Search found 7278 matches

by jeffyscott
Tue Nov 06, 2018 7:33 am
Forum: Investing - Theory, News & General
Topic: Thoughts on 5 year TIPS bonds?
Replies: 42
Views: 3620

Re: Thoughts on 5 year TIPS bonds?

For those in retirement, who treat fixed income as a means of wealth preservation (rather than seeking maximum growth which comes with associated risk), and who can comfortably afford to tie up savings for 5 years, why would a guarantee of beating inflation by 1% over 5 years in a tax-deferred acco...
by jeffyscott
Mon Nov 05, 2018 10:21 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on 5 year TIPS bonds?
Replies: 42
Views: 3620

Re: Thoughts on 5 year TIPS bonds?

There has been some mention of the seasonality effect. #Cruncher developed a spreadsheet to derive an estimated real yield that factors in seasonality. I made some modifications, for example, to dynamically pull CPI data from FRED, and to use quotes downloaded from Fidelity. Below is a chart showin...
by jeffyscott
Mon Nov 05, 2018 9:24 am
Forum: Investing - Theory, News & General
Topic: How many eggs in one basket?
Replies: 24
Views: 2779

Re: How many eggs in one basket?

... To clarify, I’m not worried Vanguard could go broke, I’m essentially concerned about their IT which seems outdated and fragile. So, the real risk I see is more about their website becoming an attractive target for hackers... I'm sure that's a concern for Vanguard. On your part, as long as you'r...
by jeffyscott
Sun Nov 04, 2018 3:51 pm
Forum: Investing - Theory, News & General
Topic: Best way to guesstimate returns of lifestrategy funds?
Replies: 19
Views: 921

Re: Best way to guesstimate returns of lifestrategy funds?

^ yeah, good call. Forecasted returns are pretty sad. RA's are much less sad than GMOs, though. GMO? I’m not aware of that. Care to educate me? I think you have to register (free) to view their forecasts, but they have US large cap at -5.2% as of Sept. 30, for example. Theirs is a 7 year forecast, ...
by jeffyscott
Sun Nov 04, 2018 3:31 pm
Forum: Investing - Theory, News & General
Topic: Best way to guesstimate returns of lifestrategy funds?
Replies: 19
Views: 921

Re: Best way to guesstimate returns of lifestrategy funds?

B4Xt3r wrote:
Sun Nov 04, 2018 3:17 pm
^ yeah, good call.

Forecasted returns are pretty sad.
RA's are much less sad than GMOs, though.
by jeffyscott
Sun Nov 04, 2018 1:57 pm
Forum: Investing - Theory, News & General
Topic: I Bond fixed rate = 0.5%
Replies: 86
Views: 7653

Re: I Bond fixed rate = 0.5%

Are not TIPS yielding (real) more than 1%? Why buy IBonds? Doesn't one have to pay income tax on imputed income each year for TIPS, but not iBonds? Right, however it takes a lot of time, and/or higher 'taxflation' on TIPS, and/or a drop in tax bracket in the future to make up the whole difference b...
by jeffyscott
Sun Nov 04, 2018 1:40 pm
Forum: Investing - Theory, News & General
Topic: Best way to guesstimate returns of lifestrategy funds?
Replies: 19
Views: 921

Re: Best way to guesstimate returns of lifestrategy funds?

... Yes it is. Interesting, so is the following list the best corrsepondence: TSM - "Large US" Total international - "EAFE" TBM - "US Aggregate" Total International Bond - "Global aggregate" ? Total International is a mix of EM and EAFE. Maybe about 20% emerging and 80% EAFE. TSM is a mix of large ...
by jeffyscott
Sun Nov 04, 2018 12:37 pm
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4365

Re: Bonds vs CDs

Yes, clearly the value of brokered CDs fluctuates based on interest rates and remaining maturity, just like a bond. Direct CDs don't fluctuate in value, since they can not be sold. All you can do is cash them in and collect the interest less any penalty. I could see it as earning 0% for the length ...
by jeffyscott
Sun Nov 04, 2018 10:32 am
Forum: Investing - Theory, News & General
Topic: iShares ETFs vs. Vanguard's Inv Grade Bond Index Funds
Replies: 4
Views: 597

Re: iShares ETFs vs. Vanguard's Inv Grade Bond Index Funds

Thanks. The equivalent funds are roughly the same. The Vanguard equivalents to the ishares are VSTBX, VCIBX & VUBRX. Packer I think the confusion was your reference to "Vanguard's Inv Grade Bond..." in the title, even though you listed the tickers for the Vanguard Corporate Bond Index funds in the ...
by jeffyscott
Sun Nov 04, 2018 10:25 am
Forum: Investing - Theory, News & General
Topic: Vanguard dividend appreciation fund has performed well this year
Replies: 3
Views: 657

Re: Vanguard dividend appreciation fund has performed well this year

I think it's "high quality", not value. It is surprising that it has beaten the S&P 500 over the past 3 years. It's long term rank in category is only 57th %ile, according to M*. So looking at just the last 3 years, does seem to be cherry picking a period that happened to work out well for that inde...
by jeffyscott
Sun Nov 04, 2018 9:05 am
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4365

Re: Bonds vs CDs

Anyone who says a CD does not fluctuate in value, with no qualifications, has either never owned brokered CDs or never paid attention to the quoted values of their CDs. The price/yield relationship for a brokered CD follows the same math that applies to a bond; i.e, one (yield or price) can be deri...
by jeffyscott
Sat Nov 03, 2018 10:18 am
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4365

Re: Bonds vs CDs

What is included in cash and cash equivalents? The term cash and cash equivalents includes: currency, coins, checks received but not yet deposited, checking accounts, petty cash, savings accounts, money market accounts, and short-term, highly liquid investments with a maturity of three months or le...
by jeffyscott
Sat Nov 03, 2018 7:51 am
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4365

Re: Bonds vs CDs

CDs are bonds. Yes, a special type of bond issued by a bank. I’m not sure it matters to the OP, but it’s worth being accurate. CDs are not a “special type of bond”. They are a form of savings account. You aren’t loaning the money to anyone when you purchase a CD, you are depositing your money in a ...
by jeffyscott
Fri Nov 02, 2018 9:53 pm
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4365

Re: Bonds vs CDs

<snip> 2. I Bond - now 2.87%, virtually risk-free, great liquidation, but limited at $10k per year. You can't sell for one year after purchase, so no liquidity for one year. So I wouldn't compare an I Bond to a fully-liquid, zero term risk cash account, but to something with a maturity of at least ...
by jeffyscott
Fri Nov 02, 2018 11:42 am
Forum: Investing - Theory, News & General
Topic: I Bond fixed rate = 0.5%
Replies: 86
Views: 7653

Re: I Bond fixed rate = 0.5%

values displayed by the Savings Bond Calculator for bonds that are less than five years old do not include the latest three months of interest. These values reflect the interest penalty. Yes, but I was thinking bond bought in May should now have interest credited for May, June, July, Aug and the pe...
by jeffyscott
Fri Nov 02, 2018 9:56 am
Forum: Investing - Theory, News & General
Topic: I Bond fixed rate = 0.5%
Replies: 86
Views: 7653

Re: I Bond fixed rate = 0.5%

looks like based on their website the 3 months is the last 3 of interest. And it looks like the interest is compounded. "I bonds increase in value on the first day of each month, and interest is compounded semiannually based on each I bond's issue date. An I bond's issue date is the month and year ...
by jeffyscott
Fri Nov 02, 2018 8:14 am
Forum: Investing - Theory, News & General
Topic: Roth conversion strategy
Replies: 19
Views: 2110

Re: Roth conversion strategy

Another place where the tax rate tables do not reflect marginal rates is when you potentially could have a zero tax rate on qualified dividends and long term capital gains. -- good example at the bottom of this page (but uses old tax rate table) https://www.bogleheads.org/wiki/Marginal_tax_rate And...
by jeffyscott
Fri Nov 02, 2018 7:50 am
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4365

Re: Bonds vs CDs

Thank you all. Qns for you @trueblueky and @jeffyscott 1."And 1 year Treasury is at 2.67%, significantly better than that 11 month CD rate." How and where can I buy say $10K worth of 1 year treasuries? 2. "Three-month treasuries pay more and do not incur state income tax." - Same question as above ...
by jeffyscott
Fri Nov 02, 2018 7:32 am
Forum: Investing - Theory, News & General
Topic: I Bond fixed rate = 0.5%
Replies: 86
Views: 7653

Re: I Bond fixed rate = 0.5%

Is I Bond a good place to park some emergency fund? I assume it is based on what I have read so far. But someone above pointed out 1-year Treasury is yielding more and tax-free(??) But I assume that doesn't have the level of liquidity like I Bond. Is that right? Where do you guys park your emergenc...
by jeffyscott
Thu Nov 01, 2018 10:19 pm
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4365

Re: Bonds vs CDs

One-month Treasury bills are currently yielding 2.21%, are exempt from state and local taxes, and can be automatically rolled over at many brokerages. If you expect interest rates to rise, T-bills look like the better deal right now. And 1 year Treasury is at 2.67%, significantly better than that 1...
by jeffyscott
Thu Nov 01, 2018 10:12 pm
Forum: Investing - Theory, News & General
Topic: I Bond fixed rate = 0.5%
Replies: 86
Views: 7653

Re: I Bond fixed rate = 0.5%

Question for retired I bond purchasers: What are you selling to buy them? I'm not sure if I'll buy, but my current first choice for any selling (for whatever reason) would be old I-bonds with 0% fixed rate. Sold some today, proceeds will fund a 529. To equal a 1 year treasury over the next year, th...
by jeffyscott
Thu Nov 01, 2018 4:45 pm
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

It tends to be larger increases toward the end of the holding period that can contribute significantly to the negative deltas. That makes sense, as there is less time to recover due to the factor you mentioned: a new 10-year bond is being added to the ladder at a higher rate each year, increasing t...
by jeffyscott
Wed Oct 31, 2018 5:07 pm
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

VG doesn't report compound returns as far as I can see just calendar year total returns and average annual returns for up to ten year periods. I still would like the compound returns however. I think what they call annual average is compounded. For example VTSMX shows 3 year 16.94% and on the cumul...
by jeffyscott
Wed Oct 31, 2018 8:15 am
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

Here's the chart for the simulated bond ladder for start years 1871 through 2008: https://i.postimg.cc/NF07KQNS/Screenshot-2018-10-27-Bogleheads-Bond-Fund-Simulator-Long-Invest-1.png Going back to this chart, I noticed that prior to ~1925 or so nearly all the results have the realized return below ...
by jeffyscott
Wed Oct 31, 2018 7:53 am
Forum: Investing - Theory, News & General
Topic: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?
Replies: 25
Views: 1388

Re: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?

I am sorry to have made you wade through that article. Not a problem. :D It was time to go through it carefully. I see how so many people are getting the wrong idea about one of the 5 year rules. It's not what Kitces says, but it is what people think Kitces says. I think that article and others abo...
by jeffyscott
Tue Oct 30, 2018 10:14 pm
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

Here's the chart for the simulated bond ladder for start years 1871 through 2008: https://i.postimg.cc/NF07KQNS/Screenshot-2018-10-27-Bogleheads-Bond-Fund-Simulator-Long-Invest-1.png Going back to this chart, I noticed that prior to ~1925 or so nearly all the results have the realized return below ...
by jeffyscott
Tue Oct 30, 2018 12:47 pm
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

The SEC yield on a TIPS fund would be calculated as it is for all bond funds, on nominal yield. That depends on who is doing the calculating, Vanguard shows it based on real return. Here's what they show for VAIPX: http://i.imgur.com/N9qcrXD.png E — BASED ON HOLDINGS' YIELD TO MATURITY FOR 30 DAYS ...
by jeffyscott
Tue Oct 30, 2018 8:27 am
Forum: Investing - Theory, News & General
Topic: 2-year CDs at Vanguard and Fidelity Today
Replies: 480
Views: 72676

Re: 2-year CDs at Vanguard and Fidelity Today

Today I got 3.2% for about 2 year, 3 mo. (Feb. 2021) and this time it was filled. But, I first got a call from Schwab asking if I planned to sell to cover. When I said, "yes, if it gets filled", she said "okay, I will put it through". Which I thought was odd since they've not called about similar CD...
by jeffyscott
Mon Oct 29, 2018 7:32 pm
Forum: Investing - Theory, News & General
Topic: Rollover - Time out of market
Replies: 28
Views: 2361

Re: Rollover - Time out of market

My conversions were not cash either, mutual fund shares were converted.
by jeffyscott
Mon Oct 29, 2018 4:12 pm
Forum: Investing - Theory, News & General
Topic: Moving positions between taxable, tax-advantaged, & tax-free accounts
Replies: 3
Views: 489

Re: Moving positions between taxable, tax-advantaged, & tax-free accounts

I've been doing something like that to a limited extent with conversions. This is my first year doing Roth conversions and I've elected to do it with emerging markets and foreign developed as they have the highest expected returns right now. Also this means I effectively bought a modest amount of th...
by jeffyscott
Mon Oct 29, 2018 3:48 pm
Forum: Investing - Theory, News & General
Topic: 2-year CDs at Vanguard and Fidelity Today
Replies: 480
Views: 72676

Re: 2-year CDs at Vanguard and Fidelity Today

Nope, they cancelled it. It is rather obnoxious that seeing this: http://i.imgur.com/Eu70chN.png and this: http://i.imgur.com/LukKCGA.png Does not mean that you will actually get any CDs even when you have successfully put in an order to buy. After that showed up as cancelled, I had another one that...
by jeffyscott
Mon Oct 29, 2018 2:35 pm
Forum: Investing - Theory, News & General
Topic: Rollover - Time out of market
Replies: 28
Views: 2361

Re: Rollover - Time out of market

For the IRA to Roth conversion, I have to complete a form and mail it to the broker. From my contact there, I understand they want some one to talk to the customer first and make sure the customer understands there are tax implications. (This is with one of the major discount brokers.) I would find...
by jeffyscott
Mon Oct 29, 2018 10:55 am
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

Assuming that the 10-4 year simulated Treasury ladder has an average maturity of 7 years and a duration something less than that I don't understand why the comparison is the next 10 years . In addition a 4-10 ladder would have roll down yield effects which again confounds the comparison. :? Perhaps...
by jeffyscott
Mon Oct 29, 2018 9:25 am
Forum: Investing - Theory, News & General
Topic: 2-year CDs at Vanguard and Fidelity Today
Replies: 480
Views: 72676

Re: 2-year CDs at Vanguard and Fidelity Today

I seem to be having odd things happen with every CD purchase lately. Today's adventure is having the "fill or kill" order sit open. I chatted regarding this, asked: I placed a CD order about 20 minutes ago. It is still open. How long does the seller have to fill it? and, after checking with the fixe...
by jeffyscott
Sun Oct 28, 2018 10:10 pm
Forum: Investing - Theory, News & General
Topic: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?
Replies: 25
Views: 1388

Re: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?

So it seems "designated Roth account" includes Roth 401/403/457. Yes, I have seen that terminology applied to the roth portion of my 457. And it seems "investment in the contract" means the contributions but not the earnings. This is my understanding of that term, also. So it looks like contributio...
by jeffyscott
Sun Oct 28, 2018 3:53 pm
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

Yes, 1 percentage point difference in yield is what I understood and meant there.

So, if I invest $100K at 3% starting yield, I might expect to end up with $122-148K about 80% of the time. I think that is the preferable way to view it. IOW, final value was within ~10% of expected 80% of the time.
by jeffyscott
Sun Oct 28, 2018 11:06 am
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 204
Views: 18890

Re: Initial SEC yield and subsequent 5yr and 10yr returns

Seems like a reasonable summary might be that usually average annual returns over the subsequent 10 years have been within 1% of the starting yield and that differential has rarely been more that 1.5% :?:

It looks like about 95% of observations are within 1.5% of beginning yield and 80% within 1%.
by jeffyscott
Sun Oct 28, 2018 10:28 am
Forum: Investing - Theory, News & General
Topic: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?
Replies: 25
Views: 1388

Re: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?

Because Roth 457 would someday have RMDs, I rolled mine to a Roth IRA after retiring. So now the IRA rules apply to that money and I can withdraw the funds that came from the rollover under the same rules as my existing Roth IRA. Because I established my first Roth IRA long ago (>>5 years) and also ...
by jeffyscott
Sat Oct 27, 2018 9:24 pm
Forum: Personal Finance (Not Investing)
Topic: why split property tax payment with SALT limit; why itemize?
Replies: 19
Views: 2293

Re: why split property tax payment with SALT limit; why itemize?

I don't itemize and pay property taxes in installments, as they are due. In my case, it's 3 payments in Jan, Mar, May. I don't see any reason to pay early.
by jeffyscott
Sat Oct 27, 2018 4:37 pm
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1247
Views: 106066

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

The thing that really bothers me about this situation is that it shows us that risk may very well not be rewarded with stocks even over the long term and even with a large highly-diversified investment such as the entire ex-US index. Well, of course, taking risk is not guaranteed to be rewarded or ...
by jeffyscott
Sat Oct 27, 2018 9:07 am
Forum: Investing - Theory, News & General
Topic: Cash Parking Lot: Prime MM or limited term tax exempt?
Replies: 19
Views: 2480

Re: Cash Parking Lot: Prime MM or limited term tax exempt?

FWIW, Ultra-short has paid off over it's (ultra) short existence:

Image
by jeffyscott
Fri Oct 26, 2018 9:47 pm
Forum: Investing - Theory, News & General
Topic: Cash Parking Lot: Prime MM or limited term tax exempt?
Replies: 19
Views: 2480

Re: Cash Parking Lot: Prime MM or limited term tax exempt?

I've been using the Prime MM but switched to the settlement fund (federal MM) this week. I was frustrated that it takes a day or so for cash to settle when I want to sell cash and buy ETFs or individual stocks (rather than exchanging into another VG fund as of the market close). I don't trade activ...
by jeffyscott
Fri Oct 26, 2018 9:19 am
Forum: Investing - Theory, News & General
Topic: US T bills - first time user
Replies: 138
Views: 13175

Re: US T bills - first time user

gmaynardkrebs wrote:
Fri Oct 26, 2018 8:39 am
So when you are in the 85% range, cap gains are not taxed?
85% of SS benefit is taxed at $44,000 for a couple. The 0% long term cap gains rate goes to just over $100K gross ($77,200 + $24,000 std deduction), so yes.
by jeffyscott
Fri Oct 26, 2018 8:29 am
Forum: Investing - Theory, News & General
Topic: US T bills - first time user
Replies: 138
Views: 13175

Re: US T bills - first time user

I no longer hold premium bonds in taxable accounts. I really don't know or want to learn how to do the amortization myself, and my experience with Vanguard is that their calculations are not reliable, I may ultimately decide not to have bonds in taxable at all. We don't have much of a taxable accou...
by jeffyscott
Fri Oct 26, 2018 8:12 am
Forum: Investing - Theory, News & General
Topic: Cash Parking Lot: Prime MM or limited term tax exempt?
Replies: 19
Views: 2480

Re: Cash Parking Lot: Prime MM or limited term tax exempt?

Hey all, For cash that you may or may not need in short term, would you put it in MM (VMMXX) or limited term tax-exempt index (VMLUX)? It seems VMMXX a more "promising" looking that no need to worry about return of principle. VMLUX definitely has higher yield after tax but the NAV seems fluctuates ...
by jeffyscott
Fri Oct 26, 2018 7:24 am
Forum: Investing - Theory, News & General
Topic: US T bills - first time user
Replies: 138
Views: 13175

Re: US T bills - first time user

I no longer hold premium bonds in taxable accounts. I really don't know or want to learn how to do the amortization myself, and my experience with Vanguard is that their calculations are not reliable, I may ultimately decide not to have bonds in taxable at all. We don't have much of a taxable accou...
by jeffyscott
Fri Oct 26, 2018 7:13 am
Forum: Investing - Theory, News & General
Topic: US T bills - first time user
Replies: 138
Views: 13175

Re: US T bills - first time user

And since UST premium must be amortized for state tax accounting since the interest income is state tax exempt, electing not to amortize federally would mean managing two sets of cost bases. So while I too considered otherwise initially, I have come around to favoring Schwab's defaults. Thanks, did...
by jeffyscott
Thu Oct 25, 2018 10:09 pm
Forum: Investing - Theory, News & General
Topic: US T bills - first time user
Replies: 138
Views: 13175

Re: US T bills - first time user

In particular the part where they say they will adjust cost basis (along a constant yield curve by default) to amortize premium only at coupon dates rather than daily, from Dec 2016 onward. If this is true then it means no automatic adjustment at year's end (for non 31Dec/30Jun dated securities), s...
by jeffyscott
Thu Oct 25, 2018 5:25 pm
Forum: Investing - Theory, News & General
Topic: US T bills - first time user
Replies: 138
Views: 13175

Re: US T bills - first time user

So if the broker's policy is to amortize by default and the OP doesn't tell them otherwise, then for this security presumably they will show an ABP adjustment of what sounds like about 56c in 2018, and 38c in 2019, rather than accounting for the whole 94c in 2019. As best as I can tell it may be th...
by jeffyscott
Thu Oct 25, 2018 2:07 pm
Forum: Investing - Theory, News & General
Topic: Rollover - Time out of market
Replies: 28
Views: 2361

Re: Rollover - Time out of market

I am thinking that I could determine the equities I want and buy them in my taxable brokerage account, when I initiate the rollover process. Once the funds are available in the IRA, I could buy the equities in the IRA, and sell them in the taxable brokerage account. Danielle I did something like th...