Search found 2880 matches

by alex_686
Wed Feb 21, 2018 3:30 pm
Forum: Investing - Help with Personal Investments
Topic: How do I unwind this Wealthfront mess?
Replies: 53
Views: 3395

Re: How do I unwind this Wealthfront mess?

Having the individual stocks is roughly like holding the S&P 500 index, plus Facebook. That's exactly what Wealthfront was trying to replicate. What about index sampling risk? Fairly low. Whatever you lose on the misfit index should be more than made up in the tax Alpha thrown off by the tax harves...
by alex_686
Wed Feb 21, 2018 3:14 pm
Forum: Investing - Theory, News & General
Topic: why Vanguard short-term bond instead of CD
Replies: 25
Views: 2010

Re: why Vanguard short-term bond instead of CD

What the SEC yield does is assumes the current price and projects income (both coupon and amortized) of the current holdings, divides the 2, and gets the yield. Then it subtracts out the expense ratio. A little more complicated than that but that is the gist of it. Is the same for a stock fund, tak...
by alex_686
Wed Feb 21, 2018 3:08 pm
Forum: Investing - Theory, News & General
Topic: Simple question [difference between IRA and 401k?]
Replies: 6
Views: 271

Re: Simple question [difference between IRA and 401k?]

A couple more distinctions. In some states 401ks are protected from lawsuits. I'm not sure if there are any federal laws in this regard. It is stronger than that. For 401k and pension funds the assets are owned by the beneficiaries (e.g., employees). They are segregated into their own account. So t...
by alex_686
Wed Feb 21, 2018 1:06 pm
Forum: Investing - Help with Personal Investments
Topic: Bond funds
Replies: 7
Views: 458

Re: Bond funds

So we are looking at the overall portfolio, risk and return. That is good. 3 suggestions. First, this suggest some type of intermediate bond fund, something with a duration of 5 to 7 years. Total Bond Fund falls into this range. I like Intermediate Corporate but this is open for debate. Second, the ...
by alex_686
Wed Feb 21, 2018 11:51 am
Forum: Investing - Help with Personal Investments
Topic: Bond funds
Replies: 7
Views: 458

Re: Bond funds

Welcome to our forum. First, what are you goals? Take a comprehensive approach. This will inform your Asset Allocation and thus your percentage to bonds and the type of bonds. I know this is very big picture. Focus on your risk tolerance and required returns. Liability matching is common. What time ...
by alex_686
Wed Feb 21, 2018 11:13 am
Forum: Investing - Theory, News & General
Topic: Simple question [difference between IRA and 401k?]
Replies: 6
Views: 271

Re: Simple question [difference between IRA and 401k?]

LittleSaver, welcome to our group. As Montana Girl suggests, the primary difference is who contributes and the contribution limit. Most people use both. However the tax advantages are basically the same. A IRA is slightly more flexible. You get to decided where it is at so which investments you can ...
by alex_686
Tue Feb 20, 2018 10:36 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

DaftInvestor wrote:
Tue Feb 20, 2018 12:42 pm
I guess its like American Baseball - the "World Series" - what World teams play outside the US?
Toronto Blue Jays. They won it back in 92.
by alex_686
Tue Feb 20, 2018 10:33 pm
Forum: Investing - Theory, News & General
Topic: why Vanguard short-term bond instead of CD
Replies: 25
Views: 2010

Re: why Vanguard short-term bond instead of CD

The key issue (suggested by title of thread) is CD versus bond fund. Are you saying I've lost money with the CD, but not with the bond fund ? You lose money - value - either way. The same factors and maths that govern bonds also govern CDs. No real economic difference. However, the price of bond fu...
by alex_686
Tue Feb 20, 2018 3:14 pm
Forum: Investing - Theory, News & General
Topic: why Vanguard short-term bond instead of CD
Replies: 25
Views: 2010

Re: why Vanguard short-term bond instead of CD

You buy a CD with a 2% yield. The day after inflation spikes to 3% and rates jump to 4%. You have lost money. Not unless I sell the CD. Similarly, the fund's share price will go down and I'll lose money if I sell it. No, you have lost money. The market has moved against you and you have a loss. The...
by alex_686
Tue Feb 20, 2018 1:50 pm
Forum: Investing - Help with Personal Investments
Topic: How big is the 'Madoff risk' -- All of your money at one advisor?
Replies: 21
Views: 2366

Re: How big is the 'Madoff risk' -- All of your money at one advisor?

Ah. thank you , this was a key component I was unfamiliar with and answers the question: how did this happen to other intelligent people. Greed. It was a advisory firm, not a fiduciary firm. It was selling to accredited investors. The advisory firm was not SPIC insured. So little oversight from reg...
by alex_686
Tue Feb 20, 2018 12:57 pm
Forum: Investing - Theory, News & General
Topic: why Vanguard short-term bond instead of CD
Replies: 25
Views: 2010

Re: why Vanguard short-term bond instead of CD

I don't see how CDs have principal risk. Yes, the value of this brokered CD can fall (below what I paid for it) if interest rates rise; but if I hold it to maturity, that doesn't matter. You buy a CD with a 2% yield. The day after inflation spikes to 3% and rates jump to 4%. You have lost money. Yo...
by alex_686
Tue Feb 20, 2018 12:53 pm
Forum: Investing - Theory, News & General
Topic: why Vanguard short-term bond instead of CD
Replies: 25
Views: 2010

Re: why Vanguard short-term bond instead of CD

I don't understand where that 2.37% SEC yield comes from. You get yield from dividends and from share price appreciation, right ? So either the share price is going to increase, or somehow the dividends are going to be higher than they are now. I don't see it. The dividends are going to be higher. ...
by alex_686
Tue Feb 20, 2018 12:34 pm
Forum: Investing - Theory, News & General
Topic: why Vanguard short-term bond instead of CD
Replies: 25
Views: 2010

Re: why Vanguard short-term bond instead of CD

A couple of points. CDs are bonds. A very special class of bonds which favor retail investors over institutional investors. However they are still a bond. SEC yield is forward looking. It is one of the higher quality numbers out there. The yield you quote is backwards looking and is a relatively low...
by alex_686
Tue Feb 20, 2018 11:14 am
Forum: Investing - Theory, News & General
Topic: CAPE 7 vs CAPE 10
Replies: 5
Views: 645

Re: CAPE 7 vs CAPE 10

I'm not sure cape7 makes more conceptual sense than cape10. I think it is a valid thesis to explore. The point of CAPE10 is that you want a long enough period of time to smooth out one off accounting adjustments to earnings to get to the real economics earnings. There is nothing magical about 10 ye...
by alex_686
Mon Feb 19, 2018 4:18 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

ETFs and mutual funds may be regulated by the same rules but what regulation regulates their naming? I imagine profanity is not allowed in a fund name. BTW, I sold my James Balanced Golden Rainbow fund. Naming rules seem very broad. As I referenced earlier, SEC regulates a fund's marketing. A fund'...
by alex_686
Mon Feb 19, 2018 4:12 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

ETFs and mutual funds may be regulated by the same rules but what regulation regulates their naming? I imagine profanity is not allowed in a fund name. BTW, I sold my James Balanced Golden Rainbow fund. Naming rules seem very broad. As I referenced earlier, SEC regulates a fund's marketing. A fund'...
by alex_686
Mon Feb 19, 2018 3:58 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

World is international and USA. For MSCI (indexes, not sure about funds) "World" means the developed world, excluding Emerging Markets. You need "All Country World" to get the world. In general for US funds and US index companies, I think "International" sometimes includes EM and sometimes doesn't....
by alex_686
Mon Feb 19, 2018 3:50 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

How about the Wellington and Wellesely funds? Those names don't seem to mean much at all. (Disclaimer: haven't invested in them.) They are not ETFs. Those are fine - as you said they don't mean anything. If you want to know what it means you need to crack open the prospectus. The SEC is more worrie...
by alex_686
Mon Feb 19, 2018 3:34 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

A different fund I always found interesting in name, and once owned: Fidelity Contrafund. I don't know what it means. It sounds "contrarian", but its top holdings indicate otherwise. How old is Countrafund? IIRC, it is a very old fund and so it is grandfathered in, sorta of. Yes, I think you are ri...
by alex_686
Mon Feb 19, 2018 3:07 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

Good to know it's not the fund's fault but rather the SEC's fault. Thanks. On the other hand, one example of a well-named fund is Vanguard FTSE All-World ex-US Small-Cap Index Fund. So it seems it is possible to have a fund that is ex-US but does not use the word "international" at all, presumably ...
by alex_686
Mon Feb 19, 2018 2:42 pm
Forum: Investing - Theory, News & General
Topic: Understanding an ETF by it's Name
Replies: 24
Views: 752

Re: Understanding an ETF by it's Name

First, I would be surprised if you found anything too weird. The SEC has regulations around marketing that covers the fund's name. If the fund says it is something, it has to be that something. Vanguard Total Stock Market Index Fund <--- not "total" because it does not invest in companies outside of...
by alex_686
Mon Feb 19, 2018 10:03 am
Forum: Personal Finance (Not Investing)
Topic: condo rental and emotional support animals issues
Replies: 22
Views: 2559

Re: condo rental and emotional support animals issues

I am not sure- but- seems to me that animal cleaning fees, damage deposits, and/ or an extra vacant day would not be forbidden by ADA, etc. There is nothing discriminatory about requiring payment for damages or cleaning. I am fairly up to-date on this, as I am on a board which is undergoing this is...
by alex_686
Sun Feb 18, 2018 11:49 am
Forum: Investing - Help with Personal Investments
Topic: Expected return of US vs International, basic question
Replies: 26
Views: 1354

Re: Expected return of US vs International, basic question

I was trying to ask how such statements can be consistent with the efficient market hypothesis. Shouldn't the risk adjusted expected return from both US and international always be equal if there is an efficient market? I think it was Fisher Black who said that the markets look much more efficient ...
by alex_686
Sun Feb 18, 2018 10:37 am
Forum: Investing - Help with Personal Investments
Topic: Expected return of US vs International, basic question
Replies: 26
Views: 1354

Re: Expected return of US vs International, basic question

Where are you getting this? Maybe because they are thinking of reversion to the mean. The market does not revert to the mean so we can scratch that. Maybe because international has a lower P/E ratio, implying that it is cheaper and more rational than the high US one. Expect that the P/E ratio can't ...
by alex_686
Fri Feb 16, 2018 5:15 pm
Forum: Investing - Help with Personal Investments
Topic: buying around dividend time
Replies: 11
Views: 915

Re: buying around dividend time

I would not want to "buy the dividend", therefore my understanding is that I would buy into the fund before the ex dividend date, before the fund price falls, so that I am the beneficiary of the dividend. I would point to Livesoft's post. This is a non-exploitable hack. You buy before the dividend,...
by alex_686
Fri Feb 16, 2018 4:28 pm
Forum: Investing - Help with Personal Investments
Topic: buying around dividend time
Replies: 11
Views: 915

Re: buying around dividend time

Just wanted to clarify what are the points to keep in mind when buying into a fund around the dividend date so that one can receive the dividend? First, why do you want to buy the dividend? A stock or mutual fund's price drops by about the same amount as the dividend. In a taxable account you have ...
by alex_686
Thu Feb 15, 2018 7:45 pm
Forum: Personal Finance (Not Investing)
Topic: Selling my home and investing more?
Replies: 2
Views: 398

Re: Selling my home and investing more?

By moving into a apartment you still pay property tax and maitiance costs. The only difference is that these costs are emended in your rent so you don't see them. Rental places tend to be cheaper so the property tax and maintenance costs tend to be cheaper. A 100k interest free loan is awfully cheap...
by alex_686
Wed Feb 14, 2018 8:31 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5784

Re: In plain English, please explain what was VIX, what happened to it and why?

Thanks for the detailed explanation. It is funny how on the retail side, all the complexity of contango, exploding gamma, etc. becomes simplified into rules like “Don’t hold ETNs overnight”. In fairness, the issue you point out are issues related to owning futures and options, not ETNs. For the cas...
by alex_686
Wed Feb 14, 2018 12:24 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5784

Re: In plain English, please explain what was VIX, what happened to it and why?

Thank you for the corrections. Can you explain the XIV, and ETNs in general? Why are ETNs considered unsecured debt? VIX is a index that measures a mathematical concept. XIV is a specific investment fund which moves in the opposite direction of VIX. When VIX jumped up in value it lost nearly everyt...
by alex_686
Wed Feb 14, 2018 12:17 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5784

Re: In plain English, please explain what was VIX, what happened to it and why?

If the S&P is ~2,800, and VIX = 10....You are betting the S&P is staying within a range ~2,800 +/- 280, or between 2520 and 3020. If you think the market will be higher or lower than the range (2,520, 3020), then you think VIX will increase. You place your bet. VIX will be higher. If the market doe...
by alex_686
Wed Feb 14, 2018 7:51 am
Forum: Investing - Theory, News & General
Topic: I think US interest rates could drop.
Replies: 62
Views: 6586

Re: I think US interest rates could drop.

Would any of our last half dozen years look out of place there? And the 40 years before that were in the 2-6% range. If you ignore the 1966-2007 period nothing stands out about our current situation as being really abnormal. A big difference is that for the time range you quoted we had fiat money, ...
by alex_686
Tue Feb 13, 2018 10:28 pm
Forum: Investing - Help with Personal Investments
Topic: UC Domestic equity fund question
Replies: 2
Views: 154

Re: UC Domestic equity fund question

I am going to take a guess here. I don't know what UC is, but I am assuming the pension manager does not like tobacco stocks. He went to Russell and asked them to create a custom index. And here we are! Index providers create thousands of indexes. In this case, standard index minus tobacco. Very eas...
by alex_686
Tue Feb 13, 2018 8:48 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5784

Re: In plain English, please explain what was VIX, what happened to it and why?

The same goes for the CRSPTM1 - CRSP US Total Market Index. VIX is an index , not a bet . I am with Jack on this one, Triceratops. While it is a high quality index it is not an index that I would recommend anybody investing in. In the end it is a derivative so it is a zero sum game. I don't follow....
by alex_686
Tue Feb 13, 2018 7:40 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5784

Re: In plain English, please explain what was VIX, what happened to it and why?

VIX is simply a gambling device. Like Bitcoin, it has nothing produced from it, no dividends, no real redeeming qualities whatsoever. It has many redeeming qualities. Like the CAPE 10 index or the Dividend Yield index to conveys real actionable information about the market. The same goes for the CR...
by alex_686
Tue Feb 13, 2018 7:17 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5784

Re: In plain English, please explain what was VIX, what happened to it and why?

Thanks, so where this index gets its assets from exactly? Also why it was shutdown? There are no assets. The value of a options, call or put, is time, the interest rate, "monnieness", and volility. We can see 3 of the 4 inputs. Volility can be figured out from the other 3. So you run S&P 500 option...
by alex_686
Tue Feb 13, 2018 6:54 pm
Forum: Investing - Theory, News & General
Topic: In plain English, please explain what was VIX, what happened to it and why?
Replies: 68
Views: 5784

Re: In plain English, please explain what was VIX, what happened to it and why?

The VIX is the expected forward volility of the S&P 500. If the VIX is 10 then the annualized standard deviation of the S&P would be 10%. If 30, then 30%. Expected volatility was low. Historically low. Around 9 if I recall. Then the market crashed. Now expected volility is around 24. So.a big jump u...
by alex_686
Tue Feb 13, 2018 4:48 pm
Forum: Investing - Theory, News & General
Topic: I think US interest rates could drop.
Replies: 62
Views: 6586

Re: I think US interest rates could drop.

. To add to that I will point out that inflation is, and has been historically, higher in the US than in the EU. Factor out inflation and there is not much room to go down. 10 year treasuries are at 2.5%, from the TIPS yield we can figure that inflation is expected to be at 2%. So that gives us .5%...
by alex_686
Tue Feb 13, 2018 10:59 am
Forum: Personal Consumer Issues
Topic: Smartphone or Similar Device Just for Pandora Music?
Replies: 4
Views: 386

Re: Smartphone or Similar Device Just for Pandora Music?

Define "steam data". Can it be wi-fi or does it have to have a wireless plan?

iTouch, Kindle Fire, etc. are all examples of cheap tablet that use wi-fi only.
by alex_686
Tue Feb 13, 2018 10:53 am
Forum: Investing - Theory, News & General
Topic: What if you only live off dividends?
Replies: 95
Views: 7881

Re: What if you only live off dividends?

What if you drop this assumption altogether and just withdraw the dividends and bond interest payments? We are not dropping an assumption here. We are talking about logic, comprehensive theory, and vigorous historical back-testing. I think you want to swap out a sound framework and replace it with ...
by alex_686
Tue Feb 13, 2018 10:36 am
Forum: Investing - Theory, News & General
Topic: SWR — Can You Include Real Estate as Part of Your Portfolio
Replies: 24
Views: 1380

Re: SWR — Can You Include Real Estate as Part of Your Portfolio

what about refinancing and taking the equity out? I don't see why you wouldn't count that. Although you'd have a mortgage payment so your monthly income needs would go up. I never understood why people want to have a paid off house when they die, unless they plan to give it to their kids. Why not l...
by alex_686
Tue Feb 13, 2018 10:16 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard REIT Fund Forms 1099
Replies: 10
Views: 572

Re: Vanguard REIT Fund Forms 1099

REIT 1099 always come late. One has to wait for the underlying companies to file and report so the 1099 can be created. Remember, most of the dividends that REITs kick out are not ordinary income but something else. Be happy if you don't get a revised 1099 sometime in late March.
by alex_686
Mon Feb 12, 2018 10:07 pm
Forum: Investing - Theory, News & General
Topic: SWR — Can You Include Real Estate as Part of Your Portfolio
Replies: 24
Views: 1380

Re: SWR — Can You Include Real Estate as Part of Your Portfolio

One should included real estate as part of your portfolio. As well as Social Security, etc. Most don't becuase it is complex and emotional. Most people think it is some type of special asset class and can't approach it with a cold eye. On that note, recognize that most people overestimate their prop...
by alex_686
Mon Feb 12, 2018 8:25 pm
Forum: Investing - Theory, News & General
Topic: I think US interest rates could drop.
Replies: 62
Views: 6586

Re: I think US interest rates could drop.

Germany uses the Euro. I am missing your point. Let me state mine again. I assume you are referencing the second point. When a European bank or financial institution needs risk free bonds for their reserves, to post for collateral, etc. they use German bonds. Greek banks don't use Greek bonds becau...
by alex_686
Mon Feb 12, 2018 8:05 pm
Forum: Investing - Help with Personal Investments
Topic: realized startup equity / schwab private client
Replies: 15
Views: 778

Re: realized startup equity / schwab private client

I believe that active management can add value. The big problem is figure out if your adviser is actually adding value. If you can't figure that out then you should stick with the neutral portfolio. Can tilting add value? Or item #1 and #3? Yes. That is one skill class. Can active selection add valu...
by alex_686
Mon Feb 12, 2018 5:45 pm
Forum: Investing - Theory, News & General
Topic: Explain why long-term bonds aren't awesome
Replies: 20
Views: 1713

Re: Explain why long-term bonds aren't awesome

So if I understand right.. rising interest rates are BAD for those already holding bonds, because you've already locked yourself in to a lower rate of return. And falling interest rates are GOOD for those holding bonds because you've locked yourself into a better return than is in the present? So w...
by alex_686
Mon Feb 12, 2018 5:26 pm
Forum: Investing - Theory, News & General
Topic: Explain why long-term bonds aren't awesome
Replies: 20
Views: 1713

Re: Explain why long-term bonds aren't awesome

Look up duration, which is a measurement of risk in bonds. Very simply, you multiple the change in rates by duration to get the change in NAV. For example, assume that rates went up by 1%. A short term bond fund where bonds mature in 1 year would have a duration of 1 and would fall by 1%. A long ter...
by alex_686
Mon Feb 12, 2018 5:06 pm
Forum: Investing - Help with Personal Investments
Topic: Is Rental Property/Income Same as Bonds
Replies: 38
Views: 1995

Re: Is Rental Property/Income Same as Bonds

The essential difference between stock and bond are payment stream and valuation. Stock's payment stream are variable, while bonds' are constant. Stock's valuation is forward projection based, while bond's valuation is based on loan quality and current yield. If you look at a piece of commercial pr...
by alex_686
Mon Feb 12, 2018 4:55 pm
Forum: Investing - Help with Personal Investments
Topic: Is it stupid of me to comprise almost all of my portfolio with high dividend funds/etfs?
Replies: 16
Views: 970

Re: Is it stupid of me to comprise almost all of my portfolio with high dividend funds/etfs?

Yes. First, you should always frame your question in a "Total Return" framework. What is the expected return, what is the risk. Does it matter if your returns are via dividends or capital appreciation? I am sure one will have a higher tax drag than the other in your particular case. Second, dividend...
by alex_686
Mon Feb 12, 2018 2:45 pm
Forum: Investing - Theory, News & General
Topic: I think US interest rates could drop.
Replies: 62
Views: 6586

Re: I think US interest rates could drop.

I am in the camp of the OP. It makes no sense that the US 10yr could yield 3+% when the German 10yr yields .75%. If US bonds start yielding well above what the rest of the world’s “safe” bonds pay, the demand for US bonds will increase and driving the price up and yield down. It just makes no sense...
by alex_686
Mon Feb 12, 2018 2:17 pm
Forum: Investing - Help with Personal Investments
Topic: Help with the pros and cons of diversification strategies
Replies: 9
Views: 340

Re: Help with the pros and cons of diversification strategies

#1 is the neural choice, the market basket. There are 2 reasons why should do #2. The first is that your 401k has some good index funds in some of the areas but not others. So you do those index funds in the 401k and plug the holes elsewhere in your portfolio. The second is that you want to overweig...