Search found 146 matches

by tpm871
Sat Jan 22, 2011 11:09 pm
Forum: Investing - Theory, News & General
Topic: please help new investor with allocation/tilting question
Replies: 12
Views: 1232

even if the die is loaded -- as many advisors claim based on FF -- the die is still the die. there are still three sides, one of which is apparently loaded. how loaded is this side and is it worth playing if i might lose 2/3 times for the rest of my life as i "stay the course?" Ah, but the point is...
by tpm871
Sat Jan 22, 2011 10:54 pm
Forum: Investing - Theory, News & General
Topic: please help new investor with allocation/tilting question
Replies: 12
Views: 1232

Re: please help new investor with allocation/tilting questio

from my earlier post, even if mr. swedroe is correct and the three-sided die is loaded toward A, there are still two other entire sides that each represent "negative outcomes" to me. given that 2/3 outcomes are "negative," am i justified in not tilting? is this analysis even valid? It's not the num...
by tpm871
Sat Jan 22, 2011 11:20 am
Forum: Investing - Theory, News & General
Topic: Asset Allocation - Debt/Real Estate/Emergency Fund
Replies: 6
Views: 1501

I wouldn't consider a house as part of your AA, just because you can't do anything to "rebalance" it (easily). For example, if stocks are down and your house represents a greater percentage of your portfolio, would you sell your house to rebalance? I include emergency money in my AA, but that's prob...
by tpm871
Sat Jan 22, 2011 12:11 am
Forum: Investing - Theory, News & General
Topic: a theoretical argument against tilting
Replies: 16
Views: 2020

I disagree with #1. There are many ways of choosing a benchmark. It all depends upon your desired risk/reward tolerance. TSM is just one of many strategies, which weights companies by market capitalization. But that's not to say that's the only way or that it's more likely to do better than some oth...
by tpm871
Fri Jan 21, 2011 11:13 pm
Forum: Investing - Theory, News & General
Topic: Years until financial independence?
Replies: 48
Views: 5798

I make a couple of conservative assumptions when I think of the FI date: 1. I won't get anything from social security ever (I consider this a potential "nice surprise", but not something I can count on). 2. I will live forever... I know that sounds delusional, but better safe than sorry (where "sorr...
by tpm871
Thu Dec 09, 2010 1:31 am
Forum: Investing - Theory, News & General
Topic: What is a High Income Earner?
Replies: 21
Views: 4182

Though now that you mention it, since Admiral shares have lost some of their prestige, I am anticipating purchasing Institutional shares of Total Stock Market ($5 million minimum to qualify), with an ER that's a whole basis point lower than Admiral shares. (0.06% vs 0.07%) (I know that some of you ...
by tpm871
Mon Dec 06, 2010 1:18 am
Forum: Investing - Theory, News & General
Topic: Behavioral "load"?
Replies: 10
Views: 1555

Vanguard's tax managed mutual funds are kind of like this. If you sell within five years , you pay a redemption fee to the other shareholders. This helps to keep the fund tax efficient, since the fund doesn't have to sell its underlying stocks as much. I like this better than funds like Vanguard Eme...
by tpm871
Sun Dec 05, 2010 11:16 am
Forum: Investing - Theory, News & General
Topic: Price of Gold
Replies: 28
Views: 3446

I kind of think it was the opposite: gold ETFs were created because gold was doing well. But I'm sure that the ETFs have also contributed to the increase/volatility of gold recently.
by tpm871
Sun Dec 05, 2010 11:05 am
Forum: Investing - Theory, News & General
Topic: Wiki article, "Boglehead-style investing at Fidelity
Replies: 34
Views: 3881

Re: Scwab page:

Hi: It is quite some time now since I had an employer provided plan (SIMPLE IRA) at Schwab. I have made the initial sketches for a wiki page. Emendations or expansions are always more than welcome. Wiki article link: Charles Schwab regards, It may be worth emphasizing that the Schwab ETFs are extre...
by tpm871
Wed Nov 17, 2010 12:56 am
Forum: Investing - Theory, News & General
Topic: Should I diversify among different brokers/banks?
Replies: 43
Views: 7504

I was concerned about this as well, and discovered the following Vanguard protection policy statement. I think Fidelity has something similar. How is my account protected? Securities in your brokerage account are held in custody by Vanguard Brokerage Services, a division of Vanguard Marketing Corpor...
by tpm871
Sun Nov 14, 2010 8:35 pm
Forum: Investing - Theory, News & General
Topic: Continuous Rebalancing
Replies: 44
Views: 8479

Re: Continuous Rebalancing

continuous rebalancing can never give better returns than just never rebalancing. Maybe I'm not understanding what you mean by "continuous rebalancing", but it seems easy enough to make a counter-example to disprove this statement... Suppose that you have two stocks A and B, which are perfectly neg...
by tpm871
Fri Nov 12, 2010 3:58 am
Forum: Investing - Theory, News & General
Topic: 401k & Roth 401k
Replies: 9
Views: 2140

The rule of thumb tends to be to contibute to the Roth only if you are in a tax bracket lower than the 25% tax bracket. But it all depends upon your assumptions about your tax situation when it comes time to withdraw. For example: If the tax system is similar to what we have today, and your withdraw...
by tpm871
Fri Nov 12, 2010 3:35 am
Forum: Investing - Theory, News & General
Topic: Total World Index (VTWSX) foreign tax credit?
Replies: 4
Views: 1279

As I understand it, if the fund pays taxes to foreign governments, then you will receive the credit. It's not really a question of "if", it's a question of "how much". I have some international funds, but the credit that I got last year was fairly modest... A pretty minute percentage of what I inves...
by tpm871
Fri Nov 12, 2010 3:24 am
Forum: Investing - Theory, News & General
Topic: Avoiding a potential QE Risky Asset bubble
Replies: 73
Views: 8544

I don't know much about economics, so I'm sure that the following idea is somehow infeasible... Instead of buying bonds to drive their yields down (increased demand/price for a more scarce asset), why didn't the government just start issuing a lot fewer new bonds going forward? They would have made ...
by tpm871
Wed Nov 10, 2010 2:49 am
Forum: Investing - Theory, News & General
Topic: Dollar hedging
Replies: 32
Views: 3411

The article didn't mention TIPS or REITs, but those are supposed to adjust favorably with inflation. Commodity ETFs... I don't like the "contango" effect, and I've heard that tax issues are more complicated. Foreign bonds... I'm surprised that they talk as if emerging market bonds are pretty safe. S...
by tpm871
Wed Nov 10, 2010 2:07 am
Forum: Investing - Theory, News & General
Topic: Help w global equity allocation - nice theory, hard reality
Replies: 9
Views: 1398

I don't invest in either strategy that you mention. However, I'd say that the only potential advantage of the world stock (other than simplicity) is that you could have less capital gains tax to pay in the short run as a result of rebalancing. That is, since it's only one fund, you won't have to reb...
by tpm871
Sun Nov 07, 2010 1:24 am
Forum: Investing - Theory, News & General
Topic: ETF questions - vanguard share-class versus non-share class
Replies: 2
Views: 755

I think of the discount/premium as simply extra volatility that ETFs have in comparison to equivalent mutual funds. Sometimes the price is beyond the cost of the underlying assets (premium); sometimes it's below (discount). I'd think that premiums mainly happen when the ETF is up, since people's dem...
by tpm871
Sat Nov 06, 2010 2:42 pm
Forum: Investing - Theory, News & General
Topic: The "75% Bogleheads"
Replies: 36
Views: 4796

I'm a 75% Boglehead: 1. I'd fail the "simplicity" criteria, since I have 16 asset classes. 2. I'd fail the "simplicity" criteria, since I incrementally rebalance as I go rather than rebalancing annually or bi-annually. 3. I recently shifted some of my bond holdings to a short term duration. 4. I hav...
by tpm871
Fri Nov 05, 2010 10:32 pm
Forum: Investing - Theory, News & General
Topic: Is this market timing?
Replies: 23
Views: 2764

Thanks for the replies. Already have the money in a short term bond fund currently. Regarding the ETF version of VISVX, may I assume those trades are commission free in a Roth? I've always read that frequent trades are a bad idea for ETFs. I would be doing monthly or weekly auto exchanges in the $1...
by tpm871
Thu Nov 04, 2010 10:55 pm
Forum: Investing - Theory, News & General
Topic: Is this market timing?
Replies: 23
Views: 2764

Some posters don't pay attention that OP can't DCA, because it is the initial $3,000. If you go for VBR instead (the ETF equivalent of VISVX), then you wouldn't have to invest the whole $3,000 all at once. You could dollar cost average, or better yet, value average over time. Plus you get the benef...
by tpm871
Thu Nov 04, 2010 12:22 am
Forum: Investing - Theory, News & General
Topic: Bull or Bear: which makes you more nervous?
Replies: 34
Views: 3737

I've been trying to reprogram my brain to react this way: 1. The lower the market goes, the safer it is because it can only drop so far below reasonable valuations for most stocks. 2. The higher the market goes, the riskier it is because it can only jump so far above reasonable valuations for most s...
by tpm871
Mon Nov 01, 2010 11:36 pm
Forum: Investing - Theory, News & General
Topic: Do Bogleheads Over-Recommend Tax-Exempt Bonds?
Replies: 40
Views: 6080

As to correlations, I personally feel that Bogleheads tend to overemphasize them. Two low-correlated lousy investments are still a lousy investment. And correlations aren't very stable over time, so instead of chasing performance people just end up chasing low correlation. Although I wouldn't chase...
by tpm871
Sun Oct 31, 2010 1:48 am
Forum: Investing - Theory, News & General
Topic: Alternatives to HSA?
Replies: 2
Views: 866

From wikipedia: The United States Census Bureau considers a baby boomer to be someone born during the demographic birth boom between 1946 and 1964. ...or perhaps you're an early gen-X-er? My company has an FSA, which allows tax advantaged medical spending within a year. Unfortunately, it doesn't car...
by tpm871
Sat Oct 30, 2010 1:50 am
Forum: Investing - Theory, News & General
Topic: What makes someone a saver?
Replies: 98
Views: 12710

Speaking of personality, though not explicitly asking the question of frugal or not, the Retire Early Home Page did a survey on which type of personality would be drawn to early retirement, which I believe requires frugality. http://www.retireearlyhomepage.com/mbti.html I've heard before that INTJ ...
by tpm871
Thu Oct 28, 2010 11:16 pm
Forum: Investing - Theory, News & General
Topic: Deal or No Deal vs. Efficient Market Theory
Replies: 4
Views: 1139

I'm just wondering whether there's something to be applied here to gain a few dollars. Perhaps when adding to a position, support levels could be the basis of the ETF buy limit price. Perhaps when trimming back a position (rebalancing), resistance levels could be the basis of the ETF sell limit pric...
by tpm871
Thu Oct 28, 2010 2:10 pm
Forum: Investing - Theory, News & General
Topic: Deal or No Deal vs. Efficient Market Theory
Replies: 4
Views: 1139

Deal or No Deal vs. Efficient Market Theory

I watched a rerun of Deal or No Deal yesterday and it got me thinking about how people can sometimes be irrational about money and risk. It made me wonder how valid the Efficient Market Theory really is. So there was a guy on Deal or No Deal who had really bad luck. He had an offer of about $150k in...
by tpm871
Sun Oct 17, 2010 10:44 pm
Forum: Investing - Theory, News & General
Topic: Help me understand a "bond bubble"
Replies: 5
Views: 1582

Vanguard wrote a good article on this topic: http://www.vanguard.com/pdf/icrrol.pdf My opinion is that there are two factors to consider: 1. Interest rates will eventually increase. Bond prices will fall in response, with the higher duration bonds being hit worse. 2. Lots of people were scared of th...
by tpm871
Sun Oct 10, 2010 8:46 pm
Forum: Investing - Theory, News & General
Topic: Are tax-free bonds not worth it?
Replies: 4
Views: 1532

Re: Are tax-free bonds not worth it?

Am I missing something? Yes, duration. Compare Ltd Term Tax Exempt to the others. Short Term Tax Exempt is very short term. Yes, you're right. Looking at the Admiral versions of these... duration VWSUX 1.2 years VFIRX 2.3 years VMLTX 2.5 years So limited term tax exempt (VMLTX) has nearly the same ...
by tpm871
Sun Oct 10, 2010 7:37 pm
Forum: Investing - Theory, News & General
Topic: Are tax-free bonds not worth it?
Replies: 4
Views: 1532

Are tax-free bonds not worth it?

In was looking at the yields/returns for Vanguard's short term tax free bond fund (VWSTX). It seems like the performance is so low in comparison to the taxable bonds that even someone in a higher tax bracket is better off with a taxable bond fund. Am I missing something? yield 1-year 3-year 5-year 1...
by tpm871
Thu Oct 07, 2010 11:25 pm
Forum: Investing - Theory, News & General
Topic: Contrarian Investing 10% of Portfolio
Replies: 12
Views: 1895

What you're describing is actually similar to "value averaging". With value averaging you add to a position the more that it declines, and you trim back the more that it exceeds your investment target. That is a way to systematically buy low and sell high. The main difference is the amount to buy or...
by tpm871
Sun Oct 03, 2010 11:43 am
Forum: Investing - Theory, News & General
Topic: choosing shorter bond durations now?
Replies: 8
Views: 2780

Re: choosing shorter bond durations now?

I recently read in The Investors Manefesto the recommendation to choose bond funds with shorter durations, such as a short term bond fund. This seemed contrary to the advice of the same author (and others) a few years back -- it was more common to see recommendations for Intermediate Term bonds as ...
by tpm871
Sun Oct 03, 2010 7:45 am
Forum: Investing - Theory, News & General
Topic: choosing shorter bond durations now?
Replies: 8
Views: 2780

choosing shorter bond durations now?

I recently read in The Investors Manefesto the recommendation to choose bond funds with shorter durations, such as a short term bond fund. This seemed contrary to the advice of the same author (and others) a few years back -- it was more common to see recommendations for Intermediate Term bonds as b...
by tpm871
Sun Sep 26, 2010 12:11 pm
Forum: Investing - Theory, News & General
Topic: unequal rebalance bands
Replies: 33
Views: 3601

We might want to clarify what we mean by rebalancing bands better. Yes, I should mention that what I do isn't what most people would call "rebalancing". I plan a value path for each individual asset class at the beginning of the year. I use bands to determine when to make contributions and when to ...
by tpm871
Sun Sep 26, 2010 12:40 am
Forum: Investing - Theory, News & General
Topic: unequal rebalance bands
Replies: 33
Views: 3601

I took a stab at computing rebalance bands for the S&P 500. My approach was to measure the % advance from local minimums to local maximums for a number of advances (36 in total) over the last ten years. I did the same for the declines. The results came to: Advances: min: 2.61% max: 39.89% median: 10...
by tpm871
Wed Sep 22, 2010 10:13 pm
Forum: Investing - Theory, News & General
Topic: unequal rebalance bands
Replies: 33
Views: 3601

I actually don't believe that rebalancing a whole portfolio at the same time is an optimal strategy. What you'd ideally like is to trim back assets near their peak and add to positions near their bottom. But if you have several or more asset classes, and they're fairly non-correlated (as a good asse...
by tpm871
Tue Sep 21, 2010 10:52 pm
Forum: Investing - Theory, News & General
Topic: Is the Recession Over for You?
Replies: 60
Views: 8265

The recession felt over for me a few months after March 2009, when the market had been steadily increasing for a while.
by tpm871
Tue Sep 21, 2010 10:43 pm
Forum: Investing - Theory, News & General
Topic: unequal rebalance bands
Replies: 33
Views: 3601

A more exciting question is: what size of rebalance bands will optimize gains for a given AA. ... Are the parameter values in that algorithm optimal? If not, what should the values be? Can we determine those values by back testing on data from past five years? Like I said earlier, I think each asse...
by tpm871
Mon Sep 20, 2010 5:00 pm
Forum: Investing - Theory, News & General
Topic: unequal rebalance bands
Replies: 33
Views: 3601

Exactly, so you could make it a rule to do the opposite of what feels good. :)
That reminds me of the Seinfeld episode where George decides to do the exact opposite what he would normally do in every decision. It seemed to work for him...
by tpm871
Mon Sep 20, 2010 4:06 pm
Forum: Investing - Theory, News & General
Topic: unequal rebalance bands
Replies: 33
Views: 3601

I would be surprised if anyone followed "the rules" exactly. I certainly don't, so in a sense, I can say, "Yes, I have used unequal rebalancing bands." I do it routinely whenever I buy near the market close an asset class that has dropped significantly during the day. Nowadays, a 5% drop in VNQ mak...
by tpm871
Mon Sep 20, 2010 9:45 am
Forum: Investing - Theory, News & General
Topic: unequal rebalance bands
Replies: 33
Views: 3601

unequal rebalance bands

I just finished reading The Investor's Manifesto, and there was a brief mention of rebalance bands towards the end. One point that I hadn't considered: ...because of the approximately lognormal distribution of asset class returns, a 20 percent relative rise in price is more likely than a 20 percent ...
by tpm871
Sat Sep 18, 2010 10:55 pm
Forum: Investing - Theory, News & General
Topic: [POLL] Learning to invest
Replies: 55
Views: 6849

Another option could have been "want to pursue early retirement".

It does always strike me as odd that most people work 40+ hours per week, yet spend zero time learning to invest and grow the money that they worked so hard for.
by tpm871
Sat Sep 18, 2010 10:30 pm
Forum: Investing - Theory, News & General
Topic: random market timing
Replies: 12
Views: 1772

How ironic is it that someone named SP-diceman disagrees with my approach of rolling the dice? :lol: It's a good point that a strongly uptrending market will many times mean that low points are not revisited. However, I'm not worried about this because: 1. I wouldn't usually be buying in a strongly ...
by tpm871
Sat Sep 18, 2010 1:30 pm
Forum: Investing - Theory, News & General
Topic: random market timing
Replies: 12
Views: 1772

random market timing

I realize that the title of this thread sounds crazy, but hear me out... SETTING ETF LIMIT ORDERS I converted a lot of my Vanguard funds to ETFs recently, and now I'm thinking about how best to price a limit order when it comes time to add to a position. Nobody can predict the future. Probably like ...
by tpm871
Fri Sep 17, 2010 8:47 pm
Forum: Investing - Theory, News & General
Topic: Value Averaging
Replies: 16
Views: 4408

my value averaging approach

I've been doing value averaging for a few years. Value averaging is especially good for volatile markets like 2008-2009, if you're disciplined enough to stick to it. I've made several tweaks to the classic value averaging approach. Here's what I do: ASSET ALLOCATION Every asset class that you have s...
by tpm871
Tue Sep 14, 2010 9:45 pm
Forum: Investing - Theory, News & General
Topic: your total returns 2007-now
Replies: 62
Views: 10211

I started this thread, but I didn't post my asset allocation like a lot of others. So... 69% equities, 31% bonds/cash That's my target allocation anyway... I currently have a fair amount in cash since the past year has done fairly well. The value averaging approach that I use has meant that I reduce...
by tpm871
Sun Sep 12, 2010 11:26 am
Forum: Investing - Theory, News & General
Topic: your total returns 2007-now
Replies: 62
Views: 10211

your total returns 2007-now

My 401(k) just added tool to show my average total returns over time. It told me that my average annual return was 7% from 3/07 until now (3/07 was as far back as the tool allowed). That was better than I was expecting, although it made sense since I have my 401(k) mostly invested in bonds (even bef...