Search found 24845 matches

by dbr
Tue Jan 23, 2018 10:08 pm
Forum: Investing - Theory, News & General
Topic: Bond Portfolio for High Net Worth Individuals - Different Rules?
Replies: 27
Views: 2018

Re: Bond Portfolio for High Net Worth Individuals - Different Rules?

Mr. Buffett, an extraordinarily high net worth individual, apparently prefers putting most of his wealth in equities. The nation of Saudi Arabia, which is really, really high worth, does, I think, have a very large investment in oil. An Iowa farmer owning 640 acres of land is worth about $4M, assumi...
by dbr
Tue Jan 23, 2018 8:17 pm
Forum: Investing - Theory, News & General
Topic: What are some alternative, numerical proxies for risk besides volatility?
Replies: 22
Views: 775

Re: What are some alternative, numerical proxies for risk besides volatility?

What a strange result that SD and max drawdown would be highly correlated. I would never have imagined.

PS Thanks for the data. That is very helpful.
by dbr
Tue Jan 23, 2018 8:14 pm
Forum: Investing - Help with Personal Investments
Topic: am I crazy to do a lump sum investment with my entire retirement in this current stock market?
Replies: 20
Views: 1886

Re: am I crazy to do a lump sum investment with my entire retirement in this current stock market?

Why not think about your plan for saving and investing over the next 25 years? This lump sum you have today is merely the beginning of a long term plan. It is not your "entire retirement." That doesn't mean you should just willy-nilly take all that cash and invest it in stocks. It does mean you shou...
by dbr
Tue Jan 23, 2018 5:56 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement income / VWINX - Vanguard Wellesley Income Fund
Replies: 10
Views: 916

Re: Retirement income / VWINX - Vanguard Wellesley Income Fund

Why not move 10% of the money into the total US stock market? That focuses the investment on the objective desired, is a small and very conservative move, is a diversified index fund, and is very low cost. 10% is probably not enough, however. The surest way to preserve capital and beyond that grow w...
by dbr
Tue Jan 23, 2018 5:38 pm
Forum: Investing - Theory, News & General
Topic: What are some alternative, numerical proxies for risk besides volatility?
Replies: 22
Views: 775

Re: What are some alternative, numerical proxies for risk besides volatility?

For instance, those that say stocks are just as risky in the long-term as the short-term are referring to the standard deviation of returns*. However, many take this statement to mean that they would have been just as likely to lose money in stocks over 20 years as they would have been over one yea...
by dbr
Tue Jan 23, 2018 5:16 pm
Forum: Investing - Theory, News & General
Topic: Bond Portfolio for High Net Worth Individuals - Different Rules?
Replies: 27
Views: 2018

Re: Bond Portfolio for High Net Worth Individuals - Different Rules?

Where is the line that makes you an HNWI? I am coming around to the view that bonds are mostly a scam at this point. MMF are getting close to 1.5% and rising. Keep some needed cash in a mmf and longer term money in an s&p 500 fund. very simple. But I am no expert. Calling a massively large asset cl...
by dbr
Tue Jan 23, 2018 5:13 pm
Forum: Investing - Theory, News & General
Topic: Bond Portfolio for High Net Worth Individuals - Different Rules?
Replies: 27
Views: 2018

Re: Bond Portfolio for High Net Worth Individuals - Different Rules?

I am 50/50 total US and total international. No bonds. But I have been wondering the same. I backtested 80/20, 90/10, 100/0 for multiple time frames, including 1997-2017 and 2007-2017. 80/20 came out ahead. Past returns do not predict the future. Aren't the past 30 years felt to be the "golden age ...
by dbr
Tue Jan 23, 2018 1:59 pm
Forum: Investing - Theory, News & General
Topic: Why hold total bond market fund when 7 year CDs yield more?
Replies: 21
Views: 2251

Re: Why hold total bond market fund when 7 year CDs yield more?

The Bond Market Fund will be buying issues with progressively higher yields in a rising environment increasing the amount it pays out over the course of the next seven years...If interest rates go the other way the fund's shares will appreciate in value hold older higher coupon bonds. The CD's are ...
by dbr
Tue Jan 23, 2018 1:54 pm
Forum: Investing - Theory, News & General
Topic: 25x 50x etc. [evaluating multiples of expenses in retirement]
Replies: 8
Views: 676

Re: 25x 50x etc. [evaluating multiples of expenses in retirement]

Also, if your pension is not inflation-adjusted then some of your assets will need to go toward maintaining its purchasing power. That would be separate from the multiplier fund. In addition to other good comments I would add that this kind of situation (if the pension is not inflation adjusted) is...
by dbr
Tue Jan 23, 2018 1:35 pm
Forum: Investing - Help with Personal Investments
Topic: Case For/Against Financial Advisor + Portfolio
Replies: 13
Views: 858

Re: Case For/Against Financial Advisor + Portfolio

I would call Vanguard and have them arrange the transfer. The receiving brokerage arranges it for free. You will need to do paperwork and perhaps a 3-way conversation with V and your current broker. There may be a transaction cost for selling, a 1% load fee if selling before one year, and account c...
by dbr
Tue Jan 23, 2018 1:29 pm
Forum: Investing - Theory, News & General
Topic: 25x 50x etc. [evaluating multiples of expenses in retirement]
Replies: 8
Views: 676

Re: 25x 50x etc. [evaluating multiples of expenses in retirement]

I would always advise care in estimating expenses. Allowing a 25% contingency or something like that and also considering the impact of having to spend a large amount of money at some point is wise. Also if that $5000/mo is not inflation indexed that makes a big difference. I think it is helpful to ...
by dbr
Tue Jan 23, 2018 1:19 pm
Forum: Investing - Theory, News & General
Topic: Kitces article: A cash bucket in retirement? Nope
Replies: 77
Views: 4744

Re: Kitces article: A cash bucket in retirement? Nope

Poor cash, so unloved by many. Reminds me of yesterday when I apologized to the clerk at a small convenience store for having to give her a $100 bill. I mentioned that I hated them because not all stores will take them. She laughed and said she LOVED $100 bills, and would take any I wanted to give ...
by dbr
Tue Jan 23, 2018 1:16 pm
Forum: Investing - Theory, News & General
Topic: Kitces article: A cash bucket in retirement? Nope
Replies: 77
Views: 4744

Re: Kitces article: A cash bucket in retirement? Nope

I don't see why using cash for your fixed-income allocation is significantly different from using bonds for this. A total bond market fund is pretty stable in the long term, maybe a little better than a money market fund or stable value fund or a CD ladder. So why the particular hate of cash since ...
by dbr
Tue Jan 23, 2018 1:10 pm
Forum: Investing - Theory, News & General
Topic: Bond Portfolio for High Net Worth Individuals - Different Rules?
Replies: 27
Views: 2018

Re: Bond Portfolio for High Net Worth Individuals - Different Rules?

I am 50/50 total US and total international. No bonds. But I have been wondering the same. I backtested 80/20, 90/10, 100/0 for multiple time frames, including 1997-2017 and 2007-2017. 80/20 came out ahead. Past returns do not predict the future. Aren't the past 30 years felt to be the "golden age ...
by dbr
Tue Jan 23, 2018 12:14 pm
Forum: Investing - Theory, News & General
Topic: Bond Portfolio for High Net Worth Individuals - Different Rules?
Replies: 27
Views: 2018

Re: Bond Portfolio for High Net Worth Individuals - Different Rules?

I think need/ability/willingness applies to wealthy individuals as well as to anyone else.
by dbr
Tue Jan 23, 2018 12:12 pm
Forum: Investing - Help with Personal Investments
Topic: Tax-deferred accounts maxed out - where to park extra funds?
Replies: 4
Views: 288

Re: Tax-deferred accounts maxed out - where to park extra funds?

Lots of people have assets in taxable brokerage accounts. It is just a question of arriving at an overall asset allocation and then locating the different holdings in taxable/tax deferred/tax exempt for lowest tax cost. This is after all methods to defer the tax on the original income are exhausted....
by dbr
Tue Jan 23, 2018 12:07 pm
Forum: Investing - Theory, News & General
Topic: Kitces article: A cash bucket in retirement? Nope
Replies: 77
Views: 4744

Re: Kitces article: A cash bucket in retirement? Nope

Using the withdrawal rates calculator from Portfolio Charts and data from 1970 forward, the safe withdrawal rate for a portfolio comprised of 30% TSM / 30% international /40% ITT (TBM) over 30 year periods was 4.7%, while substituting ITT for T-bills only dropped the SWR to about 4.6%, hardly a sig...
by dbr
Tue Jan 23, 2018 11:53 am
Forum: Investing - Theory, News & General
Topic: Why hold total bond market fund when 7 year CDs yield more?
Replies: 21
Views: 2251

Re: Why hold total bond market fund when 7 year CDs yield more?

It doesn't have to be bond funds OR CDs. Why not bond funds AND CDs? Both fit in the FI category yet each has slightly different set of pros and cons.(And I-Bonds could also be added to the mix.) The reason why not is because there has to be a right answer and if your answer is different from mine,...
by dbr
Tue Jan 23, 2018 11:50 am
Forum: Investing - Theory, News & General
Topic: What are some alternative, numerical proxies for risk besides volatility?
Replies: 22
Views: 775

Re: What are some alternative, numerical proxies for risk besides volatility?

There is nothing wrong with talking about all sorts of concerns and hazards that relate only vaguely or even not at all to the prices of investments on a market, but that is a different conversation from one about how prices of investments on a market do affect things that concern us. Both kinds of ...
by dbr
Tue Jan 23, 2018 11:01 am
Forum: Investing - Help with Personal Investments
Topic: Case For/Against Financial Advisor + Portfolio
Replies: 13
Views: 858

Re: Case For/Against Financial Advisor + Portfolio

You can look up the transaction costs for either broker on the web pages for the two.
by dbr
Tue Jan 23, 2018 11:00 am
Forum: Investing - Help with Personal Investments
Topic: Bonds - Total Bond fund vs Long Term Inv Grade fund
Replies: 3
Views: 289

Re: Bonds - Total Bond fund vs Long Term Inv Grade fund

Did the Morningstar - TCR - Tax Cost Ratio - http://performance.morningstar.com/fund/tax-analysis.action?t=VWETX®ion=usa&culture=en_US for me.... LT Inv Grade - VWETX Fund Bal - $100,000 Divs $3,346 CG $1,116 Tot Bond - VBTLX Fund Bal - $100,000 Divs $1,783 CG $0 I mentioned future, not now. As ...
by dbr
Tue Jan 23, 2018 10:34 am
Forum: Investing - Theory, News & General
Topic: Kitces article: A cash bucket in retirement? Nope
Replies: 77
Views: 4744

Re: Kitces article: A cash bucket in retirement? Nope

I don't think all the disdain for cash-like products is justified-- it is often positioned that a person who opts for buying a cash-like product is always making a poor move - and that is not always the case. That is the point I was/am trying to make. part of the problem with these discussions is t...
by dbr
Tue Jan 23, 2018 10:32 am
Forum: Investing - Theory, News & General
Topic: Why hold total bond market fund when 7 year CDs yield more?
Replies: 21
Views: 2251

Re: Why hold total bond market fund when 7 year CDs yield more?

Convenience and it is probably a wash on return. When CD yields are competitive with the alternative in bond they can be a good choice. Don't forget CDs have reinvestment risk if you can't redeem the CD early without too large a penalty to replace it with a higher yielding CD if interest rates go up...
by dbr
Tue Jan 23, 2018 10:27 am
Forum: Investing - Theory, News & General
Topic: What are some alternative, numerical proxies for risk besides volatility?
Replies: 22
Views: 775

Re: What are some alternative, numerical proxies for risk besides volatility?

Academic papers often refer to volatility and risk as if they are the same thing, although volatility does not capture the whole picture. Assets that have high volatility tend to be more risky, but that is not always the case. There is no perfect measure for risk, but what are some alternative nume...
by dbr
Tue Jan 23, 2018 10:06 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Advisor Recommendation
Replies: 8
Views: 493

Re: Vanguard Advisor Recommendation

I am pretty sure the first two equity allocations are not separate funds, but instead are just the Total US Stock Market index fund. I now wonder whether the first 3 bond allocations are just the Total US Bond Market Index fund. 99% you are right. This came up on a previous thread where it became e...
by dbr
Tue Jan 23, 2018 10:03 am
Forum: Investing - Help with Personal Investments
Topic: Bonds - Total Bond fund vs Long Term Inv Grade fund
Replies: 3
Views: 289

Re: Bonds - Total Bond fund vs Long Term Inv Grade fund

There are a number of reasons TBM might be a better asset to hold than LT Inv. Grade, but I doubt large capital gains in the future is going to be one of them. While interest rates can't be predicted hardly at all, the likelihood of significant interest rate decreases and bond NAV increases seems re...
by dbr
Tue Jan 23, 2018 10:00 am
Forum: Personal Finance (Not Investing)
Topic: Stats on When People Take Social Security
Replies: 173
Views: 11513

Re: Stats on When People Take Social Security

Any thoughts of taking SS early at 62; and in turn, investing that check each month in VTSAX and VBTLX? That has been discussed many times. In rough terms the math is that the increase in benefit in delaying SS is about a certain 8% per year delayed. To compete with that you have to be invested at ...
by dbr
Tue Jan 23, 2018 9:55 am
Forum: Investing - Help with Personal Investments
Topic: bond allocation
Replies: 15
Views: 1003

Re: bond allocation

I think total bond index will do very well over a long investing horizon such as in an IRA, better than any stable value fund except one like mine. There have been numerous posts detailing the negative issues with TIPs funds (e.g. low yields, taxes, volatility) so I won't bother to go into those. E...
by dbr
Mon Jan 22, 2018 7:07 pm
Forum: Investing - Help with Personal Investments
Topic: bond allocation
Replies: 15
Views: 1003

Re: bond allocation

Sorry, I meant to say hedge against rising interest rates. The fund invests in floating rate loans and securities. If interest rates increase then the rates on the loans go up. I believe the rates are usually tied to LIBOR. Of the investments you have the stable value fund would be the obvious answ...
by dbr
Mon Jan 22, 2018 7:04 pm
Forum: Investing - Theory, News & General
Topic: Small Value Premium - How Do You View It?
Replies: 45
Views: 2102

Re: Small Value Premium - How Do You View It?

I look at it as interesting and valid research. I don't like the difficulty in finding causes why those differences in return exist. I think people should be sure that if they want to exploit such a premium that they have a firm understanding of associated risk. I am not sure I really understand the...
by dbr
Mon Jan 22, 2018 6:53 pm
Forum: Investing - Help with Personal Investments
Topic: bond allocation
Replies: 15
Views: 1003

Re: bond allocation

How does HFLIX further hedge for inflation compared to what you have? I don't know much about this kind of fund but am curious about the rationale.

Give a 0.74% ER, you are considerably behind the 8-ball to start with using this fund.
by dbr
Mon Jan 22, 2018 5:59 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Retirement Planning
Replies: 5
Views: 976

Re: Vanguard Retirement Planning

these calculators seem like they would work - BUT - not sure if the Income is Gross or Net for things like taxes on pension, W2, etc - https://personal.vanguard.com/us/insights/retirement/retirement-tools https://personal.vanguard.com/us/insights/retirement/tool/retirement-income-worksheet https://...
by dbr
Mon Jan 22, 2018 10:37 am
Forum: Investing - Help with Personal Investments
Topic: Advice on constructing a hands-off portfolio with intermediate-term uncertainty
Replies: 6
Views: 454

Re: Advice on constructing a hands-off portfolio with intermediate-term uncertainty

If you plan to make a large purchase with a time certain time-frame, then you need to tee it up with a conservative investment, such as a CD. On the other hand, if you are OK with not making the large purchase, but only to purchase it when the time is right even when it could have taken much longer...
by dbr
Mon Jan 22, 2018 10:28 am
Forum: Investing - Help with Personal Investments
Topic: Ready to give up on bond fund, Lost 2.25% past 6 months
Replies: 76
Views: 8203

Re: Ready to give up on bond fund, Lost 2.25% past 6 months

Few questions for the experts here, as I've been thinking of purchasing SWAGX for the bond/fixed income portion of my Roth IRA. -If I'm reading things correctly, does it appear that the OP mistook price of the bond fund for total return of the bond fund? Probably he is looking at the price and not ...
by dbr
Mon Jan 22, 2018 10:17 am
Forum: Investing - Help with Personal Investments
Topic: Ready to give up on bond fund, Lost 2.25% past 6 months
Replies: 76
Views: 8203

Re: Ready to give up on bond fund, Lost 2.25% past 6 months

I haven't seen a good reason to hold bond funds other than maybe tax exempt ones in taxable accounts. If you have access to CDs and/or good stable value funds, go with that. With bond funds, you may have to wait almost twice the duration of the funds just to get the original principal plus the orig...
by dbr
Mon Jan 22, 2018 10:11 am
Forum: Investing - Theory, News & General
Topic: Puzzled by Berkin & Swedroe contradiction re term premium
Replies: 3
Views: 361

Re: Puzzled by Berkin & Swedroe contradiction re term premium

There is also a matter of risk. It used to be and I don't know if you see it anymore that Larry suggested duration should be extended when you can get 20bps in yield for every extra year in duration. In your case extending maturity (proxy for duration, I know) by 15 years gets you 70bps or about 5bp...
by dbr
Mon Jan 22, 2018 10:05 am
Forum: Investing - Help with Personal Investments
Topic: current asset vs paycheck asset allocation
Replies: 3
Views: 280

Re: current asset vs paycheck asset allocation

If your 401k automatically rebalances (mine does) it doesn't matter too much, and mirroring is probably fine. If it doesn't for some reason, you can use new contributions to rebalance each pay period, or periodically, by switching back and forth between funds. Yes, exactly so. The object is to main...
by dbr
Mon Jan 22, 2018 9:51 am
Forum: Investing - Help with Personal Investments
Topic: Ready to give up on bond fund, Lost 2.25% past 6 months
Replies: 76
Views: 8203

Re: Ready to give up on bond fund, Lost 2.25% past 6 months

Novice here. I have small part of my retirement portfolio in the bond fund of SWAGX, an intermediate bond fund from Schwab. It’s been losing money ever since I bought it 6 months ago. I want to just give up and invest in a 2% cd at synchrony instead. I thought bonds were supposed to be the stablizi...
by dbr
Sun Jan 21, 2018 6:17 pm
Forum: Investing - Theory, News & General
Topic: When Vanguard papers say "diversification benefits," what precisely are they referring to?
Replies: 4
Views: 479

Re: When Vanguard papers say "diversification benefits," what precisely are they referring to?

As far as I know "diversification benefit" means that the risk of the portfolio is reduced because two uncorrelated assets having the same expected return and the same expected risk combine to produce the same expected return and less risk. If the correlation were perfectly negative, there would be ...
by dbr
Sun Jan 21, 2018 1:56 pm
Forum: Investing - Help with Personal Investments
Topic: A 4-5% rebalance to bonds barely budges risk/return
Replies: 43
Views: 3237

Re: A 4-5% rebalance to bonds barely budges risk/return

past performance has no bearing on future results, i dont know if it matters what the difference was in the past This seems to overstate it a bit. It's imperfect but it's all we've got. SOMETHING has to drive our asset allocation strategies and if not historical returns, then what? Phases of the mo...
by dbr
Sun Jan 21, 2018 1:38 pm
Forum: Investing - Help with Personal Investments
Topic: A 4-5% rebalance to bonds barely budges risk/return
Replies: 43
Views: 3237

Re: A 4-5% rebalance to bonds barely budges risk/return

There is also the concept of rebalancing out of stocks too high but not rebalancing in to stocks too low. The general trend of that strategy is to bias away from risk and also reduce return.
by dbr
Sun Jan 21, 2018 1:29 pm
Forum: Investing - Theory, News & General
Topic: [Bogleheads' Guide to Investing - Is this calculation correct?]
Replies: 6
Views: 759

Re: [Bogleheads' Guide to Investing - Is this calculation correct?]

The table looks wrong to me, too. http://i63.tinypic.com/kewva9.png And the numbers given for the newsletter look wrong if the quote in this post is right. https://www.bogleheads.org/forum/viewtopic.php?t=13424 Ron Thanks for posting the chart. Ok, that IS some goofy math. Somebody didn't proof rea...
by dbr
Sun Jan 21, 2018 1:28 pm
Forum: Investing - Help with Personal Investments
Topic: A 4-5% rebalance to bonds barely budges risk/return
Replies: 43
Views: 3237

Re: A 4-5% rebalance to bonds barely budges risk/return

Is there anything wrong with not rebalancing at all? Losing 30 versus 40 percent of piortfolio would be just as painful but I would keep buying like I did in 2008 (although now I have 10x more). If you never reblance then eventually over time the highest returning and riskiest assets will dominate ...
by dbr
Sun Jan 21, 2018 1:23 pm
Forum: Investing - Help with Personal Investments
Topic: AA questions mix index funds w/high yield
Replies: 7
Views: 377

Re: AA questions mix index funds w/high yield

Just a quick comment by way of example is that AMZA has a current yield of 24.25% and a three year annualized return of -14.4%. I don't know what is going on with the other investments, but the fundamental properties of investments are return and the variability of return, and I would focus on those...
by dbr
Sun Jan 21, 2018 12:50 pm
Forum: Investing - Help with Personal Investments
Topic: AA questions mix index funds w/high yield
Replies: 7
Views: 377

Re: AA questions mix index funds w/high yield

Almost no one has any idea what those tickers are.
by dbr
Sun Jan 21, 2018 12:48 pm
Forum: Investing - Help with Personal Investments
Topic: A 4-5% rebalance to bonds barely budges risk/return
Replies: 43
Views: 3237

Re: A 4-5% rebalance to bonds barely budges risk/return

1. Rebalancing is for the purpose of keeping in the ballpark of where one wants to be. It is true that 5% is perhaps barely noticeable threshold. 2. There are probably only three asset allocations worth considering most of the time for most people 75/25, 50/50, 25/75. If someone wants to adopt 100/0...
by dbr
Sun Jan 21, 2018 12:43 pm
Forum: Investing - Theory, News & General
Topic: AA is much harder than I thought...
Replies: 45
Views: 4815

Re: AA is much harder than I thought...

Whether or not you invest 100% in stocks or add some bonds depends on your need to get the return. You pretty much have to run a model estimating the outcomes to compare the two. You also have to assess your ability to cope if you don't get the return you really want. Young age and ability to earn, ...
by dbr
Sat Jan 20, 2018 7:29 pm
Forum: Investing - Help with Personal Investments
Topic: Asset allocation and rebalancing
Replies: 7
Views: 497

Re: Asset allocation and rebalancing

what I don't understand is that there is advice everywhere to buy and hold, not sell when the market goes lower... however when the market goes lower different asset classes will go down at different rates. Say Bonds drop 10%, Stocks drop 20%.. now do you sell Bonds at a 10% loss and direct the mon...
by dbr
Sat Jan 20, 2018 5:15 pm
Forum: Personal Finance (Not Investing)
Topic: Met with a CFP, not too impressed.
Replies: 51
Views: 8624

Re: Met with a CFP, not too impressed.

We went to a Garrett Financial Network planner. I think we paid $2,300 but I could be wrong. We went back for a second meeting to go over the plan. The next weekend I sat down with the plan and a calculator. Our Social Security payments were off by $10k, our pension amounts were wrong, she had mixe...
by dbr
Sat Jan 20, 2018 5:13 pm
Forum: Investing - Help with Personal Investments
Topic: Income in retirement questions
Replies: 15
Views: 2041

Re: Income in retirement questions

Thanks for the info. What about High Yield Corporate Bonds VWEHX? It has a nice consistent yield. I thought if it would yield 4.5% consistently that would reduce the amount of stocks needed to sell for income. It is a mistake to confuse the dividends and interest paid out by various investments wit...