Search found 2544 matches

by #Cruncher
Sun Feb 06, 2011 1:19 pm
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Reported Duration Seems Low
Replies: 17
Views: 4192

The interesting part though is that Vanguard shows an SEC yield of 0.20% for investor shares and 0.31% for admiral shares while the T. Rowe Price fund shows an SEC yield of 0.85% - with an expense ratio of 0.50% vs. 0.25% for Vanguard investor shares. So while I have access to Vanguards TIPS fund i...
by #Cruncher
Sun Feb 06, 2011 6:28 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Reported Duration Seems Low
Replies: 17
Views: 4192

Doc, you seem unable to grasp the concept of real cash flow . It can be used just as well as nominal cash flow in calculating yield-to-maturity and duration. How do you think the Treasury calculates YTM on a newly issued TIPS, or the WSJ calculates YTM based on current prices? (E.g., PDF file showin...
by #Cruncher
Fri Feb 04, 2011 2:17 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Reported Duration Seems Low
Replies: 17
Views: 4192

Re: Vanguard TIPS Fund Reported Duration Seems Low

The problem is that you need to know the future inflation to calculate the duration. Why? The way I calculated it does not require knowing future inflation. And it yields (pardon the pun) a useful result. Vanguard's way, on the other hand, goes through a complicated procedure to arrive at a duratio...
by #Cruncher
Thu Feb 03, 2011 12:11 pm
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Reported Duration Seems Low
Replies: 17
Views: 4192

Re: Vanguard TIPS Fund Reported Duration Seems Low

It's often beneficial to read the footnotes. Something all of us should do more often. Doc, I did read the footnote regarding duration. I even quoted it in my original post! I'm not saying that Vanguard's calculation is wrong -- even though their explanation is rather opaque. What I'm saying is tha...
by #Cruncher
Thu Feb 03, 2011 12:51 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Reported Duration Seems Low
Replies: 17
Views: 4192

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. According to the Bogleheads Wiki discussion of duration a 1% increase in interest rates should cause approximately a 5.3...
by #Cruncher
Wed Feb 02, 2011 11:03 pm
Forum: Investing - Theory, News & General
Topic: Allocating: include T bond whose income is being spent?
Replies: 5
Views: 882

Yes, definitely! The fact that you choose to live off your interest doesn't affect your bond's status as an asset. You wouldn't exclude stocks because you decided to live off their dividends. Or if you lived off rental income, you wouldn't exclude the value of the property being rented.
by #Cruncher
Fri Jan 28, 2011 10:39 pm
Forum: Investing - Theory, News & General
Topic: Looking for help with TIPS math
Replies: 12
Views: 1896

I altered the puzzle a little: "Does a TIPS have the same yield-to-maturity as a nominal bond when inflation comes in as expected?" And I did a little Cash Flow - Present Value calculation to answer it. I understand what Larry is saying, but for the sake of this calculation I'm assuming the other th...
by #Cruncher
Sun Jan 23, 2011 1:31 am
Forum: Investing - Theory, News & General
Topic: help me double check this 100% safe investment idea please
Replies: 19
Views: 2770

Jfet , this probably isn't the best place to ask about a tactic involving options trading. Most of us don't use them. I haven't traded them in over 30 years and needed to shake the cobwebs out of my brain before I could understand what you're up to. I confirmed the option prices on Yahoo Finance an...
by #Cruncher
Sat Jan 22, 2011 5:28 pm
Forum: Investing - Theory, News & General
Topic: Vanguard International Bond Fund?
Replies: 31
Views: 6691

I would consider it, but only if it were un hedged. However, from what I've heard, this is unlikely. Hedging the currency risk is something I don't understand. It purposely destroys the chance to diversify away from the US Dollar. It's almost like someone objecting to a total stock market fund doesn...
by #Cruncher
Fri Jan 21, 2011 9:36 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on new 10-yr TIPS currently up for auction
Replies: 68
Views: 7881

I don't know where Langkawi gets the inflation adjustment of "$0.21907 per $1000". I should have written $0.21907 per $1000 par value. The inflation factor of 1.00022 applied to the price of 99.577991 results in $0.21907. Thanks for the explanation. Now I understand what you're doing: 99.577991 pri...
by #Cruncher
Fri Jan 21, 2011 8:28 pm
Forum: Investing - Help with Personal Investments
Topic: Inflation Rate to Use in Retirement Planning
Replies: 34
Views: 8420

:D I "estimate" every 20yrs things double in price. Or the dollar equals 2 dollars. In reality. Thats being conservative. Doubling in 20 years corresponds to an annual increase of 3.5%, which is a little more than the 3.2% annual rate over the last 30 years. See bottom right corner of this table: C...
by #Cruncher
Fri Jan 21, 2011 1:39 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on new 10-yr TIPS currently up for auction
Replies: 68
Views: 7881

I bought 15 of the 1/2021 TIPS at auction at Vanguard brokerage. The transaction price includes $7.46 in accumulated interest. How can there be accumulated interest on a fresh bond? Also, when I tally the principal cost, Vanguard shows an amount that is $3.28 higher for the 15 bonds than the calcul...
by #Cruncher
Fri Jan 21, 2011 10:16 am
Forum: Investing - Theory, News & General
Topic: .....
Replies: 14
Views: 2106

Mining for gold costs money so inputs increasing as fast or faster than the price of gold will negatively impact the performance of the stock. The performance of the stock price, of course, depends on market conditions; but profits would be negatively impacted only if costs increase substantially f...
by #Cruncher
Fri Jan 21, 2011 1:53 am
Forum: Investing - Theory, News & General
Topic: TIPS Auction today gives euphoria!!!!
Replies: 10
Views: 2236

After all TIPS real yields in fact range by as much as 3% or more over time. Or more! Examining the real yields on TIPS AUCTIONS - IN ORDER OF BOND'S ISSUANCE shows the range between highest and lowest yields ever obtained at auction is about 4% points for 5-year and 10-year maturities. The range i...
by #Cruncher
Sun Jan 16, 2011 1:10 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on new 10-yr TIPS currently up for auction
Replies: 68
Views: 7881

Yes, I know that [that Fidelity's 1.01% yield is only an estimate], but haven't really considered it. I'm assuming for working purposes it's likely pretty close, right? Depends on what you mean by "close". The 10-year TIPS yield hasn't fluctuated much this month. But previously it has. For example,...
by #Cruncher
Sun Jan 16, 2011 12:24 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on new 10-yr TIPS currently up for auction
Replies: 68
Views: 7881

The 1.01% yield on the 10-yr bond at auction was posted on Fidelity's web page Protagonist, I'm not sure you realize this is just an estimate. No one will know the precise yield until the auction takes place. For example see: Why Buy TIPS from Auctions on the Explore Bonds website. Although it's an...
by #Cruncher
Sun Jan 16, 2011 8:03 am
Forum: Investing - Help with Personal Investments
Topic: My bond portfolio
Replies: 10
Views: 3031

Re: my weight on Short-term TE bonds. the concern is that if I place all muni bonds in ine intermediate-term or longer, then rate risk would become much larger, in particular right now treasury yield is very low? "Rate risk", as I understand it, is a concern only if you think you might need to liqu...
by #Cruncher
Sun Jan 16, 2011 12:44 am
Forum: Investing - Help with Personal Investments
Topic: My bond portfolio
Replies: 10
Views: 3031

I don't see any real problem with your bond mix. Presumably you're only asking for an opinion about the mix within the bond category, not about the portion that bonds are of your total portfolio -- since you didn't provide that. I wouldn't change my holdings because of the recent fall in municipal b...
by #Cruncher
Sat Jan 15, 2011 10:09 am
Forum: Investing - Help with Personal Investments
Topic: Fidelity Tax Free Bond
Replies: 12
Views: 1748

Re: Fidelity Tax Free Bond

Not really sure how the bond market work so any heip would be apprieciated. Welcome to the forum! If you want to learn about bonds, check out the Boglehead's Wiki: Bond Basics For more general info about investing try: Bogleheads Financial Start-Up Kit Regarding the advisability of selling a tax-ex...
by #Cruncher
Sat Jan 15, 2011 9:44 am
Forum: Investing - Help with Personal Investments
Topic: Need new strategy
Replies: 10
Views: 1614

Re: Need new strategy

I have a well diversified fund elsewhere ... Did you mean to say "well diversified portfolio elsewhere" or are you saying that other than the VG LT Tax Exempt, the rest of your holdings are in a single fund? If the latter, telling us which fund and what % of your assets are in it and the VG Tax Exe...
by #Cruncher
Sat Jan 15, 2011 8:17 am
Forum: Investing - Theory, News & General
Topic: In Which a Bond Market Timing Strategy is Entertained
Replies: 19
Views: 2466

Very well laid out, Jacob. Thanks. Looking at it concretely can also benefit someone who's inclination is not to time the market. Instead of just saying to oneself, "I don't want to gamble that interest rates will rise, therefore ...", one can now say, "I don't want to gamble that interest rates wil...
by #Cruncher
Sat Jan 15, 2011 3:44 am
Forum: Investing - Theory, News & General
Topic: turnover: how to calculate it?
Replies: 2
Views: 639

I found a couple of definitions which say it uses the lesser of purchases and sales, not the average : Investopedia and InvestorWords This makes no difference in your example. But say in a year a fund sells everything but leaves half in cash. Using the average the turnover would be 75%. But using th...
by #Cruncher
Fri Jan 14, 2011 5:51 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS Auction Date Gap
Replies: 1
Views: 501

Accrued interest for Jan 15 - Jan 31 will be added to the price you pay. On July 15 you will collect the normal 6 months interest. So net, you don't get any interest for the 16 day period. It is unusual for the Treasury to initially issue 10-year notes so many days after their "Dated" date (Jan 15 i...
by #Cruncher
Wed Jan 12, 2011 6:01 pm
Forum: Personal Finance (Not Investing)
Topic: Treasury Inflation-Protected Securities for a savings acct?
Replies: 27
Views: 2464

(From Boglehead's Wiki - emphasis added) If you hold individual TIPS in a taxable account, both the inflation adjustment to principal and the interest payments are taxable as ordinary income for federal income tax, although the bonds do not pay out the inflation adjustment to principal until the ma...
by #Cruncher
Wed Jan 12, 2011 4:50 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Brokerage - buying Treasury bonds at auction
Replies: 12
Views: 2330

Doesn't seem to be the case with Fidelity. I have a t-bill maturing tommorrow, but they wouldn't let me place an order in the 10 year auction today, even though there would be money by the settlement date. Maybe they wouldn't let you place an order because the auction won't be officially announced ...
by #Cruncher
Wed Jan 12, 2011 8:49 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Maturity Graph
Replies: 37
Views: 10044

The Treasury does not issue bonds to serve the needs of investors, it issues them to serve the government's need to borrow money, and during the years of the surplus the government did not need to borrow and issued few bonds of any kind. Naturally, and that's the way it should be. I'd be interested...
by #Cruncher
Wed Jan 12, 2011 1:14 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Maturity Graph
Replies: 37
Views: 10044

Is it conceivable that enough TIPs being issued could have a regulating or limiting effect on inflation? This got me wondering how many TIPS have been issued over time. I was expecting a continuous expansion of the program. But this isn't the case. The following shows the net face value issued each...
by #Cruncher
Tue Jan 11, 2011 1:07 am
Forum: Investing - Theory, News & General
Topic: TIPS and Total Bond for the Younger Investor?
Replies: 4
Views: 1287

Re: TIPS and Total Bond for the Younger Investor?

I see TIPS mentioned a fair bit on this board and I'm afraid I don't know a great deal about them. ... so any advice or a link so I could study this more would be much appreciated. Take a look at the Boglehead's Wiki article: Treasury Inflation Protected Securities For an in-depth discussion, this ...
by #Cruncher
Sun Jan 09, 2011 11:15 pm
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Maturity Graph
Replies: 37
Views: 10044

I wonder if there is a reason why some years are overweighted...I also wonder how much of the total TIPS issued are owned by this fund. Here's a bar chart I just prepared of the total amount of TIPS that the Treasury has auctioned grouped by maturity year. It's like the Vanguard chart except it als...
by #Cruncher
Sun Jan 09, 2011 12:30 am
Forum: Investing - Help with Personal Investments
Topic: TIPS- when to buy?
Replies: 11
Views: 2221

... but this would be balanced by the NAV decline of the entire portfolio due to increasing interest rates. ... the OVERALL effect on TOTAL RETURN would be to maintain the real return for perpetuity on your initial bulk investment at roughly the same level as when you initially invested You're a to...
by #Cruncher
Sat Jan 08, 2011 12:24 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS- when to buy?
Replies: 11
Views: 2221

Re: TIPS- when to buy?

Is the logic behind a retiree NOT buying into a TIPS fund in one bulk investment during a time of low yield (e.g. now), because ... you are essentially locking yourself in to the same low real yield on your initial investment for life regardless of future yield/NAV fluctuations? Definitely not, Pro...
by #Cruncher
Sat Jan 08, 2011 11:43 am
Forum: Investing - Theory, News & General
Topic: Great Chart: S&P returns by in & out date
Replies: 57
Views: 10331

Ok, added an option to suppress return values and only show background colors. This now fits on one monitor -- at least those w/ 1300ish pixels across. Thanks, Mossy. You keep making it better! I didn't have to suppress the numbers entirely. I just set your option, Return Display Precision, to zero...
by #Cruncher
Sat Jan 08, 2011 10:20 am
Forum: Personal Finance (Not Investing)
Topic: Random questions about insurance, retirement, etc
Replies: 4
Views: 805

Re: Random questions about insurance, retirement, etc

1. How does life insurance work? With my plan, I can pay about $6/month, and my wife is covered for $100,000. Paid monthly for 60 years, that's only $3,600. 1) 6x12x60 = $4,320 2) the premium is $6 a month today. Will the premium still be $6 a month when she is 60? I suspect that the premium does i...
by #Cruncher
Sat Jan 08, 2011 9:28 am
Forum: Investing - Theory, News & General
Topic: Great Chart: S&P returns by in & out date
Replies: 57
Views: 10331

Updated chart link: http://personalbizfinance.com/pbf/data/real_return_start_end.pl It's now a dynamic script where you can choose allocations between 4 categories (stock, bond, money market, gold). Nicely done, Mossy! Works fine with Safari, Firefox, & Chrome on my Mac. Now where do I have room to...
by #Cruncher
Fri Jan 07, 2011 10:16 pm
Forum: Investing - Theory, News & General
Topic: Excellent Article re Stable Value Funds
Replies: 45
Views: 9591

While very technical in places... Indeed! Judging by the abstract, ...We conduct mean-variance analysis, Sharpe and Sortino ratio analysis, stochastic dominance analysis, and optimal multi-period portfolio composition analysis. ... In our paper, innovations are achieved in constructing efficient st...
by #Cruncher
Fri Jan 07, 2011 5:23 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS vs Bond fund
Replies: 4
Views: 2417

You might want to read TIPS and Interest Rate Changes on the Explore Bonds web site.

Regarding GNMA's you might want to read the Boglehead's Wiki article Mortgage Backed Securities.
by #Cruncher
Fri Jan 07, 2011 5:02 pm
Forum: Investing - Help with Personal Investments
Topic: 401k withdrawal
Replies: 3
Views: 686

The $250K was invested somewhere inside that 401K. Why the hesitation today to invest similarly - even if you changed the overall AA to 60/40 from something else? I agree. I'm in a very similar situation. I've already left instructions with Vanguard about how much to invest in two different funds w...
by #Cruncher
Fri Jan 07, 2011 1:33 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on convertible bond fund
Replies: 3
Views: 743

It can seem like the best of possible worlds: "If the stock market goes up, my convertibles will participate because of their equity aspect; if it goes down they'll be protected by their bond aspect." But the market isn't stupid, it prices convertibles taking this into account. In the couple of page...
by #Cruncher
Fri Jan 07, 2011 12:07 am
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund Maturity Graph
Replies: 37
Views: 10044

Vanguard TIPS Fund Maturity Graph

http://eyebonds.info/bheads/vgTIPSgraph.gif I've seen several posts discussing the duration of the VG TIPS fund so I thought it would be interesting to show the fund's holdings graphically. I copied them from Vanguard's web site (as of 9/30/2010) and used Excel to group them by maturity year and pr...
by #Cruncher
Thu Jan 06, 2011 10:52 pm
Forum: Investing - Help with Personal Investments
Topic: New 25 Year Old Investor with some questions on index funds
Replies: 7
Views: 1156

Re: New 25 Year Old Investor with some questions on index fu

MrLion wrote:I figured that investing is the only way I am going to retire early. I only make money because it can liberate me from work.
For someone still in school this is rather sad. Stop thinking about investing and think about what type of work would turn you on.
by #Cruncher
Tue Jan 04, 2011 11:07 pm
Forum: Investing - Theory, News & General
Topic: TBM 80% turnover??
Replies: 8
Views: 2285

I'm also surprised by the magnitude of the turnover. But I found a couple of things that may make it less worrisome. From a Morningstar Investing Classroom: With bond funds though, quite often managers employ cash-management strategies that inflate turnover rates. It's not uncommon to see turnover r...
by #Cruncher
Sun Jan 02, 2011 11:47 pm
Forum: Investing - Theory, News & General
Topic: Great Chart: S&P returns by in & out date
Replies: 57
Views: 10331

Quite interesting. But in my opinion the chart would be better without deducting taxes and fees since it's not what investors are used to seeing and they can vary by individual. I tracked down a web page with links to several PDF files of variations on this graph. Unfortunately none exclude both tax...
by #Cruncher
Sat Jan 01, 2011 11:15 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation how to count High Yield Corp Bond Fund?
Replies: 24
Views: 2589

Re: Asset Allocation how to count High Yield Corp Bond Fund?

But i think counting some part of VWHEX as equity is prudent (maybe 50%). ... I think the main point of knowing your equity/bond split is to control your downside risk. You must be a speed reader (and writer), grok. Your post came only 8 minutes after mine! Equities and bonds differ in more than ju...
by #Cruncher
Sat Jan 01, 2011 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation how to count High Yield Corp Bond Fund?
Replies: 24
Views: 2589

Re: Asset Allocation how to count High Yield Corp Bond Fund?

Here is morningstar's analysis on JNK- a high yield ETF: http://quicktake.morningstar.com/etfnet/RatingsAndRisk.aspx?Country=USA&Symbol=JNK Best fit index refers to the S&P 500 index (see footnote) They found that the correlation between jnk and the s&p 500 was 99% (square root of the 98%). The reg...
by #Cruncher
Sat Jan 01, 2011 5:21 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS vs Total Bond Market?
Replies: 14
Views: 10973

Since March 18, 2009 the funds VIPSX and VBMFX have returned about the same results. Although that is short-term, I think it helps show that it really doesn't matter what you do. I disagree. All this means is that it hasn't mattered during this period of time. The interest coupons for all nominal b...
by #Cruncher
Sat Jan 01, 2011 4:45 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS
Replies: 31
Views: 3892

The interest rate on TIPS is only adjusted twice a year, so, effectively, they're always six months behind actual inflation. ourbrooks, To be precise, the principal value is adjusted, not the interest rate. Twice a year the coupon is applied against the adjusted principal on the interest payment da...
by #Cruncher
Fri Dec 31, 2010 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: possible lazy portfolio
Replies: 7
Views: 2421

You can set up your own IRA; you're not dependent on your employer. The stock portion seems a strange mix of safety and aggressiveness. If it were me, I'd probably replace the consumer staples, utilities, and small cap with a 30% allocation to a total stock market index fund. In my opinion you have...
by #Cruncher
Fri Dec 31, 2010 7:58 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS
Replies: 31
Views: 3892

What percentage of your total portfolio is dedicated to a TIPS mutual fund? And what is your rationale for it? 15% - 20% -- in individual bonds, not in funds. Rationale for what? TIPS vs nominal treasuries? Treasuries vs other bonds. TIPS fund vs individual TIPS? The allocation %? I'm assuming you'...
by #Cruncher
Fri Dec 31, 2010 12:05 pm
Forum: Investing - Help with Personal Investments
Topic: Where to put new bond fund dollars?
Replies: 4
Views: 1157

I'm in a similar position to yours: NY resident and tax-deferred space full. I own the same Vanguard New York Long-Term Tax-Exempt. The name might be a little misleading: the average duration / maturity are only 6.8 / 7.6 years which is more toward the intermediate term. Of course, since it's not an...
by #Cruncher
Thu Dec 30, 2010 12:28 am
Forum: Investing - Help with Personal Investments
Topic: What to do with my EE savings bonds?
Replies: 7
Views: 1623

If you're in your mid twenties and have acquired EE bonds over the past 26 years, someone must have stuffed them under the mattress in your cradle! I know very little about EE bonds so I'll pass on your first two questions. Maybe reading the Boglehead Wiki EE bond section will help. 3. Regarding cur...