Search found 21780 matches

by grabiner
Wed Jul 04, 2007 9:40 pm
Forum: Investing - Help with Personal Investments
Topic: Pay off Car Loan vs Invest in Roth & 401K
Replies: 28
Views: 7859

Remember the risk

Well I sat down and did the math in excel. Assuming a 10% rate of return for my investments, over three years I would make $707.41 more by holding the loan till maturity and investing instead of prepaying. I'll probably pay down the loan, instead of investing in the 401K, after maxing out my Roth. ...
by grabiner
Wed Jul 04, 2007 9:35 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard tax-managed funds
Replies: 36
Views: 12251

Re: tax managed funds

how does the expense ratio and total international market exposure of FTSE ex USA fund compare to the Tax managed international fund. thanks Most of the numbers have been posted. However, there are two minor unknowns. Until the FTSE index distributes its dividends, we won't know how much are qualif...
by grabiner
Wed Jul 04, 2007 9:30 pm
Forum: Investing - Theory, News & General
Topic: Extended Market Index - Tax Efficient?
Replies: 6
Views: 2267

It's OK to be a few thousand off

With my current balances, putting 10k into Tax-Managed Small Cap would over weight small and mid caps (which I have been considering) based on market cap anyway, especially since I have some small cap value in my IRA. This is probably still the best way to do it. If you actually want only $5000 in ...
by grabiner
Wed Jul 04, 2007 9:16 pm
Forum: Investing - Help with Personal Investments
Topic: ROTH IRA v. 457 deferred comp.
Replies: 16
Views: 6631

Do you need to hold anything else?

T. Rowe Price Small Cap Stock Trust (.071% expense ratio) Brandes Inst. International Equity Fund (1.12% expense ratio) Citizens Core Growth Fund (.08%) - substantial overlap w/ S&P 500 S&P 500 Index fund (.03%) Global Balanced Fund (.67%) Tactical Asset Allocation Fund (.25%) Government/Credit Bon...
by grabiner
Tue Jul 03, 2007 9:40 pm
Forum: Investing - Theory, News & General
Topic: Saving/Investing the Proper Amount
Replies: 20
Views: 7033

Poor rule of thumb

One rule-of-thumb from the book....The Millionaire Next Door is to divide your age by 10 and take it times your annual income......and this is what your net worth should be: Age 50 Income $100,000 Expected Net Worth = (50/10) x $100,000 = $500,000 If you are really good at saving and investing, you...
by grabiner
Tue Jul 03, 2007 9:12 pm
Forum: Investing - Theory, News & General
Topic: Extended Market Index - Tax Efficient?
Replies: 6
Views: 2267

Use Tax-Managed Small-Cap

While Extended Market Index is not likely to be tax-efficient in the future, you have an option which is likely to be tax-efficient and provides a similar diversification benefit. Tax-Managed Small-Cap may deviate slightly from its small-cap index in order to maintain tax-efficiency, but it should t...
by grabiner
Sun Jul 01, 2007 10:13 pm
Forum: Investing - Help with Personal Investments
Topic: JAMRX: Keep it or sell it?
Replies: 3
Views: 1072

In taxable, sell it

JAMRX is now Janus Research Fund, and it is still <1% ER, but has a turnover of about 150%. It has gotten huge, with 16B in assets. Bad news: high turnover, .98% management fees, actively managed. The high turnover means that most of its gains will be taxable, and many will be short-term gains. You...
by grabiner
Wed Jun 27, 2007 9:15 pm
Forum: Investing - Help with Personal Investments
Topic: Question about 401k Investing with only loaded funds provide
Replies: 4
Views: 1521

Re: Question about 401k Investing with only loaded funds pro

I recently joined a small consulting firm that provides a 401k plan by Morgan Stanley that offers only loaded funds, stock purchases and supposedly index funds that have an A, B or C share rating with different break points and an upfront load that depends on the share I choose (I do not quite unde...
by grabiner
Wed Jun 27, 2007 8:49 pm
Forum: Personal Finance (Not Investing)
Topic: Nazi Germany's economic policy
Replies: 24
Views: 7073

Good article from Monday's (6/25) WSJ about Roosevelt and 30's US economics: " Roosevelt did famously well by one measure, the political poll. He flunked by two other meters that we today know are critically important: the unemployment rate and the Dow Jones Industrial Average. In his first inaugur...
by grabiner
Tue Jun 26, 2007 8:16 pm
Forum: Investing - Theory, News & General
Topic: Credit obligations too high for CC approval
Replies: 35
Views: 13271

Disciplined use of credit card

Yes, that is a risk for sure, and I considered that five years ago when I made the decision to not borrow money no matter what. However, you have to balance that risk with the risk of overspending and getting into debt. In my mind, the risk of a credit card far outweighs the risk of a debit card. ....
by grabiner
Tue Jun 26, 2007 7:48 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Inefficient Funds in Taxable Used for Withdrawals
Replies: 3
Views: 1362

Tax efficiency is still useful in retirement

While it is true that you will need to generate gains to get spending money out of a tax-efficient fund, it is still better to pay as little in tax as possible on the money you spend, and therefore efficiency is still important. For example, suppose you need to spend $10,000 more than you have earne...
by grabiner
Tue Jun 26, 2007 7:39 pm
Forum: Investing - Theory, News & General
Topic: How much of your portfolio is in index funds?
Replies: 35
Views: 13709

88% indexed counting Tax-Managed International

Vanguard's Portfolio Watch considers tax-managed funds to be index funds, as do I; you hold them for the same reasons you would hold index funds, and they attempt to track an index. Given that, my only non-index holdings are International Explorer in my Roth, and a small amount of TIAA Real Estate w...
by grabiner
Tue Jun 19, 2007 9:04 pm
Forum: Investing - Help with Personal Investments
Topic: Too much in Index Funds?
Replies: 10
Views: 4019

It's good introductory advice.

The primary value of Portfolio Watch is for the inexperienced investor. It will point out where you deviate from conventional guidelines, and you need to be aware that you are making these deviations, and have a good reason. I have several Cautions on my Portfolio Watch, and all of them are delibera...
by grabiner
Mon Jun 18, 2007 11:12 pm
Forum: Investing - Help with Personal Investments
Topic: Taxable Account Opinions
Replies: 9
Views: 3075

Specific identification

I was planning on opening a total stock market fund, or a STAR fund. Because these are not individual stocks, I shouldnt need to specify where in the fund I am pulling the money out of, correct? The tax will be the same regardless. When you sell, send Vanguard a letter with your sales, "Please sell...
by grabiner
Mon Jun 18, 2007 11:03 pm
Forum: Investing - Help with Personal Investments
Topic: A question about the effect of taxes
Replies: 2
Views: 1367

I would compromise

I was trying to understand tax efficiency and exactly how much of a detriment taxes can have on your investments. My question is not based on my portfolio, but rather a hypothetical. Let's say for a TAXABLE account you have two options (included are its average annual returns over the past 10 years...
by grabiner
Mon Jun 18, 2007 10:57 pm
Forum: Investing - Help with Personal Investments
Topic: Where is "pay tax to convert to Roth" in investing
Replies: 12
Views: 3917

You got it right

Thank you all for your well-reasoned replies. Each is very logical to me, although your conclusions vary. I appreciate both the numerical examples as well as the alternative ways to conceptualize the problem. I will tell you that I had thought, for my own case, that "pay tax to convert to Roth" sho...
by grabiner
Mon Jun 18, 2007 10:49 pm
Forum: Investing - Theory, News & General
Topic: A few questions about capital losses and asset location
Replies: 7
Views: 1646

Re: A few questions about capital losses and asset location

Specifically I looked at the TAX COST RATIO for all the fund I currently have or am currently interested in. Since M* gives 3 values for this (3 year, 5 year, 10 year) I gave my own weighing (75% 10yr, 15% 5yr, 10% 3yr) and then ranked the funds in order by this number. That gave me a list that loo...
by grabiner
Mon Jun 18, 2007 10:32 pm
Forum: Investing - Help with Personal Investments
Topic: Help a teacher!
Replies: 22
Views: 7465

Time horizon justifies 403(b)

2. I don't see any compelling reason to get involved in a pricey 403b with no match. While I agree that your 403(b) is not good (and you should max out your Roth IRA first), it's still better than investing the same money in a taxable account. You plan to work with this employer for 13 years. Payin...
by grabiner
Sun Jun 17, 2007 7:54 pm
Forum: Investing - Help with Personal Investments
Topic: Salary v. 401K
Replies: 12
Views: 2759

The value of benefits

More important than the match is the overall quality of the 401(k), if you plan to stay with the employer for a long time. That extra 1% in fees reduces the value of the whole plan, not just the match, for as long as you stay with the employer. :shock: I am constantly surpised at how some people on...
by grabiner
Sun Jun 17, 2007 11:53 am
Forum: Investing - Help with Personal Investments
Topic: Taxable Account Opinions
Replies: 9
Views: 3075

Minimize costs with specific identification

Also, is it just the 15% CG tax and the Expense Ratio fees paid when withdrawing funds? The tax is paid only on your gains, so it will never be 15%, and you can reduce it further if you use specific identification when you sell your shares, selling the shares bought at the highest cost. If you buy ...
by grabiner
Sun Jun 17, 2007 11:43 am
Forum: Investing - Help with Personal Investments
Topic: Salary v. 401K
Replies: 12
Views: 2759

About dollar for dollar, unless you max out

Look at the total value of your compensation, including the after-tax value of your 401(k). If you don't max out your 401(k), this is an easy comparison. If Job A pays $55K with no match and you contribute $15K, and Job B pays $50K with a 10% match and you contribute $10K, then either job will give ...
by grabiner
Sun Jun 17, 2007 11:25 am
Forum: Investing - Help with Personal Investments
Topic: Help Wanted: What to Sell to Buy More Intl. SC?
Replies: 16
Views: 2832

Rarely worth selling in taxable to reallocate

Unless your portfolio has gotten seriously out of balance, any diversification benefit from holding a different fund in the taxable account is unlikely to be worth the tax cost. If you sell a fund with a 25% capital gain, you will lose 4% to taxes, which means that the new investment starts out 4% b...
by grabiner
Sat Jun 16, 2007 3:22 pm
Forum: Investing - Help with Personal Investments
Topic: Bogleheads and Actively-Managed Funds
Replies: 10
Views: 2863

What I hold now, and have held

I currently hold two active funds, and had good reasons for holding several others in the past. My current non-index holdings are International Explorer and TIAA Real Estate. I don't have a small-cap international index available, and since I hold this fund in my IRA, the tax-inefficiency doesn't ma...
by grabiner
Thu Jun 14, 2007 10:48 pm
Forum: Investing - Help with Personal Investments
Topic: Where is "pay tax to convert to Roth" in investing
Replies: 12
Views: 3917

Re: Where is "pay tax to convert to Roth" in inves

For the general rule of thumb for investing priority, these four make sense to me: 1. 403b up to the match 2. Max out Roth 3. Max out 403b 4. Taxable investing Where in the priority order would this be: "use investment dollars to pay for converting traditional IRA to Roth IRA"? If you expect to be ...
by grabiner
Wed Jun 13, 2007 9:00 pm
Forum: Investing - Help with Personal Investments
Topic: Lowering my tax burden on a capital gain
Replies: 5
Views: 2773

It should be a long-term gain

It sounds like you will be selling the property for a long-term capital gain. If so, you pay tax at the regular rates on your ordinary income, and then 15% of your gains, even if your total income would be in a much higher bracket. The tax burden thus isn't too bad. If you pay state tax on the sale,...
by grabiner
Wed Jun 13, 2007 8:53 pm
Forum: Investing - Theory, News & General
Topic: Your worst investing mistake
Replies: 145
Views: 36655

Wow, I should have made a larger range

I can edit my post but not my poll, but I see that I should have had several larger categories, and in retrospect, I should have expected that. There are probably a lot of people who became Diehards after being misdirected by a broker in the Internet bubble with a large account, or putting too much ...
by grabiner
Tue Jun 12, 2007 5:52 pm
Forum: Investing - Theory, News & General
Topic: Your worst investing mistake
Replies: 145
Views: 36655

Your worst investing mistake

Experience is a cruel teacher; how cruel was it to you? How much (in taxes, lost returns, or fees paid) did your worst investing mistake cost, and what was it? By "mistake", I mean somthing which you now understand you shouldn't have done in the first place. Buying a fund which happened to do badly ...
by grabiner
Sun Jun 10, 2007 12:22 pm
Forum: Investing - Help with Personal Investments
Topic: Advice on Funds within HSA
Replies: 5
Views: 2278

Treat it as part of your overall allocation

I have a HSA with Exante Financial Services. Annual deposit of $5650. I pay deductibles out of pocket (self insure). Assets are presently in a bank account earning 4%. Fund options are as listed: Vanguard Wellington | VWELX | Balanced | ER 0.3 Vanguard Global Equity | VHGEX | International | ER 0.7...
by grabiner
Sun Jun 10, 2007 10:21 am
Forum: Investing - Theory, News & General
Topic: Total Intl Index vs FTSE All World ex US
Replies: 11
Views: 4181

I am in the same boat, but am curious, does the 16 basis point FTC difference stay the same no matter tax bracket? Also, I assume that 16 is a historical average, right? The 16 basis points for the FTC is not a constant nor an average. It may be a decent estimate (based on last year's data), but no...
by grabiner
Fri Jun 08, 2007 8:37 pm
Forum: Investing - Help with Personal Investments
Topic: Total Stock Mkt. Fd. to post dividend in June
Replies: 3
Views: 1345

It should be small

Total Stock Market Index has a yield of about 2%, and pays dividends quarterly, so the June dividend should be about .5%. If you pay taxes on this dividend, they would be .08% (assuming 100% qualified dividends taxed at 15%). Therefore, it isn't enough to worry about buying a dividend; go ahead and ...
by grabiner
Fri Jun 08, 2007 8:33 pm
Forum: Investing - Help with Personal Investments
Topic: How is my simple taxable AA?
Replies: 18
Views: 4992

You can always reallocate between accounts later

I honestly want to keep my taxable account and retirement account completely separate. My taxable account will without a doubt be drawn upon in years to come. It may be 3 or 5 years, it may be 10 years, but it sure isn't going to be the same as my retirement accounts, which would be at least 30 yea...
by grabiner
Fri Jun 08, 2007 8:26 pm
Forum: Investing - Theory, News & General
Topic: Total Intl Index vs FTSE All World ex US
Replies: 11
Views: 4181

Weight costs against benefits

Hi Everyone, As part of my taxable account I was purchasing VG Total Intl Index. A couple of months ago I started purchasing FTSE All World ex US instead of the former. I am passed the redemption cost time frame however the capital gains on Intl Index would be short term (but have shrunk in the pas...
by grabiner
Mon Jun 04, 2007 11:12 pm
Forum: Investing - Help with Personal Investments
Topic: 401k Investment Review Meeting
Replies: 31
Views: 9472

Don't encourage performance chasing

I wanted to add: In our investment review meeting, we compared each of the funds in our plan to possible alternate funds available in our platform. We had to make an explicit decision to keep the currently selected fund or to switch. We did not always switch to a different fund with a better recent...
by grabiner
Sun Jun 03, 2007 3:04 pm
Forum: Investing - Help with Personal Investments
Topic: When to get out of tax inefficient fund?
Replies: 8
Views: 1933

Consider waiting for one year to get long-term gains

If you have substantial capital gains, you might be better off waiting until the gains become long-term because of the lower tax rate. Compare the tax you would pay on the gains you hold now to the tax you would expect to pay if you wait for the one-year period. I would recommend planning to get out...
by grabiner
Sun Jun 03, 2007 2:53 pm
Forum: Investing - Help with Personal Investments
Topic: which fund to start with in taxable investing?
Replies: 13
Views: 5637

A couple of questions: 1. Then, of course, there's the whole buying vs. owning a house debate. I'm afraid I don't quite understand what is meant by this. You have to decide whether buying or renting a house is the better decision, and it isn't so clear; it depends on a variety of factors. There are...
by grabiner
Sat Jun 02, 2007 11:20 pm
Forum: Investing - Help with Personal Investments
Topic: Question regarding Taylor's placement
Replies: 3
Views: 1811

Liquidity first; then it depends on accounting method

I want to pose a possible question that might challenge the tax efficiency argument. Say a person is in a "lower" tax bracket (<= 25%) and has 25 years to retirement. An individual who might need taxable monies sooner (e.g., home purchase) than those monies in 401's and a Roth. Is this a situation ...
by grabiner
Thu May 31, 2007 6:40 pm
Forum: Investing - Help with Personal Investments
Topic: IRA Question
Replies: 8
Views: 2291

Re: IRA Question

1) In two years when I finish training, my income will likely exceed the maximum for being able to contribute to my Roth. Does this mean there can be no more contributions to tax advantaged acounts or are there other things I can do to continue to save for retirement with tax benefits? When you fin...
by grabiner
Wed May 30, 2007 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: Sell AIVSX and/or re-distribute "excessive" Saving
Replies: 7
Views: 2882

Re: Sell AIVSX and/or re-distribute "excessive" Sa

I am a 45 years of age, Single Male, no known heath issues, Rents Apt, 15% tax Bracket, Childless, with absolutely no Debt.I am pretty much tolerant of the volatile market. My thought will probably change in 5-10 years, though. I max out my 401K 6% for the company match. Max out my Roth, invest $30...
by grabiner
Tue May 29, 2007 8:24 pm
Forum: Investing - Help with Personal Investments
Topic: Link - In 401K - employers really contribute to the IRS
Replies: 10
Views: 3070

There is a fifth category

In the fifth category, you are already earning enough that 85% of your Social Security benefits are taxed. Every additional dollar you get is taxed only as regular income, and it's better than earned income because you do not pay Social Security tax on it. The 50% taxable amount is also not a penalt...
by grabiner
Tue May 29, 2007 7:55 pm
Forum: Investing - Help with Personal Investments
Topic: Taxable Bonds, which Vanguard tax-exempt or other option?
Replies: 7
Views: 2429

REITs are most important to tax-defer

You want to tax-defer the funds which lose the most to taxes, and that is certainly the REITs, since they are required to distribute all of their income and it is taxable at your full income tax rate. Bonds are the next class to tax-defer; their income is also all taxable (or you pay for the tax exe...
by grabiner
Mon May 28, 2007 5:34 pm
Forum: Investing - Help with Personal Investments
Topic: two questions on international
Replies: 14
Views: 4514

Re: two questions on international

1. VGTSX vs. VFWIX: What's the practical difference between VGTSX and VFWIX? I know that they follow somewhat different indexes. VFWIX (FTSE Index) holds the top 90-95% of each country by market cap, compared to 85% for VGTSX (Total International), so it gets a bit more mid-cap and small-cap exposu...
by grabiner
Sat May 26, 2007 5:02 pm
Forum: Investing - Theory, News & General
Topic: Why Pay Your Manager For Doing Nothing?
Replies: 4
Views: 1643

The article picked the wrong closet

A manager who can earn 1% expenses and match the S&P 500 after expenses is being fairly paid; he is generating 1% extra returns, and he is being paid the amount he can generate. (The managers in the article aren't necessarily doing this; active funds may outperform or underperform the index, and it'...
by grabiner
Sat May 26, 2007 4:51 pm
Forum: Investing - Help with Personal Investments
Topic: Should tax deferred room influence asset allocation?
Replies: 5
Views: 1687

I wouldn't let it affect primary decisions

The most important asset allocation decision you can make is the basic division of your portfolio between high-risk and low-risk investments, because this determines the risk of your portfolio. If you hold 80% of your portfolio in stock, you will lose 40% in a serious bear market, as happened in 197...
by grabiner
Thu May 24, 2007 8:37 pm
Forum: Investing - Help with Personal Investments
Topic: After tax Contributions to 401k vs. Investing in Mutual Fund
Replies: 22
Views: 5613

Will investments in taxable accounts be tax-efficient?

Making after-tax contributions to the 401(k) (or similarly to a nondeductible IRA) means that you will pay tax on the gains at your full marginal tax rate when you sell. If you can invest in your taxable account in funds which have most of their returns from unrealized capital gains, you'll pay a sm...
by grabiner
Sun May 20, 2007 8:09 pm
Forum: Investing - Theory, News & General
Topic: how many people swtiched
Replies: 10
Views: 3543

These tax rankings aren't quite accurate

...I too was convinced that I had made a tremendous mistake by buying Total Int'l in a taxable account. No mistake at all. In it's category, Total International has a solid tax ranking of: - Top 12% over 3 years - Top 9% over 5 years - Top 22% over 10 years Bob M*, and even Vanguard, don't consider...
by grabiner
Fri May 18, 2007 10:57 pm
Forum: Investing - Help with Personal Investments
Topic: Asset allocation across all accounts
Replies: 11
Views: 3380

Make an order

I have a question about doing one asset allocation across all accounts. Sorry for asking so many random questions, as I am trying to come up with an asset allocation and figure out what I am doing. How do you go about rebalancing your accounts if some money is in a 401k and other money is in a taxa...
by grabiner
Fri May 18, 2007 10:26 pm
Forum: Investing - Theory, News & General
Topic: What is the consensus on High Yield Bond Funds?
Replies: 111
Views: 22141

Share prices

One slight concern I had. Looking at the share price graph, it looks like in the late 90s the price was around $8. It then fell below $6 in 2003, and has only risen a little above $6 since. Why hasn't it rebounded more fully? Is this simply a function of having paid large distributions? An investme...
by grabiner
Fri May 18, 2007 10:01 pm
Forum: Investing - Help with Personal Investments
Topic: What's Wrong With a 100% Stock Investment?
Replies: 118
Views: 55188

Mathematics versus reality

Mathematically, the best porfolio for a very young investor is 100% stock. That is, if you add money to your portfolio every year, you will have a higher probability of having more money if you start at 100% stock and decrease your stock allocation later than if you start at 80% stock, given reasona...
by grabiner
Wed May 16, 2007 7:46 pm
Forum: Investing - Theory, News & General
Topic: AMT and Capital Gains
Replies: 9
Views: 3246

Sell now if costs aren't too great

I would advise getting rid of the old mutual funds now if you want to get rid of them at all. Each additional year you keep them, you will pay the extra expenses and taxes, which is probably about 1% a year. (If there will be a big tax difference, you might split the sales over two or three years, b...
by grabiner
Wed May 16, 2007 7:34 pm
Forum: Investing - Theory, News & General
Topic: Cash out your mistake or learn and move on?
Replies: 6
Views: 2135

Re: Cash out your mistake or learn and move on?

Well if you just hold an ETF you only pay the capital gains yearly on the dividends. Where as with mutual funds you are usually given a much larger chunk as a distribution at the end of each year to offset the capital gains that the fund has incurred from all of it's trades throughout the year. Is ...