Search found 2650 matches

by #Cruncher
Thu Apr 14, 2011 5:34 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard Quicken problem, VG password <=10 chars (secretl
Replies: 24
Views: 2704

Re: Vanguard Quicken problem, VG password <=10 chars (sec

VG has (without telling me) truncated my pw to 10 chars. Anything I type after that, they ignore. Which would be irrelevant except when I want to download to Quicken. (underline added) Besides the problem with Quicken, there's a general security issue. Imagine someone creating what he thinks is a s...
by #Cruncher
Wed Apr 13, 2011 10:39 pm
Forum: Investing - Theory, News & General
Topic: Real Yield on Vanguard TIPS Fund?
Replies: 23
Views: 3641

I think the real yield on the Vanguard TIPs fund could even be zero after expenses. Vanguard agrees with you, Grok! Here are the SEC yields reported for the Investor and Admiral classes as of 04/12/2011: –0.05% (net of 0.25% ER) Vanguard Inflation-Protected Securities Fund Investor Shares (VIPSX) +...
by #Cruncher
Wed Apr 13, 2011 9:04 pm
Forum: Investing - Theory, News & General
Topic: Real Yield on Vanguard TIPS Fund?
Replies: 23
Views: 3641

It is not the real yield to maturity, Roosevelt. As the footnote you quoted states, it is calculated "by adding the trailing 12-month inflation adjustment" to the real YTM. If we believe the footnote, we can easily calculate the real YTM. For example the YTM as of 2/28/2011 is reported as 2.9% on th...
by #Cruncher
Wed Apr 13, 2011 8:07 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 172
Views: 48920

I've constructed a little Excel spreadsheet to help in building a 30 year TIPS ladder. My approach uses only the currently available maturities. It buys extra bonds in the year after and / or before the missing years. One thing that jumps out is that there are several runs of ~5 years which result ...
by #Cruncher
Sun Apr 10, 2011 9:33 pm
Forum: Investing - Help with Personal Investments
Topic: Short Term TIPS in taxable account (make sense?)
Replies: 2
Views: 885

STIP and STPZ look about the same to me. Both have a 0.20% expense ratio and have almost identical holdings except as you say, STIP also holds TIPS that mature within one year. I don't know of any other comparable TIPS funds or ETFs. (I wouldn't consider Proshares Ultrashort TIPS, symbol TPS, since ...
by #Cruncher
Sat Apr 09, 2011 8:02 pm
Forum: Personal Finance (Not Investing)
Topic: Age in Bonds questioned by ....
Replies: 22
Views: 4369

The worst 10-year period for owning stocks since 1926 (1929-1938) produced annualized losses of just 0.9%, adjusted for inflation. Where has he been the past dozen years? According to Morningstar $10,000 invested in the S&P 500 on 12/31/1998 declined to $8,700.43 on 12/31/2008. The CPI-U increased ...
by #Cruncher
Sat Apr 09, 2011 10:33 am
Forum: Investing - Help with Personal Investments
Topic: How to know the correct yield of VMLTX?
Replies: 14
Views: 1788

Re: "Yield"

I pay almost no attention to "yield". It is "total return after taxes" that counts. Taylor, while total return may be the best measure of a stock fund, it's not the best one for a bond fund. For example, the Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares (VWITX) reports the following 3....
by #Cruncher
Sat Apr 09, 2011 10:11 am
Forum: Investing - Help with Personal Investments
Topic: How to know the correct yield of VMLTX?
Replies: 14
Views: 1788

According to several sources, the SEC yield is calculated as follows (from Wikipedia but also other places): The formula for SEC 30-day yield is Yield = 2[{(a-b)/cd+1}^6-1] Where: * a = dividends and interest * b = accrued expenses * c = average daily number of outstanding shares that were entitled...
by #Cruncher
Sat Apr 09, 2011 9:44 am
Forum: Investing - Theory, News & General
Topic: Morningstar growth chart use question
Replies: 2
Views: 701

Re: Morningstar growth chart use question

To use the morningstar growth chart does one has to input a portfolio in? Are there any growth charts available (free) that would simply take the start date of the graph, and automatically include all dividends and such in? Treating it like a single purchase on the start date of the graph? Unless I...
by #Cruncher
Sat Apr 09, 2011 2:08 am
Forum: Investing - Help with Personal Investments
Topic: How to know the correct yield of VMLTX?
Replies: 14
Views: 1788

My money is with the Vanguard number. I actually prefer to look at the YTM of the underlying bonds. ... At shorter maturities the current yield can distort the yield if there are significant amounts of bonds held at a premium or discount. I agree that the Vanguard figure (1.38%) is almost certainly...
by #Cruncher
Sat Apr 09, 2011 1:19 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 172
Views: 48920

I like the idea of using coupon income to reduce the number of bonds I need to buy. If I keep buying for the next twenty years though it seems tricky to factor that in ... While the spreadsheet seems to work OK for creating a one-time ladder to provide the same real dollars each year of principal a...
by #Cruncher
Fri Apr 08, 2011 1:31 pm
Forum: Investing - Theory, News & General
Topic: trying to understand how to handle bonds
Replies: 7
Views: 1170

Re: trying to understand how to handle bonds

Let’s assume, for example, that you are subject to the 36% marginal federal rate and live in a state with a 5% marginal rate. In your taxable account, you can purchase the Vanguard Limited-Term Tax-Exempt Fund, which has a yield of 3.15%. Since you will pay state tax on most of this, the yield fall...
by #Cruncher
Fri Apr 08, 2011 12:55 pm
Forum: Investing - Theory, News & General
Topic: Long-Term Bond Funds
Replies: 5
Views: 1631

Re: Long-Term Bond Funds

You sometimes see statements to the effect that the expected interest rate rise is already built into the fund NAV. ... So I assume this means that if interest rates go up, the NAV wouldn't fall as much as expected based on the fund's duration. No. What you may have heard is that, given an overall ...
by #Cruncher
Wed Apr 06, 2011 9:02 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 172
Views: 48920

Is there an easy way to update the index ratios? Glad you like it, Grok. There are actually 2 sets of index ratios. The first, in column H (multiplied by $1,000) are for whatever date one chooses to take as the "base" date of real values. It is calculated using the Ref CPI for that date which needs...
by #Cruncher
Tue Apr 05, 2011 11:23 pm
Forum: Investing - Theory, News & General
Topic: TIPS correlation with inflation?
Replies: 3
Views: 963

The variance in market prices acts as a noise process that decorrelates their values to CPI. Exactly! As an example take the Feb 2041 TIPS: It was auctioned Feb 17 at a yield of 2.19% and a price of less than 99. ( Auction Results PDF ) Today, Apr 5, the yield is 1.82% and the price is over 107. ( ...
by #Cruncher
Tue Apr 05, 2011 12:00 am
Forum: Investing - Theory, News & General
Topic: New Investor: Understanding TIPS
Replies: 9
Views: 1362

Re: New Investor: Understanding TIPS

If you don't reinvest the inflation increment neither the principal nor the payout will be adjusted for inflation. Alternatively, one can turn any investment into an inflation adjusted holding by simply reinvesting whatever is needed to compensate for inflation. This amount may exceed the yield pai...
by #Cruncher
Mon Apr 04, 2011 4:27 pm
Forum: Investing - Theory, News & General
Topic: List of US TIPS etfs
Replies: 1
Views: 515

This ETF db web page has a list with a couple more: TPS (ultra short) and WIP (non-USA). It aslo has the correct symbol (STIP) for the iShares Barclays 0-5 Year fund. It shows the iShares TIP having almost 20 times the market cap of the next largest TIPS ETF. Too bad the table doesn't include expen...
by #Cruncher
Sun Apr 03, 2011 1:21 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 172
Views: 48920

I've constructed a little Excel spreadsheet to help in building a 30 year TIPS ladder. The example below shows a ladder delivering approximately 30,000 real dollars every year from 2012 - 2041 for a cost of about $700,000. The desired annual amount, of course, can be changed. It starts with the most...
by #Cruncher
Sat Apr 02, 2011 9:24 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 172
Views: 48920

I've downloaded the Bodie paper Grok refers to and posted it on a web site so others won't to have download it themselves: Bodie Paper PDF . It's an interesting and easy read and is only about 10 pages long. The inflation-indexed bonds issued by the US Treasury can be “stripped” by qualified financi...
by #Cruncher
Fri Apr 01, 2011 5:09 pm
Forum: Investing - Help with Personal Investments
Topic: California home ownership and need for TIP’s
Replies: 2
Views: 663

Here's the way I'd look at it. Consider this hypothetical asset allocation before and after a house purchase: Before After Desired ------ ----- ------- 500 500 250 stocks 0 250 250 real estate 250 0 250 nominal bonds 250 250 250 TIPS ------ ----- ------- 1,000 1,000 1,000 Total For simplicity I'm as...
by #Cruncher
Fri Apr 01, 2011 9:48 am
Forum: Investing - Theory, News & General
Topic: Confused by Yahoo "Pct from Yr High" for VOO and V
Replies: 1
Views: 508

I assume instead of "Pct from Yr High" you mean "Pct from Yr Low". Here is what I show on a Yahoo portfolio page: Symbol Name Last Trade 52-wk Range Pct from Yr High Pct from Yr Low ------ ------------------------------- ------------- ------------- ---------------- --------------- VOO Vanguard S&P 5...
by #Cruncher
Fri Apr 01, 2011 3:33 am
Forum: Investing - Help with Personal Investments
Topic: smallest fraction of a mutual fund share you can buy?
Replies: 11
Views: 3686

Re: smallest fraction of a mutual fund share you can buy?

My Fidelity 401k records say I purchased 1.893 shares on 9/17/07 for a total price of $166.18, yet 1.893 * $87.77 = $166.14. Where is the discrepancy? The discrepancy is simply due to the fact that most, if not all, mutual funds record the number of shares to only 3 decimal places. Fidelity took yo...
by #Cruncher
Thu Mar 31, 2011 11:14 am
Forum: Investing - Theory, News & General
Topic: TIPS...Moving there soon
Replies: 13
Views: 3026

There is no significant difference in tax efficiency between TIPS and similar maturity nominal Treasuries. That's right, there is no significant difference. However, should inflation be unexpectedly high, there is some benefit in having TIPS in a tax-exempt account and nominal bonds in a taxable ac...
by #Cruncher
Tue Mar 29, 2011 1:17 pm
Forum: Personal Finance (Not Investing)
Topic: Chart that shows total return?
Replies: 2
Views: 535

See my post in "Help me understand the returns of index funds" thread.
by #Cruncher
Tue Mar 29, 2011 7:40 am
Forum: Investing - Theory, News & General
Topic: do global TIPS make sense if domestic ones aren't available?
Replies: 13
Views: 1822

Alas, another country's TIPS are not precision instruments because they following some other country's inflation, not yours, and because of currency risk. It would be interesting to know how much inflation varies among the eurozone countries. My guess (and I could be way off base) is that it doesn'...
by #Cruncher
Mon Mar 28, 2011 12:37 pm
Forum: Investing - Theory, News & General
Topic: TIPS...Moving there soon
Replies: 13
Views: 3026

Have you considered buying individual TIPS instead of a fund? Two reasons to consider it: With any Treasury security, including TIPS, you get no additional safety because of a fund's diversification. I.e., buying 1 TIPS is as safe as buying 30. Most TIPS funds including iShares TIP and Vanguard's ge...
by #Cruncher
Mon Mar 28, 2011 12:09 am
Forum: Personal Finance (Not Investing)
Topic: What's it like to be an equity analyst?
Replies: 3
Views: 860

Re: What's it like to be an equity analyst?

Like you I've worked in corporate finance but never as a securities analyst. So I can't give any experience as what the work is like. But I think your concern about its value is misguided. Typically, most of us feel that all of the research that goes into selecting investments for mutual funds doesn...
by #Cruncher
Sun Mar 27, 2011 11:41 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice, please - questions about complexity, tax
Replies: 18
Views: 2622

Re: Portfolio advice, please - questions about complexity, t

What I am trying to figure out though is how to deal with issues like taxable vs nontaxable accounts without becoming overly complex. I will be integrating a significant amount of new money (about 20% of the new total portfolio) and most of it is going into a non tax-advantaged account. For domesti...
by #Cruncher
Sat Mar 26, 2011 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: Tax refund-ethical question
Replies: 22
Views: 2456

Here's a comparable ethical dilemma: A man sticks a gun in my back and demands 25% of everything I've got. I give him my wallet that contains $1,000. He counts the money and erroneously counts only $800. He therefore takes $200 and walks off. Question: Is it unethical for me to keep quiet? Or should...
by #Cruncher
Sat Mar 26, 2011 10:36 am
Forum: Investing - Theory, News & General
Topic: Why did TIPS drop 20% in 2008?
Replies: 90
Views: 12314

Re: TIPS in 2008

Why did TIPS suffer a drop 15-20% in 2008 I am not sure where you got your figures, but Vanguard TIPS fund (VIPSX) declined -2.85% in 2008. ...I did not mean that the "end result" for year 2008 was a drop of 15-20%, but rather that there was a very quick sharp 15-20% drop followed by a reasonably q...
by #Cruncher
Fri Mar 25, 2011 10:16 pm
Forum: Investing - Help with Personal Investments
Topic: Inflation concern
Replies: 8
Views: 1442

Hello Willie, Congratulations on your recent marriage! (I read your other post from January .) As does Opponent Process I think you're already pretty well positioned to protect against inflation: Your two homes Your 25% allocation to stocks Your bond fund is intermediate and not long term Assuming y...
by #Cruncher
Fri Mar 25, 2011 8:39 pm
Forum: Investing - Theory, News & General
Topic: Help me understand the returns of index funds
Replies: 10
Views: 2970

... could you point out where/how one can find a comparative chart on say Morningstar or a similar site that *does* include dividends in the display for a more useful comparison of funds or stocks? Morningstar does produce charts based on total return including dividends of the "$10,000 invested on...
by #Cruncher
Fri Mar 25, 2011 8:39 am
Forum: Investing - Help with Personal Investments
Topic: TIPS
Replies: 3
Views: 915

Re: TIPS

VG posts the real yield of it's TIPS fund on the website every day. Thanks for the response, would this be the SEC yield? Yes. (See: Vanguard Inflation-Protected Securities Fund Investor Shares (VIPSX) .) But be careful comparing the SEC yield among TIPS funds and ETFs. They don't all define it the...
by #Cruncher
Fri Mar 25, 2011 8:13 am
Forum: Investing - Help with Personal Investments
Topic: Does "Price" = NAV? What are the rounding rules?
Replies: 23
Views: 5126

Nisi, in your Wiki article you say: The NAV is important to understand here because that growth comes in two different ways. First, the market value of the stocks in the fund may have gone up, so each share of the mutual fund is worth more, maybe $88 instead of $85.92. Second, the stocks in the fund...
by #Cruncher
Thu Mar 24, 2011 7:28 am
Forum: Investing - Help with Personal Investments
Topic: Does "Price" = NAV? What are the rounding rules?
Replies: 23
Views: 5126

Re: Does "Price" = NAV? What are the rounding rule

For a mutual fund, are "Price" and "NAV" synonyms, or is there a subtle distinction--and, if so, what is it? They definitely aren't synonyms, no more than "husband" and "father" are, even though in both cases they can be equal. This confusion appears in the opening line of your article: NAV is to a...
by #Cruncher
Wed Mar 23, 2011 3:05 pm
Forum: Investing - Theory, News & General
Topic: I'm passing on the 10-year TIPS auction
Replies: 14
Views: 2380

... but CPI-U 6 month (mean? avg?) sets the "inflationary component" ? total yield being this figure (adjusted twice yearly right?) + base interest rate? The inflation adjustment is handled differently for TIPS than for I-Bonds. It changes every day, not just once every 6 months. For example, here ...
by #Cruncher
Tue Mar 22, 2011 11:30 pm
Forum: Investing - Help with Personal Investments
Topic: Buying reasonable investments at reasonable cost in my 401K
Replies: 3
Views: 835

Re: Buying reasonable investments at reasonable cost in my 4

So I'm trying to determine the best way to buy other funds/ETFs, while minimizing fees. It seems like buying every month would be too expensive with a $7.95 flat commission It's really a question of amount, not of time. For example, I'd consider a $7.95 commission to purchase $100 of an ETF prohibi...
by #Cruncher
Mon Mar 21, 2011 11:07 pm
Forum: Investing - Help with Personal Investments
Topic: Abbreviation versus name [ticker versus fund name]
Replies: 26
Views: 3306

However, if one is not requesting help, but replying to a post or in general conversation, it seems the burden should be on the reader to look up things they don't know, whether it be terms or tickers, etc. I disagree. In my humble opinion (that took me 5 seconds longer to type than "IMHO"), in all...
by #Cruncher
Sun Mar 20, 2011 11:41 pm
Forum: Investing - Help with Personal Investments
Topic: Transfer to a new Vanguard account - help needed for newbie
Replies: 10
Views: 3223

Assuming you have capital gains, I'd wait until one year so the gains would be taxed long term. The additional fees over a 6 month period would be less than the tax difference between short term and long term. And I see no reason to expect the 5 funds to perform noticeably worse than comparable ind...
by #Cruncher
Sun Mar 20, 2011 8:37 pm
Forum: Investing - Theory, News & General
Topic: Guesstimation of future declines in bond prices
Replies: 26
Views: 4539

Re: Guesstimation of future declines in bond prices

How about TIPS? As an exercise I did a similar calculation for the Vanguard TIPS fund (VIPSX) and came up with a 12.4% decline should real rates revert to the average of 2005-2007. I used the same method fluffy used except that I reduced the Income Returns from Vanguard's web site by the change in ...
by #Cruncher
Sun Mar 20, 2011 2:05 pm
Forum: Investing - Help with Personal Investments
Topic: funding Fixed Income & portfolio rebalancing
Replies: 11
Views: 2074

Vanguard Total Bond Market Index Fund Investor Shares (VBMFX) which you mention is probably the most popular bond fund among forum members. I own it myself. Here are others you might consider: Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares (VWITX) if the fund will be held in a taxable a...
by #Cruncher
Sat Mar 19, 2011 2:35 pm
Forum: Investing - Theory, News & General
Topic: Guesstimation of future declines in bond prices
Replies: 26
Views: 4539

Excellent work, fluffy! Thank you. It helps me with a bond fund selection decision I'm currently working on. The only thing I might do differently would be instead of calculating change in price = duration x change in rate, use actual bond prices at rates before and after. I did what grayfox suggest...
by #Cruncher
Fri Mar 18, 2011 10:16 am
Forum: Investing - Help with Personal Investments
Topic: Bond Market Discount on 1040 Schedule B or Schedule D?
Replies: 3
Views: 1246

Thanks for your reply, Huey. Before I can answer your questions, I need you to clarify a few issues. Did you ever accrue the market discount using either a ratable accrual method or a constant yield method? Accruing market discount means that you report a portion of market discount as "current inter...
by #Cruncher
Fri Mar 18, 2011 5:53 am
Forum: Investing - Help with Personal Investments
Topic: Bond Market Discount on 1040 Schedule B or Schedule D?
Replies: 3
Views: 1246

Bond Market Discount on 1040 Schedule B or Schedule D?

I realize this isn't a tax forum. But many of you have encountered this question and handled it one way or the other on your Federal tax return, so I'd value your opinions. Background: In 2008 and 2009 I purchased two TIPS in the aftermarket at a discount, one at Fidelity and the other at Schwab. (B...
by #Cruncher
Thu Mar 17, 2011 7:33 pm
Forum: Investing - Help with Personal Investments
Topic: Sell Tips before they mature on 4/15/2011?
Replies: 9
Views: 1534

The value at maturity will be $20,000 x 1.1068 = $22,136, plus you'll get a final interest payment of $20,000 x 1.1068 x 0.02375/2 = $262.86 if my math is correct. So you might as well just let them mature. Your math is correct but you're using the wrong index ratio. Instead of yesterday's IR of 1....
by #Cruncher
Thu Mar 17, 2011 4:20 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Reported Yield Seems Low
Replies: 19
Views: 4944

It appears ishares now reports the avg real YTM for TIP. i don't recall seeing this previously. Is this new? http://us.ishares.com/product_info/fund/overview/TIP.htm I don't know if it's new since I don't follow this fund. I did my own calculation weighting the separate YTM's from the WSJ page for ...
by #Cruncher
Thu Mar 17, 2011 2:57 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Reported Duration Seems Low
Replies: 17
Views: 4250

Re: Vanguard TIPS Fund Reported Duration Seems Low

The Vanguard web site portfolio page says the average duration of its TIPS fund is 5.3 years as of 12/31/2010. This seemed low to me compared to the average maturity of 8.7 years. ... The Vanguard web site has the following footnote for duration: This duration estimates the percentage change in the...
by #Cruncher
Sun Mar 13, 2011 11:14 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS questions
Replies: 4
Views: 955

Can the base rate be negative like on a reissue and the secondary market? Yes it can be negative. In such case the coupon will be zero and the price will be higher than par. Yes, the yield to maturity can be negative. But apparently the Treasury has decided the coupon will be at least 0.125%. See m...
by #Cruncher
Sun Mar 13, 2011 3:27 am
Forum: Investing - Theory, News & General
Topic: rising interest rates and tips
Replies: 4
Views: 1171

Re: rising interest rates and tips

I am trying to understand what the impact of rising interest rates will be on tips. I always associate rising interest rates with inflation but I think this may be incorrect could someone please educate me? TIPS prices respond to changes in real interest rates and so are not affected by inflation. ...
by #Cruncher
Sun Mar 13, 2011 3:05 am
Forum: Investing - Help with Personal Investments
Topic: muni bonds versus taxable bonds?
Replies: 5
Views: 1510

I know the historical performance doesn't predict the future, but doesn't it at least suggest that the difference is minimal, even for those in the highest tax bracket? I believe in this case the historical performance does predict the future, but in an inverse way. Because the two taxable funds ha...