Search found 3033 matches

by jalbert
Mon Jun 18, 2018 7:28 pm
Forum: Investing - Theory, News & General
Topic: Are the Fed and Treasury distorting the MBS market?
Replies: 6
Views: 641

Re: Are the Fed and Treasury distorting the MBS market?

Thanks. The MBS index fund yields makes it even more suspicious of something odd happening given that the spread with the treasury fund not only narrowed but actually inverted.
by jalbert
Mon Jun 18, 2018 1:49 pm
Forum: Investing - Theory, News & General
Topic: Bill Bernstein's 8:4:5:3 ratio
Replies: 21
Views: 2310

Re: Bill Bernstein's 8:4:5:3 ratio

Yes, it suggests that if one is going to put forward arbitrary set of numbers that don't have a sound rationale for being exactly what they are, A megacorp where I once worked had an employee benefit that involved some free financial planning advice from a 3rd party firm that had no stake in what i...
by jalbert
Mon Jun 18, 2018 12:00 pm
Forum: Investing - Theory, News & General
Topic: Are the Fed and Treasury distorting the MBS market?
Replies: 6
Views: 641

Re: Are the Fed and Treasury distorting the MBS market?

Generally the spread in yield is compensation for the prepayment option. A very narrow spread would be indicative of negligible risk of prepayments (refis, home sales, foreclosures), so a narrowing of the spread when rates are rising is possible. A range of about 35-75 bp is typical from what I’ve s...
by jalbert
Sun Jun 17, 2018 11:41 pm
Forum: Investing - Theory, News & General
Topic: Are the Fed and Treasury distorting the MBS market?
Replies: 6
Views: 641

Are the Fed and Treasury distorting the MBS market?

I noticed that since the Fed started shedding bonds from its balance sheet by not reinvesting $60B/mo of bond interest and returned principal, treasury note yields seem to have risen significantly more than GNMA yields. The current SEC yield on VFIJX the VG GNMA fund is at 2.88% while the SEC yield ...
by jalbert
Sun Jun 17, 2018 11:05 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 89
Views: 7346

Re: Very confused with the current market

I remember Warren buffet once said: buy the dips and value investing. the stock market always go higher due to inflation in the long term, however, should not we buy the dips? Are those crazy tech stocks still value investing ? I am expecting the dips. Mr. Buffett also does not like to sell holding...
by jalbert
Sun Jun 17, 2018 11:01 pm
Forum: Investing - Theory, News & General
Topic: Are Vanguard's actively managed funds better?
Replies: 11
Views: 1521

Re: Are Vanguard's actively managed funds better?

However, Wellington's stock allocation is probably more like Dividend Appreciation Index rather than total stock market. Your 8 years leaves out the 2008/09 decline when it's high quality stocks likely did better. I recently compared Wellington to a mix of 65% Dividend growth (VDIGX) and 35% Interm...
by jalbert
Sun Jun 17, 2018 10:55 pm
Forum: Investing - Help with Personal Investments
Topic: Making taxable account more tax efficient
Replies: 16
Views: 2217

Re: Making taxable account more tax efficient

I recommend IXUS for a total non-US stock index fund in a taxable account. It is more tax efficient than Vanguard options.
by jalbert
Sun Jun 17, 2018 9:00 pm
Forum: Investing - Help with Personal Investments
Topic: move out of bonds into money market and online savings
Replies: 19
Views: 2704

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 too late and are as li...
by jalbert
Sun Jun 17, 2018 6:39 pm
Forum: Investing - Theory, News & General
Topic: Are Vanguard's actively managed funds better?
Replies: 11
Views: 1521

Re: Are Vanguard's actively managed funds better?

Some Vanguard managed funds are better than relative index funds, most notably Vanguard Wellington (VWELX - Investor Shares - 60% to 65% stocks / 40% to 35% bonds) and Vanguard Wellesley Income (VWINX - Investor Shares - 35% to 40% stocks / 65% to 60% bonds ). Supporting data follows. _____________...
by jalbert
Sun Jun 17, 2018 2:52 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 89
Views: 7346

Re: Very confused with the current market

- It has been history higher and higher. - the fundamental law says it will recycle every 10 years - I had been on cash for 10 months Please don't tell me I should not time the market. What's going wrong? What is wrong is your belief is the notion that there is a fundamental law that 10-yr market h...
by jalbert
Sun Jun 17, 2018 2:18 pm
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 61
Views: 3318

Re: A different theoretical view of SWR

I can’t find the reference but a recent article J read by an actuary who studied the problem compatibles SWR, income annuities, and the US govt RMD algorithm used for IRAs and found the RMD algorithm to be optimal, using a balanced portfolio. This is just one study among many.
by jalbert
Sun Jun 17, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Mechanisms for disappearance of factor premia -- how does it work for momentum?
Replies: 14
Views: 742

Re: Mechanisms for disappearance of factor premia -- how does it work for momentum?

Depends on why the factor exists. With small and value, many believe that most or all of the factor is risk-related. If so, then that should not be arbitraged away regardless of how well known. If it is, then that in itself is an exploitable inefficiency. After all, the outperformance of stocks ove...
by jalbert
Sun Jun 17, 2018 12:26 pm
Forum: Investing - Theory, News & General
Topic: How much tilt is enough to make a difference?
Replies: 27
Views: 1801

Re: How much tilt is enough to make a difference?

2000 is a very biased start year for such a backtest. While any backtest done with a contiguous, non-independent sample is problematic, 2000 is especially problematic as it was an inflection point between a period where growth trounced value and a period where value overperformed, and both mean-reve...
by jalbert
Sat Jun 16, 2018 11:12 pm
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 61
Views: 3318

Re: A different theoretical view of SWR

If you're like me and believe that churning calculations of historical market returns is not a useful exercise for predicting future returns, you're still left with everyone's problem: how to determine a SWR. From a theoretical perspective I've come to believe that over the long term reasonable inv...
by jalbert
Sat Jun 16, 2018 10:13 pm
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 61
Views: 3318

Re: A different theoretical view of SWR

Well - 3.33% is less than 4% so already very conservative. Do you adjust the withdrawal to account for inflation - or does it stay fixed? Do you recalculate every year? Do I get to take 5% 10 years into my 30 year retirement? As far as I know the 4% number was never claimed to be valid for a global...
by jalbert
Sat Jun 16, 2018 8:42 pm
Forum: Investing - Help with Personal Investments
Topic: Using Wellesley Fund as a bond alternative
Replies: 18
Views: 2177

Re: Using Wellesley Fund as a bond alternative

You likely can establish your preferred asset allocation with a mix of vtsax and Wellesley income, but it would create unnecessary complexity with no benefit. If you want some of your equity holdings to be an actively managed large cap value portfolio just combine vtsax with some of the Windsor or W...
by jalbert
Sat Jun 16, 2018 2:25 pm
Forum: Personal Finance (Not Investing)
Topic: Rule of 55 is it official?
Replies: 50
Views: 9263

Re: Rule of 55 is it official?

She'll reach age 55 before me. Suppose she quit her job in that year (that she turns 55). Could she then withdrawal her full 401k and roll it over into a traditional IRA? Or for rule of 55, does she still have to withdrawal from the company 401k plan? (where she may have limited options, especially...
by jalbert
Fri Jun 15, 2018 11:55 pm
Forum: Investing - Theory, News & General
Topic: Gundlach sees 10 yr yields hitting 6%
Replies: 18
Views: 3137

Re: Gundlach sees 10 yr yields hitting 6%

DoubleLine Capital’s chief investment officer said in January that the benchmark 10-year U.S. yield would keep rising if it broke past the 2017 high of 2.63 percent. If you look at what that says, all it is predicting is that 2.63% won’t be a precise market top. It is predicting that either the 10-...
by jalbert
Fri Jun 15, 2018 7:26 pm
Forum: Investing - Help with Personal Investments
Topic: Late to the party, looking for some advice
Replies: 18
Views: 2168

Re: Late to the party, looking for some advice

wondered whether or not to include bonds, since my portfolio is, as you say ZERO. Its just most things I've read (at least for planning at an earlier age than myself) so some kind of conservative/aggressive asset allocation based of risk tolerance. Using it to smooth out the dips instead of pure po...
by jalbert
Fri Jun 15, 2018 7:02 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Managed Payout Fund
Replies: 29
Views: 2379

Re: Vanguard Managed Payout Fund

If you look at the history of the fund, they frequently change the portfolio make-up because of what they see as market inefficiencies, which in practice can also be seen as performance chasing and market timing. It is actively managed. The portfolio change associated with any active management dec...
by jalbert
Fri Jun 15, 2018 6:57 pm
Forum: Investing - Theory, News & General
Topic: Are Bogleheads smarter than the bond market?
Replies: 36
Views: 3338

Re: Are Bogleheads smarter than the bond market?

Dr. Bernstein is right about the risk of anything but shorter term bonds. But he's been wrong about the market. So far. He says "keep your safe money safe" and "take your risk on the equity side", no on the bond side. Rick Ferri, however, says to buy something like Vanguard Total Market and deal wi...
by jalbert
Fri Jun 15, 2018 3:03 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Rediscovering The Size Effect
Replies: 36
Views: 3426

Re: Larry Swedroe: Rediscovering The Size Effect

It is always a good idea to retain some skepticism about research results when the researcher takes the liberty of deciding which well understood experimental design principles they will follow and which they will abandon.
by jalbert
Fri Jun 15, 2018 1:32 pm
Forum: Investing - Theory, News & General
Topic: Factor Diversification = Beta?
Replies: 7
Views: 608

Re: Factor Diversification = Beta?

All other things being equal, having more bets is better than fewer.
Because market beta is the sum of all possible factors in any partition of the market, as you increase the number of factors they eventually all dissolve into market beta.
by jalbert
Fri Jun 15, 2018 12:58 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Managed Payout Fund
Replies: 29
Views: 2379

Re: Vanguard Managed Payout Fund

My big questions are why no real estate and why no tips? I would tend to guess they got a zero weight by their model as opposed to being excluded from the investable domain of the model. What I think is interesting about the portfolio for an individual investor is what grok was just pointing out, i...
by jalbert
Fri Jun 15, 2018 2:01 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Managed Payout Fund
Replies: 29
Views: 2379

Re: Vanguard Managed Payout Fund

I find this fund very interesting as an investment portfolio, but I don’t understand the rational of the portfolio Vanguard designed as a managed payout fund. It was designed by the Vanguard quantitative group, so I’m sure substantial analyses went into the design. To me, this is a portfolio that lo...
by jalbert
Fri Jun 15, 2018 1:35 am
Forum: Personal Finance (Not Investing)
Topic: Financial strength ratings of auto insurers
Replies: 12
Views: 826

Re: Financial strength ratings of auto insurers

Almost all states have a state guaranty fund where each licensed carrier pays a percentage of premium for the fund to manage claims in the case of an insurer insolvency. Insolvencies don't happen very often, and most policyholders and claimants get pretty close to what they are owed. Insurance comp...
by jalbert
Thu Jun 14, 2018 10:02 pm
Forum: Personal Finance (Not Investing)
Topic: Financial strength ratings of auto insurers
Replies: 12
Views: 826

Re: Financial strength ratings of auto insurers

Most auto insurers also insure against other types of liabilities. The concern would be that your insurer becomes insolvent from a large exposure to, say a major earthquake or hurricane somewhere and as a result lacks the resources to cover a million dollar judgment in an auto liability lawsuit.
by jalbert
Thu Jun 14, 2018 9:58 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin Price Manipulation
Replies: 45
Views: 4913

Re: Bitcoin Price Manipulation

Just the fact that there was a referendum and 25% voted for the initiative shows that even outside of crypto there is dissatisfaction of monetary system creating money out of thin air backed by nothing. Except the Swiss were not voting on whether their central bank can create money out of thin air....
by jalbert
Thu Jun 14, 2018 9:47 pm
Forum: Personal Finance (Not Investing)
Topic: Universal life insurance within ones Asset Allocation Model
Replies: 7
Views: 607

Re: Universal life insurance within ones Asset Allocation Model

UL is a horrible horrible complicated product and adding a LTC rider complicates even further.
What is the best option for LTC Insurance?
by jalbert
Thu Jun 14, 2018 9:43 pm
Forum: Investing - Theory, News & General
Topic: Factor Diversification = Beta?
Replies: 7
Views: 608

Re: Factor Diversification = Beta?

Be sure to keep in mind that the validity of a t-stat is dependent on having a sufficiently large random sample of independent trials.
by jalbert
Thu Jun 14, 2018 7:14 pm
Forum: Personal Finance (Not Investing)
Topic: Universal life insurance within ones Asset Allocation Model
Replies: 7
Views: 607

Re: Universal life insurance within ones Asset Allocation Model

Or do I just forget about it and simply remove the 58K from my present asset allocation as if it was never there? That. You will only tap into it if your liabilities increase commensurately from needing LTC. The way I would incorporate it into planning is by viewing the first $200K of any LTC liabi...
by jalbert
Thu Jun 14, 2018 4:52 pm
Forum: Personal Consumer Issues
Topic: Changing DNS service to provide more security
Replies: 14
Views: 1423

Re: Changing DNS service to provide more security

That's not how certificate authentication works. Neither your ISP nor a bad actor pretending to be your ISP can "send you rogue certificates" and force your computer to trust them. If one of your trusted certificate authorities is your ISP that is compromised, it is certainly possible. Have you eve...
by jalbert
Thu Jun 14, 2018 4:44 pm
Forum: Investing - Help with Personal Investments
Topic: Living on Your Investments? What Happens When a Bear Market Hits?
Replies: 53
Views: 7448

Re: Living on Your Investments? What Happens When a Bear Market Hits?

Using our buy, hold and sell strategy, we counseled our clients to sell in November of 2007 and stay out until June of 2009. Highly unlikely someone who didn’t know to include dividends in a return calculation of the S&P500 has a reliable system to predict bear markets. In fact, even top economists...
by jalbert
Thu Jun 14, 2018 4:13 pm
Forum: Investing - Theory, News & General
Topic: Why market drop when Fed announced rate increase?
Replies: 19
Views: 2488

Re: Why market drop when Fed announced rate increase?

I am confused. As soon as the Fed announced late this afternoon that they were raising interest rates, the market (DOW) dropped. Why did it drop? The Fed announcement was not a surprise; we all knew it was coming. Can someone help me understand why the drop? Don’t make the mistake of assuming someo...
by jalbert
Thu Jun 14, 2018 11:58 am
Forum: Investing - Theory, News & General
Topic: Vanguard - You'll need to sign up for security codes soon
Replies: 41
Views: 5806

Re: Vaguard - You'll need to sign up for security codes soon

Would being an authorized agent on another's account be sort of like being a joint owner? It is more like being a power of attorney. Being a joint owner is another way to get authorized access, but it imparts ownership rights as well, and there are no joint IRAs to my knowledge. Once someone is aut...
by jalbert
Thu Jun 14, 2018 11:49 am
Forum: Investing - Help with Personal Investments
Topic: Late to the party, looking for some advice
Replies: 18
Views: 2168

Re: Late to the party, looking for some advice

Understood. Thank you for the clarification. I just assumed they were tracking the same, as the Principal fund options booklet list both as "Benchmark: Bloomberg Barclays Aggregate Bond Index". I misused/misunderstood the term tracking. I guess a better word is replicate? They are looking to replic...
by jalbert
Thu Jun 14, 2018 3:43 am
Forum: Personal Finance (Not Investing)
Topic: Timeshare ever worth it? Please share details
Replies: 118
Views: 9248

Re: Timeshare ever worth it? Please share details

In FL cocoa beach. Offered a timeshare for 44K upfront (payment options etc) plus annual maintainence fees around 1500. Is this for 1 week/yr? Would you buy the unit as an exclusively owned condo for 52*44K and take on HOA fees of $1500*52/yr? That’s $78,000 per year they are collecting for “mainte...
by jalbert
Thu Jun 14, 2018 3:28 am
Forum: Investing - Theory, News & General
Topic: How to Use Russell Small Cap Completeness Index Fund with SP500 to Mirror Total Stock Market.
Replies: 12
Views: 1232

Re: How to Use Russell Small Cap Completeness Index Fund with SP500 to Mirror Total Stock Market.

A completion index for the S&P 500 is about 50% mid-caps and 50% small-caps. Hard to be precise because there is no single agreed upon delineation between mid-caps and small-caps. But the S&P500 is about the largest 80% of the market, and the Russell 1000 is about 90% of the market. Many folks consi...
by jalbert
Thu Jun 14, 2018 3:07 am
Forum: Investing - Theory, News & General
Topic: Vanguard - You'll need to sign up for security codes soon
Replies: 41
Views: 5806

Re: Vaguard - You'll need to sign up for security codes soon

Would being an authorized agent on another's account be sort of like being a joint owner? It is more like being a power of attorney. Being a joint owner is another way to get authorized access, but it imparts ownership rights as well, and there are no joint IRAs to my knowledge. Once someone is aut...
by jalbert
Thu Jun 14, 2018 2:51 am
Forum: Investing - Theory, News & General
Topic: Bitcoin Price Manipulation
Replies: 45
Views: 4913

Re: Bitcoin Price Manipulation

The odds are probably against it, but if it happens, every household in the world is going to need to have a bit of Bitcoin, and the current price is nothing compared to where it will be. Only 21 million coins can ever exist, and many of those are already lost forever. But nothing prevents having 2...
by jalbert
Wed Jun 13, 2018 11:03 pm
Forum: Personal Consumer Issues
Topic: Changing DNS service to provide more security
Replies: 14
Views: 1423

Re: Changing DNS service to provide more security

This probably depends on if the consumer router inside someone's home even validates the DNSSEC response. If it does, then a compromised ISP probably likely wouldn't reduce the security since the compromised ISP still wouldn't be able to impersonate the website's authoritative DNS server (with DNSS...
by jalbert
Wed Jun 13, 2018 10:57 pm
Forum: Personal Finance (Not Investing)
Topic: Financial strength ratings of auto insurers
Replies: 12
Views: 826

Re: Financial strength ratings of auto insurers

Financial strength is what enables them to be capable of paying your claims if you need to file one.
by jalbert
Wed Jun 13, 2018 10:56 pm
Forum: Investing - Theory, News & General
Topic: Vanguard - You'll need to sign up for security codes soon
Replies: 41
Views: 5806

Re: Vaguard - You'll need to sign up for security codes soon

I just received an email from Vanguard Flagship Services addressed to my wife with the message "You'll soon be required to sign up for security codes". My wife won't touch a computer or a smartphone. I use my email address for both of our accounts. Will I get in trouble with Vanguard for using my p...
by jalbert
Wed Jun 13, 2018 8:22 pm
Forum: Personal Finance (Not Investing)
Topic: Financial strength ratings of auto insurers
Replies: 12
Views: 826

Financial strength ratings of auto insurers

I ran across the following data aggregated from AM Best on financial strength ratings of insurers one might consider for auto insurance. It is 2015 data, so not completely current, but I still found it useful. Amongst the commonly considered insurers, it appears that Berkshire Hathaway, State Farm, ...
by jalbert
Wed Jun 13, 2018 8:11 pm
Forum: Personal Consumer Issues
Topic: Changing DNS service to provide more security
Replies: 14
Views: 1423

Re: Changing DNS service to provide more security

Agreed that it's a complex answer. We should probably differentiate between security and privacy, too. For example, Google's public DNS (8.8.8.8 and 8.8.4.4) provide decent security (and now supports DNSSEC) but likely mediocre privacy, since Google likely wants to use that information for advertis...
by jalbert
Wed Jun 13, 2018 7:46 pm
Forum: Investing - Help with Personal Investments
Topic: Next Steps for Single 34 Year Old with Savings and Roth IRA (VASGX)
Replies: 37
Views: 2959

Re: Next Steps for Single 34 Year Old with Savings and Roth IRA (VASGX)

I’ve seen various recommendations regarding the brokerage account. For someone who’s still learning the ropes, is it advisable to start with Vanguard’s Total Stock Market Index Fund Admiral Shares? Where would you all recommend I keep the Emergency Fund? VTI or ITOT for starters for US exposure in ...
by jalbert
Wed Jun 13, 2018 7:29 pm
Forum: Personal Consumer Issues
Topic: Anyone with a paid off house drop homeowners insurance
Replies: 78
Views: 5391

Re: Anyone with a paid off house drop homeowners insurance

Well, they would have to successfully sue the owner for something first -- negligence, an intentional tort, etc. Yes. If the fire was caused by negligence of the homeowner, I’d expect the neighbor’s insurance company to sue. The lien would not be attached to the house, but to the owner if they did ...
by jalbert
Wed Jun 13, 2018 5:10 pm
Forum: Personal Consumer Issues
Topic: Anyone with a paid off house drop homeowners insurance
Replies: 78
Views: 5391

Re: Anyone with a paid off house drop homeowners insurance

Curious, if a house burned to the ground and the fire spread to a neighbor’s house, and the neighbor’s insurance company determined the fire was cause by the homeowner of the first house, would the neighbor’s insurance company slap a lien on the owner of the first house to recoup their loss from pay...
by jalbert
Wed Jun 13, 2018 4:27 pm
Forum: Investing - Theory, News & General
Topic: VMMXX (Vanguard Prime MM) risks
Replies: 71
Views: 7329

Re: VMMXX (Vanguard Prime MM) risks

If I had $50K+ sitting in a money market fund (which I don’t) hands down I would use the Vanguard Treasury MMF. It has a yield that matches or slightly exceeds that of the Federal MMF, is fully state tax-free, and is probably the safest mutual fund or bank account on the planet in nominal terms. The...
by jalbert
Wed Jun 13, 2018 4:09 pm
Forum: Personal Consumer Issues
Topic: Changing DNS service to provide more security
Replies: 14
Views: 1423

Re: Changing DNS service to provide more security

Whether it increases or decreases security is a complex question to answer.