Search found 7463 matches

by tadamsmar
Wed Oct 24, 2007 2:49 pm
Forum: Investing - Help with Personal Investments
Topic: Designation of Step-child as beneficiary
Replies: 9
Views: 2761

I can designate any individual as my beneficiary on the Vanguard form.

I was just wondering if I could put "per stipes" after their names so that the designation would automatically go to their desendents in necessary.
by tadamsmar
Wed Oct 24, 2007 2:19 pm
Forum: Investing - Theory, News & General
Topic: Timber as an asset class
Replies: 7
Views: 1480

It's unclear to me what kind of risk exists for this asset class. Anyone else invest in timber? I own a 50 acre pine plantation on my old home place. The forestry expert/broker who helped me sell some timber and replant about a decade ago mentioned one risk was that Russia would get their act toget...
by tadamsmar
Wed Oct 24, 2007 12:27 pm
Forum: Investing - Help with Personal Investments
Topic: Designation of Step-child as beneficiary
Replies: 9
Views: 2761

Designation of Step-child as beneficiary

I just realized that my beneficiary designation on my IRAs is not ideal. I designated my Estate as by secondary beneficiary, figuring I would let my will take care of splitting things up. But the tax implications of that are awful. The descendent designation includes per stipes, but, of course, step...
by tadamsmar
Wed Oct 24, 2007 12:00 pm
Forum: Investing - Help with Personal Investments
Topic: HSA Advice
Replies: 25
Views: 6748

Quote: they get it completely tax free (no estate taxes) I think the reference is to income taxes, not estate taxes. Also, this pub is from 2004. A lot has changed since then. I think you are right. If it goes to your estate then your estate pays income taxes based on the excess beyond qualified ex...
by tadamsmar
Wed Oct 24, 2007 11:32 am
Forum: Investing - Theory, News & General
Topic: Estimating expense/tax "leakage"
Replies: 4
Views: 1136

The most common example of soft dollars appears to be in excess trading commissions. Those wouldn't show up in a fund's net operating expenses? According to this site, transaction costs do not show up in the operating cost of a mutual fund: expense ratio Definition For a mutual fund, operating cost...
by tadamsmar
Wed Oct 24, 2007 10:28 am
Forum: Investing - Help with Personal Investments
Topic: HSA Advice
Replies: 25
Views: 6748

May be better than I said: If the HSA passes to a person other than the surviving spouse, the HSA ceases to be an HSA as of the date of the death of the account owner, and the person receiving the HSA is required to include the value of the HSA in gross income, but reduced by any payments from the H...
by tadamsmar
Wed Oct 24, 2007 9:49 am
Forum: Investing - Help with Personal Investments
Topic: HSA Advice
Replies: 25
Views: 6748

susa, I agree that it can be used like a better-than-any-IRA completely untaxed retirement account where the remainder can be converted to your estate, assuming you and your spouse have sufficient qualified expenses. (Spouses need to have separate accounts to max out their contributions, but they ca...
by tadamsmar
Wed Oct 24, 2007 7:50 am
Forum: Investing - Help with Personal Investments
Topic: How far do you take rebalancing?
Replies: 9
Views: 2426

There is a conflict between percentage rules and duration rules for rebalancing. At least, in the case where the percentage rule has you rebalancing more often than the duration rule. There is a rule that you should not rebalance more than once a year to avoid going against short-term momentum: m Wh...
by tadamsmar
Wed Oct 24, 2007 7:26 am
Forum: Investing - Help with Personal Investments
Topic: HSA Advice
Replies: 25
Views: 6748

Note that you can withdraw tax free from your HSA to pay any bill that you paid out of pocket in the past I should have said that you can withdraw tax-free based on past out-of-pocket payments. You obviously don't pay the bill twice. The only drawback to this is that you have to keep the records on...
by tadamsmar
Wed Oct 24, 2007 7:01 am
Forum: Investing - Help with Personal Investments
Topic: HSA Advice
Replies: 25
Views: 6748

Almost seems like it makes sense to leave the funds in for a while, pay medical expenes out of after tax money and let the account build up. Seems like worst case is you remain really healthy and risk having some funds revert to regular IRA tax status when/after you are 65. I can't imagine not havi...
by tadamsmar
Wed Oct 24, 2007 12:31 am
Forum: Investing - Theory, News & General
Topic: Estimating expense/tax "leakage"
Replies: 4
Views: 1136

Soft dollars

The expense ratio is not reliable, because of hidden fees called soft dollars : m m m Note that nobody really knows how bad the problem is because mutual funds are not required to report the magnitude of their soft dollar usage to anyone. The figures in these various web sites are all estimates.
by tadamsmar
Tue Oct 23, 2007 3:29 pm
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

Initially TSP trades were very restrictive on frequency. When I was initially hired into FERS in '87 you could only alter your allocation once every 45 days and move funds around once every 30 days. In the mid '90s they loosened it to 30 and 10 and then in the late '90s they changed it to whenever ...
by tadamsmar
Tue Oct 23, 2007 12:04 pm
Forum: Investing - Help with Personal Investments
Topic: How to calculate the pros and cons of deferring income?
Replies: 30
Views: 6811

"With a 401k contribution, you save taxes NOW at your MARGINAL rate. In retirement when you start making withdrawals, the first amount withdrawn is in the 0% tax bracket (standard deduction, exemption, credits, etc.). The next little bit is at 10%, the next at 15%, etc. There is virtually no w...
by tadamsmar
Tue Oct 23, 2007 11:51 am
Forum: Investing - Help with Personal Investments
Topic: How to calculate the pros and cons of deferring income?
Replies: 30
Views: 6811

Bravo House Blend!

Suppose a person in retirement is withdrawing from their retirement fund such that they have an income near the top of a bracket. Like 75K a year, near the top of the 25% bracket. Seems it would make sense for them to withdraw from their Roth only on occasions when they had to spend a bit more in a ...
by tadamsmar
Tue Oct 23, 2007 7:14 am
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

Quote: Timing is a wash, no win no lose, except for fees, cost, risk, deviation from the efficient frontier. This is not correct. Example: Investor A believes the stock market is going down so he sells stocks to Investor B who thinks it's going up. The stock market declines. Investor A breaks even....
by tadamsmar
Mon Oct 22, 2007 8:47 pm
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

I still claim, though, that the TSP market timers (as indicated by the sentiment survey) are consistently wrong. Anyone care to disagree? The sentiment survey was not presented with a demonstration that it was statistically significant. If it was statistically significant and a large effect then it...
by tadamsmar
Mon Oct 22, 2007 1:30 pm
Forum: Investing - Theory, News & General
Topic: SWR -- 4% revisited...again...
Replies: 51
Views: 12041

Recursive percent rule

Seems to me that you could spend a increasing percentage each year of the current value. Sort of like refiguring the 4% rule based on the fact you are a year older, and, of course, on the current value of your portfolio. Another idea: Rather than setting a constant value based on risk of ruin during...
by tadamsmar
Mon Oct 22, 2007 1:08 pm
Forum: Investing - Theory, News & General
Topic: John Bogle and other veterans talk about the 1987 crash
Replies: 6
Views: 1993

Lesson of 1987

The market recovered really fast in 1987. In less than a year. It turned out not to be a risk if you were saving for retirement or even in retirement. In retirement, you would not need to take much (if any) out at the lower equity prices; If you rebalanced then you may have put more in. The only ris...
by tadamsmar
Mon Oct 22, 2007 12:56 pm
Forum: Investing - Theory, News & General
Topic: TSP vs Vanguard
Replies: 13
Views: 4464

The key here being the word "initial" in the paragraph and "at inception" on the graph. That's all I'm trying to point out. How about the phrase "points on the efficient frontier"? The initial points roll down the efficient frontier. Maybe that is what they are talking...
by tadamsmar
Mon Oct 22, 2007 8:41 am
Forum: Investing - Theory, News & General
Topic: (Just For Fun) Retirement Planning Differential Equation
Replies: 14
Views: 3949

I think this paper extends a similar deterministic equation to non-deterministic: http://www.yorku.ca/milevsky/Papers/NAAJ2000A.pdf but I just gave it a quick skim. Also, The Calculus of Retirement Income : http://www.amazon.com/exec/obidos/ASIN/0521842581 It's easier to read than it looks at first ...
by tadamsmar
Mon Oct 22, 2007 7:06 am
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

In an efficient market environment, market timing reduces risk adjusted returns due to infirior portfolio construction. I agree. In an environment of behavouristic biases that apply to every almost every person in the same way, market timing does work in a negative way, but not in a positive way. I...
by tadamsmar
Sun Oct 21, 2007 7:39 am
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

Huh?

If you believe that people who try to time the market (in a context were this trading does not any effect on their fees or transaction cost) are going to lose money then logically you must believe market timing works. After all, if these guys are losing big bucks reacting to trailing returns, then a...
by tadamsmar
Sun Oct 21, 2007 7:28 am
Forum: Investing - Theory, News & General
Topic: TSP vs Vanguard
Replies: 13
Views: 4464

After reading several of your posts regarding the efficient frontier, I am convinced you misunderstand a very important concept regarding the efficient frontier....it can only be known in retrospect. Just because a particular asset allocation was on the efficient frontier in the past, doesn't mean ...
by tadamsmar
Thu Oct 18, 2007 12:03 pm
Forum: Investing - Theory, News & General
Topic: TSP vs Vanguard
Replies: 13
Views: 4464

When the "G" fund is available, I usually recommend it for the fixed income portion of a portfolio. You can see it role in the L Fund efficient frontier: http://www.tsp.gov/rates/fundsheet-lfunds.pdf G does two things relative to the typical efficient frontiers you see where G is not avai...
by tadamsmar
Thu Oct 18, 2007 9:29 am
Forum: Investing - Help with Personal Investments
Topic: HSA/IRA
Replies: 2
Views: 986

Your HSA account administration company should be able to help you find the conversion forms. Here is an article on it: http://www.kiplinger.com/columns/ask/archive/2007/q0503.htm I have never done it. Note that HSA investing tends to be more limited and expensive, but that could change in the futur...
by tadamsmar
Thu Oct 18, 2007 7:37 am
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

I would like TSP to include REIT funds, because tax-deferred accounts are the best place to keep them. However, the TSP administration repeatedly rejected them as sector funds and encouragement for market timing. I think they viewed adding REITs as market timing. They were being asked to add the la...
by tadamsmar
Thu Oct 18, 2007 7:32 am
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

It's a bit like portfolio rebalancing. If you are only able to do it once a year, (or even less frequently) I suspect it improves returns (although theory says it should not). There is a theory that the market has a bit of short term momentum that cannot be exploited by traders due the costs. Under...
by tadamsmar
Wed Oct 17, 2007 7:19 pm
Forum: Investing - Theory, News & General
Topic: TSP vs Vanguard
Replies: 13
Views: 4464

There is no Vanguard or private fund like the G Fund.

It has the low risk of a Money Market, but with a higher return.
by tadamsmar
Wed Oct 17, 2007 5:24 pm
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

(almost word for word) conversation with several Federal employees. Me: So, do you participate in the TSP? Them: No, the market wasn't doing well. So, I stopped. Me: Do you mean that the market went down? Them: Yes, I sold when the market went down. Me: When are you doing to get back in? Them: When...
by tadamsmar
Wed Oct 17, 2007 2:26 pm
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

Harmless Market Timing

Here's a completely harmless way to time the market in the TSP: 1. Trade only in the L funds. That way you are stay on the efficient frontier, so you lose nothing in terms of risk-adjusted return. 2. Your average allocation over a year (or other relatively short time period) results in an age-approp...
by tadamsmar
Wed Oct 17, 2007 2:08 pm
Forum: Investing - Theory, News & General
Topic: TSP Market Timers
Replies: 46
Views: 15983

Mostly Harmless

As the Hitchhiker's Guide to the Galaxy says about Earth, timing in the TSP is mostly harmless. After all, it does not increase fees, transaction costs, or taxes. If these guys are switching everything to I or S for long periods then that might be inappropriate risk for them. Also, if they are not d...
by tadamsmar
Wed Oct 17, 2007 11:19 am
Forum: Investing - Help with Personal Investments
Topic: Newley married newbie needs some help
Replies: 7
Views: 1593

Anyway, I don't this with my own employer funds to create a TSM-like allocation in my overall plan.


I meant to say I do this.
by tadamsmar
Wed Oct 17, 2007 8:52 am
Forum: Investing - Help with Personal Investments
Topic: Newley married newbie needs some help
Replies: 7
Views: 1593

I like Laura's plan, too. I do want to point out that both 401 and 403 plans do have pretty low cost S&P 500 funds. I would use these as part of my US stock allocation. Those funds look like the best deal in your company plans. If you put about 75% in an S&P500 fund and about 25% in the Vang...
by tadamsmar
Wed Oct 17, 2007 7:52 am
Forum: Personal Finance (Not Investing)
Topic: Biodiesel from algae
Replies: 26
Views: 7904

You need sustained high oil prices to make biodiesel the next big thing. http://www.wired.com/wired/archive/13.12/3070.html Wired put production at $45 a barrel, with tar sands much cheaper to produce from Of course we are well above $45 now, but that might not be the sustained price longer term. Si...
by tadamsmar
Wed Oct 17, 2007 7:34 am
Forum: Investing - Theory, News & General
Topic: VG Financial Engines Tool
Replies: 23
Views: 5511

FE says "Get behind a log"

Whenever I run FE, it suggests that I put 90% of my portfolio in intermediate bonds. Has anyone actually gotten any useful advice out of the darn thing? Has it caused you to change your asset allocation in a meaningful way? FE is telling you that you don't need to take on risk to reach your goal of...
by tadamsmar
Wed Oct 17, 2007 7:29 am
Forum: Investing - Theory, News & General
Topic: VG Financial Engines Tool
Replies: 23
Views: 5511

FE

I use to use FE, but I never really changed much as a result. It did have its own ideas about allocation, but mine seemed good enough. Those who are complaining that they did not learn much: You are Bogleheads simulating a Boglehead philosophy, what do your expect? I'm sure the average person would ...
by tadamsmar
Tue Oct 16, 2007 1:42 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing Sounds Half Wrong for Retired Investors
Replies: 36
Views: 8956

The markets have not shown momentum for longer periods. So, don't rebalance more than one a year.

Of course anything can happen. But the best you can do is avoid what seems most likely to happen.
by tadamsmar
Tue Oct 16, 2007 7:36 am
Forum: Investing - Theory, News & General
Topic: Diehards' Philosophy
Replies: 37
Views: 8819

I think you have this backwards. Index funds (including tax-managed funds which track an index) have the lowest tax costs in almost all stock classes, because they minimize capital gains. If you are going to hold value stocks in a tax-deferred account, you could hold Value Index, Windsor, Windsor I...
by tadamsmar
Mon Oct 15, 2007 6:56 pm
Forum: Investing - Theory, News & General
Topic: good lecture by Malkiel on Behavioral Finance
Replies: 14
Views: 3465

Why don't I ever see these guys using the average mutual fund manager return to report what US stocks have done? I did not quite understand your whole post. But the best thing to use is the average invested dollar, not the average mutual fund manager, since they come in all different (dollar) sizes...
by tadamsmar
Mon Oct 15, 2007 6:49 pm
Forum: Investing - Theory, News & General
Topic: good lecture by Malkiel on Behavioral Finance
Replies: 14
Views: 3465

Malkiel maintains that Value has outperformed Growth only recently and there is regression to the mean. This means that the relative outperformance of Value should be predictable. A simple model is to plot the annual return of the vanguard value index fund minus the annual return of the vanguard gr...
by tadamsmar
Mon Oct 15, 2007 11:38 am
Forum: Investing - Theory, News & General
Topic: Diehards' Philosophy
Replies: 37
Views: 8819

Use low-cost, low-turnover ...

Use low-cost, low-turnover funds .. Implies index funds. First, in a taxable account I don't think index funds are the lowest cost. Second, It might be better if Taylor had not even used the word "funds". I think it may be possible to buy and hold stocks at an even lower costs, and some d...
by tadamsmar
Sun Oct 14, 2007 10:46 am
Forum: Investing - Theory, News & General
Topic: how high is too high to stay the course?
Replies: 27
Views: 8922

Rebalancing does a good bit of it.

Assume you were 50-50 stock and bonds.

If the PE went from 15 to 30 quickly, then you would have to move about 25% of your stocks to bonds anyway. Or 50% if you express it in terms of the original value of the stock allocation when the PE was 15.
by tadamsmar
Sun Oct 14, 2007 10:18 am
Forum: Investing - Theory, News & General
Topic: how high is too high to stay the course?
Replies: 27
Views: 8922

Are we not Bogleheads?

In his Pillar of Wisdom 11, Bogle made it clear that we may rarely sometimes know something that the market does not. How can 50+% of so-called Bogelheads disagree with him as this poll indicates? Granted, Bogle did not state it in terms of a P/E where we should bail. Is it a rare P/E or should we r...
by tadamsmar
Fri Oct 12, 2007 7:54 am
Forum: Investing - Help with Personal Investments
Topic: Would appreciate your help with my porfolio
Replies: 24
Views: 4443

Need specifics.

You need to give specifics on the mutual funds and brokerage accounts to get better answers here. That 17000.00 for expenses looks like yearly expenses. That does not include stock trade transaction costs. Mutual funds can have high transaction costs due to excessive trading or due to inflated trans...
by tadamsmar
Tue Oct 09, 2007 8:55 pm
Forum: Investing - Theory, News & General
Topic: Don't time the market? Do we practice what we preach?
Replies: 23
Views: 4906

A point I think can't be overemphasized is that we cannot really judge our risk aversion subjectively, just by thinking about it. Many of us really have to learn by (usually very unpleasant) experiences. So one's AA can, very sensibly, I think, change over time in response to the sleep-at-night fac...
by tadamsmar
Tue Oct 09, 2007 7:53 am
Forum: Investing - Theory, News & General
Topic: Don't time the market? Do we practice what we preach?
Replies: 23
Views: 4906

"Market Timing" definition: "Portfolio changes based on market forecasts." It is not necessary to have a "lifetime allocation" to avoid market timing. Bogleheads often make allocation changes that are not market timing: Rebalancing Dollar-cost-averaging Increasing bond...
by tadamsmar
Mon Oct 08, 2007 3:14 pm
Forum: Investing - Theory, News & General
Topic: Is this why 401k fees are so high?
Replies: 6
Views: 1794

Because we are not a good lobby

We are not good a lobbying our employers or Congress. And the securities industry is good at lobbying congress to keep the regulators under control.

It's worst than you think because it is legal to hide fees in inflated transaction costs:

http://www.investopedia.com/ask/answers/04/011404.asp
by tadamsmar
Mon Oct 08, 2007 3:06 pm
Forum: Investing - Theory, News & General
Topic: Don't time the market? Do we practice what we preach?
Replies: 23
Views: 4906

Don't time the market? Do we practice what we preach?

I noticed someone complaining on another about how we diehards are always telling people to not time the market, and of course the guy thought that whatever he was thinking about doing was not timing. But, it occured to me that if one really wantec to avoid timing the market, then one would have to ...
by tadamsmar
Mon Oct 08, 2007 7:24 am
Forum: Investing - Help with Personal Investments
Topic: What underperforming asset class should we invest in today?
Replies: 25
Views: 7484

What underperforming asset class should we invest in today? Underperforming asset classes evidence the same future risk-adjusted returns as overperforming ones, as shown in _A Random Walk Down Wall Street_. Matresses, not asset classes, have hidden springs. Market is performing well, bonds not bad ...
by tadamsmar
Wed Oct 03, 2007 8:48 am
Forum: Investing - Help with Personal Investments
Topic: Never own your home outright, Never pay it off
Replies: 114
Views: 39634

My analysis

I did a spreadsheet on a 30-year morgage at the present 6.09 % mortgage rate. Need a no risk 7.33 % ROI to cover the payments. This assumes a taxable investment and full morgage interest deduction. I guess you could make money if you ran your risk up a bit with a mostly stock investment. But I am no...