Bogleheads.org

I’ve owned it since 1998. You can’t really argue much with the historical result; what happens in the future no one knows, but at least it is relatively low cost and low turnover, so it has some of the same attributes of what makes index funds a good choice.

Why do you expect to need to replace the catalytic converter? It’s not a part that typically goes bad.

What you stated in your original post is correct. The brokerage or mutual fund is just holding the underlying assets for you; you effectively own a piece of the underlying assets of the fund or own the securities such as individual stocks or bonds being held for you.

I also hold this fund although in a lower percentage than you do. The Vanguard fund holds the higher rated high yield aka “junk” bonds. This fund will act like a hybrid of stocks and bonds in terms of performance. If the economy goes into a recession, these bonds will lose some value due to concerns among investors that the bonds will default. The fund will also slowly lose value over time due to downgrades or defaults; this is the risk for receiving the higher yield. If this fund makes up 24% of your portfolio, covers your $700 income need and you are not taking other withdraws, I personally think your strategy is fine. High yield bonds get discussed a lot here, with some people loving them and others not. There are of course other ways to...

The 30 day treasury yield has fallen from a high of 4.83% on March 9 to 4.23% today. The 8 week treasury has fallen as well but a little less overall and is in the same range (4.57% right now). That’s a decent proxy for money market funds. So - if rates would stay closer to the current value for a period of time, you’d expect to see the money market fund fall a half percent or so from its current level. That is a big IF however as the fund is constantly having older securities mature and replacing them with new, so the fund will tend to lag the current rate trend a bit. And rates could always increase again in a week. Or go down more. We just don’t know for sure.

One risk is if you take your car in for service with a really dirty filter they will change it and charge you 10 times what it would cost to do it yourself. This is especially a risk with a spouse who doesn’t know better and OKs the charge. This. I had a nice, expensive filter that got replaced in 6 months with a cheap filter at 4x the price exactly in this manner. Some do this aggressively. Jiffy lube near my place for instance. They'll proudly display a filter from afar and claim it'll damage your engine, but they can fix the problem easily and bill it to you. Most folks who don't know better will gladly accept it. Yes, no matter how new or old it is, it’s dirty and should be replaced according to them. Same with your wiper blades, cabin...

One thing I will point out if you don’t know and that I recently learned helping my son roll over a Roth 401(k). If there is any employer match money, that actually needs to be rolled over to a traditional rollover IRA unless you want to do a Roth conversion and pay taxes on the rollover amount. The employee sourced money can go to a Roth IRA rollover. So if yo rollover a Roth 401(k), you would potentially have two rollover accounts, one Roth and one traditional. That's because employer match money cannot be contributed to a Roth account--so there can never be employer-match money in a Roth account in a 401(k). Correct, it’s just that most 401(k) statements or websites gloss over the fact that the money is in two separate buckets - i.e., h...

A common theme I see in lower priced off-brand or budget line tire reviews that is most concerning to me is relatively poor wet/rain performance.

You could contact Taylor Larimore on the forum and ask if he needs any help removing barnacles off the sail boat

Open the pod bay doors, HAL ChatGPT

One thing I will point out if you don’t know and that I recently learned helping my son roll over a Roth 401(k). If there is any employer match money, that actually needs to be rolled over to a traditional rollover IRA unless you want to do a Roth conversion and pay taxes on the rollover amount. The employee sourced money can go to a Roth IRA rollover. So if yo rollover a Roth 401(k), you would potentially have two rollover accounts, one Roth and one traditional.

I don’t remember this much free floating anxiety at Bogleheads during the 2008 GFC. That's an interesting observation. My thought is that in 2008 we were a more unified country and didn't see a conspiracy under every bed (ESG, DEI, "woke" isn't what caused this). I think part of it was in 2008, it was an across the board financial crisis - we were all along for the same ride. In this case, a specific set of banking customers were at risk while the rest of us were seemingly ok. We think. Maybe. People want to know - in my specific situation, am I good or will I be the next one circling the drain? To use a bad analogy which I tend to love to do, it’s like a small group of people got very ill eating some bad sausage and so now every...

The Vanguard TIPS fund is not near an all time high; it is actually at or near the lowest it’s been in 5 years or more. Given that none of us can reliably predict the future, I would put together a plan to get to your desired asset allocation. Do it all at once now or you could move a chunk in every quarter over the next year to smooth out any valuation concerns.

Charles Joseph wrote: ↑Tue Mar 14, 2023 5:59 pm

John Z wrote: ↑Tue Mar 14, 2023 5:25 pm Short term (1-day, 1-week, 1-month, 3-month and YTD are in the bottom 2 quartiles of performance which is a good thing, you would be buying in low.

Or, manager risk is showing up. Matt Hand just recently took the helm with Michael Reckmeyer's retirement (equity side).

I sold Wellesley a few months ago when I finally surrendered to all index. I miss it, but for me (and me only) I had to pick sides in order to keep sane. Active? Or index?

It tends to hold more value stocks which have not done well this year. Last year value stocks were great. Overall it’s a solid, low cost low turnover active fund.

Telemarkers can spoof the caller ID and make it show whatever they want it to. The idea is you see a number that looks familiar, or alarming and you answer the call.

While I don’t have direct experience with Douglas, the OEM tires on our Dodge Caravan (now long ago sold) were Goodyear Integrity. These were Goodyear’s budget tires. When they wore out, we replaced them with Goodyear ComforTred which is one of Goodyear’s premium tires. The Integrity’s by comparison were: similar on dry pavement, not as good in the rain or snow, louder, and wore out more quickly. I’d expect Douglas are similar. For a car driven less frequently, mostly in dry weather, they are probably passable. Anything else, or if money is not really the issue, I’d get something better.

paul e, you are taking a bit of a beating here - but you seem to be taking it well, so kudos. As others have said, nobody knows what will happen. We all have our “gut”, but things change quickly. The current banking crisis came out of nowhere, for example. Now of course we will see people coming out of the woodwork and claiming “I saw this coming - I TOLD you this would happen”. And they may have. But my experience over time is that you might makes some good calls and you might make some bad. So - what I would do is: think about the current situation. What happens if your gut is right? What does it mean to you? What happens if you turn out to be wrong? What would that mean to you? And then chart a course that you can live with if either sce...

Even the most pro-free market WSJ admits that this is a bailout. Free market doesn't mean that only the rich have free put options while the poor have to pay for it. If there is to be a bailout, then there should be a commitment that it will be borne entirely by all big depositors, not by FDIC. The WSJ, while a fine news organization, has a definite political slant to it (as many media sources do). I would take opinion pieces in the WSJ as exactly that - someone’s opinion aligned to the views and orientation of the media source itself. I would say the WSJ’s free market orientation makes it more likely to want to call this a bailout, not less. Laissez faire capitalism has some flaws in my opinion, but that tends to be where the WSJ lands. T...

This ignores the reality that depositors lack the skills, information, and resources to properly evaluate the creditworthiness of banks. It also ignores the reality that a nationwide bank run on all regional and mid sized banks was likely. Investing the customer deposits wisely is the obligation of the shareholders bondholders and bank management. They will face the consequences (complete wipeout). Punishing depositors accomplishes nothing except the perverse counterproductive effect of concentration in too big to fail which actually leads to the exact consequences you are seeking to avoid. +1 There is conjecture that uninsured depositors will be made whole because the bank has sufficient assets to pay them. And some bond holders might get...

At 12/31/2023, SVB had total assets of $211 billion. Liabilities and stockholders equity were of course the same. Deposits totaled $173 billion. That's $211 billion of assets to cover $173 billion of deposits (equity and other debt come after depositors). The assets could decline in value by 18% and still cover the deposits. That doesn't seem plausible given the nature of the assets, but perhaps someone has better information. If this is correct, the FDIC is not going to need to make a sizeable special assessment. We shall see. They could have said Asset > Liability, so we are all good. But they didn't, they said they will guarantee, hence moral hazard... Or did they run the numbers, saw that asset > liability and said “we can guarantee at...

elderwise wrote: ↑Sun Mar 12, 2023 5:50 pm

trirunner wrote: ↑Sun Mar 12, 2023 5:48 pm

jebmke wrote: ↑Sun Mar 12, 2023 5:47 pm

trirunner wrote: ↑Sun Mar 12, 2023 5:45 pm

jebmke wrote: ↑Sun Mar 12, 2023 5:39 pm

I believe in resolutions they have a special FDIC assessment on banks to fund any shortfall borne by FDIC. Essentially an industry "bailout" to the extent the wind-down results in losses.

It's basically a bailout, the industry will pass the cost down to average customers. so average Americans will pay to make VC whole.

Isn't that true with all insurance?

I did not sign up to pay to insure > $250k for VCs.

Exactly, when I pay for my car or homeowners insurance I am protecting MY asset.

Not my neighbors.

Your neighbor’s house is on fire and you live downwind. And there’s a strong wind a blowin’.

That is 7.5%, so if you think of 2022 where inflation was running 7-9% for a period of time, plus any fixed coupon rate, it makes sense.

b4nash wrote: ↑Sun Mar 12, 2023 11:19 am

QuiGonJohn wrote: ↑Sun Mar 12, 2023 11:03 am Well if that's the case, then the numbers they are basing the calculations on are "fabricated" to tell a different story. Inflation is still bad. Just shopped, 16oz bottle of Kraft Salad Dressing, that was $2.52 before Jan 2021, now was $5.99. Many other items similar story.

Kraft salad dressing is $2.98 right now at my Walmart. $1.97 for the store brand.

Ken’s Steakhouse varieties $1.99 at Kroger if you buy 5 items in the promo group. Usually $3.99; $2.98 everyday at Walmart. I saw Kraft salad dressing for $1.99 a few weeks ago at Kroger under a similar promo.

I see so many people just pay full price for grocery items when you can shop around and/or use coupons and sales to save a lot of money.

I am not saying they are unattractive to people that understand how they work, but I think many new people bought them thinking they were getting an interest rate of 9.62% or 6.89% when they were really only getting a fixed rate of 0% or 0.4% plus a fleeting inflation adjustment. So now that money markets and CDs are available for 4.5%, 5% or higher, I think people will be less inclined to stick with iBonds unless the fixed rate comes in quite a bit higher. I am not disillusioned with iBonds because they don't stay at the 9.62% I started with. Rather I am disappointed because, DESPITE the FED continually raising interest rates, Treasury lowered the rate on iBonds once, in Nov, and now pundits say they will do so going into May. To me, what...

whodidntante wrote: ↑Sat Mar 11, 2023 8:43 pm

smooth_rough wrote: ↑Sat Mar 11, 2023 10:50 am What is schwabs exposure to long bonds?

Some data here:
https://seekingalpha.com/article/458662 ... g-cautious

Some commentary from me:
They are not especially vulnerable under "normal" conditions. In a panic environment, sure. Schwab could be forced to liquidate holdings and could fail.

Schwab’s holdings don’t include any stocks, bonds or mutual funds held in customer accounts in their brokerage arm, however. Schwab is just the trustee holding those assets on behalf of their customers. The customers own those assets, not Schwab.

If Schwab were to fail, those would remain and be moved to another brokerage as part of a reorganization.

My question is why did people all of the sudden need to rush to get money out. Do they have a liquidity problem? On a day to day bases people should not need all the money. This are not individual account holders. This are business owners who need to do payrolls and pay bills asap. So the bank did not have enough to satisfy normal operations of clients or they didn't have enough to cover a panic? What I can gather it started from a big investor telling people to pull money out. No sure why we are pussyfooting around on naming the "big investor." Although there may have been more than one. Bloomberg reported on Thursday, 3/9/2023 that Founders Fund, the venture capital fund co-founded by Peter Thiel, has advised companies to pull ...

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023. Why would 4% be terrible? You’re still getting ~7% right now for six months, so that would give you a blended average of 5.5% for the year. If the Fed is to be believed, interest rates may reach that level this summer, at which point half the year is already gone. Plus, there’s already been a recent uptick in inflation, belying the claim that some made that inflation was over. Also, some now believe that rates can’t go as high because of the SV Bank mess. Who knows? But with I bon...

tibbitts wrote: ↑Sat Mar 11, 2023 9:57 pm

Kenkat wrote: ↑Sat Mar 11, 2023 8:28 pm I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

"Fairly small"? Maybe more like "complete."

I said “fairly rapid”?

Banks and brokerages are fundamentally different. A bank takes your money and then loans it out or invests it. If the bank collapses, your money is tied up or not immediately available. If a bank makes enough bad investments or loans, there might not be enough money to cover all deposits.

A brokerage on the other hand just uses your money to buy securities - stocks, bonds, mutual funds - and then holds them for your benefit. Barring some outright fraud, if a brokerage collapses, your stocks, bonds and mutual funds are still there and yours. There’s not a lot of reasons for a brokerage to collapse in the same way a bank might.

Here’s a good summary of what protection SIPC provides:

https://www.sipc.org/for-investors/what-sipc-protects

I wonder if we are going to see a fairly rapid loss of interest in iBonds among investors newer to them that got in when they had a composite rate of 9.62% now that the new composite rate is looking more like something in the 3.5-4% range starting in May of 2023.

Money in a brokerage account, while not covered by FDIC, is also not directly held by the bank ... I don't know about First Republic but at many brokerages, uninvested cash is (or at least can be) FDIC insured. Seem to me the easy way to get better yield AND the full faith and credit of the U.S. government is to just buy treasuries. It is sometimes an option but typically a federal money market fund is the default. Vanguard just recently added an FDIC option. Interesting. My experience is the "good" brokerage firms like Vanguard and Fidelity use a money market fund as default but the "stingy" ones like Merrill Edge and Etrade use FDIC cash as default (less interest). I only have experience with brokerages at Vanguard an...

Is this a rollover to the mutual fund platform or the brokerage platform? I just recently helped my sister consolidate some IRA and 401k accounts to Vanguard and I could see a transaction of “Incoming Check” and the amount online, with the actual money hitting the account a few days later when the check actually was processed. I have the brokerage platform. Is that where you saw the transaction? I don't see it in my brokerage account. But thanks for the tip. l'll keep looking next week. Yes, brokerage platform. We did rollovers from 5 accounts. Two of those were initiated from Vanguard (one electronic, one paper) and three from the source company. One check came to us and we forwarded, the others were direct trustee to trustee. It seemed a...

Is this a rollover to the mutual fund platform or the brokerage platform? I just recently helped my sister consolidate some IRA and 401k accounts to Vanguard and I could see a transaction of “Incoming Check” and the amount online, with the actual money hitting the account a few days later when the check actually was processed.

02nz wrote: ↑Sat Mar 11, 2023 10:09 am

Kenkat wrote: ↑Sat Mar 11, 2023 8:45 am Money in a brokerage account, while not covered by FDIC, is also not directly held by the bank ...

I don't know about First Republic but at many brokerages, uninvested cash is (or at least can be) FDIC insured.

Seem to me the easy way to get better yield AND the full faith and credit of the U.S. government is to just buy treasuries.

It is sometimes an option but typically a federal money market fund is the default. Vanguard just recently added an FDIC option.

Go to the website, find the page that lists the account ownership / registration (including the POD designation) and print it out. Print out the beneficiary page as well.

Financial institutions and all the people that work at them take their responsibilities very seriously. Same with the FDIC. At some point, you have to trust in the process and the people behind them. Vanguard could be storing all of our money in a shoebox and giving it to magical dwarves to store for us, but there are people, rules and regulations to ensure that does not happen.

Understand the existing rules, ensure you are covered and then take a deep breath is my advice.

Money in a brokerage account, while not covered by FDIC, is also not directly held by the bank, so while not immune to market forces, it is also somewhat insulated because it is not part of the bank’s balance sheet. For example, if you held stocks, bonds or mutual funds in the brokerage account, if First Republic bank were to be shut down, you’d still own those stocks, bonds or mutual funds. First Republic is just the trustee holding them for you.

stoptothink wrote: ↑Fri Mar 10, 2023 3:13 pm My wife is in fintech and a significant number of her clients/accounts had accounts with Silicon Valley Bank. She's been on the phone non-stop since early this morning and her employer has asked everybody to be on call through the weekend; absolute pandemonium.

I saw a post this morning on the r/personalfinance sub-Reddit from someone who said they are typically paid by their employer through an SVB account; they did not get a paycheck today and the company itself could be in some peril if this is not resolved quickly. So these types of events do impact “regular” folks.

What happened to bank "resiliency" requirements after the great recession? Lol...Guess that didn't happen...eh? :oops: Oh, it happened. And then things were ok again and we got comfortable and rolled some of those regulations back. Meet the new bank (failure), same as the old bank (failure)… Sadly, we will get fooled again. And again.* * https://en.wikipedia.org/wiki/Won%27t_Get_Fooled_Again What regulations were rolled back that were related to this? https://www.cnbc.com/amp/2018/05/24/trump-signs-bank-bill-rolling-back-some-dodd-frank-regulations.html https://www.washingtonpost.com/business/economy/senate-passes-rollback-of-post-financial-crisis-banking-rules/2018/03/14/43837aae-27bd-11e8-b79d-f3d931db7f68_story.html https://co...

"Bank stress from bond holdings". The problem wasn't that SVB held bonds. The problem was that SVB had deposits that could be withdrawn quickly and assets that had significantly longer terms. Borrow short and lend long is risky and the risk manifested. If they had a more conservative portfolio of assets they wouldn't have a problem. They didn't anticipate that they might have to liquidate longer term bonds in the face of higher interest rates due to depositors withdrawing money, leading to a classic bank run. Bad risk management. What happened to bank "resiliency" requirements after the great recession? Lol...Guess that didn't happen...eh? :oops: Oh, it happened. And then things were ok again and we got comfortable and ...

The other option is quit with two weeks notice and then refuse to work more than 40 hours and drag your feet on anything that is not transition related. They may just ask her to leave immediately. Worst case, if it degenerates further, she can always just walk down to HR, say “today is my last day due to an increasingly hostile work environment, here’s my badge” and then walk out.

watchnerd wrote: ↑Fri Mar 10, 2023 9:47 am

jebmke wrote: ↑Fri Mar 10, 2023 7:59 am
If I read your last paragraph correctly, that implies that a LMP portfolio could explode if the "L" part moves shorter and larger for an individual (e.g. sudden health crisis requiring long term uninsured care or other lump that was not anticipated or wrongly forecast in the expense forecast).

It could if all your net worth was in an LMP.

But if you couple that with a risk portfolio, a cash account, and a paid off house, you have options other than liquidating your bond ladder prematurely.

This is basically my plan for financing my retirement pre-social security in one sentence.

How long does the bridge need to be? Is it just 3 years, from 65 to 68?

If it’s just the lenses that are cloudy, you can get polish or a kit to restore them if you haven’t tried that yet.

I’ve used Meguiar's that makes both a polish and a kit and 3M makes a kit as well.

If yield to maturity is close to zero and you don't want to hold equities, then simply sit in cash or very short term fixed income. No reason to risk a loss of 12% on your money because you were reaching for a yield of 1%. I think the converse may soon be true ie: if yields start to reach 6% then the upside is much higher than the downside. There’s a little revisionist history here. The absolute lowest the yield of Total Bond Index got was 1.94% in 2021. The average yield for 2021 was 2.25%: https://seekingalpha.com/symbol/VBTLX/dividends/yield At that time, money market funds were paying 0.01%. HYSA’s were paying 0.4%. Ask me how I know. So the decision in 2021 or 2022 was zero or close to zero in money markets or HYSA or 2%-ish in Total ...

This might also be relevant:

https://www.ssa.gov/oact/ssir/SSI11/Exclusions.html

You might be able to also contribute money to an ABLE account that she could utilize for savings and other expenses:

https://www.ablenrc.org/what-is-able/wh ... e-acounts/

Because of all this esoteric math my takeaway from this is to just buy individual Intermediate term Treasuries. The 5 year Treasury at the time I bought VBTLX was paying the exact same yield, around 2.6% or so. If I had bought a 5 year T note I would've been doing great instead of losing a whole boatload of money. The thing I would consider is this: if you bought a 5 year treasury at 2.6% in July of 2018, you’d need to buy another one in July of 2023. Let’s say that ends up being 4.25%. Great, it’s up and you lost nothing from 2018-2023. Now, advance 5 more years. You will need to buy a 5 year treasury in July of 2028. What will the rate be then? At the end of 15 years, would you have been better off with the 5 year treasury strategy or th...

I would talk to them but rather than attack Tina’s motives and character (even if it is justified), I would focus on what could go wrong. Folks, I understand the agreement but you have absolutely no legal basis for getting your share of the money back. What if she is killed in a car crash? What if she has a terminal illness in the future and needs money for her care? What if her husband dies, she remarries and future hubby doesn’t view the agreement in the same way? And then add that there are ways to structure this type of thing so that you are protected from these types of events. The ship has kind of sailed on the current situation (Tina already has the money) but maybe for future situations this would help. I’d also add that hopefully y...

I have a couple of these at home:

https://www.staples.com/staples-traymor ... t_24328571

Is it unreasonable to expect transparency for the two balances? No. It is not. I guess I am fortunate because I can see everything in my 401(k) by money source - employee pre-tax, employer match, qualified rollover, etc. There are something like 30 different possible classifications. And I can specify money source if I do transfers or other transactions. It will default to all money sources but it will ask if I want to specify one. I know they have to track all this in the back-end record keeping system but I guess they don’t see the need to expose it to the customer, despite its usefulness. Perhaps they think displaying this information would be unnecessarily confusing and would lead to additional questions and customer service interactio...