Search found 1617 matches

by Tyler Aspect
Tue Feb 25, 2020 12:35 am
Forum: Investing - Theory, News & General
Topic: Coronavirus and the market
Replies: 4089
Views: 397352

Re: Coronavirus and the market

It is clear the drastic quarantine practice of China could damage economic output, but a relax government response such as in Japan could lead to community spread infections. Each country will have to decide between economy and disease isolation.

I would say visible economic impact for a period of 6 months might be in effect. The epidemic would eventually settle into a situation akin to a more severe version of flu that have be managed in an on-going basis. I can see disruptions in tourist industry, supply chain, and retail business.
by Tyler Aspect
Mon Jan 27, 2020 6:45 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4685361

Re: U.S. stocks in free fall

Sees the stock drop. Went to local CVS. They are out of facemasks. Saw one lady wearing one asking if they have more; nope, all out.
by Tyler Aspect
Thu Dec 05, 2019 3:38 pm
Forum: Personal Investments
Topic: Leveraged ETF's
Replies: 16
Views: 1390

Re: Leveraged ETF's

I wouldn't call it gamble. It's well thought out. Index investing with more risk. True ... but if it's 3X leveraged and the market goes down 33% in one day I would think the account is wiped out. I was thinking gambling in termos of only buying the 3X. In terms of HIS strategy Hopefully the balancing fund goes up so you can rebalance. So less risky for him but pretty much gambling as to what I was thinking (buy only the leveraged fund with no hedge). It's a neat read though. Very interesting. I think there was some discussion in the main HEDGEFUNDIE thread on that. Circuit breakers set the max loss in a day at 20%, so the max loss should be 60% for UPRO. And even before they were put into place in 1987, we never had a day nearly that bad. ...
by Tyler Aspect
Mon Dec 02, 2019 1:12 pm
Forum: Personal Investments
Topic: Leveraged ETF's
Replies: 16
Views: 1390

Re: Leveraged ETF's

ProShares Ultra S&P 500 were down 81% during the last recession. These are very volatile funds.

The 3X leveraged ETFs were started after the last recession, so their history is a bit too short.
by Tyler Aspect
Thu Nov 21, 2019 6:38 pm
Forum: Investing - Theory, News & General
Topic: Where does the money come from?
Replies: 54
Views: 7703

Re: Where does the money come from?

... The banks know their customers will not all withdraw their funds at once, so that the banks will loan out their deposit to earn a good return for themselves. If there are large withdraws they can borrow from the Federal Reserve cheaply to meet redemption . ... No, that is not correct. It's a common misconception frequently taught as true, but only banks in very serious trouble borrow directly from the Fed, and that remains confidential so as not to cause a bank run. The Fed and the FDIC keep in touch about such situations. Please see the ongoing Vanguard's Chief Economist thread. PJW You forgot to underline my "large withdrawal" qualifier. A withdraw is large when it is large respect to the bank, maybe in the billion dollar r...
by Tyler Aspect
Thu Nov 21, 2019 6:24 pm
Forum: Investing - Theory, News & General
Topic: Where does the money come from?
Replies: 54
Views: 7703

Re: Where does the money come from?

Checking account, bond funds, or stock funds do not really map to real dollar bills behind the scene. The banks know their customers will not all withdraw their funds at once, so that the banks will loan out their deposit to earn a good return for themselves. If there are large withdraws they can borrow from the Federal Reserve cheaply to meet redemption. The bond funds represent behind the scene promises made by commercial institutions to pay regular dividends and to replay loan at maturity. Promise to pay is not hard dollar bills. The stock funds represent ownership in business enterprises. The compositions are factories, office complex, employee work force, products, expertise, strategy and reputation of the companies. Their valuation ar...
by Tyler Aspect
Thu Nov 21, 2019 5:23 pm
Forum: Personal Investments
Topic: Funding one-time large expense in retirement
Replies: 8
Views: 1756

Re: Funding one-time large expense in retirement

First withdraw from taxable, then from traditional IRA. This should minimize tax.
by Tyler Aspect
Thu Nov 21, 2019 5:03 pm
Forum: Non-US Investing
Topic: Newbie asks for advice
Replies: 5
Views: 716

Re: Newbie asks for advice

Non-US citizen investments usually take place in ETFs domiciled in Ireland. Young investor might have a 80% stock / 20% bond allocation.

iShares Core MSCI World UCITS ETF (Acc), IWDA.L

iShares Core Global Aggregate Bond UCITS ETF, AGGH.L
by Tyler Aspect
Sun Nov 17, 2019 1:23 am
Forum: Investing - Theory, News & General
Topic: Why does Vanguard's Short-Term Corporate Bond fund outperform iShares'?
Replies: 4
Views: 1121

Re: Why does Vanguard's Short-Term Corporate Bond fund outperform iShares'?

You need to research these funds' past expense ratios. They will probably be different.
by Tyler Aspect
Mon Nov 11, 2019 11:01 pm
Forum: Personal Investments
Topic: alternative investments
Replies: 35
Views: 3616

Re: alternative investments

I am not kidding. If you look hard enough I am sure you can find something that can lose a lot of your money.
by Tyler Aspect
Mon Nov 11, 2019 6:17 pm
Forum: Personal Investments
Topic: VMATX (MA Tax Free) for proceeds from locking in LTCG?
Replies: 4
Views: 860

Re: VMATX (MA Tax Free) for proceeds from locking in LTCG?

Selling individual stocks is a good idea to mitigate the risk of individual stocks. I would sell 1/3 this December, 1/3 January 2020, and 1/3 January 2021. Roth IRA conversion: Convert $140k per year until age 69, which allows your annual income to come under $250k per year. There does not appear to be a reason to purchase tax free bond fund in the taxable account because your federal tax bracket will probably be 24%. You do not need a bond fund in your taxable account. Because the size of your tax deferred account is much larger than your taxable account, all your bond allocations can easily fit within your tax deferred account. If your taxable stock holding has a loss, then just withdraw from the IRA until the stock market bounces back. Y...
by Tyler Aspect
Sun Nov 10, 2019 4:23 pm
Forum: Personal Investments
Topic: Bond for a recovering "xen of bad choices"
Replies: 15
Views: 2473

Re: Bond for a recovering "xen of bad choices"

Hi, annu. You may find this thread helpful: https://www.bogleheads.org/forum/viewtopic.php?t=289693. Tyler Aspect's advice to put bonds in a tax deferred account is often, but not always correct, and is less likely to be correct for individuals in the top tax bracket during a low interest rate environment. I see this advice popping up more often recently, and it makes sense from an interest rate perspective, but isn’t there usually a tax arbitrage to be had by keeping stocks in taxable so eventually withdrawals are at LTCG rates rather than having had lots of growth in tax-deferred, which would likely be taxed at a high rate? We can make a comparison of total bond market in tax deferred account (yield 2.24%) versus intermediate term tax-ex...
by Tyler Aspect
Sun Nov 10, 2019 11:10 am
Forum: Personal Investments
Topic: Bond for a recovering "xen of bad choices"
Replies: 15
Views: 2473

Re: Bond for a recovering "xen of bad choices"

Welcome to Bogleheads.

The most tax efficient move is to purchase a US stock index fund in the taxable account, and increase bond exposure by the same amount in the tax deferred account.
by Tyler Aspect
Fri Nov 08, 2019 9:43 pm
Forum: Investing - Theory, News & General
Topic: [Deleted]
Replies: 117
Views: 18020

Re: Long Term Bonds getting killed today

We're seeing the other side of long term bonds today. They've had quite a run over the last 37 years and investors are in love with them for returns and diversification. LTB demonstrated today one of their potential drawbacks, increased volatility. Today in the US, Europe, and Japan there is hope that a trade deal will get done including reduced tariffs on both sides. Also hope that aggressive monetary policy stimulus worldwide may stimulate global economic growth. The risk of recession seems much diminished at present. Interestingly, US stocks had only modest gains while LT bonds suffered much greater losses. Why the disparity? Perhaps all this good global growth news has some considering the very slight risk of the return of inflation wh...
by Tyler Aspect
Fri Nov 08, 2019 6:10 pm
Forum: Personal Investments
Topic: Need Help With Bond Funds and Comfort Level. Or...
Replies: 9
Views: 1309

Re: Need Help With Bond Funds and Comfort Level. Or...

Before buying any bonds in a taxable account your tax advantaged accounts should be entirely composed of bonds, such as the total bond market index (BND). Intermediate Term Bond index ETF (BIV) might be better than BND in the taxable account in the state of California.

Bonds in general have a lower level of return compared to stocks, but bonds are more stable in producing return. If bonds lose value because the market yield has gone up that is not the end of the world; this is merely a trade-off of net asset loss versus higher income. Higher income wins if your holding period is longer than the bond fund's duration measurement.
by Tyler Aspect
Fri Nov 08, 2019 4:32 pm
Forum: Investing - Theory, News & General
Topic: My planned retirement withdrawal strategy
Replies: 1
Views: 776

Re: My planned retirement withdrawal strategy

It is common for an investment portfolio of a retired investor to consist of 50% stock / 50% bond.

iShares Core MSCI World UCITS ETF
iShares Core Global Aggregate Bond UCITS ETF

I do not know if you want your investments to be valued in US dollar or Euro. That is for you to decide. Keep in mind that a balanced investment portfolio can be safer than rental properties. The valuation of real-estate properties can swing just as hard as stocks.

Inflation indexed bonds usually have low yields because they are "too safe".

I do not see a need to construct a bucket of investment for transitioning into state pension.
by Tyler Aspect
Fri Nov 08, 2019 11:33 am
Forum: Investing - Theory, News & General
Topic: Expected Return For Bond Funds
Replies: 13
Views: 2178

Re: Expected Return For Bond Funds

Total return of bond funds includes both capital return and income return. The market price fluctuates purely as a function of changes in the interest rate environment. Is there any reason to expect positive capital return over time? If I assume that interests rates have equal chance of going higher or lower, is my expected return equivalent to the current yield? If I were to buy either a 10 year Treasury or a 10 year Treasury fund, both would have the same expected return, correct? If that is the case, when projecting expected returns, we should disregard past capital return (even averaged over long periods) and look exclusively at yield, correct? A 10 year Treasury note has one maturity date, while a Treasury bond fund would have interna...
by Tyler Aspect
Mon Nov 04, 2019 10:50 pm
Forum: Personal Investments
Topic: Investment portfolio
Replies: 10
Views: 1148

Re: Investment portfolio

Be careful not become too extended on rental mortgages. Paying off some commercial mortgage, and buying a total international stock market index in the Roth IRA could be your next steps.
by Tyler Aspect
Mon Nov 04, 2019 6:21 pm
Forum: Investing - Theory, News & General
Topic: Stock Duration Help
Replies: 14
Views: 1243

Re: Stock Duration Help

UberGrub wrote: Sun Nov 03, 2019 1:49 pm
Tyler Aspect wrote: Sun Nov 03, 2019 1:43 pm Stocks do not have a duration because the amount of stock dividend lowers its net asset value by equal value.
What does that sentence even mean?
Say that your stock is worth $5000, and it pays out $50 dividend. The stock's valuation would drop from $5000 to $4950.
by Tyler Aspect
Sun Nov 03, 2019 1:43 pm
Forum: Investing - Theory, News & General
Topic: Stock Duration Help
Replies: 14
Views: 1243

Re: Stock Duration Help

Stocks do not have a duration because the amount of stock dividend lowers its net asset value by equal value. The stock's total return is more relevant than the dividend.
by Tyler Aspect
Fri Nov 01, 2019 2:20 pm
Forum: Personal Investments
Topic: Still don’t understand Bond Index Funds..
Replies: 10
Views: 2520

Re: Still don’t understand Bond Index Funds..

Individual bonds have individual issuer risks. Diversified bond index funds are designed to avoid single issuer defaults. Bonds are easy to understand. Each bond pays a fixed yield, and the principle amount is paid back at the bond's maturity date. Bonds held at a brokerage account has a mark to market net asset value. If the market yield for that bond's type increased, then the existing bond's net asset value will drop. This is because a new buyer could purchase the same type of bond with higher dividends. However, the net asset value recovers as the remaining dividend payments get delivered, until your principle amount is paid back (100% recovery of net asset value). At this point you can see the yield increase is to your benefit, because...
by Tyler Aspect
Fri Nov 01, 2019 12:43 pm
Forum: Personal Finance (Not Investing)
Topic: Why SHOULDN’T I open an SAT/ACT prep center?
Replies: 29
Views: 4251

Re: Why SHOULDN’T I open an SAT/ACT prep center?

College prep centers are popular in our area.

They offer services using long term contracts and pay-as-you-go fees.

The services include:

college selection and student interest matching

SAT and ACT assessment tests (free)

Initial consultation (free)

informational seminars (free)

SAT and ACT preparation classes

Essay writing classes

private tutoring on high school courses and SAT / ACT tests

periodic consultant meetings on progress tracking and college application
by Tyler Aspect
Thu Oct 31, 2019 10:03 pm
Forum: Personal Investments
Topic: Best way to sell off invididual stock investment portfolio?
Replies: 16
Views: 1994

Re: Best way to sell off invididual stock investment portfolio?

Welcome to Bogleheads.

It seems that if you sell all your stocks with losses this year in combination with ticker DE and VFC, then you would have capital gains of $700 in this year.

Then you can sell all your individual stocks next year, and pay the additional taxes using 4 estimated tax payments.

Recently a number of stock brokers have stopped charging for stock and ETF transactions. Check if your broker have also stopped charging.

If you want to buy VTI then you might as well open a taxable account at Vanguard; you will also have access to their higher yielding money market funds.

Dividend oriented stock funds have higher amount of taxes accessed each year, so they would not be as appealing as VTI.

Hope that helped.
by Tyler Aspect
Wed Oct 30, 2019 11:30 pm
Forum: Investing - Theory, News & General
Topic: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?
Replies: 133
Views: 16775

Re: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?

What are your thoughts if there was a concise guide that packed all the highlights, key tenants, and graphs into an easy to read manner? Great idea, really. And thanks for volunteering to do so. Who knows it might one day become a classic :p Couple of topics you can consider addressing: - How does it aligns with the main BH principles (which ones it adheres to and where it deviates). - What are the critical things that need to happen in the future for this strategy to work great, and in what ways it would fail badly. 3X leveraged portfolio is not Boglehead approach. The most aggressive Target Retirement funds in the financial industry starts at 90% stock / 10% bond. This is already a very aggressive investing posture. The current 3X levera...
by Tyler Aspect
Wed Oct 30, 2019 2:10 pm
Forum: Investing - Theory, News & General
Topic: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?
Replies: 133
Views: 16775

Re: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?

Charting Returns of Long Term US Treasury, 2X Leveraged, and 3X Leveraged This chart is from February 2010 to September 2019. Portfolio 1 is 3X leveraged long term US Treasury (TMF); portfolio 2 is 2X leveraged long term US Treasury (UBT); portfolio 3 is long term US Treasury (TLT). symbool annual return max drawdown TMF 15.46% -49.74% UBT 12.74% -34.92% TLT 7.750% -18.03% What I noticed in TMF was that the maximum draw-down is 3 times of TLT, but the annual return was only 2 times of TLT. That did not impress me. (Data source from PortfolioVisualizer) https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2008&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&initialAmount=1...
by Tyler Aspect
Tue Oct 29, 2019 7:29 pm
Forum: Personal Investments
Topic: I’m done with index funds
Replies: 239
Views: 40536

Re: I’m done with index funds

unclescrooge wrote: Tue Oct 29, 2019 2:00 pm
Tyler Aspect wrote: Tue Oct 29, 2019 12:56 am I agree that tax loss harvesting will eventually be a wash. A single company stock sold within the index needs to be replaced after the wash sale period at a potential lower price, thus boosting the gain of that company in a subsequent sale. Definitely not worth the annual 0.7% expense ratio.
And what happens if you end up buying it back at a higher price?
In this case the cost basis is at a higher price, but the investor would have lost out on gains during the wash sale period.
by Tyler Aspect
Tue Oct 29, 2019 12:56 am
Forum: Personal Investments
Topic: I’m done with index funds
Replies: 239
Views: 40536

Re: I’m done with index funds

I’m having a hard time picturing how this would work. Can you provide more info? I’d love to hear the details. My concern is that your time is valuable plus the additional overheard of managing this. Isn’t there a limit to how much TLH write offs you can take each year? Don't lose too much sleep over it. Tax loss harvesting is pretty much a gimmick. You sell stocks that have done poorly, ie, you sell stocks when they are cheap. These are the stocks you should be buying, so eventually you end up losing money in terms of forgone gains . Overall I think it's a wash. But to each his own. Everyone wants to thinks they are a special snowflake. This is one way to make proper feel special. I agree that tax loss harvesting will eventually be a wash...
by Tyler Aspect
Mon Oct 28, 2019 3:39 pm
Forum: Investing - Theory, News & General
Topic: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?
Replies: 133
Views: 16775

Re: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?

Volatility Decay of Leveraged ETFs Let us examine the price movements of leveraged ETFs. Before we begin we will set up some price goal posts at $50, $100, and $200. If our tracking index was at $100 per share, then doubling it would make it $200 per share. A sebsequent price halfing movements would drop the share price to $100. Doubling is multiplication by 2, while halfing is division by 2. It is useful to notice that a doubling is canceled out by halfing, thus returning price to the original point. Let us bring in a 2X daily leveraged ETF into the picture. Suppose the current net asset price is $100, if we want the end of day net asset price to hit $200, then the tracking index needs to go up 1.5 times today. Doubling the gain brings th...
by Tyler Aspect
Mon Oct 28, 2019 3:35 pm
Forum: Investing - Theory, News & General
Topic: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?
Replies: 133
Views: 16775

Re: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?

I compared the portfolio performance between a portfolio of (60% Columbia Large Cap Index A / 40% CASHX) versus (30% ProShares Ultra S&P500 / 70% CASHX). I picked Columbia Large Cap Index A because its expense ratio is almost half of ProShareoer 12 years of data. Where is the volatility decay? Maybe 2 servings of 6 eggs equals 12 eggs after all. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=fa...
by Tyler Aspect
Sat Oct 26, 2019 2:56 pm
Forum: Investing - Theory, News & General
Topic: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?
Replies: 133
Views: 16775

Re: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?

For me there is no reason to call this the "excellent adventure". Calling it the excellent adventure already assumes a good outcome, which is not warranted. Is there a convincing exit strategy if things go bad? Do you have to wait until you have 80% loss before selling out the leveraged positions? Just agree to disagree. You clearly do not understand these products at all. Ok. If I do not understand these products then how did I get this chart to almost match? I compared the portfolio performance between a portfolio of (60% Columbia Large Cap Index A / 40% CASHX) versus (30% ProShares Ultra S&P500 / 70% CASHX). I picked Columbia Large Cap Index A because its expense ratio is almost half of ProShares Ultra S&P500. I was ho...
by Tyler Aspect
Sat Oct 26, 2019 3:11 am
Forum: Investing - Theory, News & General
Topic: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?
Replies: 133
Views: 16775

Re: Any interest in concise guide to HEDGEFUNDIE 3x Leveraged ETF Excellent Adventure?

For me there is no reason to call this the "excellent adventure". Calling it the excellent adventure already assumes a good outcome, which is not warranted. Is there a convincing exit strategy if things go bad? Do you have to wait until you have 80% loss before selling out the leveraged positions?
by Tyler Aspect
Sat Oct 26, 2019 2:28 am
Forum: Non-US Investing
Topic: Using margin loan for house downpayment
Replies: 4
Views: 1146

Re: Using margin loan for house downpayment

I hear American lenders look for client's monthly loan payment to be less than 36% of monthly pretax income.

Margin loan has margin call provisions, where mortgage loans do not. Maybe you can sell your company stock to reduce the need for loans.
by Tyler Aspect
Fri Oct 25, 2019 3:33 pm
Forum: Investing - Theory, News & General
Topic: How I Learned to Stop Worrying and Love Negative Interest Rates
Replies: 5
Views: 1186

Re: How I Learned to Stop Worrying and Love Negative Interest Rates

A. If significant negative interest rate arrives I could move to Canada the land of freedom with STYLE.

B. if significant negative interest rate also arrives in Canada I could delay my move with STYLE. :D
by Tyler Aspect
Fri Oct 25, 2019 3:15 am
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part VI
Replies: 7650
Views: 1724130

Re: What Book Are You Currently Reading? Part VI

"This Fight is Our Fight" by Elizabeth Warren

some shocking discovery about the source of corporate profit


Manga series "Ancient Magus' Bride"

subtle and beautiful art style
by Tyler Aspect
Fri Oct 25, 2019 3:05 am
Forum: Investing - Theory, News & General
Topic: SPXX -- Nuveen S&P 500 Dynamic Overwrite
Replies: 16
Views: 1895

Re: SPXX -- Nuveen S&P 500 Dynamic Overwrite

TropikThunder wrote: Thu Oct 24, 2019 11:35 pm
MishkaWorries wrote: Thu Oct 24, 2019 9:20 am I checked Portfolio Visualizer and the fund out performed the S&P 500 since its inception.
EfficientInvestor wrote: Thu Oct 24, 2019 9:37 am I just ran a backtest as well on PV (link below) and it's showing that SPXX has had a lower return and higher standard deviation than SPY (S&P 500) since inception.
Well that's a conundrum. :|
I was able to replicate EfficientInvestor's result, but not MishkaWorries.
by Tyler Aspect
Fri Oct 25, 2019 2:52 am
Forum: Personal Investments
Topic: Widowed and scared to let go of investment advisor
Replies: 27
Views: 3408

Re: Widowed and scared to let go of investment advisor

Welcome to Bogleheads. Target asset allocation: 65% stock / 35% bond Stock allocation: 70% US, 30% international US bond percentage = 35% US stock percentage = 65% * 0.7 = 45.5% International stock percentage = 65% * 0.3 = 19.5% Brokerage at Vanguard, Fidelity, or Charles Schwab Example portfolio Her taxable: emergency cash 2% [very short term US bond] Vanguard FTSE Developed Market ETF (VEA) 10.3% [international stock] Vanguard Total Stock Market ETF (VTI) 28.1% [US stock] Her 401k: Vanguard Institutional Index Fund 17.4% [US stock] Vanguard Total bond market 6.7% [US bond] His 401k: Vanguard Total bond market 4.4% [US bond] Her Traditional IRA: Vanguard Total bond market ETF (BND) 21.9% [US bond] Her Roth IRA: Vanguard Total International...
by Tyler Aspect
Wed Oct 23, 2019 10:58 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 4236

Re: Leveraging Investment with Pledged Asset Loan

If you have to leverage your portfolio even through it is not needed, the cheapest way to do it is via ProShares ULtra S&P 500 (SSO). That SSO is going to drop like a rock in a recession, so that you might have to rebalance your portfolio very frequently when the market is volatile. The cost of SSO is around 1%, so that is better than what you get on your own at 3%. Leveraged 1.2 X 20% SSO = 40% notional US stock US bond = 120% * 0.4 = 48% International stock = 120% * 0.6 * 0.25 = 18% US stock = (120% * 0.6 * 0.75) - 40% = 14% ProShares Ultra S&P 500 (SSO) : 20% Vanguard Developed Markets Index Admiral (VTMGX) : 18% Vanguard Extended Market Admiral (VEXAX) : 14% Vanguard Total Bond Market Index Adm (VBTLX) : 48% But I have to cautio...
by Tyler Aspect
Tue Oct 22, 2019 10:29 pm
Forum: Investing - Theory, News & General
Topic: How buying corporate bonds work
Replies: 5
Views: 975

Re: How buying corporate bonds work

Not a good idea to buy individual corporate bonds. The lack of diversification makes them unattractive.

Most Bogleheads select bond index funds or bond ETFs for their fixed income investments. Vanguard total bond market ETF (BND) is commission free at Fidelity.
by Tyler Aspect
Tue Oct 22, 2019 10:09 pm
Forum: Personal Investments
Topic: New in retirement
Replies: 8
Views: 1805

Re: New in retirement

An example portfolio for retired investor could be:

50% US bond (ticker symbol BND)
38% US stock (ticker symbol VTI)
12% International stock (ticker symbol VEA)
by Tyler Aspect
Tue Oct 22, 2019 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: ACA Open Enrollment With COBRA Ending
Replies: 17
Views: 1434

Re: ACA Open Enrollment With COBRA Ending

The health insurance you purchase in the ACA market place is effective on the January 1st of next year. It does not overlap with your expiring COBRA.

The ACA premium subsidy has a sharp income cut-off. Be sure to do some planning of your remaining income stream this year, and the next year.
by Tyler Aspect
Tue Oct 22, 2019 1:02 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 4236

Re: Leveraging Investment with Pledged Asset Loan

An early retiree with a standard 60% stock / 40% bond portfolio saw 1/3 of the portfolio disappear in year 2008 to 2009. I would submit that the 1/3 loss is scary enough. It took about 3 years for the market to bounce back, and during this time an early retiree still would have to sell off small portions to fund retirement. This was not pleasant, but still perfectly survivable given the subsequent bull market.

I as an investor with 30 years of investing experience would not do leveraging in an early retiree situation, because I understand the plain Jane portfolio is already exciting enough in a recession.
by Tyler Aspect
Mon Oct 21, 2019 10:02 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 4236

Re: Leveraging Investment with Pledged Asset Loan

AlohaJoe wrote: Mon Oct 21, 2019 8:32 pm
Tyler Aspect wrote: Sat Oct 19, 2019 8:46 pm The inverted yield curve is a probabilistic indicator of an economic down-turn in 2 years.
The yield curve isn't inverted anymore (it un-inverted? de-inverted? re-verted? on October 11), so everything is fine, right? 8-)
I personally look at the six month Treasury Bill yield versus five year Treasury Note yield. Once the inversion signal turns on, then the prediction is for an economic recession within two years. The prediction is not modified by the inversion going away. It is unknown if the prediction will turn out to be false-positive this time.
by Tyler Aspect
Mon Oct 21, 2019 11:29 am
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 4236

Re: Leveraging Investment with Pledged Asset Loan

3 Funds Portfolio 80/60/40 comparison chart : 75% US stock / 25% international stock Portfolio 1 : 80% stock (young aggressive investor) Portfolio 2 : 60% stock (moderately aggressive investor) Portfolio 3 : 40% stock (moderately conservative investor) http://drive.google.com/uc?export=download&id=1OVG8sVEvKx0cZCDZcp5Vjq-NC7Uyd0Kt Concentrate on the maximum draw-down during the last recession for each portfolio, and calibrate it to your current asset level. Find the maximum level of aggression that is still tolerable for you. You can examine the portfolio composition using the link below. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2004&firstMonth=1&endYear=2014&lastMonth=12&...
by Tyler Aspect
Sat Oct 19, 2019 9:25 pm
Forum: Personal Investments
Topic: Bonds or just use Money Market/ Savings??
Replies: 25
Views: 4438

Re: Bonds or just use Money Market/ Savings??

A typical early retiree investment allocation is around 60% stock / 40% bond. The bond's purpose is not for the return. Its purpose is actually to dilute the return and to limit the losses of stocks.
by Tyler Aspect
Sat Oct 19, 2019 8:46 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 4236

Re: Leveraging Investment with Pledged Asset Loan

But your timing is questionable. You want to borrow a loan to bet everything on VTI. The inverted yield curve is a probabilistic indicator of an economic down-turn in 2 years. If you already have enough asset for your retirement living, why make this bet in the first place?

You know just with a 100% stock portfolio you could have 50% loss in a recession. Leveraged, your loss could approach 80% in a recession. Are you OK with needing to go back to work in a recession if this bet goes bad?
by Tyler Aspect
Sat Oct 19, 2019 1:37 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 4236

Re: Leveraging Investment with Pledged Asset Loan

https://www.portfoliovisualizer.com/bac ... 0&total3=0

Well, check at least if you can withstand the result of significant losses of a leveraged portfolio during an economic down-turn.
by Tyler Aspect
Fri Oct 18, 2019 3:38 pm
Forum: Personal Investments
Topic: Leveraging Investment with Pledged Asset Loan
Replies: 48
Views: 4236

Re: Leveraging Investment with Pledged Asset Loan

Are you a retired investor? Some young aggressive investors might have a small portion of their portfolio leveraged, because if that part blows up in smoke they still have their salary income to add to the portfolio. It would just be a very expensive investment education. If you are already retired, then you might have appetite for risk, but you in this situation cannot withstand large losses.
by Tyler Aspect
Wed Oct 16, 2019 11:27 am
Forum: Investing - Theory, News & General
Topic: Fixed Income In Retirement
Replies: 17
Views: 2263

Re: Fixed Income In Retirement

Franco1289 wrote: Wed Oct 16, 2019 7:18 am Can retires and those about to enter retirement still count on bonds for fixed income in the coming decade? Are bond yields dead and if so for how long? Should retires aim for more equities in their portfolios like high dividend paying stocks , index funds or REITs?
You are still in your 30's in terms of age, so retirement withdraws should be a long way off.

Just because bond yield is low it does not mean the conventional 4% withdraw rule for 30 year retirement period is not in effect. S&P 500 currently year to date return is 21%, while total bond market index year to date return is 8%.

The primary bond holding of a retired investor is still the total bond market index.
by Tyler Aspect
Wed Oct 16, 2019 12:03 am
Forum: Investing - Theory, News & General
Topic: Adjusting AA based on equity risk premium
Replies: 52
Views: 4918

Re: Adjusting AA based on equity risk premium

What have you been doing specifically OP? Nothing yet! I've been holding steady at a fixed AA (65/35) for some years now as I approach (early/semi) retirement. But it hasn't felt right to stick stubbornly to an AA that I ignorantly selected out of gut feel and conventional wisdom a decade ago. That sounds more like I'm simply afraid of ever changing anything, quite unlike the mindset of the "wise navigator" of the stay-the-course metaphor. I've been seeking to instead formulate a coherent meta-strategy where all the assumptions and approximations are clearly labeled and that leaves for room for gradual variations as new information and possibilities come to light, to avoid what nisiprius recently called the Zeno's paradox of inve...
by Tyler Aspect
Tue Oct 15, 2019 11:18 pm
Forum: Investing - Theory, News & General
Topic: Bank of America declares 'the end of the 60-40' standard portfolio
Replies: 88
Views: 17639

Re: Bank of America declares 'the end of the 60-40' standard portfolio

The bond yields are low right now. But the stabilizing nature of bonds can continue to work its contribution in a 60% stock / 40% bond portfolio. The proper response is to recognize a lower forward estimation of portfolio return. Just bumping stock allocation even higher can backfire if the investor has appetite for risk, but no toleration for losses.