Search found 3800 matches

by jalbert
Thu Nov 15, 2018 4:21 pm
Forum: Personal Finance (Not Investing)
Topic: annuity with true COLA built in
Replies: 28
Views: 1877

Re: annuity with true COLA built in

Some insurance companies that offered COLA’d SPIAs stopped offering them when real rates went negative some years ago. The Principal was still offering them when I last checked. Comparing to a non-COLA’d SPIA, cost was a 40% reduction in initial payout. The historical average (communicated to me inf...
by jalbert
Wed Nov 14, 2018 1:39 pm
Forum: Investing - Theory, News & General
Topic: Bloomberg: GE Preferred STOCK in Vanguard short bond funds??
Replies: 14
Views: 1600

Re: Bloomberg: GE Preferred STOCK in Vanguard short bond funds??

TropikThunder wrote:
Wed Nov 14, 2018 3:00 am
Dividend stocks (especially Dividend Aristocrats) are a bond proxy, so I don’t see the problem.
Super-reliable dividend stocks like GE was for decades?

Not sure what bond proxy means here, but dividend stocks are much more volatile and much riskier than investment grade bonds.
by jalbert
Wed Nov 14, 2018 1:35 pm
Forum: Investing - Help with Personal Investments
Topic: Better funds than VTSAX and VEA?
Replies: 13
Views: 738

Re: Better funds than VTSAX and VEA?

I have utter discomfort investing in the Chinese stocks. Born and raised in China I know its stock market is consisted of panic sellers and is a mess. Companies also do not have an incentive to maximize profit and most of the GOOD companies like alibaba, xiaomi and stuff IPO in the US and HK. Other...
by jalbert
Tue Nov 13, 2018 11:34 pm
Forum: Investing - Theory, News & General
Topic: Bloomberg: GE Preferred STOCK in Vanguard short bond funds??
Replies: 14
Views: 1600

Re: Bloomberg: GE Preferred STOCK in Vanguard short bond funds??

Being an actively managed fund, I would guess the list of fund risks articulated in the prospectus and on the web site list include “manager risk”.

There is a short term corporate bond index fund if you want more control of what you are holding: vscsx/vcsh.
by jalbert
Tue Nov 13, 2018 7:03 pm
Forum: Investing - Theory, News & General
Topic: Investment advisors- is regulatory burden higher on fiduciaries?
Replies: 51
Views: 1917

Re: Investment advisors- is regulatory burden higher on fiduciaries?

As a broker I have a duty to ensure what I sell you is appropriate.
I don’t know the definition of appropriate used by brokers but I can say that it is far broader than mine.
by jalbert
Tue Nov 13, 2018 2:36 pm
Forum: Investing - Theory, News & General
Topic: Rumor mill - Fidelity starting individual HSA's Nov. 15th
Replies: 242
Views: 15656

Re: Rumor mill - Fidelity starting individual HSA's Nov. 15th

Old National Bank partners with the brokerage devenir to offer various mutual funds at cost including a number of Vanguard admiral shares funds: https://hsainvestments.com/fundperformance/?p=TBH Annual fee is $36, so less than Fido’s $48 if you do not meet the asset threshold. You do have to mainta...
by jalbert
Tue Nov 13, 2018 1:17 am
Forum: Investing - Help with Personal Investments
Topic: Permanent Portfolio - Interested in Bogleheads thoughts
Replies: 13
Views: 1654

Re: Permanent Portfolio - Interested in Bogleheads thoughts

The last 30 40 years have been ugly for the PP, but 5% gold improved the sharpe ratio of a 60/40 portfolio over the same period, for what it’s worth: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=2&startYear=1972&endYear=2018&initialAmount=10000&annualOperation=0&annua...
by jalbert
Tue Nov 13, 2018 12:57 am
Forum: Investing - Theory, News & General
Topic: Vanguard investor class shares on their way out?
Replies: 75
Views: 6753

Re: Vanguard investor class shares on their way out?

Perhaps this is mostly shares being converted from investor class to admiral or ETF class.
by jalbert
Mon Nov 12, 2018 7:26 pm
Forum: Personal Consumer Issues
Topic: How to Encrypt a Text file?
Replies: 53
Views: 3911

Re: How to Encrypt a Text file?

The length of the clear text is what I’m referring to. AES256 is a block cipher with 128-bit blocks. 32 ascii characters is 256 bits or two blocks to encrypt. I don’t follow the technical issues of AES256, which is supposed to be secured against differential cryptanalysis, so this may not be necessa...
by jalbert
Mon Nov 12, 2018 1:36 pm
Forum: Investing - Help with Personal Investments
Topic: Permanent Portfolio - Interested in Bogleheads thoughts
Replies: 13
Views: 1654

Re: Permanent Portfolio - Interested in Bogleheads thoughts

The so-called permanent portfolio may be diversified but it has a low expected return. 50% of the portfolio has a zero expected real return (cash, gold). 25% stock 75% TIPS 25% stock 25% nominal treasuries 50% TIPS 1/3 stock 1/3 nominal treasuries 1/3 TIPS would be some examples of diversified portf...
by jalbert
Mon Nov 12, 2018 2:40 am
Forum: Personal Consumer Issues
Topic: Should I reject Google drive for privacy/tracking?
Replies: 38
Views: 2990

Re: Should I reject Google drive for privacy/tracking?

One thing to keep in mind with cloud storage like Dropbox or google drive is that your requirements for backup, retention, and restore may not be met by the storage provider’s implicit or explicit policy. For instance, if you realize that you inadvertently deleted a file sometime in the past, will y...
by jalbert
Mon Nov 12, 2018 1:26 am
Forum: Investing - Theory, News & General
Topic: Do you prefer etfs or mutual funds?
Replies: 52
Views: 4673

Re: Do you prefer etfs or mutual funds?

I prefer ETFs in taxable accounts because they are simply more tax efficient. WIth mutual funds you pay capital gains each year. That depends on the mutual fund. The mutual funds Ive owned in a taxable account have never distributed a capital gain in the time I’ve orned them, and I don’t expect the...
by jalbert
Mon Nov 12, 2018 12:55 am
Forum: Investing - Theory, News & General
Topic: Rumor mill - Fidelity starting individual HSA's Nov. 15th
Replies: 242
Views: 15656

Re: Rumor mill - Fidelity starting individual HSA's Nov. 15th

Old National Bank partners with the brokerage devenir to offer various mutual funds at cost including a number of Vanguard admiral shares funds: https://hsainvestments.com/fundperformance/?p=TBH Annual fee is $36, so less than Fido’s $48 if you do not meet the asset threshold. You do have to maintai...
by jalbert
Mon Nov 12, 2018 12:35 am
Forum: Personal Consumer Issues
Topic: How to Encrypt a Text file?
Replies: 53
Views: 3911

Re: How to Encrypt a Text file?

If the file is 32 characters or shorter, add 32 random characters at the top of the file as a header. Could also add the random header if s larger file.
by jalbert
Sun Nov 11, 2018 6:44 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA R1 With Painfully High Expenses - stuck?
Replies: 34
Views: 1918

Re: TIAA R1 With Painfully High Expenses - stuck?

My wife works for a small-ish independent school where their 403b is with TIAA-CREF. Because of the school's small size and T-C's new fees, her investment options all carry pretty high expense rations (ER's from .51% in the CREF equity offerings to .79% for Real Estate -- ones I don't use like TIAA...
by jalbert
Sun Nov 11, 2018 2:46 am
Forum: Investing - Help with Personal Investments
Topic: Is it a waste keeping money in a money market account?
Replies: 33
Views: 7016

Re: Is it a waste keeping money in a money market account?

In my experience, money market account yields have not done any better than bank account yields since I've been an adult (about a decade). Currently, FZFXX offers a yield of 1.83% while ally penalty free CD's are offering 2.1%. That’s because the expense ratio of FZFXX is too high. If you want equi...
by jalbert
Sat Nov 10, 2018 3:55 pm
Forum: Investing - Help with Personal Investments
Topic: Reverse Mortgage
Replies: 17
Views: 1877

Re: Reverse Mortgage

But spending the equity is the goal. It’s not going to be an unexpected shock if it’s what you’re trying to do to begin with. Reverse mortgages are often high cost, high fee products that may spend down the equity at a faster rate than other options for tapping the equity. Their fixed costs and mor...
by jalbert
Sat Nov 10, 2018 3:52 pm
Forum: Investing - Theory, News & General
Topic: How much international stock? A suggestion.
Replies: 440
Views: 79100

Re: How much international stock? A suggestion.

Going 100% domestic EXPOSES you to uncompensated currency risk (that of your home currency). Currency exposure of int’l investments would not be called a risk if it could not go both ways— we would call it a liability. By definition a risk is a possible problem not a guaranteed one. If your expense...
by jalbert
Sat Nov 10, 2018 3:28 pm
Forum: Investing - Help with Personal Investments
Topic: Relative Credit Risk: US Treasuries, FDIC-Insured Money Market, TIAA-CREF General Account
Replies: 5
Views: 284

Re: Relative Credit Risk: US Treasuries, FDIC-Insured Money Market, TIAA-CREF General Account

It depends on the types of emergencies you are trying to cover. TIAA has a very strong credit rating and is the 2nd or 3rd strongest insurance company in the US (NY Life is probably #1). Any fully liquid version of TIAA Traditional is perfectly adequate to cover personal emergencies like a job loss ...
by jalbert
Fri Nov 09, 2018 11:43 pm
Forum: Investing - Theory, News & General
Topic: How much international stock? A suggestion.
Replies: 440
Views: 79100

Re: How much international stock? A suggestion.

Going 100% domestic EXPOSES you to uncompensated currency risk (that of your home currency). Currency exposure of int’l investments would not be called a risk if it could not go both ways— we would call it a liability. By definition a risk is a possible problem not a guaranteed one. If your expense...
by jalbert
Fri Nov 09, 2018 11:34 pm
Forum: Investing - Help with Personal Investments
Topic: Reverse Mortgage
Replies: 17
Views: 1877

Re: Reverse Mortgage

I think they're a very useful, realistic solution to cash flow issues. Leaving assets behind to loved ones shouldn't be the primary financial goal. Before that must come surviving. There's nothing wrong with one as long as you are conservative with estimating how much you can get for the house when...
by jalbert
Fri Nov 09, 2018 11:33 pm
Forum: Investing - Help with Personal Investments
Topic: Reverse Mortgage
Replies: 17
Views: 1877

Re: Reverse Mortgage

If they need in-home care, they may not be far from needing to move to a nursing home. The reverse mortgage will be called if neither one is living in the house. Sounds risky to me. What’s the risk? If neither parent is occupying the house, it’s going to be sold anyway. The risk is spending down eq...
by jalbert
Fri Nov 09, 2018 11:31 pm
Forum: Investing - Theory, News & General
Topic: A reminder: Stay away from AQR
Replies: 168
Views: 12166

Re: A reminder: Stay away from AQR

This is probability. If the expected odds that you will win a game at a casino are say 55%(obviously no such game exists) then you don’t win on each hand or roll of the dice. You win over time. Momentum has very short periods of underperformance for a factor. There’s a great chart in Larry’s factor...
by jalbert
Fri Nov 09, 2018 11:27 pm
Forum: Investing - Theory, News & General
Topic: SWAN ETF - 10% Leaps / 90% Treasuries
Replies: 24
Views: 1898

Re: SWAN ETF - 10% Leaps / 90% Treasuries

A LEAP is a call option on the S&P500 with longer term than a traditional option. This is a standard hedging strategy. To work you need the 90% in T-bills to earn enough interest to cover most or all of the cost of enough quantity of a LEAP to matter.
by jalbert
Fri Nov 09, 2018 1:16 am
Forum: Investing - Theory, News & General
Topic: A reminder: Stay away from AQR
Replies: 168
Views: 12166

Re: A reminder: Stay away from AQR

Why should trend following or momentum be a long-term strategy? If a bet on a trend fails, the holding no longer has positive momentum, or it would not have failed, so the strategy moves on to another momentum bet. This means the strategy is unlikely to harvest any mean reversion from failed momentu...
by jalbert
Thu Nov 08, 2018 11:33 pm
Forum: Investing - Help with Personal Investments
Topic: Reverse Mortgage
Replies: 17
Views: 1877

Re: Reverse Mortgage

My parents own their home and it has come to a point where they need in home care. It has been suggested that a reverse mortgage may be suitable for extra cash per month. In the past I have heard horror stories, however am hearing that it is much better than it used to be. Any thoughts or experienc...
by jalbert
Thu Nov 08, 2018 10:38 pm
Forum: Investing - Theory, News & General
Topic: China Still An Emerging Market?
Replies: 24
Views: 2000

Re: China Still An Emerging Market?

1. on bond markets, China is safer than many "developed" markets. Would you rather own Chinese government debt, or Italian? Going to have to ask for a source on that one if you have it. Other than the usual finance news articles and blogs which have been trying to prop up China over the years I hav...
by jalbert
Thu Nov 08, 2018 10:32 pm
Forum: Investing - Theory, News & General
Topic: no dividends in index funds!
Replies: 95
Views: 9276

Re: no dividends in index funds!

I’m not making the argument for dividends, but as I am in the 15% bracket, according to current U.S. tax laws, I pay zero federal tax on dividends . They are all qualified. So, not taxed as ordinary income. Naturally, that can always change. And when your life circumstance changes, you may have eno...
by jalbert
Thu Nov 08, 2018 10:18 pm
Forum: Investing - Theory, News & General
Topic: Would you still jump if you were ready, then the market dropped 50%??
Replies: 40
Views: 4616

Re: Would you still jump if you were ready, then the market dropped 50%??

It’s the great paradox. If you retire and the next day the market drops 50% the 4% rule says you’re safe for 30 years. If the market drops 50% the day before you retire you don’t have enough. There’s not really any paradox. The 4% rule gives you a high probability of success. It does not guarantee ...
by jalbert
Thu Nov 08, 2018 10:06 pm
Forum: Investing - Theory, News & General
Topic: Good explanation of how bond funds don't get crushed in rising rate environment
Replies: 64
Views: 6171

Re: Good explanation of how bond funds don't get crushed in rising rate environment

Suppose you invest $1,000 in a treasury mutual fund with a 5-year duration and a yield of 3%. Suppose rates rise one percentage point over the first year, and suppose the entire rise occurs on the day after you invest. With a 5-year duration, the fund value drops 5% and you now have $950 earning 4%....
by jalbert
Thu Nov 08, 2018 5:07 pm
Forum: Investing - Theory, News & General
Topic: Would you still jump if you were ready, then the market dropped 50%??
Replies: 40
Views: 4616

Re: Would you still jump if you were ready, then the market dropped 50%??

It’s the great paradox. If you retire and the next day the market drops 50% the 4% rule says you’re safe for 30 years. If the market drops 50% the day before you retire you don’t have enough. There’s not really any paradox. The 4% rule gives you a high probability of success. It does not guarantee ...
by jalbert
Thu Nov 08, 2018 3:56 am
Forum: Investing - Theory, News & General
Topic: Good explanation of how bond funds don't get crushed in rising rate environment
Replies: 64
Views: 6171

Re: Good explanation of how bond funds don't get crushed in rising rate environment

But bonds funds don't seem to do that. They have turnover ratio's of > 50% per year, which seems to imply that they are buying a bond, holding it for a while, and then selling it to buy a replacement.
I think maturing bonds that are replaced also contribute to the turnover data.
by jalbert
Thu Nov 08, 2018 1:48 am
Forum: Investing - Theory, News & General
Topic: Is VXUS better than VEA/VWO?
Replies: 8
Views: 2566

Re: Is VXUS better than VEA/VWO?

snip .... VXUS != VEA + VWO I would use only 1 fund. The rebalancing is automatic and free. You don't see a lot of people reconstructing a total market fund by using 9 funds of Small/Mid/Large Value/Blend/Growth either. The Total International fund does not rebalance to keep developed and emerging ...
by jalbert
Thu Nov 08, 2018 1:39 am
Forum: Investing - Theory, News & General
Topic: China Still An Emerging Market?
Replies: 24
Views: 2000

Re: China Still An Emerging Market?

Why is China still considered an Emerging Market country? Isn’t it number 6 in terms of market cap? Above Germany, Switzerland and Australia. At what point does an Emerging economy become classified as developed? And therefore, when would it be added to developed world indices? China A-shares only ...
by jalbert
Mon Nov 05, 2018 12:36 am
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 99
Views: 8707

Re: David Swensen Unconventional Success

He has made one change in 13 years (suggested reducing REITs from 20% to 15% and increasing EM Equity from 5% to 10%). I like the inactivity and consistency. Something often in short supply. Agreed. Too many authors on investing are busy touting today what worked yesterday, ready to revise it tomor...
by jalbert
Mon Nov 05, 2018 12:30 am
Forum: Investing - Theory, News & General
Topic: Dangers of VTSAX? (Unrealized Appreciation)
Replies: 26
Views: 4687

Re: Dangers of VTSAX? (Unrealized Appreciation)

Right. It is not relevant to the analysis of whether VTSAX would have to distribute capital gains. Active funds do a lot of trading for reasons other than processing flows of capital in and out of the fund.
by jalbert
Mon Nov 05, 2018 12:27 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS
Replies: 14
Views: 1185

Re: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS

However, since I'm treating the bond portion as super-safe (ala Merriman), and since I really don't want to see a 5% loss when rates go up 1% When was the last time a treasury bond fund with a 5-year duration lost 5% because rates went up one percentage point? Yes, (so-called modified) duration is ...
by jalbert
Sat Nov 03, 2018 11:55 pm
Forum: Investing - Help with Personal Investments
Topic: Are Bond Funds Really a Good Investment Now?
Replies: 44
Views: 5014

Re: Are Bond Funds Really a Good Investment Now?

Vanguard uses short-term TIPS in their Target Retirement funds when the target year is close. Just barely: their 2020 target retirement fund has just 5% in short-term TIPS. With that low an allocation I’m not sure why they even bother. Sure. They increase it to 23% of fixed income by the target year.
by jalbert
Sat Nov 03, 2018 11:42 pm
Forum: Personal Consumer Issues
Topic: Is it wise to give out credit card and driver's license in this situation?
Replies: 14
Views: 1495

Re: Is it wise to give out credit card and driver's license in this situation?

The hotel wanting that info is reasonable. Emailing driver’s license info is not a good idea unless it were encrypted. Getting that communication initialized will be slower than overnight express courier, which would be my first choice for that.
by jalbert
Sat Nov 03, 2018 11:01 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS
Replies: 14
Views: 1185

Re: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS

As for the hybrid, after look at the various returns, I really don't like what feels like guaranteed loses vs. insured 2.5% gains. While no losses are guaranteed with either option, your broker will show the market value of a CD ladder and if rates go up, it will be marked down to a market value on...
by jalbert
Sat Nov 03, 2018 7:46 pm
Forum: Investing - Theory, News & General
Topic: Dangers of VTSAX? (Unrealized Appreciation)
Replies: 26
Views: 4687

Re: Dangers of VTSAX? (Unrealized Appreciation)

Going from a hazy memory here..I think it was around the year 2000 when Fidelity Magellan had huge capital gains distributions. Seems like it was around $25/shr or perhaps 25%/ shr.
Behavior of an actively managed fund is not very relevant.
by jalbert
Sat Nov 03, 2018 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS
Replies: 14
Views: 1185

Re: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS

You mentioned MUCH less liquid. If I want to sell a CD before its maturity, how does that work? Is there a 'sell' link? Do you forfeit 6 month's interest or does it just go on the market and you are subjected to market risk if rates are higher (like a bond) ?? Brokered CDs are registered securities...
by jalbert
Sat Nov 03, 2018 6:37 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS
Replies: 14
Views: 1185

Re: Vanguard CD's vs. Paul Merriman Short Term GOV Bonds +TIPS

In this case, brokered CDs earn a premium over treasuries of the same maturity because you are being compensated for brokered CDs being MUCH less liquid. If you are confident you can manage liquidity by CD maturities then you may earn a small premium over treasuries with brokered CDs. But events out...
by jalbert
Sat Nov 03, 2018 5:41 pm
Forum: Investing - Theory, News & General
Topic: no dividends in index funds!
Replies: 95
Views: 9276

Re: no dividends in index funds!

If a person is in the withdrawal stage, taking and spending the dividends is fine and can be part of spending from a total return perspective. I disagree; taxes can be higher with dividends over LT cap gain. Please help me learn. I will retirement next year. My wife will still be working and we wil...
by jalbert
Sat Nov 03, 2018 5:12 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 99
Views: 8707

Re: David Swensen Unconventional Success

The reason would be if you believe one of the portfolios better manages risks (such as accelerating inflation) that did not materialize during the backtest period.
by jalbert
Sat Nov 03, 2018 3:25 pm
Forum: Investing - Help with Personal Investments
Topic: My Grandmother has 80% stocks
Replies: 55
Views: 5288

Re: My Grandmother has 80% stocks

I asked why she is still invested so aggressively. She said the reason is because she has held these Vanguard funds for so many years, and if she sold, the tax bill would be enormous. If she would like to have a lower stock allocation but is not selling because of capital gains, she may want to be ...
by jalbert
Sat Nov 03, 2018 2:17 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 99
Views: 8707

Re: David Swensen Unconventional Success

Since Unconventional Success was published in 2005, the Swensen portfolio and a 3-asset-class market index portfolio have tracked closely: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=2&startYear=2005&endYear=2018&initialAmount=10000&annualOperation=0&annualAdjustment...
by jalbert
Sat Nov 03, 2018 2:00 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 99
Views: 8707

Re: David Swensen Unconventional Success

The book "Unconventional Success" by David Swensen was published in 2005. I would have thought that it would perhaps be updated by now. Very little content in the book is dated. Not sure what an update would need to look like. This is not a book touting the latest fashion. The first part is a prett...
by jalbert
Sat Nov 03, 2018 1:51 pm
Forum: Investing - Theory, News & General
Topic: The biggest rallies in stocks have happened during the worst times to be invested
Replies: 15
Views: 2316

Re: The biggest rallies in stocks have happened during the worst times to be invested

WanderingDoc wrote:
Sat Nov 03, 2018 1:04 am
jalbert wrote:
Sat Nov 03, 2018 12:39 am
The thread title contradicts itself.
My thoughts as well. The title has a positive connotation, whilst the post itself was gloomy.
I was only referring to the thread title contradicting itself.
by jalbert
Sat Nov 03, 2018 1:49 pm
Forum: Investing - Theory, News & General
Topic: Dangers of VTSAX? (Unrealized Appreciation)
Replies: 26
Views: 4687

Re: Dangers of VTSAX? (Unrealized Appreciation)

With $708B in total assets, if everyone but one small investor tried to withdraw from vtsmx/vtsax and sell all of their holdings in VTI on the same day, embedded capital gains would not be a concern as there would no longer be any embedded capital gain by the end of the day. You would be tax-loss ha...