Search found 4600 matches

by john94549
Thu Aug 04, 2011 3:39 pm
Forum: Personal Investments
Topic: Rebalancing in this market chop?
Replies: 13
Views: 2306

Re: Rebalancing in this market chop?

jazzykat wrote:Today I blew past my 5% bands and so tomorrow is rebalancing for me (nearly -7% equities). (FYI: I own mostly mutual funds) HOWEVER, given that most markets went down ~5% just today what's to say we won't have a ridiculous bounce and then I would be within tolerance again.

What does convential wisdom say? Don't worry about it if you got it so that you are between your bands? Are you supposed to look at the intraday market just to make sure that you are still close to being over your band at the end of the day and then go for it?
I hit my 5% band today and bought equities. Not a huge amount (100 shares of SPY). Buying (or selling) when you hit your band is an excellent concept. It removes emotion (and noise).
by john94549
Thu Aug 04, 2011 3:34 pm
Forum: Personal Investments
Topic: Today was a Really Bad Day
Replies: 278
Views: 58073

Re: Today was a Really Bad Day

livesoft wrote:I am asked all the time "How can one tell if a day is a Really Bad Day?"

Did anybody have any problems realizing that today was a Really Bad Day? Do you now know how to tell if a day is a Really Bad Day or not?
Any day above ground is a really good day. Other days, you're just keeping score. I actually bought some equities today, since sentiment was so negative. I'm a bit of a contrarian, and my re-balance band went off in any event.
by john94549
Thu Aug 04, 2011 3:30 pm
Forum: Personal Investments
Topic: Fortitude
Replies: 0
Views: 375

Fortitude

Folks, when you hit that re-balance band, despite all the noise, it's time to buy equities. Might seem painful, but it's the right move. I pulled the trigger today and bought. Not a whole bunch, but enough to get me back in balance.
by john94549
Thu Aug 04, 2011 3:02 pm
Forum: Personal Finance (Not Investing)
Topic: Ally No penalty CD vs Savings acct.
Replies: 21
Views: 8420

archbish99 wrote:Probably multiple 1099s. Their online application allows you to fill out the application once for up to (I think) 5 accounts at a time, though. I would assume their IRA is similar. Worth exploring.

And I also generally bank with USAA. True, their rates are virtually identical, but their ~6 month penalty on breaking a CD is painful to contemplate.
The penalty for breaking a 7 year CD is even more painful (a year's interest). Which is why I confirmed with USAA this week they LIFO'd partial withdrawals. The good news: (a) they LIFO, and (b) they allow partials.

They also answer the phone, with a live person, so long as you press "0". But then, I've been with USAA since I was a boot Ensign, about three wars ago. Go Navy!
by john94549
Thu Aug 04, 2011 2:52 pm
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance is enough?
Replies: 86
Views: 33787

Re: Umbrella / Excess Pricing

I didn't think that the cost per million of coverage would increase dramatically as the limit went up, since you have to exhaust the lower limits before you even start using the upper limits. What am I missing here? I found the cost per million decreased from 1-5 and increased thereafter. I suspect that's because people who buy very large amounts are wealthier and perhaps in many cases obviously so and thus are better targets for lawsuits. It helped me make my decision, though, I purchased a 5MM policy. Jon, my broker friend always called it the "tipping point". At a certain point, underwriters get scared. Excess and umbrella up to a point seldom pay out (for reasons previously discussed herein), and, even if they do, there's rei...
by john94549
Thu Aug 04, 2011 1:23 pm
Forum: Personal Investments
Topic: I'm buying!
Replies: 140
Views: 23898

I nibbled today, 100 shares of SPY at $122. Hit my re-balance band.

It's weird when your cash (sitting at 0%) wildly outperforms the rest of your portfolio, but that's Mr. Market. Talk about outperformance, I am so glad to be "age-appropriate" these days. My shabby CDs aren't looking that shabby and the bond bubble, well, don't go there.

Obey your re-balance bands and ignore the noise. Age-in-bonds/cash and remember to spoil the grandchildren.
by john94549
Thu Aug 04, 2011 1:03 pm
Forum: Investing - Theory, News & General
Topic: Index purchase today?
Replies: 18
Views: 3220

If you are re-balancing with a Vanguard account, I think orders received before 3 PM eastern time reflect the close that day. Otherwise, it's the next day. Which begs the larger question: why are you market-timing?
by john94549
Thu Aug 04, 2011 12:41 pm
Forum: Investing - Theory, News & General
Topic: Market Crash, ETFs, mutual funds and rebalancing.
Replies: 1
Views: 806

Re: Market Crash, ETFs, mutual funds and rebalancing.

There are a number of threads running about the equity market being down, TIPS prices way up, whether ETFs are better than mutual funds and also one or more rebalancing threads. Well I don't know what to do. The mutual find prices are close of market yesterday. Do I find a similar ETF and adjust? What about foreign? Are we up against fair market pricing questions? Individual Treasury bonds? Do I need to get quotes on each one as of now? How much will it change before I get the rest of the info together? Some of our Treasuries require I actually talk to the bond desk to sell. Will they even bother to take my puny order today? I think I'll go research the canned or bottled beer question instead. If anyone has a better idea please let me know...
by john94549
Thu Aug 04, 2011 12:23 pm
Forum: Personal Investments
Topic: "Target Retirement Income Fund" - Retiree Seeking
Replies: 12
Views: 3508

The only caveat I would mention is the risk to bond funds when rates (finally) rise and the bond bubble bursts*. Target funds heavily skewed to bonds will under-perform in that case, even when compared to CDs. I created my own "target fund" back in 2004, when I was a couple of years from retirement. I used the "age-in-bonds" axiom as a starter, with emphasis on index funds to achieve the allocation. In 2006, when interest rates were quite high, I created a CD ladder (which became my personal "bond fund"), and this ladder (along with cash) comprises roughly 80% of my "age-in-bonds" allocation. Point: Target funds are fine for folks who find they meet their needs. I wanted a goodly chunk of my fixed-inc...
by john94549
Thu Aug 04, 2011 12:01 pm
Forum: Personal Finance (Not Investing)
Topic: If you are a millionaire... [Poll]
Replies: 70
Views: 11891

I guess "very good salary" and "saved steadily" fit us. Basically started married life with nothing (I think we had $50 in the checking account and a VW). But we always set a target of socking away at least 15%/year.

Those little acorns added up over the years.
by john94549
Thu Aug 04, 2011 11:44 am
Forum: Personal Consumer Issues
Topic: Buying Single Pots And Pans
Replies: 46
Views: 6140

My wife swears by a store called "Sur la Table". She buys all her stuff there. We're in the SF Bay area, but I'm sure you can google it to see if one's near you.
by john94549
Thu Aug 04, 2011 11:38 am
Forum: Personal Consumer Issues
Topic: Munching on my flowers
Replies: 28
Views: 6237

Thanks to all. I suspect Raybo hit on the culprit, as we frequently catch roof rats in our attic trap. Cat? We have a very timid, fat, indoor cat. We also have foxes. Not real sure we should leave the cat out overnight. But rat bait sounds like a potential solution.

With Mr. Market down (again) today, it's nice to have something else to think about.

This just proves Bogleheads know the answers to just about everything.

Chuckle.
by john94549
Thu Aug 04, 2011 11:25 am
Forum: Personal Finance (Not Investing)
Topic: Raise Your Rate CD?
Replies: 14
Views: 2994

HueyLD wrote:Here is my take on raising rate CDs based on my past experience.

The issuing bank will likely keep the rates low for the terms tied to raising rate CDs. In other words, you may not get a change to exercise your right to raise the rates over the terms of your CDs.

Ally may be different from others, but I won't bet too much money on it.
Good point. For example, Alliant is still quoting (as of today, at least) 2.45% APY for a 4-year CD ($25,000+)(not that far below a 10 year Treasury, might I add). If your "raise-your-rate" CD stays stuck at 2%, on a $100K CD, that's a "delta" of about $1900 in interest over the four years. Not a whole lot, but more than beer money, I guess.
by john94549
Thu Aug 04, 2011 10:30 am
Forum: Personal Finance (Not Investing)
Topic: Raise Your Rate CD?
Replies: 14
Views: 2994

The 4-year with two potential bumps is not too bad. The 2-year is not that far above what I get in my Alliant savings account (20 basis points or so).

I'm facing a similar quandry the end of August. Frankly, I don't have a clue what I'm going to do.

I guess the good news is that our AA is 38/62, so the market ups and downs (mostly downs, these days) aren't retirement-busters.
by john94549
Thu Aug 04, 2011 10:08 am
Forum: Personal Investments
Topic: Retiree Needs to Invest 100K Where? Low Risk Sought
Replies: 6
Views: 1495

Re: Retiree Needs to Invest 100K Where? Low Risk Sought

My CD expired and now I have 100K to invest. I have been investing in CD's and wondering if there are any good suggestions on where is a good low risk place for this money? I am a retiree so am cautious. Also, think the market is risky right now. Have a handle on banking already so know of the good CD deals in the U.S. Anything else? In this rate environment, you might be well-advised to break the CDs into a ladder. Unless you are willing to go out at least five years, you won't get much over 2%. If rates spike up, you'll kick yourself. Another option (discussed on another thread and over at depositaccounts blog) is to buy an Ally 5 year (currently 2.32%) and break it if rates spike. The early-withdrawal penalty is (currently) mild.
by john94549
Thu Aug 04, 2011 4:53 am
Forum: Personal Consumer Issues
Topic: Munching on my flowers
Replies: 28
Views: 6237

Munching on my flowers

OK, OK, in the grand scheme of things, this is not a "big issue". But it rankles me. I have a flower garden. Next to the flower garden is a nice cypress shrub. Every night, it seems, some little beast comes out from under the shrub and bites off my flowers. I have even found trails of flowers leading in that direction. So, it's not deer, or gophers, or voles, it's something hiding under the shrub. I have noticed these weird-looking small lizards (I'm not sure if they are lizards) coming out from time to time, and I think they are the culprits. I know with major issues hitting the economy and millions out of work, this might seem a non-issue, but it still rankles me. As I am not politically-correct, any suggestions of poisoned bait...
by john94549
Thu Aug 04, 2011 4:12 am
Forum: Personal Investments
Topic: Nervous Retirees Seek Allocation Advice
Replies: 33
Views: 6945

All of this is great advice, and we appreciate your taking the time to give it. It brings up several points we hadn't been thinking about, such as tax on Social Security and the 401k. To clarify, we don't intend to keep all that cash. Our big problem has been deciding how to convert the cash into something that will fund us long term. Dandy, I assume the funds you are talking about are Vanguard funds, correct? I'll also read up on annuities in that section of this forum. Thanks for that tip. Cycleprof, I appreciate your comments on postponing Social Security. I always thought the SSA's calculations were based on giving the recipient a specific total over time, so that if the time were longer, the check would be less--but all adding up to t...
by john94549
Thu Aug 04, 2011 3:32 am
Forum: Personal Finance (Not Investing)
Topic: Ally No penalty CD vs Savings acct.
Replies: 21
Views: 8420

I agree with what folks have written about the Ally 5 year CDs. I'm buying one for $20K every 4 months as I save for a house down payment which I intend to use when I have a bit over $300K set aside in 2016. I normally bank with USAA, but would never consider buying a CD with them versus Ally--simply based on the generous early withdrawal terms Ally has. Gray, I have an IRA CD with USAA coming due the end of this month, and I must admit I'm torn between just biting the bullet and rolling it over or (alternatively) moving it to Ally, in multiple tranches. If I have one CD at USAA and rates spike, I'm stuck. If I have multiple CDs at Ally and rates spike, I at least have options. One thing folks are always concerned about over at depositacco...
by john94549
Thu Aug 04, 2011 2:41 am
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance is enough?
Replies: 86
Views: 33787

To Jon in NYC: Why (as a general rule) do plaintiff's attorneys not chase uninsured or under-insured defendants? Money. It costs a whole lot to pursue a case, and the upfront costs must be advanced by the attorney. To bring a case to trial takes years. Then, to collect on a judgment (excess or otherwise), years more, with no guarantee of success (i.e., collection). Most plaintiff's attorneys I knew needed bank financing to fund these costs. I agree that my personal experiences in over 30 years as an insurance-defense lawyer do not equate to a universal sample. However, I would reiterate I never, ever, personally experienced (or heard of) a plaintiff's attorney going after personal assets in an "excess judgment" situation. So, rath...
by john94549
Wed Aug 03, 2011 6:31 pm
Forum: Personal Investments
Topic: Retiree Questions Bond Funds - When Are Bond Funds Risky?
Replies: 7
Views: 1304

Ironically enough, if all goes to heck in a handbasket, and interest rates sky-rocket, bond funds will be, well, not so good. This is a tad counter-intuitive, since most folks think the end of the world will be good for bonds.

Actually, the end of the World won't be good for much of anything, as it is going to happen about 4 billion plus years from now when everything is fried to a crisp. I doubt US Treasuries will be a big factor at that time.
by john94549
Wed Aug 03, 2011 6:17 pm
Forum: Personal Investments
Topic: Retiree Questions Bond Funds - When Are Bond Funds Risky?
Replies: 7
Views: 1304

The Vanguard head of fixed-income stuff posted an article. It was back in January or February. The bottom line was to expect flat or negative returns in bond funds if rates go up. Major "duh"
by john94549
Wed Aug 03, 2011 5:56 pm
Forum: Investing - Theory, News & General
Topic: Deleted
Replies: 42
Views: 7818

Stocks are not even close to a "scream". Screaming is when everybody is throwing in the towel, predictions are major Depression, and the folks on MSNBC quit and go to work for the FAA. That's a major buy signal. This is just noise.
by john94549
Wed Aug 03, 2011 5:48 pm
Forum: Investing - Theory, News & General
Topic: Post your WRONG predictions here
Replies: 76
Views: 8214

I predicted rates would go up (and Treasuries fall) back In February, 2011.

Boy, howdy.

Balanced against that putrid forecast, howsomever, was a prediction that the S+P would gyrate all over the place and that money could be made timing the market, going long and short with ultra ETFs (such as SDS). Gee whilikers, violating Bogleheads' basic axiom, timing the market, I actually more than covered my putrid bet on Treasuries and am up more in my trading account than I am in my "real money" Vanguard account.

Which proves that Heaven looks out for stupid folks.
by john94549
Wed Aug 03, 2011 5:17 pm
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance is enough?
Replies: 86
Views: 33787

Re: Thanks!

Finally, some on-the-ground data. Thanks for that, John, greatly appreciated. Bill It's a kabuki dance.* The plaintiff's attorney makes a policy demand at primary plus excess (not including any "ultra" umbrella excess). The ultra demands the primary and excess settle within their limits. The excess demands settlement within primary, but refuses to contribute to cost of defense. Primary refuses, assuming cost-of-defense will eat up wasting limits, in any event, and negotiates with excess, which has a reinsurance treaty barring negotiation. Sound like Congress? It's worse. After many years of trying to negotiate the insurance/reinsurance, primary/excess, minefield, I just gave up. I live happily watching the market go up, and down,...
by john94549
Wed Aug 03, 2011 4:32 pm
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance is enough?
Replies: 86
Views: 33787

Re: Be Careful

With the MA data; yes, only six cases in excess of a million, but that's only because very few litigation targets have >$1M of assets or coverage, and are thus worth pursuing in court. If you do have those kinds of assets or coverage, your odds are a lot higher than those data would indicate. Bill I represented many, many, really, really wealthy individuals who had assets much greater than their "exposure" (the basic insurance term-of-art). Not once in over 30 years (even when liability was reasonably clear and damages egregious, i.e., in excess of policy limits) did I ever wind up having a client being pursued for personal assets. Never. Not once. It just did not happen. Ever. Somebody asked for input from "legal" type...
by john94549
Wed Aug 03, 2011 4:09 pm
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance is enough?
Replies: 86
Views: 33787

In my prior life (as an insurance-defense attorney) I never, ever, saw a plaintiff's attorney try to chase personal assets. Ever. Not once, in over 30 years. If you have a million in umbrella, they'll ask for a million in the policy-limits demand. If you have five million, guess what happens? Just my $.02. Now, if you have minimum limits and a condo in Maui, and other unprotected assets, the story might be different. My experience with plaintiff's attorneys is that they're in for the quick score, not to try the case to verdict (and judgment), and then attempt to transform the matter into a collection case. The reason premiums for excess coverage are so low (relatively speaking) is that the excess layers put demands on the initial and mid-te...
by john94549
Wed Aug 03, 2011 3:17 pm
Forum: Personal Finance (Not Investing)
Topic: Ally No penalty CD vs Savings acct.
Replies: 21
Views: 8420

You can't do a partial break, but as he suggests, you can spilt up the money into 10 $1k 5-year CDs and only break as many CDs as you need. You'd have to run the numbers, but my tummy tells me the archbishop's idea is the best, unless you go with a bank like USAA, which charges the penalty only on the amount of principal withdrawn (i.e., partial breaks are permitted and no penalty applies to withdrawal of accrued interest*). Ally's rate and USAA's rate on a 5-year CD are virtually identical. So, you could go with 10 5-year CDs from Ally or one 5-year CD from USAA and get the same result. It gets complicated, sometimes overly-so. After all is said and done, with this low rate environment, sometimes the simplest is the best. My apologies to ...
by john94549
Wed Aug 03, 2011 1:24 pm
Forum: Personal Finance (Not Investing)
Topic: Ally No penalty CD vs Savings acct.
Replies: 21
Views: 8420

Cash not needed for an extended period of time should most assuredly be in a CD ladder, not in a savings account. Keep in savings what you might need over the next year. Take the rest and consider a five-year ladder, with an equal amount in each rung. As each rung matures, re-invest the proceeds (less whatever you might need to replenish your savings account) in a five-year CD. You'll be amazed at how this increases your yield over time. Yosef's idea of buying the Ally 5-year and breaking it is worthy as well, but you have to make sure you can do a partial break and pay the penalty on only the partial. I haven't studied the Ally Truth-in-Savings Disclosure to see what their position is on this. There are many discussions of the pro's and co...
by john94549
Wed Aug 03, 2011 12:44 pm
Forum: Investing - Theory, News & General
Topic: Anyone Hitting Their Bands This Week?
Replies: 45
Views: 7288

My preferred allocation in my Schwab SEP-IRA trading account is 40% equities/60% cash. Mr. Market is nudging me closer to my re-balance band (i.e., where I would buy more equities from my cash stash), but he refuses thus far to tank. Just to bleed. As for my "real money" (Vanguard IRA) and my wife's, not even close yet. We're actually still a bit up from the end of last year, even with the recent swoon (credit some nice returns on fixed-income for that).
by john94549
Wed Aug 03, 2011 9:15 am
Forum: Investing - Theory, News & General
Topic: Which Vanguard bond funds are you currently using, and why?
Replies: 96
Views: 20526

Re: Which Vanguard bond funds are you currently using, and

tc101 wrote:Which Vanguard bond funds are you currently using? What are your reasons for selecting these particular funds for your bond investments?
My wife has a goodly chunk of VBTSX in her 401K. It was the best bond fund offered by the plan admin.
by john94549
Wed Aug 03, 2011 8:02 am
Forum: Personal Investments
Topic: using interest on savings account as tax deduction on schA
Replies: 10
Views: 1315

Re: using interest on savings account as tax deduction on sc

I call BS. The only thing I could guess is that someone was entering their checking account interest on 1040 Schedule A, line 14, "Investment Interest" , and then possibly filing form 4592 about it. But doing so would be grossly incorrect, because this line is for an investment interest expense (i.e. paying margin interest), not interest income (what you'd earn from a bank). I'm sure this is not legit. The teller might have been correct. Investment interest expense to the extent of interest and dividends received is deductible. So, if she (or her husband) borrowed money to buy or hold securities (usually through a margin account, but any borrowing counts so long as it's traceable to the "buy or hold"), and her/their onl...
by john94549
Tue Aug 02, 2011 9:27 pm
Forum: Investing - Theory, News & General
Topic: Bill Gross move out of US Treasuries
Replies: 59
Views: 9247

I bet a bit of my "fun-money" trading account shorting the long (20 plus year) Treasuries back in February. Well, guess how that bet turned out? Fortunately for me, both my wife and my Mom stayed long in bond funds.
by john94549
Tue Aug 02, 2011 9:09 pm
Forum: Personal Finance (Not Investing)
Topic: Does it pay to claim Social Security Benefits Later?
Replies: 57
Views: 8586

Russell, interesting thread, but you still have the "asterisk" issue. On the annual Social Security statements, there was always this pesky "asterisk" next to your projected benefits which said, in effect, that the projected benefits were entirely problematic. Congress could do X, Y, or Z, and maybe you'd get this number, maybe not. I don't think anyone has ever done a study on how that "asterisk" affected the decision to collect at 62. As I said, I always considered (and still consider) my benefits as a "bird in the hand", unlikely to be reduced once commenced. COLA can be fiddled, but cuts are pretty obvious. I think you might also under-estimate the liquidity issue. I know I have "X" in m...
by john94549
Tue Aug 02, 2011 8:47 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing reduces volatility of the entire market
Replies: 3
Views: 969

Re: Rebalancing reduces volatility of the entire market

Here's what suddenly occurred to me. The market is a positive-feedback amplifier. Emotional traders following trends tend to exaggerate market movements. Buy and hold removes assets from trading and allows smaller volume to influence prices more. Rebalancing counteracts price movements by trading in the opposite direction to market movements. This is negative feedback , a common technique of stabilizing biological and engineering contraptions. So if enough people rebalance on arbitrary days, the market will be less volatile. Of course, this will have no effect on intraday movements or on fundamentally justified shifts. Exactly why I picked February 18, 2011, to re-balance. It was arbitrary. It was also when Mr. Market told me to. This obvi...
by john94549
Tue Aug 02, 2011 8:20 pm
Forum: Investing - Theory, News & General
Topic: Its so tempting to buy
Replies: 21
Views: 4224

Re: Its so tempting to buy

Jay69 wrote:I have never bought a single stock in my life but I'm so tempted to toss a few small dollars at Ford for the heck of it.

How do you resist!

Will see if I can hold out till the end of the day!
Having some "fun money" to gamble in the casino called Wall Street is not all bad. Just set a hard-and-fast limit (5% is not bad, it's what I use). Life is not just index funds. That having been said, never gamble with "real money" (stuff for retirement). My fun money account is actually ahead of my Vanguard account (%-wise) YTD. Gives me some sort of perverse joy.
by john94549
Tue Aug 02, 2011 8:03 pm
Forum: Personal Investments
Topic: Extra cash question
Replies: 11
Views: 1432

Re: Extra cash question

hisairness wrote:I don't explicitly have an emergency fund as the money market account presently contains five figures.
Hmm, so you're saying the money market fund "is" your emergency fund. Well, I wouldn't get too fancy, then. Just my $.02.

Stretching for a few basis points can tie you in knots if you need the money.
by john94549
Tue Aug 02, 2011 7:58 pm
Forum: Investing - Theory, News & General
Topic: What would happen to the economy if everyone's a Boglehead?
Replies: 22
Views: 2406

I thought that the unemployment rate of a LOT of people might rise. Likely. Consumer spending is about 70% of the economy. If people buy less, then businesses produce less, which means a lower GDP, lower income and less employment. Consider the paradox of thrift - if everyone tries to save more, then they spend less, so income drops (one person's spending is another's income), so there's less money available to save. Wikipedia does a good job explaining. http://en.wikipedia.org/wiki/Paradox_of_thrift The ideal is to be a cheap saver in an economy in which everyone else is a profligate spender. My wife and I were savers during the era of profligate spending by others. Now, we intend to prop up the economy in our dotage. Spoil the grandchild...
by john94549
Tue Aug 02, 2011 7:51 pm
Forum: Personal Investments
Topic: Extra cash question
Replies: 11
Views: 1432

Re: Extra cash question

Greetings, I've got some extra cash and am a little confused as to what to do with it. It's presently earning 0.50% in my money market account at my credit union. I've been thinking of a couple ideas, but the cons to them result in me backing off: 1) I-bonds. If I hold for 30 years, I'll be in my mid-60s which might(?) be when I'm paying taxes on them during my peak earnings period (fingers crossed if I get there). 2) 5 year CD at another credit union. The rate is roughly 2.82%, but I'd be paying taxes every year on it. 3) Muni bond funds. I'm aware that the longer term funds have a higher yield, but I'd lose capital when the NAVs drop. So, if you were in my shoes, would you choose any of the above three options (ignoring the cons) or go w...
by john94549
Tue Aug 02, 2011 7:42 pm
Forum: Personal Investments
Topic: Rebalancing Portfolio
Replies: 6
Views: 1445

Re: Rebalancing Portfolio

RhoRho wrote:I need to rebalance my portfolio and wondering is there a preferance between re-allocating or transfering funds. Is there a difference? What is more beneficial?
Transfer out is beneficial when your current account custodian does not have the product you want for re-balancing. Since this requires more paperwork (and some time lag), I would opt for a re-allocation if possible (which can often be done with the click of a mouse). With Vanguard, I have done both, many times.
by john94549
Mon Aug 01, 2011 10:07 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Cards without Gimmicks? etc ?
Replies: 25
Views: 18953

Re: Credit Cards without Gimmicks? etc ?

paix wrote:Are there any credit cards, that are gimmick, straightforward cards, i might even pay an annual fee if there was

I always pay mine off monthly, but rather not be a part of credit card companies that charge 20% apr, and are always changing the rules.

only thing i care about is no foreign transaction fee at this point, and a decent website

thanks
If you qualify, USAA's card. Last I checked, no gimmicks, no nonsense.
by john94549
Mon Aug 01, 2011 10:01 pm
Forum: Personal Finance (Not Investing)
Topic: Does it pay to claim Social Security Benefits Later?
Replies: 57
Views: 8586

I decided to start at 62 simply as a matter of cash-flow and as a hedge against a reduction in benefits going forward. I seriously doubt whether benefits already started will be reduced. I suspect COLA might be endangered. I regard my current SS benefit as akin to fixed, as a fixed annuity. I'm not counting on any major increases. I could have chosen to delay, but would have had to munch on other retirement assets in the interim. Maybe it's being overly cynical, but my attitude was collect SS while it's there. I know I have my stuff in the bank (so to speak).
by john94549
Mon Aug 01, 2011 9:33 pm
Forum: Investing - Theory, News & General
Topic: "More Funds Does Not Mean More Diversified"
Replies: 3
Views: 1473

Re: "More Funds Does Not Mean More Diversified"

Hi Bogleheads: Simplicity is Mr. Bogle's second "pillar" in his Twelve Pillars of Wisdom . One important way to simplify our portfolio is to reduce our funds to the minimum. This article by Boglehead Mike Piper, editor of The Oblivious Investor , provides insight: More Funds Does Not Mean More Diversified For several years, my wife had a virtual smorgasbord of funds in her 401K. This fund, that fund, I lost count. The program admin invested in all the funds, based on whether you wanted "aggressive", "moderate", or "conservative". At the same time, she had her Vanguard IRA (from a prior employment) in just VBIAX and VTIAX. Guess what, for all the shifting and replacing of funds in her current 401K (re...
by john94549
Mon Aug 01, 2011 8:59 pm
Forum: Investing - Theory, News & General
Topic: Today's Manufacturing Report
Replies: 11
Views: 1552

Re: Today's Manufacturing Report

This economy is worse than most people had anticipated, The latest manufacturing report came in at 50.9. Less than fifty indicates contraction. Weak ISM data is relatively highly correlated with recessionary periods. I am very surprised that the equity markets have not sold off in anticipation of the weakening economy. The odds of the economy falling into another recession have increased substantially. I still submit the best way to hedge against what you note is an "age-appropriate" allocation in one's retirement portfolio, especially if you are in or near retirement. I am retired, and have subscribed to the "age-in-bonds" formula for quite some time. In addition, with respect to the bond component of the allocation, I...
by john94549
Mon Aug 01, 2011 8:31 pm
Forum: Investing - Theory, News & General
Topic: Seven deadly sins of investors
Replies: 31
Views: 5484

This probably seems silly to a lot of Bogleheads but I am way too obsessed with checking things and tinkering to straight-up B-H-R. I think this limited tinkering freedom can scratch that itch without allowing me to screw myself with bad decisions. Doesn't seem silly and makes since to me. I know it is discussed in several investing books I've read, but to sit back and do nothing is unique to passive investing and counterintuitive to a lot of life's situations. When I next visit my IPS, I'm considering putting in the 5% of total assets as "play money" to put and move around as I see fit. Kind of like strategic money :D. If I leave the other 95% static and according to the plan I think this will work for me. I've seen a lot of oth...
by john94549
Sun Jul 31, 2011 7:04 pm
Forum: Personal Investments
Topic: Estimating Expected Bond- Minus Cash -Yield?
Replies: 5
Views: 819

I'm not sure I understand your question, but if I do, it's a calculation I do quite frequently. Example: should I buy a bond fund, a bond, have a CD ladder, or a CD. If that is the question, here are some thoughts. Background: I am 64 and have a 38/62 asset allocation. Of the 62% bond allocation, probably 75% at this point is in a CD ladder. CDs are, of course, bonds, and should be considered as such when calculating an allocation. When I have a CD coming up for renewal, I try to calculate the risk/reward of the prevailing interest rate for an equal term CD (a replacement in my ladder) and compare it to "buying in" to somebody else's bond ladder (a bond fund) or buying an individual bond of like quality and term (7-yr CD as oppose...
by john94549
Sun Jul 31, 2011 6:34 pm
Forum: Personal Investments
Topic: Health insurance after retirement/before Medicare.
Replies: 6
Views: 1623

I believe you should look at COBRA. In California, Cal-COBRA offers an additional 18 months beyond regular COBRA, which makes it possible (at least theoretically, if you can afford it) to retire at 62 and have coverage until 65.
by john94549
Sun Jul 31, 2011 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Who has retired early? What age and what amount did you have
Replies: 108
Views: 27759

Retired three weeks shy of 59 1/2, with "enough" (we'll leave it at that).
by john94549
Wed Jul 27, 2011 8:30 pm
Forum: Personal Investments
Topic: Scenario [market timing]
Replies: 27
Views: 2360

If you are just starting out (and, at $3000, I think that's a fair assumption), don't try to time the market. Better yet, dollar-cost-average every paycheck, and shoot for 15% savings rate every paycheck, from now until you retire. If you are just starting out, tilt toward equities. As you get closer to retirement, use the "age-in-bonds/cash" formula.

I'm an old-fart, I saved at that 15% rate, and (wow) it worked.

I should note my wife and I started married life with $50, a used VW, and a pregnancy. The pregnancy was (appropriately) after we were married. From that, and a very rigorous savings regimen, we were able to build a nice portfolio, more than ample for retirement.
by john94549
Wed Jul 27, 2011 3:21 pm
Forum: Personal Investments
Topic: Options for cash portion of IRA
Replies: 3
Views: 721

Hector, for many, many, years I have kept a portion of my IRAs in CDs. You can absolutely keep CDs in an IRA. I use an "age-in-bonds/cash" allocation. Of late, bond funds have been out-performing CDs, but I suspect that might change if (when) rates go up. I ladder my CDs. When one is about to mature, I try to replace it with the best equivalent term yield available. It's not rocket science. I've used Ken's site for many years to capture the best rates (depositaccounts).

With the market so helter-skelter these days, it helps to have an anchor. I'm 64, I have 64% in bonds/cash in my IRA retirement accounts, and of that 64%, probably two-thirds in CDs. Works for me.
by john94549
Tue Jul 26, 2011 11:38 pm
Forum: Personal Investments
Topic: Vanguard Prime or Treasury MM in light of US default?
Replies: 15
Views: 2973

I use Vanguard MMFund (VMMXX) only for short-term cash, with the intention of moving to higher-yielding CDs as soon as possible. Before you snicker, it is possible to get 2.75% or thereabouts if you are willing to go longish (5 to 7 year CDs). It's not great, but it's out there. PenFed comes to mind.