?
Replies: 113
Views: 14194

Re: What is the bull case for nominal bonds right now?

There is much bearish sentiment in the air about this asset class, so it would be good to hear the other side. I don't find "because I hold stocks" to be a persuasive bull case because that's not even about the bonds themselves. I am not bullish on bonds by any means but I do wonder if there is an opportunity in nominal bonds. We might be experiencing peak inflation right now. Thus, I am reluctant to do a nominals for TIPS switch in my portfolio now. There is a lot I don't know, I am wary of perhaps doing more harm than good to my portfolio by making changes now. My thinking is to wait this out, my portfolio was built with inflation risk in mind though I regret that I didn't own more TIPS. If my portfolio was good enough to battl...
by gmaynardkrebs
Sun May 08, 2022 10:21 am
Forum: Personal Investments
Topic: Where to put cash other than ibonds right now (due to inflation)
Replies: 31
Views: 5802

Re: Where to put cash other than ibonds right now (due to inflation)

willthrill81 wrote: Sun May 08, 2022 10:00 am
02nz wrote: Sun May 08, 2022 9:57 amThey don't come with inflation protection - but TIPS' inflation protection isn't free, either.
The cost of TIPS' inflation protection is very arguably so small as to be inconsequential to most retail investors, and it might even be negative. The breakeven inflation rate on 5 year TIPS is only 3.2%, which is far below the most recent annual inflation rate of 8.5%.
What confuses me is that TIPS haven't don't seem to have done all that well over the years, and even lately with all the inflation fears.
by gmaynardkrebs
Sat May 07, 2022 9:08 pm
Forum: Investing - Theory, News & General
Topic: TIPs: The final year in the life of a 5 year TIP
Replies: 125
Views: 14292

Re: TIPs: The final year in the life of a 5 year TIP

grok87 wrote: Sat May 07, 2022 5:28 pm I think the bonds were issued at close to par. I’ll Assume 100 but probably someone will correct me. Today you can sell for 118.29.
So 18.3% gain pretax
Although, I think you've already paid the tax on the inflation adj as OID, unless in an IRA.