Search found 2839 matches

by jalbert
Mon May 21, 2018 5:46 pm
Forum: Investing - Help with Personal Investments
Topic: Bond conundrum: looking for recommendations
Replies: 9
Views: 785

Re: Bond conundrum: looking for recommendations

With that info, I would put 100% bonds in 401(k) and rollover IRA. Then only a little bond funds in taxable as tax-exempt muni for MA. My AA would be about 65% equities which all fit in taxable. I would not have REITs at all (apologies to @staythecourse). Would suggest a slight tweak— additionally ...
by jalbert
Mon May 21, 2018 2:27 pm
Forum: Investing - Theory, News & General
Topic: Do I understand duration correctly?
Replies: 21
Views: 1349

Re: Do I understand duration correctly?

How would I go about reducing my average duration as my time horizon grows shorter? If you are holding bonds to diversify the risk of holding stocks, then your time horizon should factor into deciding the ratio of stocks to bonds. You would not normally try to match the duration of the bond portfol...
by jalbert
Mon May 21, 2018 2:17 pm
Forum: Personal Finance (Not Investing)
Topic: Are high dividend stocks advantageous for the 15% tax rate?
Replies: 24
Views: 1662

Re: Are high dividend stocks advantageous for the 15% tax rate?

Dividend stocks are sensitive to interest rates and tend to overperform when rates fall, and underperform when rates rise. Rates started rising on December 14, 2016. 84% of the companies in the S&P 500 pay dividends (large-cap companies). 70% of mid-cap companies pay dividends. 54% of small-cap com...
by jalbert
Mon May 21, 2018 3:14 am
Forum: Investing - Help with Personal Investments
Topic: Please help me rationalise this 401k investment choice
Replies: 23
Views: 1167

Re: Please help me rationalise this 401k investment choice

My colleague , although agreeing broadly on the "low expense ratio" idea, asked me why should one not pick other available options which are at least not giving negative YTD and have comparable (or even better) performance... Because past performance is not very predictive of future performance. I ...
by jalbert
Sun May 20, 2018 11:51 pm
Forum: Personal Finance (Not Investing)
Topic: Are high dividend stocks advantageous for the 15% tax rate?
Replies: 24
Views: 1662

Re: Are high dividend stocks advantageous for the 15% tax rate?

Dividend stocks are sensitive to interest rates and tend to overperform when rates fall, and underperform when rates rise.
by jalbert
Sun May 20, 2018 7:53 pm
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 28
Views: 2148

Re: Dividend / no dividend index funds?

Just Fed watching like I usually do. They usually provide some direction.
First, you specifically mean when the Fed funds rate has peaked not interest rates in general. Second, at any point in time, future Fed actions are guided by future outcomes not yet known at the point in time.
by jalbert
Sun May 20, 2018 2:31 pm
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 28
Views: 2148

Re: Dividend / no dividend index funds?

https://us.spindices.com/documents/research/research-the-beauty-of-simplicity-the-sp-500-low-volatility-high-dividend-index.pdf?force_download=true These usually outperform and I will probably buy some when interest rates peak. Perhaps you meant to say they usually outperform when interest rates fa...
by jalbert
Sun May 20, 2018 1:32 am
Forum: Investing - Theory, News & General
Topic: Bogle featured in Barrons cover story
Replies: 30
Views: 2324

Re: Bogle featured in Barrons cover story

At Vanguard, ETFs are associated with index funds and the ETFs, Admiral shares, investor-class shares, and any institutional share classes that might exist for a fund are all different share classes of the same fund. One example of how that can be used to avoid capital gain distributions is that fun...
by jalbert
Sun May 20, 2018 12:49 am
Forum: Investing - Theory, News & General
Topic: Bogle featured in Barrons cover story
Replies: 30
Views: 2324

Re: Bogle featured in Barrons cover story

ETFs have made index fund investing more tax efficient. Even if you prefer Vanguard mutual funds, having ETF shares classes of the funds has enabled Vanguard to avoid having to distribute capital gains. While I’ve not heard Mr. Bogle discuss this point, I’m fairly certain he is well aware of it. ETF...
by jalbert
Sat May 19, 2018 11:05 pm
Forum: Investing - Theory, News & General
Topic: Do I understand duration correctly?
Replies: 21
Views: 1349

Re: Do I understand duration correctly?

If I may ad a convolution to the question: The illustrations apply as if the bond funds returns are reinvested. How much longer does it take if the returns are used as income and NOT reinvested into the same bond fund? Does it ever recover, as bonds all eventually mature, or does the manager's sell...
by jalbert
Sat May 19, 2018 1:01 pm
Forum: Investing - Theory, News & General
Topic: Do I understand duration correctly?
Replies: 21
Views: 1349

Re: Do I understand duration correctly?

Take a bond fund with a duration of 5 in a rising interest rate environment. Year 1, interest rates increase by 1%. Bond fund should recover in 5 years. Year 2, interest rates increase by another 1%. Bond fund now requires 9 years to recover. Year 3, 1% increase, now 13 years to recover. [edited to...
by jalbert
Fri May 18, 2018 7:16 pm
Forum: Investing - Help with Personal Investments
Topic: Need Help: Early Retirement, ACA Subsidies, Asset Location
Replies: 18
Views: 908

Re: Need Help: Early Retirement, ACA Subsidies, Asset Location

Ok this confirms my thinking thanks. I think even VWO would be too much distribution for me though - it looks like it was 2.96% according to the Triceratop sheet. Vanguard no longer publishes a yield for VWO/VEMAX (EM stock). I was assuming it was lower than VTMGX (DM stock). If not, they might be ...
by jalbert
Fri May 18, 2018 2:16 pm
Forum: Investing - Help with Personal Investments
Topic: Need Help: Early Retirement, ACA Subsidies, Asset Location
Replies: 18
Views: 908

Re: Need Help: Early Retirement, ACA Subsidies, Asset Location

To maximize your ACA subsidy, fill taxable space in order of increasing dividend/interest distributions by allocating in the following order until taxable space is full: First, maximize annual I-bond and EE bond purchases. Second would be tax-efficient US equity. You can reduce realized dividend inc...
by jalbert
Fri May 18, 2018 2:02 am
Forum: Personal Finance (Not Investing)
Topic: Are high dividend stocks advantageous for the 15% tax rate?
Replies: 24
Views: 1662

Re: Are high dividend stocks advantageous for the 15% tax rate?

While I know the consensus here is that favoring higher-dividend stocks does not make sense for an equity portfolio, does it make sense for a taxable portfolio used for income in retirement because of the 15% tax rate on dividends? When you realize a long-term capital gain from a mutual fund withdr...
by jalbert
Thu May 17, 2018 4:14 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1598

Re: How do stock buybacks work, and how do index funds handle them?

For a float-adjusted Index, the fund should only have to rebalance if the free float market cap weight changes, which depends on whether a price movement from the buyback offsets the reduction in free float shares. You don't have to adjust float-adjusted indexes when a stock changes price, you chan...
by jalbert
Wed May 16, 2018 10:19 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1598

Re: How do stock buybacks work, and how do index funds handle them?

However, if the number of shares changes, then that does create something that the fund has to deal with. We just saw that we must own an equal percentage of the available shares of each stock in the index. If a company buys back stock (and our shares aren't proportionally bought back in the buybac...
by jalbert
Wed May 16, 2018 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: When to claim Social Security: two reasons not to wait
Replies: 68
Views: 11459

Re: When to claim Social Security: two reasons not to wait

Thanks, but it is still ambiguous as both spouses have a FRA but the usage is not clarified. Suppose spouse P, who will file for a primary benefit, is 1 year older than spouse S, who will claim a spousal benefit based on P’s PIA. Suppose both reach FRA at age 67. If P delays past age 67, both benefi...
by jalbert
Wed May 16, 2018 6:57 pm
Forum: Investing - Help with Personal Investments
Topic: Lower cost but similar alternatives to these American Funds in my Roth IRA?
Replies: 9
Views: 423

Re: Lower cost but similar alternatives to these American Funds in my Roth IRA?

Hello - I have recently ended my 5 year relationship with my financial adviser to try to trim costs and learn how to handle my own money. My wife and I, through IRA conversions years ago and on going backdoor Roth IRA annual contributions, each have around 110K dollars divided equally in the follow...
by jalbert
Wed May 16, 2018 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: When to claim Social Security: two reasons not to wait
Replies: 68
Views: 11459

Re: When to claim Social Security: two reasons not to wait

The survivor benefit is the higher of the two SS benefits being paid, regardless of when the spouse or survivor claimed his/her benefit. The maximum spousal benefit is half of the husband’s/wife’s benefit at the the husband’s/wife’s FRA. This will be reduced if the spouse claims it prior to his/her...
by jalbert
Wed May 16, 2018 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: When to claim Social Security: two reasons not to wait
Replies: 68
Views: 11459

Re: When to claim Social Security: two reasons not to wait

I'm not very knowledgeable of the fine points of different SS options, but was under the impression that, under the new rules, if someone delays SS and their spouse will receive a spousal benefit under a primary recipient's benefit, then once the spouse reaches FRA, the spousal regular benefit and s...
by jalbert
Wed May 16, 2018 3:25 pm
Forum: Investing - Help with Personal Investments
Topic: How do you quantify the risk differential between 85/15 and 70/30?
Replies: 70
Views: 5695

Re: How do you quantify the risk differential between 85/15 and 70/30?

Answering the OP's question... a good starting point is to assume a 55% drop in equities and compare portfolio drawdowns. For the purposes of asset allocation, that may be sufficient. A more detailed and quantitative measure is provided by doing a conditional value-at-risk optimization using portfol...
by jalbert
Wed May 16, 2018 11:57 am
Forum: Investing - Help with Personal Investments
Topic: Why are stock returns expected to be so low over the next decade?
Replies: 27
Views: 4430

Re: Why are stock returns expected to be so low over the next decade?

I am a semiretired entrepreneur and teach entrepreneurial finance at a major university. Discounted cash flow has always seemed like an academically interesting but mostly not very useful exercise....obviously irrelevant for startups but questionable even for mature companies. Cranking a bunch of n...
by jalbert
Wed May 16, 2018 2:06 am
Forum: Personal Finance (Not Investing)
Topic: This is not a typical medical collections issue- what to do?
Replies: 49
Views: 6160

Re: This is not a typical medical collections issue- what to do?

Watty wrote:
Fri Mar 09, 2018 6:44 pm
The first thing to do is to send them a certified letter asking for a formal debt validation letter.
That may turn out to be the second thing to do, but the first thing to do is to consult with an attorney.
by jalbert
Tue May 15, 2018 11:40 pm
Forum: Investing - Help with Personal Investments
Topic: Why are stock returns expected to be so low over the next decade?
Replies: 27
Views: 4430

Re: Why are stock returns expected to be so low over the next decade?

Lots of ways to look at it. The equity risk premium is the excess return above the risk-free rate (yield on cash investments that have no credit risk). The risk-free rate is low, so even if the equity risk premium is rewarded, it is added in to a low risk free-rate to get overall nominal return. If ...
by jalbert
Tue May 15, 2018 11:09 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1598

Re: How do stock buybacks work, and how do index funds handle them?

Does this mean that if I hold a world cap index, the % of the world cap I own would slowly increase? Since buybacks would first increase the % of THAT company I own, and then the fund would rebalance which increases the % of the world that I own. I'm not clear what you are asking. If a company does...
by jalbert
Mon May 14, 2018 6:55 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard GNMA VS Vanguard Intermediate-Term Bond Index Fund
Replies: 6
Views: 838

Re: Vanguard GNMA VS Vanguard Intermediate-Term Bond Index Fund

60% Vanguard intermediate bond index fund
15% Vanguard GNMA fund
25% Vanguard short-term TIPS index fund

Would be a reasonable diversification.
by jalbert
Mon May 14, 2018 4:05 pm
Forum: Investing - Theory, News & General
Topic: How do stock buybacks work, and how do index funds handle them?
Replies: 17
Views: 1598

Re: How do stock buybacks work, and how do index funds handle them?

A float-adjusted stock index fund would track the index. Rebalancing is not needed if only capitalization of holdings change, but if the index provider adjusts the free float of a stock, whether due to buybacks or just “private” shares being added to or removed from the tradable universe, then a fun...
by jalbert
Mon May 14, 2018 3:55 pm
Forum: Investing - Theory, News & General
Topic: New inflation-protected ETF launches: iShares Inflation Hedged Corporate Bond ETF (LQDI)
Replies: 27
Views: 2195

Re: New inflation-protected ETF launches: iShares Inflation Hedged Corporate Bond ETF (LQDI)

Based on recent sample correlations: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VGIT+CMBS+VTIP+BNDX&endDate=05%2F13%2F2018&timePeriod=1&numTradingDays=60 A bond portfolio of: 25% intermediate treasuries 25% intermediate hedged int’l Bonds 25% short-term TIPS 25% commercial MB...
by jalbert
Mon May 14, 2018 1:01 pm
Forum: Investing - Theory, News & General
Topic: New inflation-protected ETF launches: iShares Inflation Hedged Corporate Bond ETF (LQDI)
Replies: 27
Views: 2195

Re: New inflation-protected ETF launches: iShares Inflation Hedged Corporate Bond ETF (LQDI)

I think the motivation for this new product is low real rates. By enabling investors to take credit risk in their inflation-protected bond portfolio, they can get a higher yield, and maybe less sensitivity to movements in real rates. Of course they take on exposure to movements in credit spreads. Yo...
by jalbert
Sat May 12, 2018 11:17 pm
Forum: Investing - Theory, News & General
Topic: Any issues with upgrading Vanguard taxable account to brokerage?
Replies: 19
Views: 1657

Re: Any issues with upgrading Vanguard taxable account to brokerage?

Having one account instead of two is a significant upgrade in convenience for everyone concerned. I don’t recall Vanguard telling me they were upgrading the accounts in any case, but rather merging them was the verb they used. Another change that happened around that time was implementing a new requ...
by jalbert
Sat May 12, 2018 11:09 pm
Forum: Personal Finance (Not Investing)
Topic: Ameriprise feedback needed
Replies: 9
Views: 788

Re: Ameriprise feedback needed

It doesn’t get any more egregious than proposing to cash out a pension with a lifetime income stream option to buy a lifetime income annuity where Ameriprise takes a commission out of the cash distribution and the remaining funds buy a lifetime income stream. What they are proposing for your father ...
by jalbert
Sat May 12, 2018 10:53 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Developed Markets Index Fund as substitute for Total International Stock Fund?
Replies: 27
Views: 2256

Re: Vanguard Developed Markets Index Fund as substitute for Total International Stock Fund?

Agree with those who point out the benefits of target date funds, but, gosh, I sure wish Vanguard would offer Admiral Class shares. Even a 100k minimum would be reachable by most folks. Bill, Lots of folks would like to see that, but I don’t have high hopes for it to happen. I once read that there ...
by jalbert
Sat May 12, 2018 7:23 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Mom's portfolio
Replies: 21
Views: 892

Re: Help with Mom's portfolio

Thanks for the feedback. She is fine right now with her income and it's meeting her needs. We were wondering if we could do better than what she had invested and make smarter choices. What are the long-term and short-term capital gains that would be realized if the two stocks were sold and what is ...
by jalbert
Sat May 12, 2018 2:59 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Mom's portfolio
Replies: 21
Views: 892

Re: Help with Mom's portfolio

In terms of an action plan, it might be worth understanding for the stocks and bonds held what is the current capital gain or loss, and for the bonds, you could ask the broker to pull bids to see how much of a hit you would take from transaction cost on a sale. It appears the portfolio is generating...
by jalbert
Sat May 12, 2018 2:48 pm
Forum: Personal Consumer Issues
Topic: Amazon package that can't be traced
Replies: 72
Views: 3830

Re: Amazon package that can't be traced

While it doesn’t seem to apply to the present situation, always check your credit cards for compromise if you receive purchased merchandise you did not order. Some vendors always ship to the billing address of a credit card as a fraud deterrent even if a different shipping address is used.
by jalbert
Sat May 12, 2018 1:42 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Mom's portfolio
Replies: 21
Views: 892

Re: Help with Mom's portfolio

If the holdings are individual corporate bonds, bid-ask spreads may render them not be so easy to sell at their stated market value. As long as none default in any way, the fluctuations in market value have no effect on the income stream generated. I think the bigger concern is in holding an undiver...
by jalbert
Sat May 12, 2018 1:48 am
Forum: Personal Finance (Not Investing)
Topic: "Patient paid amount" for month of death in nursing home?
Replies: 33
Views: 3747

Re: "Patient paid amount" for month of death in nursing home?

Upon death of a recipient, SSA generally claws back the final social security check and the estate must file paperwork to get it. This is to ensure it goes to the correct people or entities. Thus, I suspect this is what happened, and what is needed is for the estate to pay the nursing home and then ...
by jalbert
Fri May 11, 2018 12:01 pm
Forum: Personal Consumer Issues
Topic: Anyone buy carbon offsets when flying?
Replies: 111
Views: 4307

Re: Anyone buy carbon offsets when flying?

No amount of paying for carbon offsets will undo the effect of the plane trip. You could buy the carbon offsets and still decline the plane trip. That is therefore the baseline to which the plane trip should be compared. To see that clearly, turn it around and ask if you take plane trips to consume ...
by jalbert
Thu May 10, 2018 11:42 pm
Forum: Investing - Theory, News & General
Topic: Cliff Asness (AQR) on Bloomberg discussing Fixed Income
Replies: 15
Views: 1670

Re: Cliff Asness (AQR) on Bloomberg discussing Fixed Income

I’m skeptical of a value measure for bonds. Yield is unambiguous but what should be the intrinsic measure of a bond? Mr. Asness suggests credit default risk. How is that measured objectively for an individual bond?
by jalbert
Thu May 10, 2018 10:59 pm
Forum: Personal Consumer Issues
Topic: Amtrak tickets - change in refund terms: UPDATE
Replies: 20
Views: 2008

Re: Amtrak tickets - change in refund terms

THY4373 wrote:
Thu Mar 22, 2018 10:32 am
Cannot say i am surprised. The current CEO of Amtrak I believe is a former Delta airlines guy. I would expect to see more changes as the airline mentality is brought to Amtrak.
That’s a losing proposition for Amtrak.
by jalbert
Thu May 10, 2018 10:47 pm
Forum: Investing - Help with Personal Investments
Topic: Should I sell Small Cap Value Fund and move it into Roth?
Replies: 23
Views: 1893

Re: Should I sell Small Cap Value Fund and move it into Roth?

Only about 72% of dividends from VBR/VSIAX are qualified and the dividend rate is about 2%. It is definitely less tax efficient than a total market index fund. IJS is a more tax efficient small cap value fund for a taxable account. It has a lower REIT allocation, leading to a higher QDI%, but it als...
by jalbert
Thu May 10, 2018 10:26 pm
Forum: Personal Consumer Issues
Topic: Picking up New Subaru-Worth buying extended warranty?
Replies: 33
Views: 2045

Re: Picking up New Subaru-Worth buying extended warranty?

The dealer offered me an extended warranty, tire warranty, key warranty, a ceramic coating option and glass protection. All of this adds up and I've never been a big fan of extended warranties. The guy at the dealer said that everything is so computerized with this car that I should consider it. I ...
by jalbert
Thu May 10, 2018 7:12 pm
Forum: Investing - Theory, News & General
Topic: Cliff Asness (AQR) on Bloomberg discussing Fixed Income
Replies: 15
Views: 1670

Re: Cliff Asness (AQR) on Bloomberg discussing Fixed Income

In any case, an investor is probably agnostic as to what is causing the underlying performance. It doesn't matter much in this context if a bond is a value bond, maybe priced inefficiently or properly priced according to some other risks, if it has superior risk/return. My point was that Mr Asness ...
by jalbert
Thu May 10, 2018 7:04 pm
Forum: Investing - Help with Personal Investments
Topic: move out of bonds into money market and online savings
Replies: 13
Views: 1865

Re: move out of bonds into money market and online savings

Hi . I am about 70:30 in stock and bond funds . In the present environment with bond returns not that impressive and also with the online savings , money market and cd rates keep going up , I am thinking of pulling out of bonds into these . What do you think ? I think you are late with the idea. Yo...
by jalbert
Thu May 10, 2018 3:32 pm
Forum: Investing - Theory, News & General
Topic: Cliff Asness (AQR) on Bloomberg discussing Fixed Income
Replies: 15
Views: 1670

Re: Cliff Asness (AQR) on Bloomberg discussing Fixed Income

In the case of a value stock, prevailing factor researchers maintain that the excess expected return is a reward for taking additional risk. This is not a market inefficiency. If a corporate bond were underpriced, i.e. yield higher than what would be predicted by default risk (a “value” bond in fact...
by jalbert
Thu May 10, 2018 2:00 pm
Forum: Investing - Theory, News & General
Topic: Agressive factor Investing
Replies: 44
Views: 4018

Re: Agressive factor Investing

size and value factor uncorrelated. Seriously? The excess expected return of value over growth is independent of size? Why then is small-cap growth the black hole of investing? Wouldn’t large-cap growth be even worse if size and value were uncorrelated? Factor models are fundamentally flawed becaus...
by jalbert
Thu May 10, 2018 1:49 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Developed Markets Index Fund as substitute for Total International Stock Fund?
Replies: 27
Views: 2256

Re: Vanguard Developed Markets Index Fund as substitute for Total International Stock Fund?

The Target Retirement fund only costs about 6 or 7 bp/year more. The Vanguard developed markets index fund tracks an all-cap index and includes Canada, S Korea, and after Sept 1, will include Poland. These three countries are not in the MSCI EAFE index.
by jalbert
Thu May 10, 2018 1:37 pm
Forum: Investing - Theory, News & General
Topic: Total Bond - SEC yield breaks 3%
Replies: 97
Views: 10547

Re: Total Bond - SEC yield breaks 3%

Agreed. I would also point out that the article's noting that a large RIA firm buys enough volume only to pay 2-4 bp transaction cost on average for bond/CD purchases is a red herring in that individual investors only get to participate in these wholesale purchases because they are paying an asset-...
by jalbert
Thu May 10, 2018 12:59 pm
Forum: Investing - Theory, News & General
Topic: Any issues with upgrading Vanguard taxable account to brokerage?
Replies: 19
Views: 1657

Re: Any issues with upgrading Vanguard taxable account to brokerage?

I had both a mutual fund account and brokerage account. Vanguard initiated processes to merge the two when they enabled holding Vanguard mutual funds in Vanguard brokerage (VBS) accounts. The only downside I’ve run into is that distributions now may only land in the settlement account or be reinvest...