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Compounding

Based on Rick Ferri's postings on this thread, I think it might be time to amend this excerpt from the Boglehead's Wiki on Developed Market Bonds: "Author Rick Ferri posits three tests for including an asset class in a portfolio: Does an asset class provide exposure to a unique investment risk? Does...

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555 wrote:Compounding, jdilla1107 please edit your posts. You are quoting me as saying things that other posters said.

My apologies - its been corrected. The person I quoted was responding to your quote -and the quote within the quote was overlooked.

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If the "mortgage as a negative bond" thinking makes sense to you and feels right to you, do it. But I don't think anyone else should be following that advice just because some smart financial guy discusses it in a book. If it doesn't feel right in your gut, you may not make it through a market cras...

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I was wondering how many of you out there treat your mortgage as a negative exposure to your allocation to fixed-income assets, as Larry Swedroe suggests doing (he references this issue on page 67 of The Only Guide for the Right Financial Plan book). In reality, do you actually treat your mortgage b...

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When I signed up for Amazon Prime I found I was buying a lot more stuff from Amazon and a good chunk of it was frivolous. Are you sure you aren't similarly justifying trips to Chic Fil A with "well, gotta get my 12 debits per month in..."? My example of Chick-Fil-A was somewhat tongue-in-cheek, but...

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MortgageOnBlack, I have used a Rewards Checking Account for the last 3 years from a local Community Bank and haven't regretted it for a moment. The Checking account was started at 4% when I opened the account in 2009, but has since been slimmed to 3% - still far and above what you can get in CDs or ...

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You know what I would do if I had a 122 million dollars? I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities... For the record, I love the reference. unofficial quote from the movie: "Well, I would invest half of it in ?...

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I'm not arguing for redirecting one's fixed-income allocation into more stocks (that would not make sense given the purpose of fixed-income in a portfolio), or arguing that stocks are or are not inflated. Just that bonds are very inflated and are more likely to decline than continue to increase in ...

Compounding

Having at least one asset class/fund in both your taxable and tax-advantaged has helped me tremendously in rebalancing, especially with new money. In my case it is a "fringe" asset class on the tax-efficient scale: Large Value. With new money available I can load up on LV in my taxable, and then sel...

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A 4x4 S&D portfolio was apparently too simple for my over-active mind, as I couldn't resist tilting it just a wee bit more: (% of equities): SV 15%; LV 14%; SC 13%; LC 12% + 10% in REITS (6% domestic, 4% int'l). The remaining 36% is in Int'l: 18% FTSE large; 18% FTSE small thru Vanguard. The value p...

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Afterall, anything I pay in NY income tax I get back as a credit on my NC return. Thats not always true. Most states will credit you for the amount of tax they would charge for the same income earned in the other state, up to the amount that you're paying in tax to the other state. Also be prepared...

Compounding

Thanks for the replies. So if I figured her "NY based" income - which I can presumably do by counting how many days she spent up there this year as a percentage of all work days in 2011 - and claim that percentage on her NY state tax return, then it all should wash out in the end? Afterall, anything...

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This doesn't seem right to me, so I wanted to get some feedback from the knowledgable group. My wife lives in NC and works from home, but her company is in NY. She goes up to NY once a month for meetings, and until this year they withheld NY state tax from her paycheck. I would file the NY tax retur...

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If the major concern is to protect yourself during major market downturns like the fall of 2008 (as evidenced in the magnified chart), then IT Treasuries (VFITX) would be your best bet. Larry Swedroe did a great job convincing me that the corporate premium was negligible in the bond market and wasn'...

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I invest in the ETF (VNQI) due to the lower expense ratio (.35) and to avoid the purchase/redemption fees of the mutual fund. I waited until this asset class came out with Vanguard before investing in it, as before that this was a rather pricey asset class to gain exposure to. Since my overall inter...

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Truth be told, I am actually kind of shocked at how many skeptical and negative posts there are towards marriage in this thread. I understand these viewpoints, but I always figured that marriage contributes to the wealth and success of an individual - as the emotional, physical, and mental health be...

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I'm coming up on 10 years since I first opened my first account at Vanguard, and thus have been reflective on all the changes that have occurred since then. I thought it would be helpful to share this with the group - especially those who just started with Vanguard in the last couple of years - so t...

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When it comes to TSM vs Slice and Dice, I commonly hear a lot of the "can't outsmart Mr. Market" and "what do I know that the market doesn't" reasoning. And on the surface that makes sense. But here is what I can't get past: because all these TSM indexes are market cap weighted , large caps are natu...

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You still don't have the IRA tax situation nailed down. Once you make that contribution to the traditional IRA you have deferred taxes on the original earnings. You owe those taxes when you earned the money which is now you just don't have to pay them until you spend that money. It's just like your...

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Not Bob, Thanks for the reply. I read the Wiki on tax-adjusted asset allocation, as well as Bill Bernstein’s argument against the adjustment. My take on this is that such decisions are not a black-and-white matter – and that which option you choose can be more of a matter of perspective, not math. F...

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I know exactly where you are coming from - the asset location decision of "Roth vs Trad IRA" doesn't get talked about enough for those that have both to choose from. Right now the assets that go into my tax-advantage accounts are all my bond funds, TIPS, REITS, small-value large value, and Int'l val...

Compounding

Just a curiousity question. China recently passed Japan as the second largest economy in the world - I'm assuming that ranking is based on GDP output. But why, when looking at the Vanguard Total World Stock Index, is China ranked tied for 9th among all countries with only a 2.3% share in that fund? ...

Compounding

Just a small additional comment to LadyGeek's post about the tax deductiblity of the SPS wrap fee (if you itemize) - that fee is only tax deductible as it pertains to taxable accounts, not any retirement accounts. I see that you have an SPS wrap account in both a Roth and traditional IRA, so I thoug...

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In researching an answer to my own question - I don't think an Inherited IRA counts toward all the other non-Roth IRAs when figuring the non-deductible/deductible prorata ratio and basis. This is from one of the steps in IRS Form 8606: "Enter the value of all your traditional, SEP, and SIMPLE IRAs a...

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I've done a lot of research on this, so hopefully my questions aren't redundant to what's out there already. I expect in 2011 to hit the income level that would disallow me from my Roth IRA contribution. My wife's situation is more agreeable to the "back door" Roth as she has a Vanguard 401k. For me...

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Larry, I have always admired how you continue to fight the good fight of what you truly believe in - even in the face of constant resistance and criticism from those that mostly have a vested financial interest in the opposite side. Where you find the time and the patience to debate point-for-point ...

Compounding

Its very sad to me what has become of the Motley Fool. Back in 1999, their sight was responsible for first educating me on indexing and how actively managed funds fell well-short of an indexed portfolio. I heard it there first. They readily warned that if you didn't have the time, inclination, inter...

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Thanks for the advice. Whether I sell them or not, the balance will be allocated to the corporate bond portion of my asset allocation - so it makes no sense to calculate the opportunity costs of a stock fund. With the Vanguard ST Corp fund yielding 3.47% - I am getting a major boost in yield by stic...

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My wife inherited an IRA account and an taxable individual account - both which contain individual corporate bonds (among other not-so-desirable investments). I had these bonds transferred over in-kind to our existing Vanguard accounts. My dilemma is whether to hold on to the existing bonds until ma...

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As many of this forum, I am assessing the costs of switching from my current Vanguard MFs into their related ETFs - and have been reading the pros and cons of this decision in the past week. My due diligence is in part because I am adding a sizable new contribution to my taxable porfolio (doubling i...

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I have to ask: Is it really that dangerous to place a market order? (last Thursday was the first time I've ever seen such a thing) Also, how "bad" is it to input your market order during after-hours and have it filled when the market opens? Regarding many of the other posts - ETF prices change every...

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Hard to catch but Neil Cavuto's last statement in the video: "This was industry legend John Bogle who always speaks his mind and seems to tick off everyone.... I like that about him actually"

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I really enjoyed this thread as I am currently adjusting my AA and thinking of incorporating cash into the equation. I've been with Vanguard and on this forum since 2003 and have always considered my cash assets "on the side" of my AA targets. My wife is much more conservative and likes to have cash...

Compounding

I agree with the argument of including microcaps in a portfolio for diversification purposes, but it should be emphasized that most small cap funds already have significant micro cap exposure (based on M* definition): Small value VISVX 17.27% microcap Small blend VTMSX 21.76% microcap REIT 2.22% mic...

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Not much talk here about DLPs. IF your goal is to get a 1080p HDTV bigger than 52", DLP will by far give you a bigger size bang for your buck with the same quality in my estimation. I bought a 65" Mitsubishi DLP for a little over $2k last year. A similar size plasma or LCD TV would have been pushing...

Compounding

This makes me wonder about the large cap index funds that track the Dow, S&P500, Russell 1000, etc: Did these indexes hold onto GM for the whole ride down? Are these funds just now selling upon its official bankruptcy? Wouldn't you think the Dow or S&P would've kicked GM out long ago based on their ...

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* The thing about diversification in an up market..... is that it works. * You can't buy yesterday's returns - they're gone forever. * Everyday you choose to hold on to an investment is like choosing to buy it all over again. * Selling in a down market is easy. Deciding when to get back in is the to...

Compounding

Your point is well taken on the higher NY state tax rates. I don't understand why NC woud cliam the NY as fully taxable. Last year was our first year filing jointly, and they did ask us to report 100% of our income but then allowed a substantial credit for every dollar paid to NY. What is the criter...

Compounding

To the original poster, I can't see a reason why you would turn down a 15 year interest-free loan - much less the possibility of not having to pay it back. If it helps put it in perspective, I closed on my very first home on March 20th 2008 - and I'm livid that I'm missing this opportunity to partic...

Compounding

Thanks for the replies. With a little digging and research of my wife's prior tax returns before we were married, I answered part of my own question. When you file with a state, you get a dollar-for-dollar credit for any taxes paid to another state. Thus you are not paying two different states on th...

Compounding

My wife used to live in NY and work for this company, and now she lives in NC and works for them mostly remotely at home - with the occasional trip up to NY. I'm not sure if she has a choice in asking HR: "change my state income tax to NC". Either way, she paid NY for 2008 and I need to figure out h...

Compounding

I haven't been able to get an answer on this in my research, so I'd figure I ask it here with all the tax posts. I am married filing jointly, and my wife and I live in NC. I work in NC and pay NC state income tax. My wife works primarily from home (NC) but her company is based in NY and she has NY s...

Compounding

Its amazing how dealing with this downturn and staying the course is almost 100% psychological. It sometimes helps me that the digital numbers I stare at on my spreadsheet don't seem quite "real" - as if they had the feel and worth of casino chips at a blackjack table. Losses in percentage terms are...

Compounding

One of the oddest nuances of this current market decline is that there does not seem to be an asset class that is overperforming and thus stabilizing the rest of the sinking portfolio. Small Value stocks helped tame the bear in 2000 and 2001 with 24% and 14% gains respectively; and in 2002 at least ...

Compounding

Ironically Jack's contant message in this interview of "stay the course", "ignore daily fluctuations", "tune out the noise", "focus on the long term fundamentals", etc - are EXACTLY the antithesis of what keeps the ratings of these cable financial news networks up. In other words, if the viewer trul...

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Its a reasonable question and a curious one at that. My educated guess would be a combination of the below: - Home country bias. I remember reading a study that indicated that residents of a particular country held higher allocations to their home country than any other outside country. Where famili...

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I don't see this issue discussed much here, so I'll bring it up. I'm very curious as to exactly how the savvy investors on this forum go about making their asset allocation more conservative as the years go by. Do you increase your bond/cash allocation gradually each year. or plan a large lump sum r...

Compounding

This issue always confused me. I'm in outside sales and thus are never sure what my income will be for the year. If my wife and I contribute $10,000 to our Roth IRAs and we eventually end up earning more than the 2008 income limits for Roth IRA contributions - we will have a dilemma. My understandin...

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Re: Finally arrived: The Vanguard Total International Bond F

Re: Treat your mortgage as a "negative exposure" to bonds?

Re: Treat your mortgage as a "negative exposure" to bonds?

Treat your mortgage as a "negative exposure" to bonds?

Re: Reward Checking Accounts vs High Yield CDs/Savings Accou

Re: Reward Checking Accounts vs High Yield CDs/Savings Accou

Re: How Would You Invest $122 Million?

Re: bonds

Re: Struggling maintaining AA with additional contributions

Re: SV and Reit Tilters Only Please

Re: W2 Question: income from multiple states

Re: W2 Question: income from multiple states

W2 Question: income from multiple states

Re: vanguard total bond versus intermediate bond

Re: Do you invest in Vanguard's International RE/REIT fund?

Re: How many Bogleheads do not marry due to financial reason

My 10 Year Anniversary at Vanguard: A Look at the Changes

Re: What is a good ratio of Large/Small Cap stock?

China is world's #2 economy, but its 9th in World Index?

Options regarding the Non-Deductible IRA

Inherited individual corporate bonds: hold to maturity?

Foreign Tax Credit on ETFs and other taxable issues

GM in Indexes

Tax Question: multiple states for married filing jointly

ST Treasuries 4.40% YTD; ST Inv Grade -2.53% YTD. WHY???

my 2 pennies...

h The long term adjustment to a more conservative allocation

What to do about "possible" income limitation on R