Search found 3568 matches

by alex_686
Sun Jul 15, 2018 2:11 pm
Forum: Personal Finance (Not Investing)
Topic: College savings plans - Roth vs. 529
Replies: 32
Views: 2285

Re: College savings plans - Roth vs. 529

And for financial aid purposes, 100% of withdrawals from a Roth IRA and other retirement accounts count as income, even if the money isn’t taxed as income. Is that true? I am not sure what my income will be when my kids are going to college (for example, if I reach FI as I am planning then I will b...
by alex_686
Sun Jul 15, 2018 2:05 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 92
Views: 5994

Re: Why is leveraging property good but leveraging stocks bad?

Sigh, I had meant the use of the 2008 housing crash as a ironic aside. That real estate was low risk, but not risk free. And then people used that to sneak in other edge cases. Not my intention. I did come across volatility drag and geometric returns over the course of my own self-research on this t...
by alex_686
Sat Jul 14, 2018 8:45 am
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 92
Views: 5994

Re: Why is leveraging property good but leveraging stocks bad?

Stocks tend to have higher volatility. That is they can move down faster than homes? Every heard of the phrase "As safe as houses"? When was the last time you heard of house prices falling? :twisted: So that is why I use the word "tends". For something more in-depth you can look at the many real-est...
by alex_686
Fri Jul 13, 2018 4:38 pm
Forum: Investing - Help with Personal Investments
Topic: New 18 year old need advice
Replies: 15
Views: 812

Re: New 18 year old need advice

Thank you for the advice! Do you recommend investing in Vanguard brokerage CD's or should put the money into bank CD's? I would advocate for brokerage CDs. This allows you to shop for the best rates and keep all of your money in a single location. The downside is that it is slightly more complicate...
by alex_686
Fri Jul 13, 2018 3:08 pm
Forum: Investing - Theory, News & General
Topic: Morgan Stanley Wealth Management
Replies: 8
Views: 918

Re: Morgan Stanley Wealth Management

But but but, banks are so trustworthy... :shock: You are takeing the wrong talk-away. It is that widows's broker accounts should be closed down. As a compliance officer once told me, widows always win court cases. I can tell you of some stories about some really sharped edge MBA finance types that ...
by alex_686
Fri Jul 13, 2018 12:05 pm
Forum: Investing - Help with Personal Investments
Topic: Self Employed 48years old and nothing saved for retirement
Replies: 40
Views: 4633

Re: Self Employed 48years old and nothing saved for retirement

I might consider not buying a house. Lots of expenses in owning a house many of which are not obvious especially if you have been a renter. Also, the ability to deduct taxes and mortgage interest may not be as doable. If you don't keep your house and landscaping up the house value will not keep up....
by alex_686
Fri Jul 13, 2018 11:56 am
Forum: Personal Finance (Not Investing)
Topic: College savings plans - Roth vs. 529
Replies: 32
Views: 2285

Re: College savings plans - Roth vs. 529

Different accounts make easier personal book-keeping, also. (this is just how my brain works). It is not just how your brain works, it is how our brain works. This is called "mental accounting" and is considered a "cognitive bias". Rationally it is better to integrated all of your goals into a sing...
by alex_686
Fri Jul 13, 2018 9:40 am
Forum: Investing - Help with Personal Investments
Topic: Investing for my homeowner's association
Replies: 31
Views: 1510

Re: Investing for my homeowner's association

Our HOA keeps about 75% in Vangaurd's Short Term Corporate Bond Fund. It has a duration of about 3. It has served us well. No restriction on what we can invest in. Luckily we did not have any big expenses during the 2008 crash. I would go with a longer duration for liability matching but it is not w...
by alex_686
Thu Jul 12, 2018 9:53 pm
Forum: Investing - Help with Personal Investments
Topic: Questions about my perspective on bond funds
Replies: 13
Views: 889

Re: Questions about my perspective on bond funds

Ive noticed this-all the talk about the rising rates so I was researching and reading but all I saw was small st and int term bumps up. First, expected rate changes are already incorporated into bond prices. So now you have to enter into second order thinking - on how current expectations about ris...
by alex_686
Thu Jul 12, 2018 3:45 pm
Forum: Investing - Help with Personal Investments
Topic: Self Employed 48years old and nothing saved for retirement
Replies: 40
Views: 4633

Re: Self Employed 48years old and nothing saved for retirement

Hello. I was probably not very clear here. I am currently trying to pay down all of my debt so I can go into the home purchase free of debt and then try to get a 15 year mortgage. So as others have suggested you should take a step back and figure out your goals. ExitStageLeft has some good links on...
by alex_686
Thu Jul 12, 2018 3:08 pm
Forum: Investing - Help with Personal Investments
Topic: What is a shell account?
Replies: 7
Views: 701

Re: What is a shell account?

Rosie: My husbands company has their 401K invested in American Funds through a local financial services company. We got a letter from the company's representative that said -"We have been doing some housekeeping and it was discovered that we do not have a "shell" account for the following account h...
by alex_686
Thu Jul 12, 2018 2:47 pm
Forum: Investing - Help with Personal Investments
Topic: What is a shell account?
Replies: 7
Views: 701

Re: What is a shell account?

Then I would talk to the employer's HR and see if this is really required. I can't see how it would be required. As a side bar, I suspect this has something to do with the new fiduciary rules. The rules require that financial adviser (FA) are to act in your best interest. Many here on Bogleheads app...
by alex_686
Thu Jul 12, 2018 2:14 pm
Forum: Investing - Help with Personal Investments
Topic: What is a shell account?
Replies: 7
Views: 701

Re: What is a shell account?

Welcome to the forum. I am making a few guesses here. The typical structure these days is to have a brokerage account (the shell account) holding the various mutual funds. We can debate the fine points about this but it is close to becoming mandatory. That being said, I think this is a mistake. I am...
by alex_686
Thu Jul 12, 2018 1:34 pm
Forum: Investing - Help with Personal Investments
Topic: Self Employed 48years old and nothing saved for retirement
Replies: 40
Views: 4633

Re: Self Employed 48years old and nothing saved for retirement

I am currently trying to pay down my debt in order to buy a house debt free. Welcome to the forum. I want to ask you a question to get a better idea of your goals and risk tolerance. Why do you want to buy a house debt free? To expound on this, all 3 of these activities are investing. 1. Paying dow...
by alex_686
Thu Jul 12, 2018 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: Questions about my perspective on bond funds
Replies: 13
Views: 889

Re: Questions about my perspective on bond funds

I would discard the "firesale" or "value" prescriptive. Bond yields have fallen since 2008 to historically low levels. The house has burned down and we are now in rebuilding mode, hopefully, to a more normal level. Or at least out of the basement. I am a proponent of bonds but we should not sugarcoa...
by alex_686
Wed Jul 11, 2018 9:50 pm
Forum: Personal Finance (Not Investing)
Topic: College savings plans - Roth vs. 529
Replies: 32
Views: 2285

Re: College savings plans - Roth vs. 529

I am not in favor of using retirement accounts for other purposes. There are many ways to pay for college, but only one to pay for retirement. If you don't like 529 plan restrictions, either set up an UTMA account or just invest in a taxable account. What? There are just as many ways for retirement...
by alex_686
Wed Jul 11, 2018 9:16 pm
Forum: Investing - Theory, News & General
Topic: Total returns
Replies: 20
Views: 1646

Re: Total returns

It can be, both legally and practically. Trading costs are a function, in part at least, of fund flows. If one share class is generating more net flows then that class is going to bear the weight of the associated trading costs. Trades due to rebalancing etc will be allocated in proportion to asset...
by alex_686
Wed Jul 11, 2018 9:15 pm
Forum: Investing - Theory, News & General
Topic: Market cap weighting vs rebalancing
Replies: 11
Views: 732

Re: Market cap weighting vs rebalancing

So, one of the tenets of modern financial theory is that all assets have the same risk adjusted returns. For example, if we assume that a 10 year government bond has the same risk adjusted return as the stock market then we can figure a few things out about investor's expected return and risk tolera...
by alex_686
Wed Jul 11, 2018 4:25 pm
Forum: Investing - Theory, News & General
Topic: Total returns
Replies: 20
Views: 1646

Re: Total returns

Also, the published expense ratio does NOT include all the expenses a fund incurred. It's basically just the management expenses. Trading costs, for instance, are not included and its possible that they are lower (on a percentage basis) for Admiral shares. Also revenue from securities lending gets ...
by alex_686
Wed Jul 11, 2018 3:49 pm
Forum: Investing - Theory, News & General
Topic: Total returns
Replies: 20
Views: 1646

Re: Total returns

1. I would point out that you have the same benchmark return for both, so I am a bit confused by the "If they are measuring the same index". Having done this for a living, different returns for different share classes must come down to the expense ratios. Or something very very wrong is happening. 2...
by alex_686
Wed Jul 11, 2018 3:38 pm
Forum: Investing - Theory, News & General
Topic: Market cap weighting vs rebalancing
Replies: 11
Views: 732

Re: Market cap weighting vs rebalancing

There are 3 parts to your question. (I suppose one possible answer is that computing weights based on expected returns and correlations is implicitly being performed by the efficient market. This would render the whole question moot: the optimal weighting would happen to coincide with the market wei...
by alex_686
Wed Jul 11, 2018 10:15 am
Forum: Personal Finance (Not Investing)
Topic: 30 Year vs 15 Year Mortgage
Replies: 79
Views: 4412

Re: 30 Year vs 15 Year Mortgage

Takes a lot of discipline to stay on a 15-year schedule on a 30-year note if you don't have to. I personally couldn't make myself do it, so I re-fied to a 15-year to save the interest. It sucks now, but I'll feel way better about it in 2030, when I would have otherwise had another 12 years to go. I...
by alex_686
Tue Jul 10, 2018 9:38 pm
Forum: Investing - Theory, News & General
Topic: Stock ETFs -- Should I look at the SEC yield, Distribution Yield, or TTM yield?
Replies: 22
Views: 957

Re: Stock ETFs -- Should I look at the SEC yield, Distribution Yield, or TTM yield?

You will want to use the forward P/E ratio. I think you are using trailing P/E. SEC yield is inappropriate for a equity fund. The others have low to no predictive powers. The blessing and the curse of the Gordon Growth Model is its simplicity. Let me throw out some observations. As some have mention...
by alex_686
Tue Jul 10, 2018 8:29 pm
Forum: Investing - Help with Personal Investments
Topic: Calculating past returns in private real estate fund
Replies: 6
Views: 336

Re: Calculating past returns in private real estate fund

- and I asked how his return compared with the market or just the vanguard REIT (which has seen a huge return since 2011). Why Vanguard's REIT (VNQ)? Why not Vanguard's Total Market ETF (VTI)? VTI is only slightly more wrong than VNQ as a benchmark. I have a mildly favorable view of private real es...
by alex_686
Tue Jul 10, 2018 5:00 pm
Forum: Investing - Help with Personal Investments
Topic: Stable Value Fund
Replies: 12
Views: 907

Re: Stable Value Fund

Is there some examples of funds or ETFs that would give me good/safe capital preservation as well as a modest upside in this environment (rising interest rates?). I owned a bond fund many years ago an got burned big time - have stuck to equity funds since. No. Stable Value funds are technically a i...
by alex_686
Tue Jul 10, 2018 4:26 pm
Forum: Investing - Theory, News & General
Topic: $860 Million ETF Trade
Replies: 16
Views: 2021

Re: $860 Million ETF Trade

That makes a lot of sense, actually. But that's not how Bloomberg described it unless the reporter was simplifying and using 'sold' and 'bought' terms to cover redemption and creation I also wonder what happens when you do redemption -- are there taxes due on the difference between NAV and market v...
by alex_686
Tue Jul 10, 2018 4:16 pm
Forum: Investing - Theory, News & General
Topic: $860 Million ETF Trade
Replies: 16
Views: 2021

Re: $860 Million ETF Trade

I don't think it would move the market. At this scale I don't think the owner would put in a market order. They would go to SPY and swap ETF shares for the underlying shares. They would then take the underlying shares and deposited them with SCHX, to create new SCHX. Done this way it would not even ...
by alex_686
Tue Jul 10, 2018 9:49 am
Forum: Personal Consumer Issues
Topic: Resume Question
Replies: 10
Views: 645

Re: Resume Question

I would change it up. I have a hard time believing that they were the exact same job. At the very least you want to show some skill progression. Have you looked at a "functional" resume over a "chronological" resume? I have X, Y, and Z skills - long and in depth. This is followed by saying you worke...
by alex_686
Tue Jul 10, 2018 8:57 am
Forum: Investing - Help with Personal Investments
Topic: [Considering the Vanguard LifeStrategy Fund]
Replies: 66
Views: 4716

Re: Lifestyle Strategies

A certain amount of protection from malfeasance within a given fund is probably part of the feeling. Having worked in operations I would not worry about this. Between dual controls, external auditors, and government regulation things are pretty tight. I can only think of a few minor cases of malfea...
by alex_686
Mon Jul 09, 2018 4:40 pm
Forum: Investing - Help with Personal Investments
Topic: Financial Planner meeting
Replies: 17
Views: 1862

Re: Financial Planner meeting

Having worked with insurance and annuity accounting, let me try to shed some light on the issue. First, before a annuity can be offered the plan has to be submitted to the state insurance agency. The plan is tested using the state's return and life expectancy assumptions, which tend to be conservati...
by alex_686
Mon Jul 09, 2018 3:03 pm
Forum: Personal Consumer Issues
Topic: App - Index app
Replies: 4
Views: 213

Re: App - Index app

Most stock market apps have the ability - you just need to figure out the ticker for the index.
by alex_686
Mon Jul 09, 2018 1:13 pm
Forum: Investing - Theory, News & General
Topic: Stock buy backs?
Replies: 13
Views: 603

Re: Stock buy backs?

Many "thanks" to all for your replies. I have a better understanding of questions #2 and #3. But I am still perplexed by #1 -- that companies would buy back stocks when they are high. It seems to me that they would want to do a buy back when they need to help support the price of their stock as wel...
by alex_686
Mon Jul 09, 2018 11:43 am
Forum: Personal Consumer Issues
Topic: New ladies bike: recommendations
Replies: 17
Views: 1014

Re: New ladies bike: recommendations

Let me echo everybody else and say that you should go to your local bike shop and test ride a few bikes. I would advocate for a hybrid bike with a steel tube frame. If this is for leisure this will serve you well and would be on the cheaper side of your price range. Then add a kickstand, helmet, lig...
by alex_686
Mon Jul 09, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: Stock buy backs?
Replies: 13
Views: 603

Re: Stock buy backs?

you've piqued my interest, what tactics do they now utilize to adjust the options to account for this? First, there is a subtle flaw in this argument. It implies that employees are receiving discounted stock. The counter argument is that cash is expensive and paper is cheap. The correct answer is s...
by alex_686
Mon Jul 09, 2018 10:26 am
Forum: Investing - Theory, News & General
Topic: Stock buy backs?
Replies: 13
Views: 603

Re: Stock buy backs?

To generalize, a stock buy back is no different than a dividend. Both are cash flow to equity holders. So try asking your 3 questions, but substitute the word "dividends" for stock buy backs. There are second order issues. Stock buy backs are more tax efficient. Increasing dividends are a signal of ...
by alex_686
Sun Jul 08, 2018 10:24 pm
Forum: Investing - Help with Personal Investments
Topic: Do you count pension contributions as a portion of your overall retirement contributions.
Replies: 47
Views: 3468

Re: Do you count pension contributions as a portion of your overall retirement contributions.

^ I'm not sure I'd agree that every professional speaks in terms of stock variables; they're uni-dimensional. Robert Merton distills virtually everything down to flow variables, if you like. At least, that's how I understand it (but I'm definitely not a professional, so give me some slack). ... The...
by alex_686
Sun Jul 08, 2018 7:18 pm
Forum: Investing - Help with Personal Investments
Topic: Do you count pension contributions as a portion of your overall retirement contributions.
Replies: 47
Views: 3468

Re: Do you count pension contributions as a portion of your overall retirement contributions.

What is meant by "stock variable?" I know that I have answered this before, but.... If you put legacy plans aside, your investment portfolio is about one thing only: how much income do I need to generate from it at a later date in order to live in a way that I'd like to live. In order to calculate ...
by alex_686
Sun Jul 08, 2018 8:25 am
Forum: Investing - Help with Personal Investments
Topic: Do you count pension contributions as a portion of your overall retirement contributions.
Replies: 47
Views: 3468

Re: Do you count pension contributions as a portion of your overall retirement contributions.

What is meant by "stock variable?" "Stock" as in inventory. I have $100k in bonds and $400k in equites on 12/31/2017. I have 100 gallons in the tank. So we are looking at a single point of time. "Flow" has a time element. I need my portfolio to generate 50k a year for 10 years. I get 1 gallon a min...
by alex_686
Fri Jul 06, 2018 10:14 am
Forum: Investing - Theory, News & General
Topic: Active Management Justification
Replies: 33
Views: 1807

Re: Active Management Justification

I believe that active management can add value. However I also believe in the Efficient Market Hypothesis. The market is tough and brutal. So I would ask this: Did the manager add value? They may have been lucky. Also, it was easy to outperform the indexes over the past 10 years. A raising tide will...
by alex_686
Fri Jul 06, 2018 10:03 am
Forum: Investing - Help with Personal Investments
Topic: Do you count pension contributions as a portion of your overall retirement contributions.
Replies: 47
Views: 3468

Re: Do you count pension contributions as a portion of your overall retirement contributions.

No, but I count my pension as income. Just like I count my social security as income. But Bogle says to treat your SS like a bond... So, here is the issue. First, pensions certain have a financial impact and need to be counted for. The problem is that some of your assets are stock variable (I have ...
by alex_686
Fri Jul 06, 2018 9:29 am
Forum: Investing - Help with Personal Investments
Topic: Do you count pension contributions as a portion of your overall retirement contributions.
Replies: 47
Views: 3468

Re: Do you count pension contributions as a portion of your overall retirement contributions.

What is the purpose of this question? I am not sure that I see it. From my viewpoint, the amount contributed to one's pension and the value of that pension have a low correlation. I think there is a great value in knowing what your pension will be. This will impact your savings rate and asset alloca...
by alex_686
Fri Jul 06, 2018 9:08 am
Forum: Investing - Help with Personal Investments
Topic: Should you use actively managed funds outside the U.S.?
Replies: 3
Views: 288

Re: Should you use actively managed funds outside the U.S.?

No, and I will tell you why the data says "Yes". Active can beat passive investing if the index is of poor quality. Specially, "investable" indexes limit themselves to the liquid part of the market. You need lots of trading to generate accurate price data for your index. You need lots of trading so ...
by alex_686
Thu Jul 05, 2018 11:28 am
Forum: Investing - Theory, News & General
Topic: History of U.S. Dividends & Share Buybacks, 1871-2017
Replies: 32
Views: 2035

Re: History of U.S. Dividends & Share Buybacks, 1871-2017

My now vague memory from a Finance class in college (1980-ish, and I didn't always show up) was that dividends were THE WAY to drive stock prices for companies. That assumption would play out with today's retirees expecting large dividends and continuing to buy dividend stocks. Clearly, things chan...
by alex_686
Thu Jul 05, 2018 11:25 am
Forum: Investing - Theory, News & General
Topic: History of U.S. Dividends & Share Buybacks, 1871-2017
Replies: 32
Views: 2035

Re: History of U.S. Dividends & Share Buybacks, 1871-2017

Jeff Albertson wrote:
Thu Jul 05, 2018 10:51 am
Buybacks defer taxes as compared to dividends. Maybe a more important reason buybacks are so popular is that CEO pay is frequently tied to stock price. It's an easy choice for a CEO to make, higher bonus or not?
Maybe.l Most boards are smart enough so they adjust for such things nowadays.
by alex_686
Thu Jul 05, 2018 7:51 am
Forum: Investing - Theory, News & General
Topic: How risky is currency risk in international investing?
Replies: 10
Views: 885

Re: How risky is currency risk in international investing?

I have nothing solid to back up my opinion, but I'll give it to you anyway ;) Currency risk adds to market risk. If you live in the USA, you spend USA dollars. Yes it does. International stocks have a annual variance of about 10% to 15%. Currency risk adds about 1% to that value. The odd thing abou...
by alex_686
Thu Jul 05, 2018 7:46 am
Forum: Investing - Theory, News & General
Topic: How risky is currency risk in international investing?
Replies: 10
Views: 885

Re: How risky is currency risk in international investing?

It is my understanding that the cost of the actual hedging is not included in the ER of the fund as the hedging is performer by "assets" (currency futures?) that are held by the fund. Is this correct? That is correct. However, the cost of currency hedging is basically zero. Just the difference betw...
by alex_686
Wed Jul 04, 2018 10:12 pm
Forum: Investing - Help with Personal Investments
Topic: Investor shares vs Admiral shares
Replies: 6
Views: 613

Re: Investor shares vs Admiral shares

Returns are net of expenses. Investor shares have higher expenses. Ergo, investor shares have lower returns. The difference in performance is about the difference in the fund's expense. As a specific example, expenses must be specific to a share class. Creating and mailing out statements and 1099s c...
by alex_686
Wed Jul 04, 2018 12:33 pm
Forum: Investing - Help with Personal Investments
Topic: Announced Dividend Not Given Out?
Replies: 8
Views: 757

Re: Announced Dividend Not Given Out?

Is it common for mutual funds to list ahead of time the dates that dividends will be distributed, and then end up not giving them out? It is uncommon but there is no law requiring it. Distributing occur to satisfy IRS income reporting. It is complex, time consuming, and if done wrong it will blow u...
by alex_686
Wed Jul 04, 2018 12:24 pm
Forum: Investing - Theory, News & General
Topic: Market cap-weighted Index - not diversified?
Replies: 14
Views: 897

Re: Market cap-weighted Index - not diversified?

The counter is that the market basket, i.e. free float cap weighted, is the most efficient portfolio out there. Highest risk for the highest return. The theory is widely embraced and has been historically robust. The index is dominated by a few high flyers because the market thinks that they are val...
by alex_686
Wed Jul 04, 2018 11:09 am
Forum: Investing - Help with Personal Investments
Topic: What’s the lowest risk investment to keep up with inflation?
Replies: 8
Views: 1486

Re: What’s the lowest risk investment to keep up with inflation?

Treasury Inflation Protected Securities (TIPS). However it sounds like you have a taxable account. Maybe I-Bonds - taxes are better but there limits and restrictions. So short term bonds and short term bond funds are probably the answer. Risk and return are linked. If you want return sufficient to b...