Search found 2733 matches

by dmcmahon
Mon Apr 12, 2021 3:58 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 High Dividend ETF - SPYD
Replies: 41
Views: 3244

Re: S&P 500 High Dividend ETF - SPYD

Interesting. I have no international, but I have VGT in my Roth IRA (most of it was bought in fall 2019) and VGT in my taxable (most of it was bought in March 2020). Interesting you are using international as a bond proxy. Your strategy makes more sense in a higher-tax world, I may go in that direc...
by dmcmahon
Mon Apr 12, 2021 1:23 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 High Dividend ETF - SPYD
Replies: 41
Views: 3244

Re: S&P 500 High Dividend ETF - SPYD

In your Roth IRA are you holding VGT and international at a 50:50 ratio? Not quite. It's still half TIPS. So it's 50/25/25 TIPS/VEA/VGT. Over the next decade if nothing changes this will run off to 0/50/50, but I'm hoping the bond markets regain some sanity and positive real yields will again be se...
by dmcmahon
Mon Apr 12, 2021 11:55 am
Forum: Investing - Theory, News & General
Topic: S&P 500 High Dividend ETF - SPYD
Replies: 41
Views: 3244

Re: S&P 500 High Dividend ETF - SPYD

I also don't think this is a great way to reduce tech allocation if that is the goal. Other ways to do this would be more international, US value stocks, or an ex-tech fund. SPYD fund holds too few stocks for me and I'm not a fan of dividend funds either. Agreed. I would not hold a high-turnover fu...
by dmcmahon
Mon Apr 12, 2021 11:55 am
Forum: Investing - Theory, News & General
Topic: S&P 500 High Dividend ETF - SPYD
Replies: 41
Views: 3244

Re: S&P 500 High Dividend ETF - SPYD

I also don't think this is a great way to reduce tech allocation if that is the goal. Other ways to do this would be more international, US value stocks, or an ex-tech fund. SPYD fund holds too few stocks for me and I'm not a fan of dividend funds either. Agreed. I would not hold a high-turnover fu...
by dmcmahon
Mon Apr 12, 2021 10:03 am
Forum: Personal Investments
Topic: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing
Replies: 55
Views: 3936

Re: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing

The part that is still tripping me up is the "tax drag that could have been avoiding by retiring causing the effective tax rate to be 75%) Consider that your current tax rate on an extra dollar of ordinary work income is (say) 37% + 12% + 4% = 54%. Now imagine that you also have some investmen...
by dmcmahon
Sun Apr 11, 2021 6:06 pm
Forum: Personal Investments
Topic: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing
Replies: 55
Views: 3936

Re: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing

I would not recommend paying down a long-term deductible mortgage at such a low rate. Why not? I did and I’ve never had cause to regret it. I’m currently earning as best 1.5%, federally taxable at a high rate, on a ladder of treasuries. Not only is the rate differential favorable, clearing the loan...
by dmcmahon
Sun Apr 11, 2021 4:23 pm
Forum: Personal Investments
Topic: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing
Replies: 55
Views: 3936

Re: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing

I will second the idea of paying down the mortgage. You are unlikely net positive after taxes versus any bond holdings. Especially if you face deduction caps. I'm surprised this came up twice! It wasn't even on my radar. I would not pay down your mortgage. CA is a non-recourse loan state, meaning i...
by dmcmahon
Sun Apr 11, 2021 4:17 pm
Forum: Personal Investments
Topic: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing
Replies: 55
Views: 3936

Re: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing

Just a suggestion — if you are a two-worker high earning family, one of you should think of starting a business for the tax advantages. Don’t draw much salary and reinvest in business. You can structure your corporate entity such that you could realize $10 million tax free under founder share provi...
by dmcmahon
Sun Apr 11, 2021 4:01 pm
Forum: Personal Investments
Topic: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing
Replies: 55
Views: 3936

Re: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing

I will second the idea of paying down the mortgage. You are unlikely net positive after taxes versus any bond holdings. Especially if you face deduction caps. I'm surprised this came up twice! It wasn't even on my radar. I’m in a similar position though not in the topmost bracket. But even at 35% +...
by dmcmahon
Sun Apr 11, 2021 12:06 am
Forum: Investing - Theory, News & General
Topic: Real Return Fakers & Quitting Investing For Good
Replies: 51
Views: 5195

Re: Real Return Fakers & Quitting Investing For Good

For years I've listened to "financial guru's" throw around compound interest rates at 10-12% but after spending time on the forum here I see investors using numbers like 3-5% for their expected real return and to ignore figures that don't account for inflation. It's pretty disappointing a...
by dmcmahon
Sun Apr 11, 2021 12:03 am
Forum: Personal Investments
Topic: If you file IRS form 1116...
Replies: 57
Views: 4404

Re: If you file IRS form 1116...

You look up the percent of the dividend of your fund that is foreign income. For instance, for VTIAX and VXUS, the foreign income is 100% of the dividend. So you take the dividend paid by your VTIAX or VXUS listed on your 1099-DIV and multply by 1.0 and that is the foreign income paid to you by VTI...
by dmcmahon
Sat Apr 10, 2021 11:58 pm
Forum: Personal Investments
Topic: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing
Replies: 55
Views: 3936

Re: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing

I will second the idea of paying down the mortgage. You are unlikely net positive after taxes versus any bond holdings. Especially if you face deduction caps. I’m in a similar position though not in the topmost bracket. But even at 35% + 3.8% + 12.3% I’m north of 50% on a marginal basis. Here’s the ...
by dmcmahon
Thu Apr 08, 2021 12:28 am
Forum: Personal Finance (Not Investing)
Topic: Minimum Net Worth for a Trust
Replies: 10
Views: 2159

Re: Minimum Net Worth for a Trust

In California probate costs a lot more than what most trusts would cost, even with a modest estate. A $200k estate would result in $14k in probate fees according to an online calculator I tried. A $1MM estate is $46k in fees. Setting up a simple trust is what a few thousand? Seems worth it even for...
by dmcmahon
Thu Apr 08, 2021 12:13 am
Forum: Personal Investments
Topic: How much cash do you really hold?
Replies: 91
Views: 6233

Re: How much cash do you really hold?

I include cash as part of the fixed income/bonds part of my portfolio. To me this is a more accurate reflection of risk. Otherwise somebody with $1000 in stocks, $0 in bonds, and $1MM in cash could say they are 100/0 allocation...I don't think that is an accurate representation of the risk they are...
by dmcmahon
Thu Apr 08, 2021 12:06 am
Forum: Investing - Theory, News & General
Topic: S&P 500 High Dividend ETF - SPYD
Replies: 41
Views: 3244

Re: S&P 500 High Dividend ETF - SPYD

I also don't think this is a great way to reduce tech allocation if that is the goal. Other ways to do this would be more international, US value stocks, or an ex-tech fund. SPYD fund holds too few stocks for me and I'm not a fan of dividend funds either. Agreed. I would not hold a high-turnover fu...
by dmcmahon
Tue Apr 06, 2021 1:29 am
Forum: Investing - Theory, News & General
Topic: International is in meltdown
Replies: 371
Views: 29499

Re: International is in meltdown

It's been a year since this thread and International still lags, and lags badly... where is the imminent outperformance that this asset class was supposedly going to deliver? That is what all the experts were saying... but I am still waiting just like a lot of folks. Since Jan 2018, VTIAX has had a...
by dmcmahon
Thu Apr 01, 2021 10:12 am
Forum: Investing - Theory, News & General
Topic: Market crashes. Who causes them?
Replies: 42
Views: 3777

Re: Market crashes. Who causes them?

I would not say "who" but rather "what", and then my one-word simplistic answer is "leverage".
by dmcmahon
Wed Mar 31, 2021 12:51 pm
Forum: Investing - Theory, News & General
Topic: Are Hedge funds basically scams?
Replies: 72
Views: 8046

Re: Are Hedge funds basically scams?

A family friend is a CIO of a large well known university endowment and formerly a charitable endowment with billions of funds. He manages a team of analysts and his said his job is simply to hire and fire hedge fund managers. When you are managing billions of dollars, it may make some sense to go ...
by dmcmahon
Wed Mar 31, 2021 12:01 am
Forum: Personal Investments
Topic: ArkX
Replies: 24
Views: 2331

Re: ArkX

question is why do you want to? because you believe in stock market gurus? Wood has garnered a large following after Ark Innovation returned nearly 150% last year. However, her flagship fund, Ark Innovation, is down nearly 9% this year. source: https://www.cnbc.com/2021/03/29/ark-invests-arkx-space...
by dmcmahon
Tue Mar 30, 2021 11:36 pm
Forum: Investing - Theory, News & General
Topic: What’s the correct diversification for high inflation?
Replies: 214
Views: 17479

Re: What’s the correct diversification for hyperinflation?

Many around home have bought into Bitcoin bc of the concern of hyperinflation. I’m in TIPS, but the longer I hold it, the less i’m convinced CPI captures cost of living changes. For example, Housing costs have gone up 20% over the past 5 years in my area. This is not reflected in CPI. Hold real est...
by dmcmahon
Sun Mar 28, 2021 6:18 pm
Forum: Personal Investments
Topic: Should I Roth convert before tax rate increases? (young accumulator)
Replies: 37
Views: 2260

Re: Should I Roth convert before tax rate increases? (young accumulator)

Jacotus wrote: Sun Mar 28, 2021 2:34 pm Bump. Any other thoughts? Traditional vs Roth is one of the most loved topics around here :twisted:.
I’m aggressively converting to Roth up to the top of my tax bracket. Short of leaving California for a low-tax state I’ll never face a lower marginal tax rate so it’s an easy decision.
by dmcmahon
Fri Mar 26, 2021 10:59 am
Forum: Investing - Theory, News & General
Topic: Investment strategies for high net worth individuals
Replies: 83
Views: 10463

Re: Investment strategies for high net worth individuals

At a very large scale you can consider VC and PE investments for the fun money part of your portfolio. Another option that opens up is directly owning significant real estate. Finally, you might decide to invest in things you think are going to be fun or make difference without worrying as much abou...
by dmcmahon
Wed Mar 24, 2021 2:21 pm
Forum: Personal Finance (Not Investing)
Topic: Transferring assets to siblings
Replies: 6
Views: 650

Re: Transferring assets to siblings

gifting the shares does not provide your siblings with a step up in basis unless the transfer occurs after your death. They're all in lower tax brackets. At least one sister would pay 0% tax on the gain. So no that was not a typo, the cap gain tax is a concern. Direct gifts that keep my basis and h...
by dmcmahon
Wed Mar 24, 2021 10:48 am
Forum: Personal Finance (Not Investing)
Topic: Transferring assets to siblings
Replies: 6
Views: 650

Transferring assets to siblings

In the next year or two, I would like to transfer a portion of my index ETF holdings to my siblings. This will burn through some of my lifetime gift tax exemption, and so be it. I could directly gift shares to them, but for several reasons I'd prefer not to do that. Several are childless, a few aren...
by dmcmahon
Wed Mar 24, 2021 10:08 am
Forum: Investing - Theory, News & General
Topic: Why the disdain for managed funds like ARKK that destroy total market funds?
Replies: 827
Views: 68863

Re: Why the disdain for managed funds like ARKK that destroy total market funds?

"If you had been willing to incur the ARK Innovation’s increased volatility, you could have made just as much by leveraging an investment in the QQQ. That is, you would have made just as much by increasing your portfolio allocation to QQQ, or by buying it on sufficient margin." Reminds me...
by dmcmahon
Wed Mar 24, 2021 10:02 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 22921
Views: 3006734

Re: U.S. stocks in free fall

I don't get this. Realizing taxes seems not at all worth whatever the taking-some-off-the-table value you perceive. You could pay a lot more in taxes in 2022. So, it’s actually a smart move. I’m doing the exact same thing. This could be yet another catalyst in driving the markets down, in addition ...
by dmcmahon
Tue Mar 23, 2021 10:03 pm
Forum: Investing - Theory, News & General
Topic: Boston Fed, MIT to release digital dollar prototypes as soon as July
Replies: 12
Views: 1503

Re: Boston Fed, MIT to release digital dollar prototypes as soon as July

Most of the interest in crypto is as a liquid hard asset similar to gold, not in the wonders of blockchain technology to decentralize transactions or keep them private. JMHO. FWIW I do not regard crypto currencies as hard assets. A hard asset has to be...well...hard. As in it hurts if you kick it or...
by dmcmahon
Tue Mar 23, 2021 8:54 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 22921
Views: 3006734

Re: U.S. stocks in free fall

hnd wrote: Tue Mar 23, 2021 6:56 pm I've been selling some covid stocks that i bought after the giant dip to lock in some long term gains. I assume many are doing the same.
Tax uncertainty may further motivate some selling. But if you just buy back your positions, is there any net change in demand for shares?
by dmcmahon
Tue Mar 23, 2021 12:17 am
Forum: Investing - Theory, News & General
Topic: Wade Pfau on Asset Allocation Using PE10
Replies: 106
Views: 14584

Re: Wade Pfau on Asset Allocation Using PE10

I’m surprised no one’s mentioned crummy yields on bonds. Prospective stock returns at points of high CAPE-10 can be statistically bucketed into average, below average, negative, etc. but if you look at them relative to the alternative? All I’m saying is that while the negative results would stink, t...
by dmcmahon
Sun Mar 21, 2021 11:30 pm
Forum: Personal Investments
Topic: Questions on how special needs trust work?
Replies: 18
Views: 1238

Re: Questions on how special needs trust work?

There really is no substitute for first-rate legal counsel in this area. Don’t look for answers on the internet, get a good lawyer specializing in this. I say this as someone with a special needs relative for whom I am trustee.
by dmcmahon
Sun Mar 21, 2021 11:04 pm
Forum: Investing - Theory, News & General
Topic: Why no love for REITs?
Replies: 182
Views: 24748

Re: Why no love for REITs?

In my opinion, the most important feature that makes real estate possibly better than stock market is safe leverage. With REIT, you don't get the leverage. You have to use mortgage to buy an actual house to get that leverage. But the REITs themselves are using leverage. How is that different? Contr...
by dmcmahon
Sun Mar 21, 2021 10:49 pm
Forum: Personal Investments
Topic: Dad Passed Away -Help with Mom's Retirement Portfolio
Replies: 15
Views: 2650

Re: Retirement: Annuity Question

Stinky wrote: Mon Mar 08, 2021 5:02 pm On the narrow question of keeping the 3.35% and 2.85% annuities, I agree that’s an attractive rate. I’d keep them as a part of her fixed income allocation.
+1 if from a reputable insurer.
by dmcmahon
Sat Mar 20, 2021 4:18 pm
Forum: Investing - Theory, News & General
Topic: Long-term risks for VT? [Vanguard Total World Stock]
Replies: 24
Views: 2464

Re: Long-term risks for VT? [Vanguard Total World Stock]

Everyone's talking about negative disasters where the world collapses. I'm more worried about positive disasters, where some set of innovations creates a new economy that leaves corporations behind Like Star Trek's money free society. And yet the Picard family still had estates in France. And don’t...
by dmcmahon
Thu Mar 18, 2021 1:31 am
Forum: Investing - Theory, News & General
Topic: Why the disdain for managed funds like ARKK that destroy total market funds?
Replies: 827
Views: 68863

Re: Why the disdain for managed funds like ARKK that destroy total market funds?

ARKK is so last month, enter MOON https://www.bloomberg.com/news/articles/2021-03-16/arkk-copycat-is-beating-cathie-wood-s-original-by-10-fold Around $260M in assets. Cathie’s 15 minutes are up? Don't count her out yet. TravelforFun What, you mean airlines, cruise ships, theme parks, oil companies,...
by dmcmahon
Thu Mar 18, 2021 12:30 am
Forum: Investing - Theory, News & General
Topic: Cryptocurrency - Bitcoin Continues to Soar!
Replies: 173
Views: 15871

Re: Cryptocurrency - Bitcoin Continues to Soar!

What is ETH's solution to the energy issue facing BTC, which is only going to get more attention with time? ETH 2.0 will switch from Proof of Work to Proof of Stake, which should dramatically decrease energy requirements because you are not wasting energy "mining". This is some risk that ...
by dmcmahon
Thu Mar 18, 2021 12:18 am
Forum: Personal Consumer Issues
Topic: upgrade iphone 6??
Replies: 62
Views: 3819

Re: upgrade iphone 6??

I am very slow to buy new devices, and I am currently on the second gen iPhone SE, so I would definitely recommend option 2. It’s a very powerful phone for a very reasonable cost, and I plan to keep it for five years. Already two years into it and still loving it. Me too. It’s not that I’m cheap, b...
by dmcmahon
Thu Mar 18, 2021 12:04 am
Forum: Personal Finance (Not Investing)
Topic: Paying Down Debt vs. Building Emergency Fund
Replies: 57
Views: 2324

Re: Build Emergency Fund vs. Debt Paydown

I’d have six months of expenses in the savings account and then pay down the high interest rate debt. How safe is your job? And can you estimate the probability of an unplanned expense that exceeds the modest balance you have? Finally, can you fall back on credit if you do have an unplanned expense...
by dmcmahon
Wed Mar 17, 2021 11:41 pm
Forum: Personal Consumer Issues
Topic: upgrade iphone 6??
Replies: 62
Views: 3819

Re: upgrade iphone 6??

Impatience wrote: Wed Mar 17, 2021 9:05 pm Just get a new phone. The SE will do fine for many years. Waiting a decade to upgrade is kind of nuts, the technology has come an enormous way in that time, certainly far enough to justify spending some money.
Agreed, except the bigger SE won’t be out for some months yet.
by dmcmahon
Wed Mar 17, 2021 11:38 pm
Forum: Personal Investments
Topic: How much do you weigh your homes value in your retirement portfolio?
Replies: 106
Views: 8331

Re: How much do you weigh your homes value in your retirement portfolio?

Don't count it in the portfolio - and it's paid off. I think of my house (after being a place to live in rent "free") as long term care insurance - i.e. when I need that, I sell the house. What I do as well. The house’s contribution to my retirement plan is that rent is not a line item on...
by dmcmahon
Wed Mar 17, 2021 11:34 pm
Forum: Investing - Theory, News & General
Topic: Why the disdain for managed funds like ARKK that destroy total market funds?
Replies: 827
Views: 68863

Re: Why the disdain for managed funds like ARKK that destroy total market funds?

SlowMovingInvestor wrote: Wed Mar 17, 2021 11:30 pm ARKK is so last month, enter MOON

https://www.bloomberg.com/news/articles ... by-10-fold

Around $260M in assets.
Cathie’s 15 minutes are up?
by dmcmahon
Sun Mar 14, 2021 11:59 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 220
Views: 22513

Re: Larry Swedroe: Munis Increasingly Risky

gasman wrote: Sun Mar 14, 2021 6:53 pm sold all my munis in 2020. All treasurys. mostly money market.
Ditto. No reason to take the risk. Although it seems clear now that municipalities with challenging fiscal situations are going to be backstopped by the Federal government.
by dmcmahon
Sat Mar 13, 2021 8:18 pm
Forum: Investing - Theory, News & General
Topic: When a company pays a dividend, what is the literal reason for the stock price decrease?
Replies: 62
Views: 5380

Re: When a company pays a dividend, what is the literal reason for the stock price decrease?

I think you guys have missed the most salient point. At T-1, if you hold a share of the stock, you’re entitled to a cash dividend. A potential buyer can buy it and collect the dividend, but at T+1 a potential buyer would not get the dividend. So someone who bought the stock at the last minute of the...
by dmcmahon
Sat Mar 13, 2021 9:38 am
Forum: Personal Investments
Topic: Advice to give dad and mom
Replies: 21
Views: 2602

Re: Advice to give dad and mom

Thanks everyone. The vast majority of their investments are in their IRAs. I think my dad's RMDs come out to over 50K a year (so that with the pension and SS likely rules out Roth conversions due to the extra taxes). They're 100% equities. They were closer to 70/30, but my dad started selling bonds...
by dmcmahon
Fri Mar 12, 2021 10:16 pm
Forum: Investing - Theory, News & General
Topic: For I-Orp, what rates of return and yield do you assume?
Replies: 15
Views: 1013

Re: For I-Orp, what rates of return and yield do you assume?

I use 5%, 1.5%, and 1%. I’m using 2.5% for international dividends and 2% growth. All those figures are nominal - I figure 2% inflation. The bond number assumes treasuries & CDs only.
by dmcmahon
Fri Mar 12, 2021 9:52 pm
Forum: Investing - Theory, News & General
Topic: How do I explain to someone that higher valuations are not as high as they seem due to bond yield?
Replies: 60
Views: 4554

Re: How do I explain to someone that higher valuations are not as high as they seem due to bond yield?

ERP is now low for high risk. In other words, on a risk adjusted basis, we're not being as well compensated for taking on equity risk as compared to the past. And therefore, on a risk adjusted basis, the ERP is lower. I agree. This is inevitable if the discount rate is forced low. Suddenly the most...
by dmcmahon
Fri Mar 12, 2021 9:16 pm
Forum: Investing - Theory, News & General
Topic: How has U.S outperformed International?
Replies: 133
Views: 10397

Re: How has U.S outperformed International?

GaryA505 wrote: Fri Mar 12, 2021 3:49 pm
abuss368 wrote: Wed Mar 10, 2021 6:24 pm We are solving the US vs. International debate on this thread!😂🤣

Tony
And after only 1001 threads on the subject! :!:
We are finally going to get to the bottom of this mystery! Next up, we finally figure out what happened to Amelia Earhart.
by dmcmahon
Fri Mar 12, 2021 8:47 pm
Forum: Investing - Theory, News & General
Topic: Have commodities been fully debunked?
Replies: 37
Views: 3257

Re: Have commodities been fully debunked?

That used to be true. But now with TIPS bonds sporting explicit negative real yields, and nominal bonds implied yields of zero or less, the argument that hard assets “aren’t an investment because they don’t have a yield” falls away. Of the hard assets I still think directly owned real estate is bes...
by dmcmahon
Fri Mar 12, 2021 1:06 am
Forum: Investing - Theory, News & General
Topic: How do I explain to someone that higher valuations are not as high as they seem due to bond yield?
Replies: 60
Views: 4554

Re: How do I explain to someone that higher valuations are not as high as they seem due to bond yield?

One way to look at what's going on is that the following are generally true: 1. A stock is worth the sum of all of its future earnings in today's dollars 2. The farther out in the future a dollar of earnings is, the less it's worth in today's dollars 3. Dollars of future earnings are forecasts, not ...
by dmcmahon
Fri Mar 12, 2021 12:44 am
Forum: Investing - Theory, News & General
Topic: Have commodities been fully debunked?
Replies: 37
Views: 3257

Re: Have commodities been fully debunked?

The argument that commodities are an inflation hedge has always seemed weak to me, because most investments sorta-kinda-tend-to keep pace with inflation--including Treasury bills, good competitive bank accounts, personal salaries, as well as stocks and real estate. The investments that do not are t...
by dmcmahon
Fri Mar 12, 2021 12:28 am
Forum: Investing - Theory, News & General
Topic: Criticism of ARK Funds
Replies: 8
Views: 1220

Re: Criticism of ARK Funds

My guess is that they are trading around core positions. Price high, trim, price low, add.