Search found 8307 matches

by Doc
Mon Jan 05, 2009 1:55 pm
Forum: Investing - Theory, News & General
Topic: what is the yield on short term investment grade (VFSTX)?
Replies: 16
Views: 2729

SEC yield is based on yield to maturity ... http://en.wikipedia.org/wiki/30_day_sec_yield Bond fund yield calculation The SEC yield calculation for a bond fund is essentially a yield to maturity for the bond portfolio. Because bond funds trade actively and prices fluctuate, the rate may not be a go...
by Doc
Mon Jan 05, 2009 1:25 pm
Forum: Investing - Theory, News & General
Topic: what is the yield on short term investment grade (VFSTX)?
Replies: 16
Views: 2729

I think that the SEC yield includes interest that is accrued but not yet paid so looking at the distribution alone is insufficient. The distribution yield is another animal in the zoo. What Does SEC Yield Mean? A standard yield calculation developed by the Securities and Exchange Commission (SEC) th...
by Doc
Mon Jan 05, 2009 1:16 pm
Forum: Investing - Theory, News & General
Topic: Disadvantages of margin account?
Replies: 17
Views: 6118

As for why I'd want a margin account? It seems I've run afoul of the "good faith violation" rules at my broker (which pertain to selling a security you've just bought, before the purchase has settled), and my account is restricted for a period. If I switch to a margin account, I *think* that issue ...
by Doc
Mon Jan 05, 2009 12:57 pm
Forum: Investing - Theory, News & General
Topic: Active management outperformance in 2000-03 bear market
Replies: 19
Views: 3357

I would also like to know, as a general issue, how actively-managed funds that are in, say, the bottom decile of expense ratio (or turnover ratio, or P/E ratio) perform, compared to index funds. Are there academic studies that address this? You won't find many active funds with e/r's in the lower d...
by Doc
Sun Jan 04, 2009 2:28 pm
Forum: Investing - Theory, News & General
Topic: So you think you understand TIPS ?
Replies: 48
Views: 10683

Taxation won't eat munis. So long as capital gains and dividends taxes are lower than taxes on interest, taxes won't eat stocks as much. The question is how munis and stocks react to inflation. Short and perhaps intermediate should not be hurt too badly. One hears that stocks don't react too badly ...
by Doc
Sun Jan 04, 2009 2:17 pm
Forum: Investing - Theory, News & General
Topic: Index Funds in a Bear Market
Replies: 4
Views: 1141

Re: Index Funds in a Bear Market

Taylor Larimore wrote: Actually, four of the (bond) index funds made money. :wink:
Did we have a bear market in nominal Treasuries in 2008? I must have missed it. :twisted:
by Doc
Sun Jan 04, 2009 1:54 pm
Forum: Investing - Theory, News & General
Topic: So you think you understand TIPS ?
Replies: 48
Views: 10683

daryll40 wrote:And for taxable accounts with tips....if the very inflation that TIPS are bot to protect against gets large, won't taxation eat TIPS real returns alive?
Yes but it would eat everything else more.
by Doc
Sun Jan 04, 2009 1:51 pm
Forum: Investing - Theory, News & General
Topic: Index Funds in a Bear Market
Replies: 4
Views: 1141

Re: Index Funds in a Bear Market

Taylor Larimore wrote:One of the biggest advantages of index funds is that they seldom underperform in bear markets.
Another way to look at it is that they always lose money in a bear market. :D

A half full glass is also half empty.
by Doc
Sun Jan 04, 2009 1:07 pm
Forum: Investing - Theory, News & General
Topic: TIPS Auction vs Secondary Market
Replies: 60
Views: 9979

Based on the definition of "On the Run" it would seem like their price and yield would be the best indicator of the auction price. The question is how much of the "weird" yield curve is due to liquidity issues and how much to deflation concerns. If it mostly deflation, then the "on the run" will be...
by Doc
Sat Jan 03, 2009 10:57 am
Forum: Investing - Theory, News & General
Topic: Mutual fund fees are going up, up, up
Replies: 8
Views: 2389

Wagnerjb wrote:Hey.....maybe this will snowball into a situation where everybody is in low-cost passive funds :D
If that happens some little guy in Owls Bend, Missouri with two shares of stock is going to set the market. :shock:
by Doc
Sat Jan 03, 2009 10:40 am
Forum: Investing - Theory, News & General
Topic: TIPS Auction vs Secondary Market
Replies: 60
Views: 9979

The Bloomberg site provides a summary of TIPS Yields for 5, 10, 20 and 30 year issues. In general it provides a reliable guide to what the auction will yield. Bloomberg's quotes are for "On the Run Issues." These are the ones that have the most deviation from the yield curve. If they continue to be...
by Doc
Fri Jan 02, 2009 10:22 am
Forum: Investing - Theory, News & General
Topic: TIPS Auction vs Secondary Market
Replies: 60
Views: 9979

Given the discussion and that the ten year TIP auction is coming up, do you all think this is a good time to participate? The current TIPS yield curve is distorted because of liquidity and deflation concerns. This makes it difficult to predict what the auction results are likely to be. Personally I...
by Doc
Thu Jan 01, 2009 4:31 pm
Forum: Investing - Theory, News & General
Topic: The Year End Return Thread
Replies: 100
Views: 16867

Our IRR was -19% with a 45/55 AA. Our treasury allocation is predominantly TIPS which I had expected to perform like nominal treasuries. :( Interesting the funds that were predominately mortgage backed did better than TIPS. You figure.
by Doc
Thu Jan 01, 2009 4:20 pm
Forum: Investing - Theory, News & General
Topic: The Year End Return Thread
Replies: 100
Views: 16867

For those interested in Internal Rate of Return calculations and the Excel XIRR function, Gummy (who posts here occasionally) has a writeup on his web site: http://www.gummy-stuff.org/xirr.htm IRR (Internal Rate of Return) is the correct metric. There are some financial programs that claim to calcu...
by Doc
Thu Jan 01, 2009 4:07 pm
Forum: Investing - Theory, News & General
Topic: Delay SS vs withdraw 401K money in down market?
Replies: 35
Views: 5435

sscritic Let me take a bunch of bits and pieces from your comments. I generally agree with your comments - you have more detail that needs to be addressed at the individual level. The 100% and 132% are in real age 66 dollars. Right. I do calculations in real dollars. It's easier that way. Just need ...
by Doc
Thu Jan 01, 2009 2:20 pm
Forum: Investing - Theory, News & General
Topic: Is VBR a no-brainer over IJS?
Replies: 47
Views: 8201

What about IShares Morningstar Small Value Index (JKL) and Russell 2000 Small Value Index (IWN)?. Their ERs are about the same as IJS. Does anyone have an opinion as to how these measure up at representing the small value asset class ? Ahh good question. Few people ever ask this. Since all (most?) ...
by Doc
Thu Jan 01, 2009 2:06 pm
Forum: Investing - Theory, News & General
Topic: Delay SS vs withdraw 401K money in down market?
Replies: 35
Views: 5435

It seems to me that we are not considering the most significant factor: What happens with the rest of your portfolio. Les take sscritic’s numbers: 100% at 66 and 132% at age 70 – four years later. Assume $10,000 is the 100% number. If I take the money early I do not reduce my own portfolio by upward...
by Doc
Wed Dec 31, 2008 2:39 pm
Forum: Investing - Theory, News & General
Topic: Delay SS vs withdraw 401K money in down market?
Replies: 35
Views: 5435

SpringMan wrote: Your surviving wife may benefit from you delaying SS.
Both of us will take their own SS so we can delay one, both or none as we choose without affecting the other. But I'll crank some numbers to be sure before I commit.
by Doc
Wed Dec 31, 2008 2:15 pm
Forum: Investing - Theory, News & General
Topic: Delay SS vs withdraw 401K money in down market?
Replies: 35
Views: 5435

Take the SS and limit your drawdown of your own investments. Keeping your capital high gives you more potential for maximizing your future income. You can always withdraw your SS election and pay the money back. (Maybe only to your "standard" retirement age.) I'm facing the same question and would b...
by Doc
Wed Dec 31, 2008 1:24 pm
Forum: Investing - Theory, News & General
Topic: VGHCX and Capital Gains
Replies: 17
Views: 3007

statsguy wrote:I have no idea how to answer your question other than to say... 75.432% of all statistics are made up
What's the standard deviation on that figure?
by Doc
Wed Dec 31, 2008 10:48 am
Forum: Investing - Theory, News & General
Topic: Journal of Indexes study: Active vs passive funds
Replies: 6
Views: 1629

Hey Norm, From this study it does appear that the MSCI indexes are a tough hurdle for active managers. As we know, many Vanguard index funds are now based on MSCI Indexes. We have something like five years experience with Vanguard's MSCI Index funds. What about the next five years? Weren't these ind...
by Doc
Wed Dec 31, 2008 10:36 am
Forum: Investing - Theory, News & General
Topic: What’s in an Index?
Replies: 6
Views: 1498

Re: It depends on what you want

smackfu wrote: The differences in return could come down to one index having an especially poorly performing company and another not having it. Or even a bankruptcy... a stock that goes to $0 is pretty painful.
Just like an actively managed fund? :?
by Doc
Wed Dec 31, 2008 10:26 am
Forum: Investing - Theory, News & General
Topic: Why isnt everyone indexing at Vanguard?
Replies: 41
Views: 7796

A few basis points can be eaten up very easily by higher other fees and inconveniences.
by Doc
Tue Dec 30, 2008 8:40 pm
Forum: Investing - Theory, News & General
Topic: Moved my Individual 401k from Schwab to Vanguard
Replies: 4
Views: 1686

Re: Moved my Individual 401k from Schwab to Vanguard

DaveH wrote:The timing seemed right so I did the paperwork to have my Individual 401k moved from Schwab to Vanguard.
Why? I think the right time has passed. With the ability to buy many Vg ETFs as well as bond ETFs and TIPS at Schwab at a much lower cost why would you move to Vg now?
by Doc
Tue Dec 30, 2008 8:35 pm
Forum: Investing - Theory, News & General
Topic: Anyone slice-n-dice the S&P 500?
Replies: 23
Views: 2725

dmcmahon wrote: IMO the main advantage of this approach is the ability to exclude or underweight some sectors, or overweight others. For that, you're now venturing into stock-picking territory.
It might avoid "bubble" problems which I wouldn't necessarily call stock-picking.
by Doc
Tue Dec 30, 2008 8:30 pm
Forum: Investing - Theory, News & General
Topic: Journal of Indexes study: Active vs passive funds
Replies: 6
Views: 1629

Seems like a pretty good paper. I haven't had the time to go over it in depth but a few of items caught my attention. In the PDF version there is a sub-title The impact of fees that doesn't appear in the HT?? version. When viewing the markets as a whole (i.e., a zero-sum game), it only makes sense t...
by Doc
Tue Dec 30, 2008 7:57 pm
Forum: Investing - Theory, News & General
Topic: What’s in an Index?
Replies: 6
Views: 1498

Re: It depends on what you want

JDK is the least diversified with only 95 large companies, and therefore is the least appealing . JDK is used as a proxy for the Morningstar Large Core Index. I had to use it because I could only get the data for the index itself through 12/29 and the others were 11/30. "Least appealing" is irrelev...
by Doc
Tue Dec 30, 2008 3:08 pm
Forum: Investing - Theory, News & General
Topic: Treasury MMs: We don't want your money.
Replies: 24
Views: 4213

Since the treasury securities that this money market is buying now have a yield that is less than the ER, won't the yield have to go negative at some point, unless Vanguard decides to subsidize the fund to prevent this? (assuming the near 0 yields on these securites continues long enough so that al...
by Doc
Tue Dec 30, 2008 2:04 pm
Forum: Investing - Theory, News & General
Topic: Treasury MMs: We don't want your money.
Replies: 24
Views: 4213

Mine has this description: ...the Fund invests in diversified portfolios of intermediate maturity fixed income securities. To provide a stabilized earnings rate and for benefit payments at book value (deposits plus interest), the fund enters into contracts to guarantee book value with highly-rated ...
by Doc
Tue Dec 30, 2008 1:35 pm
Forum: Investing - Theory, News & General
Topic: What’s in an Index?
Replies: 6
Views: 1498

What’s in an Index?

I was looking at JKD iShares Morningstar Large Core Index and was surprised at the outperformance wrt the “standard index” and the category average. So what index should I use? [table] Total Returns thru 11/08.... 1 yr 3 yr MSCI US LC 300 .............. -37.08 -7.86 MSCI US Prime Cap 750.... -38.33 ...
by Doc
Tue Dec 30, 2008 12:53 pm
Forum: Investing - Theory, News & General
Topic: Treasury MMs: We don't want your money.
Replies: 24
Views: 4213

I had no idea that it was done in the same sort of way that a stable value fund does this. Huh again. :o I thought stable value funds got their stability through insurance contacts. Apparently MM funds can keep their NAV constant through accounting rules - "Amortized Cost Method" vs. "Mark to Marke...
by Doc
Tue Dec 30, 2008 12:00 pm
Forum: Investing - Theory, News & General
Topic: Treasury MMs: We don't want your money.
Replies: 24
Views: 4213

The funds need that "extra" NAV to cover the fund expenses during a period when the new bonds they must buy are paying next to nothing. Otherwise, the funds will break the buck as expenses must be paid out of principal. Thus, anyone buying into a fund now is effectively forcing the fund to buy more...
by Doc
Tue Dec 30, 2008 11:56 am
Forum: Investing - Theory, News & General
Topic: Why the premiums in bond ETF's.
Replies: 6
Views: 1300

drbagel wrote:I found this article on the subject.
Thanks, very good explanation of the high "spreads".
by Doc
Mon Dec 29, 2008 2:27 pm
Forum: Investing - Theory, News & General
Topic: Treasury MMs: We don't want your money.
Replies: 24
Views: 4213

Jeffy, Share Price Calculations. The current price per share, for purposes of distribution, redemption and repurchase, of any redeemable security issued by any registered investment company ("money market fund" or "fund"), notwithstanding the requirements of section 2(a)(41) of the Act and of Rule 2...
by Doc
Mon Dec 29, 2008 1:55 pm
Forum: Investing - Theory, News & General
Topic: Why the premiums in bond ETF's.
Replies: 6
Views: 1300

I just looked at CIU which is the Lehman 1-5 credit etf and has very little activity and the "spread" today is both plus and minus some 600 bp's and has crossed zero several times.
by Doc
Mon Dec 29, 2008 1:47 pm
Forum: Investing - Theory, News & General
Topic: Why the premiums in bond ETF's.
Replies: 6
Views: 1300

Re: Why the premiums in bond ETF's.

I'm not sure I understand what you mean. AGG is a huge fund with relatively few and liquid holdings, but it has seen big premiums/discounts. AGG trades in "lots" of tens of thousands, SPY for example in millions. Check out on some charting service like yahoo finance. You might also want to look at ...
by Doc
Mon Dec 29, 2008 1:07 pm
Forum: Investing - Theory, News & General
Topic: Why the premiums in bond ETF's.
Replies: 6
Views: 1300

Re: Why the premiums in bond ETF's.

drbagel wrote:Can someone explain to me why such dramatic deviations from NAV have occurred in bond ETFs, while stock ETF's remain much closer to the target?
Are you sure you're not looking at the effect of size/float of the ETF instead of equity/FI?
by Doc
Mon Dec 29, 2008 12:20 pm
Forum: Investing - Theory, News & General
Topic: Treasury MMs: We don't want your money.
Replies: 24
Views: 4213

People who buy into the funds now gain at the expense of existing shareholders because the bonds have increased in value but this is not reflected in the NAV. Huh? From the prospectus: Share Price Share price, also known as net asset value, or NAV, is calculated each business day as of the close of...
by Doc
Sat Dec 27, 2008 2:30 pm
Forum: Investing - Theory, News & General
Topic: Slicing and Dicing Bonds
Replies: 14
Views: 2850

Ouch. It appears to me that you've increased your risk by taking those steps. Most equity slice and dice proponents do so to increase return. I was just trying to make that point that I slice and dice FI to affect risk factors primarily (not return). I would be interested in why you think 1) Shorte...
by Doc
Fri Dec 26, 2008 11:38 am
Forum: Investing - Theory, News & General
Topic: Market Adjusting Bonds for AA purposes
Replies: 3
Views: 886

Market
by Doc
Fri Dec 26, 2008 11:23 am
Forum: Investing - Theory, News & General
Topic: Slicing and Dicing Bonds
Replies: 14
Views: 2850

I slice & dice total bond market but not for the reasons in the OP. The major reasons I take this approach are risk control and tax efficiency. Risk factors: 1) No maturities greater then ten years. 2) TIPS are a replacement for nominal treasuries. Not an addition. 3) A lower allocation to mortgage ...
by Doc
Wed Dec 24, 2008 12:17 pm
Forum: Investing - Theory, News & General
Topic: Direct Investment in TIPS - Basic Questions
Replies: 9
Views: 2390

Re: Direct Investment in TIPS - Basic Questions

2. The coupon payments from the bond are reinvested at the same 2.903% yield There is some confusing here because people try to equate YTM with Total Return. The YTM calculation involves netting the present value of all the cash flows to zero and thus makes no assumption at all about reinvesting. T...
by Doc
Tue Dec 23, 2008 3:25 pm
Forum: Investing - Theory, News & General
Topic: do you use Morningstar for information about funds
Replies: 14
Views: 2236

Re: do you use Morningstar for information about funds

[Doc when I tried to go there all I got were sites about Twilight Zone the TV show. Norm, You get to go to the future in the twilight zone so you know what funds are going to outperform before they actully do. :lol: I guess you youngsters don't remember the twilight zone. Maybe I should have said b...
by Doc
Tue Dec 23, 2008 3:05 pm
Forum: Investing - Theory, News & General
Topic: Inappropriate Fear of All non-index passive funds?
Replies: 19
Views: 3205

Well, what you'd expect is that, compared to a low-cost index fund, the actively managed fund would have a little more risk, because the manager's picks would sometimes be good and sometimes be bad. I'm missing something here. If risk is defined as standard deviation, the funds "risk" is the (appro...
by Doc
Tue Dec 23, 2008 12:59 pm
Forum: Investing - Theory, News & General
Topic: do you use Morningstar for information about funds
Replies: 14
Views: 2236

Re: do you use Morningstar for information about funds

grabiner wrote: The ratings aren't particularly useful because they measure past performance and have little relation to future results.
Hi Dave,

For ratings based on future performance I recommend

twilightzone.com
by Doc
Tue Dec 23, 2008 11:57 am
Forum: Investing - Theory, News & General
Topic: ETFs and the tax efficiency of the open end fund equivalent
Replies: 8
Views: 1986

Re: How does the etf help the open end fund shares?

When authorized participants redeem ETF shares in-kind, the mutual fund can give away the lowest-basis shares. Why is this not a taxable transaction for the fund. The fact that it is a barter and not a cash transaction seems irrelevant. Barter transactions are taxable. Trading something with a basi...
by Doc
Tue Dec 23, 2008 11:38 am
Forum: Investing - Theory, News & General
Topic: VAIPX Vanguard TIPS Admiral Fund
Replies: 18
Views: 5492

It does leave me a little surprised that there was sufficient deflation in the quarter to reduce the dividend so much. If I can ask one more question, does this same effect in some way, shape or form occur with owning individual TIPS, or is it unique to TIPS funds? My conclusion up until now has be...
by Doc
Mon Dec 22, 2008 2:04 pm
Forum: Investing - Theory, News & General
Topic: Do you market time bond (fund) holdings?
Replies: 26
Views: 3298

jeffyscott wrote: while another may "yes" because they would sell long term treasuries, due to the low yields.
So it's market timing if you sell long term treasuries because of low yield but its rebalancing if you sell them because of high price (i.e. high gain). :lol:
by Doc
Mon Dec 22, 2008 12:52 pm
Forum: Investing - Theory, News & General
Topic: Do you market time bond (fund) holdings?
Replies: 26
Views: 3298

It depends on what your motive is. I use this definition of market timing from Wikipedia which emphasized the predictive nature of the move rather than triggers today. Market timing is the strategy of making buy or sell decisions of financial assets (often stocks) by attempting to predict future ma...
by Doc
Mon Dec 22, 2008 12:26 pm
Forum: Investing - Theory, News & General
Topic: Rollover of IRA to Roth - Tax question ?
Replies: 22
Views: 3874

Huh? I said "make sure it makes sense to delay the income". If the rates are higher in 2011/12 then one needs to calculate whether it's better to just realize the conversion income in 2010 instead of delaying it to 2011/12. Duh. Sorry Al. I know I sometimes transpose stuff when I type. Didn't reali...