Search found 146 matches

by tpm871
Sun Nov 13, 2011 2:57 am
Forum: Investing - Theory, News & General
Topic: Questions on Value Averaging
Replies: 12
Views: 3392

Re: Questions on Value Averaging

1) I'm not sure I understand the theory that value averaging (VA) works on quarterly periods better than it does on monthly periods (pp. 160-4). It would seem that he is saying that the market tends to overreact in the short term, and my understanding of VA is that it works by capitalizing on those...
by tpm871
Sun Oct 16, 2011 12:22 am
Forum: Investing - Theory, News & General
Topic: Indexes and Prediction
Replies: 5
Views: 772

Most Bogleheads tend to go with #1, but not necessarily because they predict that large caps will win. They do so because a market weighted fund is self balancing regardless of what wins, so they don't have to sell, pay fees, and pay taxes every year to keep their portfolio balanced. Those costs can...
by tpm871
Sat Oct 01, 2011 9:26 am
Forum: Investing - Theory, News & General
Topic: Paying off the mortgage in 12 months
Replies: 15
Views: 1832

If it were me, I'd pay it off. In fact, I paid mine off a while back, and it feels great. However, equities may be a bargain now, so it's possible that you'd do much better investing. Given the mortgage interest deduction, you'd only need to do better than around a 4% return in equities for equities...
by tpm871
Sun Sep 18, 2011 11:41 am
Forum: Investing - Theory, News & General
Topic: Cash - short term treasury vs. money market vs. FDIC account
Replies: 11
Views: 3472

Given the recent pledge by the Fed to keep interest rates low for at least the next two years, I feel that the opportunity costs of money markets and short term bonds aren't worth it. This isn't a "cash equivalent", but I keep the safer part of my holdings in intermediate term treasury funds and int...
by tpm871
Sun Sep 18, 2011 11:14 am
Forum: Investing - Theory, News & General
Topic: Switching employers and maxing out your 401(k)
Replies: 10
Views: 1821

I was in a similar situation this year, since I changed jobs mid-year. You should understand how each employer does matching in order to know how best to act. For example: * My old employer matched based on percentages of my income, for different tiers -- 100% match for the first 3% of salary contri...
by tpm871
Sun Sep 18, 2011 9:41 am
Forum: Investing - Theory, News & General
Topic: Why I think ETFs make more sense that Admiral-Shares MF
Replies: 60
Views: 6421

I put Livesoft's summary of pros and cons in the Wiki: http://www.bogleheads.org/wiki/ETFs_vs_Mutual_Funds I'd add a few points to these: ETF Pros: * many non-Vanguard ETFs are more tax efficient due to not needing to sell holdings when ETF shares are exchanged * it's possible to buy at a discount ...
by tpm871
Fri Sep 16, 2011 11:49 pm
Forum: Investing - Theory, News & General
Topic: Why I think ETFs make more sense that Admiral-Shares MF
Replies: 60
Views: 6421

Re: Why I think ETFs make more sense that Admiral-Shares MF

. I am due to rebalance in a month's time and I wished I could just place a low-ball limit order good for the next 30 days. I wouldn't recommend this because of the risk of a stale limit order, an order placed at a price which is no longer appropriate. Suppose that you place an order to buy at $50 ...
by tpm871
Thu Sep 15, 2011 10:21 pm
Forum: Investing - Theory, News & General
Topic: Article: Why wealth disappears by 3rd generation
Replies: 40
Views: 7146

Let's count the generations: Cornelius Vanderbilt (May 27, 1794 – January 4, 1877) William Henry Vanderbilt I (May 8, 1821 – December 8, 1885) Cornelius Vanderbilt II (November 27, 1843 – September 12, 1899) Reginald Claypoole Vanderbilt (1880 – September 4, 1925) What I find interesting is that ea...
by tpm871
Sat Sep 10, 2011 8:29 am
Forum: Investing - Theory, News & General
Topic: Anything actionable in neuroeconomics?
Replies: 37
Views: 3483

I originally voted no on this, but upon reflection I do try to take advantage of neuroeconomics in some ways: 1. I always assume that markets will be "over sold" and "over bought" at times, and that there's a tendency to revert to the mean. This belief prompts me to do mostly the opposite of what th...
by tpm871
Thu Sep 08, 2011 6:16 am
Forum: Investing - Theory, News & General
Topic: PIMCO says individuals should be in cash
Replies: 42
Views: 6801

Isn't this the same people who advised that you dump Treasurys several months ago, only to be completely wrong? Now they would like to have more Treasurys and cash. Kind of makes me think that this is a bullish sign for equities.
by tpm871
Mon Aug 29, 2011 7:25 pm
Forum: Investing - Theory, News & General
Topic: Pimco's Gross Acknowledges 'Mistake' On Treasurys Bet -FT
Replies: 54
Views: 7670

Remember this the next time you're tempted to follow the advice of an "expert".
by tpm871
Sun Aug 21, 2011 10:33 am
Forum: Personal Consumer Issues
Topic: Bogleheads Personality Type
Replies: 176
Views: 52712

Being an INTJ type myself, I sometimes worry that aspects of my personality could work against me in investing. Intuitives are more likely to develop their own theories on how things work, sometimes with little data or proof. Judging types are more likely to take quick action. If you put those two t...
by tpm871
Sun Aug 21, 2011 8:21 am
Forum: Personal Consumer Issues
Topic: Bogleheads Personality Type
Replies: 176
Views: 52712

I'm an INTJ. This link discusses "retire early" personality types. ISTJ, INTJ, INTP being the most likely. I read somewhere else that INTJ was the most common retire early type. http://www.retireearlyhomepage.com/mbti.html There's also a "makes the most money" mention... ExxJ seems to do well. That ...
by tpm871
Sun Aug 21, 2011 7:39 am
Forum: Investing - Theory, News & General
Topic: Rebalancing
Replies: 35
Views: 3530

Like opportunistic rebalancing, I check frequently (twice per month in my case). But I use different size bands for each asset class, and I use a different size for the upper and lower bands of each asset class. The band sizes that I use are based on observations of the asset classes' past volatilty...
by tpm871
Fri Aug 19, 2011 11:43 pm
Forum: Investing - Theory, News & General
Topic: "You've Lost it. Now What?"
Replies: 16
Views: 3596

What's with all the pro junk bond comments? That seems like bad advice.
by tpm871
Sun Jul 24, 2011 5:33 pm
Forum: Investing - Theory, News & General
Topic: small cap value: IJS or VBR?
Replies: 17
Views: 6017

small cap value: IJS or VBR?

I currently have VBR for my small cap value allocation, but I'm considering an investment in IJS as well. The expense ratios are close (VBR=0.23, IJS=0.25), and Fidelity allows you to buy/sell IJS for free. The main appeal of IJS is that it focuses on smaller stocks than VBR; VBR has a lot in midcap...
by tpm871
Sun Jul 24, 2011 8:05 am
Forum: Investing - Theory, News & General
Topic: Total International vs. Separate Markets
Replies: 14
Views: 2548

I invest in them separately for three reasons: 1. The fees are a little lower on VGK and VPL. 2. I want to overweight emerging markets. 3. I like to slice and dice, trying to take advantage of correlation differences between Europe, Pacific Rim, and Emerging Markets. The disadvantage that some say i...
by tpm871
Sun Jul 17, 2011 12:44 pm
Forum: Investing - Theory, News & General
Topic: "When will things get back to normal?"
Replies: 63
Views: 8362

Great presentation. But what I struggle with is what type of bonds to invest in. While I'm convinced that treasurys are the way to go for my tax deferred account, I'm not sure whether to go with short term or intermediate term. Larry seems to recommend intermediate term in the presentation, despite ...
by tpm871
Sat Jul 16, 2011 4:06 pm
Forum: Personal Investments
Topic: Would you mind taking a look at my portfolio?
Replies: 9
Views: 1825

Re: Would you mind taking a look at my portfolio?

Questions: 1. What do you think of my 401k choices – we’ve recently had a fund lineup change and it feels like I may need to do some adjusting 2. Any advice for what to do with that cash? I am willing to take on risk, and I don’t just want to put it in an index fund necessarily… 3. Maybe even a boo...
by tpm871
Sun Jul 10, 2011 12:27 pm
Forum: Investing - Theory, News & General
Topic: Implementing Value Averaging: Problems and Solutions?
Replies: 51
Views: 6211

I wrote about my approach to value averaging on another thread, and I think it answers some of the op's questions. See my post at the end of this thread for the explanation/example: http://www.bogleheads.org/forum/viewtopic.php?t=56730 To summarize: 1. I do value averaging at a whole portfolio level...
by tpm871
Sun Jul 03, 2011 12:20 am
Forum: Investing - Theory, News & General
Topic: A mini-quiz on how bonds work
Replies: 32
Views: 2585

I answered (a) for the first question, since you'd come out ahead if you consider the interest earned.
by tpm871
Mon May 16, 2011 10:37 pm
Forum: Personal Investments
Topic: I Bonds - Now or End of May?
Replies: 32
Views: 4106

Why not "Now or the end of November?". The fixed rate is still 0, so it can't go any lower in November... Maybe it will be higher. Then you'd lock in this year's I bond purchase at a higher rate -- scratch that -- at a non-zero rate.
by tpm871
Sun May 15, 2011 1:05 am
Forum: Personal Investments
Topic: Young member in need of advice
Replies: 8
Views: 1083

I agree that paying off loans and maxing out your IRA are good things. You can open an IRA with Vanguard or some other discount brokerage. This gives you the ability to buy mutual funds, stocks, and ETFs. Most people around here recommend index mutual funds such as Vanguard Total Stock Market -- I'd...
by tpm871
Sat May 14, 2011 10:28 am
Forum: Investing - Theory, News & General
Topic: Just wondering how much people are saving for retirement
Replies: 76
Views: 8827

I contribute the max to my 401(k) and traditional IRA. My employer contributes the equivalent of about 8% of my salary.

Overall, I save about 55% of my gross salary, not including the employer contribution. It's hard to go much beyond that due to taxes.
by tpm871
Wed Apr 27, 2011 11:38 pm
Forum: Investing - Theory, News & General
Topic: Why is the market going up?
Replies: 126
Views: 15184

Here's why I think the stock market is going up: 1. People (individuals and institutions) got really rattled in 2008/2009. Many people pulled out of the market when it was down, and their money went elsewhere: savings or paying off debt. 2. It's long enough now that people are forgetting how painful...
by tpm871
Sun Apr 17, 2011 1:49 am
Forum: Personal Investments
Topic: Beginner Could Use Portfolio Help
Replies: 27
Views: 4209

I guess I am old fashioned. I would be willing to invest in the 401k and 403b up to the match, but would otherwise devote every penny to paying down debt - the IRS first, and the mortgage second. For young folks in the 33% tax bracket, this almost amounts to chump change. You have a lot of time to ...
by tpm871
Wed Apr 13, 2011 3:41 pm
Forum: Personal Investments
Topic: 401(k) rollover - mixed Roth 401(k)
Replies: 1
Views: 472

401(k) rollover - mixed Roth 401(k)

I am about to change jobs, and will roll over my 401(k) to an IRA. The contributions that I made to the 401(k) were partially "traditional" (i.e., tax deferred) and partially "Roth" (i.e., Roth 401(k)). Both contributions are in the same 401(k) account with my current employer. It's a roughly 75/25%...
by tpm871
Wed Apr 13, 2011 3:15 pm
Forum: Personal Investments
Topic: Picking a Vanguard Bond Index Fund...
Replies: 4
Views: 1244

Changing interest rates will impact the value of bond funds. When interest rates decline, bond funds gain in value and vice versa. The degree that a bond fund is impacted is related to its duration -- short term funds are impacted less than long term funds when interest rates change. Since interest ...
by tpm871
Sun Apr 03, 2011 10:01 pm
Forum: Investing - Theory, News & General
Topic: 26, decent knowledge, looking for advice (Update)
Replies: 25
Views: 3111

Here's some thoughts: * When I started my first job out of grad school, I continued to live like a grad student (i.e., cheaply) until I paid off my loans. This was painless at the time, because that's the lifestyle that I knew. That gave me a good head start -- zero debt before starting to increase ...
by tpm871
Sat Apr 02, 2011 12:25 pm
Forum: Investing - Theory, News & General
Topic: Slice up global or Total International Stock Index
Replies: 31
Views: 4448

How does a total type fund rebalance? Would they not as well pick up on the price changes? I think that a total type fund doesn't actually rebalance, because decreases/increases of one asset correspond to decreases/increases in that asset's market weight. For example, if Europe goes down, it's weig...
by tpm871
Fri Apr 01, 2011 11:35 pm
Forum: Investing - Theory, News & General
Topic: Slice up global or Total International Stock Index
Replies: 31
Views: 4448

I like to slice for a couple of reasons: lower fees and lower correlation. The Europe and Pacific ETFs have an ER of just 0.14, and Emerging Markets is just 0.22. Compared with 0.2 for total international, your fees overall would be lower (unless you vastly overweight emerging markets). tpm871 One ...
by tpm871
Thu Mar 31, 2011 11:33 pm
Forum: Investing - Theory, News & General
Topic: Slice up global or Total International Stock Index
Replies: 31
Views: 4448

I like to slice for a couple of reasons: lower fees and lower correlation. But if one doesn't take advantage of the lower correlation, what's the point? Did you buy more Europe when the Greeks raised a rukus? Did you buy more Pacific when Japan tanked? Did you sell when things recovered? I'm just c...
by tpm871
Thu Mar 31, 2011 9:23 pm
Forum: Investing - Theory, News & General
Topic: Slice up global or Total International Stock Index
Replies: 31
Views: 4448

I like to slice for a couple of reasons: lower fees and lower correlation. The Europe and Pacific ETFs have an ER of just 0.14, and Emerging Markets is just 0.22. Compared with 0.2 for total international, your fees overall would be lower (unless you vastly overweight emerging markets). I also like ...
by tpm871
Wed Mar 23, 2011 10:31 pm
Forum: Investing - Theory, News & General
Topic: Practical aspects of threshold trigger rebalancing
Replies: 22
Views: 3061

I set up my funds to pay dividends and capital gains distributions in cash, and all new contributions go into a money market fund. Whenever an asset hits its lower band, I buy using the money from the money market fund. Whenever an asset hits its upper band, I sell to get back within the band and pu...
by tpm871
Tue Mar 22, 2011 11:20 pm
Forum: Investing - Theory, News & General
Topic: Where Are the Ultra-Short Bond Funds?
Replies: 27
Views: 4788

There are 1-3 year Treasury ETFs, SHY and VGSH. These have duration of around 1.8 years. Another one is SCHO, which has a 1.9 year duration, and a 0.12 expense ratio (slightly lower than those). It's 100% Treasurys, so no worries about junk bonds. Seems like a good counter balance to equities, yet ...
by tpm871
Sun Mar 20, 2011 2:01 pm
Forum: Investing - Theory, News & General
Topic: Return to Mean negates 'slice and dice'?
Replies: 10
Views: 2341

On the contrary, I'd say that we who slice and dice are best able to take advantage of the RTM effect. And yes, rebalance bands help here. The way that I think of it is that every asset class performs a bit differently over time. At any point in time, one of your asset classes is your best, and anot...
by tpm871
Sun Mar 20, 2011 12:50 am
Forum: Personal Investments
Topic: How much should I be saving?
Replies: 32
Views: 5116

Have you looked at www.firecalc.com ? That calculator might be able to help you decide what your "number" might be. Then you just try to save 50% of your income until you reach your number. That's when you will be F inancially I ndependent and able to R etire E arly. For me, I just save/invest as m...
by tpm871
Sat Mar 19, 2011 1:29 am
Forum: Personal Investments
Topic: Best REIT Fund
Replies: 4
Views: 2078

The disadvantage of the ETF is the spread when buying and selling. However, the spread for VNQ is usually pretty small because of its high trading volume. Another factor is the premium/discount when buying and selling, which may either help or hurt you depending on your timing. If you invest $10k or...
by tpm871
Sat Mar 05, 2011 10:49 pm
Forum: Investing - Theory, News & General
Topic: Is 100% equities really that risky for young investors?
Replies: 127
Views: 19262

I don't have faith in any type of statistical analysis concerning the stock market. Why? Because the behavior of the market is influenced by its participants, who have knowledge of various statistical analyses. Statistics works fine when the things that are being measured are not affected by the mea...
by tpm871
Fri Mar 04, 2011 9:47 pm
Forum: Investing - Theory, News & General
Topic: Would this work for 401(k)?
Replies: 3
Views: 790

Dollar cost averaging is OK if you want things to be on autopilot, but you can do better. The disadvantage of DCA is that you are always buying, even if your asset allocation is out of whack (e.g., if stocks are above your allocation, it doesn't make sense to buy even more just so that you can sell ...
by tpm871
Sat Feb 26, 2011 12:45 pm
Forum: Personal Investments
Topic: How much is 401(k) matching worth to you?
Replies: 3
Views: 787

How much is 401(k) matching worth to you?

I recently got a job offer, but one of the drawbacks is that the new job has a less generous 401(k) match. Both jobs have fairly good 401(k) plans, but my current job is just better. Here's how they compare: * My current employer will match a percentage of my salary, with no upper dollar amount limi...
by tpm871
Fri Feb 25, 2011 1:24 am
Forum: Investing - Theory, News & General
Topic: DOW 36,000 Guy Fessed Up! CHUTZPAH!
Replies: 34
Views: 5978

madsinger wrote: He sees which way the wind is blowing, finds out what people want to hear, writes a book on it.
Exactly. As a contrarian, I almost want to read his new book so that I can do the exact opposite...
by tpm871
Tue Feb 22, 2011 2:02 am
Forum: Investing - Theory, News & General
Topic: reits
Replies: 13
Views: 2579

I invest in REITs. However, I do think that it's a risky and volatile asset class. I remember my REIT fund dropping by 50% over just a couple of months back in late 2008... Fortunately, I stuck with it, and added to my position. But I'll always think of REITs as being very risky as a result of that ...
by tpm871
Sun Feb 20, 2011 11:26 am
Forum: Investing - Theory, News & General
Topic: The perfect 401k?
Replies: 58
Views: 9259

My top fund picks would be: REIT index TIPS Short term treasurys Because these are the type of funds that you'd want to be held in a tax deferred account. If the employees have other investments in taxable accounts, these would be nicely complementary. Vanguard is a good choice. My next few fund pic...
by tpm871
Wed Feb 16, 2011 11:41 pm
Forum: Investing - Theory, News & General
Topic: Your worst investing mistake
Replies: 108
Views: 18570

Before I knew about Boglehead stuff, I invested in some individual stocks. One was Sun Microsystems, and I lost 90% of what I paid for it. But that experience taught me something... The hard way :!:
by tpm871
Wed Feb 16, 2011 11:27 pm
Forum: Investing - Theory, News & General
Topic: Poll: What is your investment philosophy?
Replies: 74
Views: 9583

I answered "other". I mostly believe in efficient markets, but I think there's a definite tendency for markets to become temporarily over bought and over sold. I buy and hold a broad asset allocation of passive investments, but my contributions and rebalancings are timed to try to take advantage of ...
by tpm871
Sat Feb 12, 2011 2:49 am
Forum: Investing - Theory, News & General
Topic: Living off your money for a very long time.
Replies: 73
Views: 10737

Cheap Health Insurance for catastrophic illness? Yeah? Where? Then I won't get one. It seems that I'll get ripped off in buying health insurance, yet if I get sick I'll just get ripped off anyways. What is everyone so obsessed with health insurance? It sounds like a guaranteed losing proposition. I...
by tpm871
Sun Jan 23, 2011 11:48 pm
Forum: Investing - Theory, News & General
Topic: What parameters do you track in your portfolio spreadsheet?
Replies: 89
Views: 22203

5) Instead of keying in your positions manually, use Yodlee, and simply cut and paste you portfolio after vanguard updates it into a purpose-built sheet in the spreadsheet. Piece of cake. I have an Excel spreadsheet that works pretty well, but of course it's time consuming to enter positions each t...
by tpm871
Sun Jan 23, 2011 3:12 pm
Forum: Investing - Theory, News & General
Topic: how often do you rebalance a portfolio
Replies: 41
Views: 6189

The conventional advice is "annually, once per year or every other year". However, like many others who responded, I use rebalance bands instead. This is a good article on the topic: http://www.tdainstitutional.com/pdf/Opportunistic_Rebalancing_JFP2007_Daryanani.pdf I'd argue that rebalancing your w...
by tpm871
Sat Jan 22, 2011 11:30 pm
Forum: Investing - Theory, News & General
Topic: please help new investor with allocation/tilting question
Replies: 12
Views: 1231

if no one knows future correlations, why roll the 3-sided die at all, especially given the other two possible negative outcomes? You could make the same argument for keeping all of your money in cash -- you don't know what TSM's return will be for sure. You're rolling the three sided die by picking...