Search found 8578 matches

by Doc
Wed Jun 03, 2009 10:54 am
Forum: Investing - Help with Personal Investments
Topic: Do TIPS belong in a Roth IRA or Traditional IRA?
Replies: 33
Views: 6422

The reasons for holding the higher-returning asset in the Roth IRA, even after tax adjustment, are secondary: If your portfolio does well, you won't need to take a large portion out, and you would prefer not to be forced to take it out only to reinvest it in a taxable account. Therefore, you would ...
by Doc
Sun May 31, 2009 11:14 am
Forum: Investing - Help with Personal Investments
Topic: Do TIPS belong in a Roth IRA or Traditional IRA?
Replies: 33
Views: 6422

Doc Not viewing problem right--two separate issues First is which do you contribute to, Roth vs Traditional and that is totally dependent on which tax rate you expect to be lower. IF lower in retirement then Traditional Second is if you have both a Roth and Traditional then which do you prefer to h...
by Doc
Sat May 30, 2009 2:44 pm
Forum: Investing - Help with Personal Investments
Topic: Do TIPS belong in a Roth IRA or Traditional IRA?
Replies: 33
Views: 6422

Anything in the middle goes into the Roth IRA. Roths and Traditionals are basically identical in terms of taxes--there are NO TAXES on either. There are NO TAXES on either. Tax efficiency is not a factor in choosing asset location between so called "tax deferred" (Traditional IRA or TIRA) and "tax ...
by Doc
Sat May 30, 2009 11:28 am
Forum: Investing - Help with Personal Investments
Topic: Do TIPS belong in a Roth IRA or Traditional IRA?
Replies: 33
Views: 6422

First Roths and Traditionals are basically identical in terms of taxes--there are NO TAXES on either. It is just that you don't own 100% of the Traditional but you do own 100% of the Roth. You are investing some share of the Traditional for the government (1-your tax rate at withdrawal). The advant...
by Doc
Sat May 30, 2009 11:22 am
Forum: Investing - Help with Personal Investments
Topic: Warning Vanguard brokerage is having problems.
Replies: 39
Views: 12723

Values for TIPS reported on-line for my brokerage account look to be incorrect. Using the Vanguard price x Treasury's Inflation Factor x # bonds I get different values than Vanguard shows. I've checked this weekly for 6 months and this is the first inconsistency. Could it be a glitch in the move fr...
by Doc
Sat May 30, 2009 10:22 am
Forum: Investing - Theory, News & General
Topic: knowing Treasury yields when buying at auction?
Replies: 7
Views: 1504

The fed chart is a constant yield curve. Meaning that it is a calculation of a fictitious note of a given fixed maturity like ten years. The calculation is based on real notes and for TIPS there was a change last year that made the curve "exact" for the on the run issues. Since the quotes from say B...
by Doc
Sat May 30, 2009 10:10 am
Forum: Investing - Theory, News & General
Topic: Retirees in your 40s - Help
Replies: 158
Views: 23147

After marriage we went to work for relatively risky startups so we decided we needed to live off one income and saved the other. Adding to the risky startup concept, consider working in less developed areas of the world where you can live comfortably on a lot less. The "hardships" assocated with su...
by Doc
Thu May 28, 2009 5:33 pm
Forum: Investing - Help with Personal Investments
Topic: To Roth, or not to Roth
Replies: 17
Views: 2954

You're more optimist than I. I think a VAT or national sales tax will be sold during a crisis as the only way to avoid raising income taxes much higher. Takes a real optimist to believe they will go down at all even temporarily. ;) I seem to recall that many years ago (Nixon Administration maybe) t...
by Doc
Thu May 28, 2009 5:14 pm
Forum: Investing - Theory, News & General
Topic: PIMCO on the new normal
Replies: 14
Views: 2147

Mr. Gross - U.S. investors should invest abroad Mr. Bogle - U.S. investors need not invest abroad; those who do should not invest more than 20% internationally. Talk about polar opposites. I think Gross is emphasizing the newer developed nations - "Brazil, India and China" and Bogle is emphasizing ...
by Doc
Thu May 28, 2009 10:18 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Portfolio Analysis Tool
Replies: 15
Views: 4695

Re: Vanguard Portfolio Analysis Tool

I just ran a test of the Portfolio Tester Tool in which I put the entire hypothetical portfolio in Total Stock Market and the result was a perfect match between the respective percentages in large, mid and small cap with what the tester tool recommends. According to the results of this test, the To...
by Doc
Wed May 27, 2009 4:27 pm
Forum: Investing - Theory, News & General
Topic: 4.11% actual expense of Schwab International Small-Mid Index
Replies: 14
Views: 3438

Re: 4.11% actual expense of Schwab International Small-Mid I

I have it in an IRA so when they raise the ER I will just sell it, ... It is not unusual for a fund company to subsidize a new fund or a low capitalized fund that the fund company needs to "round out" its product mix. If Schwab cannot attract more investment in this fund it is probably more likely ...
by Doc
Tue May 26, 2009 1:42 pm
Forum: Investing - Help with Personal Investments
Topic: Warning Vanguard brokerage is having problems.
Replies: 39
Views: 12723

Re: Update

Well, think I solved it. Turned off online services for Vanguard in Money then turned back on again and carefully associated accounts through the advanced setup choice. Now have some weeding and pruning of downloaded transactions to do but seems to have at least correctly associated exisiting accou...
by Doc
Tue May 26, 2009 12:08 pm
Forum: Investing - Help with Personal Investments
Topic: Warning Vanguard brokerage is having problems.
Replies: 39
Views: 12723

Re: Changing VG brokerage account numbers in MS Money

Would greatly appreciated any tips anyone has for adjusting Microsoft Money for the change from Pershing. I have three VG brokerage accounts (two IRA, one regular). I changed to the new account numbers in Account Details pages of Money but still get "update unsuccesful" when updating these accounts...
by Doc
Mon May 25, 2009 1:51 pm
Forum: Investing - Help with Personal Investments
Topic: Warning Vanguard brokerage is having problems.
Replies: 39
Views: 12723

New website is up with new VBS account number. Same problem with only being able to buy in the margin account, unfortunately. Microsoft Money shows an "unsuccessful" download for the "old" account and a zero balance for the "new" accounts. But Vg website show the correct balance for the "new" accou...
by Doc
Mon May 25, 2009 12:48 pm
Forum: Investing - Theory, News & General
Topic: Means-testing entitlements - a trap for 401K savers?
Replies: 49
Views: 7346

SS is already means tested, by default. This happened when it was made taxable. The higher your income, the more SS is taxed, and at higher rates. This may be a semantic argument. I consider "means testing" as not getting the benefit if your income exceeds a certain amount. Taxing the benefit if yo...
by Doc
Mon May 25, 2009 11:08 am
Forum: Investing - Theory, News & General
Topic: Means-testing entitlements - a trap for 401K savers?
Replies: 49
Views: 7346

What's wrong with means testing? If you means test SS you no longer have a "retirement" program but instead you have a "welfare" entitlement and a more progressive income tax. That's not arguably a bad thing but it is no longer "social security". Once you do that you reduce the universal acceptabil...
by Doc
Sat May 23, 2009 4:54 pm
Forum: Investing - Theory, News & General
Topic: Tax rate in retirement
Replies: 28
Views: 3873

Anybody who thinks he knows what his taxes (or even tax rates) will be in the long term is blowing smoke. True but investing in an unknown world is something we all have to do. The question addressed rates "based on current tax law". This is arguably the best place to start and then we can do "what...
by Doc
Sat May 23, 2009 9:41 am
Forum: Investing - Theory, News & General
Topic: Tax rate in retirement
Replies: 28
Views: 3873

To answer the question, I need to know the answers to the following questions: Am I married now? Will my spouse die or divorce me before I retire? (change from filing joint to filing single) What happens to my income after my spouse divorces me? What happens to my income after my spouse dies? Will ...
by Doc
Sat May 23, 2009 9:27 am
Forum: Investing - Theory, News & General
Topic: Vanguard called me about my proxy votes
Replies: 9
Views: 2343

I had to vote 5 separate proxies. They sure don't make it easy.
by Doc
Fri May 22, 2009 7:54 pm
Forum: Investing - Theory, News & General
Topic: Tax rate in retirement
Replies: 28
Views: 3873

thenextguy wrote: You'd have to be making considerably more in retirement in order to be paying a higher average tax rate than on your contributions.
That's why I split the poll for younger and older workers.
by Doc
Fri May 22, 2009 1:09 pm
Forum: Investing - Theory, News & General
Topic: Tax rate in retirement
Replies: 28
Views: 3873

The future taxes on tax-advantaged accounts will be minimized because we will be converting from tax-deferred to tax-free Roth IRAs for almost 20 years while in a low tax bracket. That's kind of the idea behind the poll. You want to pay the tax when your rate is low. If your rate is high when you c...
by Doc
Fri May 22, 2009 1:03 pm
Forum: Investing - Theory, News & General
Topic: Tax rate in retirement
Replies: 28
Views: 3873

I'm 43. Is that younger or older? Where's the dividing line -- 40, 45, 50, ...? Hey Ziggy, Purposely left to the responder. The intent was that young workers are paying a low rate now and will be paying a higher rate while still working. The older class are at or near their maximum working rate.
by Doc
Fri May 22, 2009 11:07 am
Forum: Investing - Theory, News & General
Topic: Tax rate in retirement
Replies: 28
Views: 3873

Tax rate in retirement

One of the important factors in choosing a ROTH vs. a Traditional Retirement Account is whether your tax rate at withdrawal will be higher or lower then when you make your contribution. I have usually assumed that it will be lower in retirement but recently I have questioned this assumption. See for...
by Doc
Thu May 21, 2009 11:40 am
Forum: Investing - Theory, News & General
Topic: Differences between asset location Roth VS IRA?
Replies: 15
Views: 2644

However my traditional 401k doesn't offer total bond market index, which I would like, but does have VG TIPS institutional shares and VG int treasury admiral shares, so I settle for 50/50 TIPS/Treasury. Mike, Total Bond Market is about 33% Treasuries. Your "settle for" is 100% Treasuries. After all...
by Doc
Thu May 21, 2009 9:37 am
Forum: Investing - Theory, News & General
Topic: Differences between asset location Roth VS IRA?
Replies: 15
Views: 2644

There is no difference in returns after you adjust for the tax treatment, but if all else is equal, putting higher-returning assets in the Roth is slightly better, because the Roth is protected against potential changes in tax rates , has more flexible rules for required minimum distributions, and ...
by Doc
Wed May 20, 2009 6:30 pm
Forum: Investing - Theory, News & General
Topic: Vanguard brokerage, acceptable service now?
Replies: 6
Views: 2612

Re: Vanguard brokerage, acceptable service now?

TallyMan wrote: Has VBS service improved?
Vanguard will take over the brokerage clearing function that had been out sourced to Pershing on May 20. Oh gee that's today. Your question is a little premature. :wink:
by Doc
Wed May 20, 2009 9:07 am
Forum: Investing - Theory, News & General
Topic: Differences between asset location Roth VS IRA?
Replies: 15
Views: 2644

EmergDoc wrote:
Here's the deal:
Pretty good analysis especially for someone trained in medicine and not math.

Grats.
by Doc
Tue May 19, 2009 3:15 pm
Forum: Investing - Theory, News & General
Topic: Schwab Total Bond Market Fund Tracking Error
Replies: 3
Views: 1240

Re: Schwab Total Bond Market Fund Tracking Error

The fund uses the index as a guide in structuring the fund’s portfolio and selecting its investments. However, the fund is not required to invest any percentage of its assets in the securities represented in the index ." Many index funds don't hold all the securities in the index. Many don't even k...
by Doc
Tue May 19, 2009 12:20 pm
Forum: Investing - Theory, News & General
Topic: Anyone else fear future taxes on Roth IRAs?
Replies: 21
Views: 3179

Re: Anyone else fear future taxes on Roth IRAs?

Exactly. I think the chance of being taxed twice on the Roth is much higher than the chance of double taxation on your traditional IRA withdrawals when you take money out in retirement I have to believe that if they tried to tax ROTH withdrawals and make no changes in so called "deferred tax retire...
by Doc
Tue May 19, 2009 11:48 am
Forum: Investing - Theory, News & General
Topic: Anyone else fear future taxes on Roth IRAs?
Replies: 21
Views: 3179

Re: Anyone else fear future taxes on Roth IRAs?

I know this might be a bit paranoid, but with all the tax revenue the federal government stands to lose from the next generation of retirees with Roths and the liberalized 401(k)-Roth conversion process next year, do any of you fear that your Roth IRAs will be taxed in the future? Are any of you st...
by Doc
Sat May 16, 2009 1:44 pm
Forum: Investing - Theory, News & General
Topic: Libor Spread Changes ???
Replies: 2
Views: 1006

According to Wikipedia: "Initially, the TED spread was the difference between the interest rates for three-month U.S. Treasuries contracts and the three-month Eurodollars contract as represented by the London Interbank Offered Rate (LIBOR). However, since the Chicago Mercantile Exchange dropped T-b...
by Doc
Sat May 16, 2009 12:05 pm
Forum: Investing - Theory, News & General
Topic: Libor Spread Changes ???
Replies: 2
Views: 1006

Libor Spread Changes ???

Since the start of the credit crisis I've been following the Ted Spread which is the difference between the Libor rate and the 90 day T-bill rate using Bloomberg. http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP:IND Pre crisis the spread was on the order of 50 bps. In the last few weeks the cha...
by Doc
Fri May 15, 2009 7:27 pm
Forum: Investing - Theory, News & General
Topic: TIPS Ladder II
Replies: 42
Views: 24863

The beauty of TIPS is that duration, the interest rate, and the magnitude of future inflation are far less important than with nominal bonds. You know your real return and you know your capital is at almost no risk, which are the most important issues with fixed income investments. As long as you m...
by Doc
Fri May 15, 2009 7:06 pm
Forum: Investing - Theory, News & General
Topic: TIPS Ladder II
Replies: 42
Views: 24863

That's sorta the approach I took - since I know what the real principal value will be at maturity, I used that number for liability matching. The interest payments that are thrown off will just go "somewhere." Not a very efficient way of doing it but I don't know any better way - like to know if th...
by Doc
Fri May 15, 2009 12:12 pm
Forum: Investing - Theory, News & General
Topic: TIPS Ladder II
Replies: 42
Views: 24863

One question regarding TIPS, particularly long-maturity TIPS. I understand liability matching - that's essentially what I'm trying to do by holding a 20-year TIPS income ladder. What I don't understand very well is YTM. The quoted YTM of each maturity that I've purchased assumes that the semi-annua...
by Doc
Wed May 13, 2009 10:47 am
Forum: Investing - Theory, News & General
Topic: Moving Emergency Fund to Schwab?
Replies: 21
Views: 5102

Thanks for the replies. For those of you who have Schwab accounts, you have been happy with the service? We have a Schwab account but I can't say that I am unhappy with the sevice because I have never had to call them . Unlike Vanguard, especially Vanguard brokerage service, everything is completel...
by Doc
Mon May 11, 2009 11:45 am
Forum: Investing - Theory, News & General
Topic: jumping in and out of VIPSX...does not compute.
Replies: 79
Views: 11332

Re: jumping in and out of VIPSX...does not compute.

Here is the blue line: http://research.stlouisfed.org/fred2/series/DFII10 Don't forget that the Fed changed their methodology on calculating the constant yield curve for TIPS late last year (December?). I don't think they ever went back and changed the prior data so the curve has a discontinuity in...
by Doc
Mon May 11, 2009 11:40 am
Forum: Investing - Theory, News & General
Topic: jumping in and out of VIPSX...does not compute.
Replies: 79
Views: 11332

As mentioned, I prefer to treat TIPS as an asset class (subclass, whatever) and rebalance whenever outside the 20/5 band rule I use. In principle this is not any different from moving in and out based on yield. To the extent that the movement is due to price changes of the TIPS themselves it is the...
by Doc
Sun May 10, 2009 12:55 pm
Forum: Investing - Theory, News & General
Topic: Why is real estate leveraged?
Replies: 37
Views: 4683

Re: Why is real estate leveraged?

Problem is they took a good thing too far . Freddie, Fannie, easy FHLB wholesale loans, and interest rates driven down by the Fed Reserve appear to have been the main causes of the mortgage/housing bubble. We also need to remember that the GSE's were encouraged to make loans available in the pursui...
by Doc
Fri May 08, 2009 6:16 pm
Forum: Investing - Theory, News & General
Topic: VG short term goverment bond funds
Replies: 6
Views: 1927

Re: VG short term goverment bond funds

Chastemp wrote:VG says they are both 1-3 year average bond funds, so is the extra performance of VSGBT a free lunch, or what? :?
Treasuries are exempt from state income tax.
by Doc
Fri May 08, 2009 11:18 am
Forum: Investing - Theory, News & General
Topic: ABC summary of Banking Crisis...amazingly frank
Replies: 18
Views: 4518

Maybe the delivery is a little dumbed down, but the message is right on. As a country we're being screwed by an elite that owes no allegiance to anyone but themselves and their cronies. Much of the current crisis is to due the over leveraging of home purchases by the non-elite individuals that purc...
by Doc
Fri May 08, 2009 11:04 am
Forum: Investing - Theory, News & General
Topic: Slice & Dice TBM
Replies: 6
Views: 2035

I do slice and dice Total Bond fro two reasons: 1)I half heartily subscribe to Larry Swedroe's bond theory. 2) We have to have a significant amount of our bonds in taxable and slice and dice yields tax advantages. I think of Total bond as: 40% short, 40% intermediate and 20 % long 33% treasury, 33% ...
by Doc
Thu May 07, 2009 12:27 pm
Forum: Investing - Theory, News & General
Topic: ABC summary of Banking Crisis...amazingly frank
Replies: 18
Views: 4518

rich wrote:There is an unbelievable amount of corruption in the system. What a mess.
Are you talking about ABC news? This clip belongs on the infomercial channel not the evening news. Thank Allah that most of the young people are getting their news from the late night comedy shows. :twisted:
by Doc
Thu May 07, 2009 12:17 pm
Forum: Investing - Theory, News & General
Topic: Death Of Vanguard? Schwab Offers 0.09% ER Index Funds
Replies: 51
Views: 10907

Since our portfolio is split relatively equally between Vanguard and Schwab I initially thought these lower fees were going to be significant for us. I just did a quick calculation and found that our Vanguard funds are only 13% of our portfolio down from 24% only three years ago. The main reason for...
by Doc
Wed May 06, 2009 11:54 am
Forum: Investing - Theory, News & General
Topic: Trying to defend boglehead theory...anyone help?
Replies: 27
Views: 3414

Boglehead theory does not count on past performance. It is all about keeping costs low. Index funds have done well because costs are kept to a minimum. So it's not Bogglehead theory to use past preformance to pick funds but it is Bogglehead theory to use past performance to "prove" that index funds...
by Doc
Tue May 05, 2009 10:25 am
Forum: Investing - Theory, News & General
Topic: vanguard proxy votes
Replies: 2
Views: 1010

"A well informed populace ..." is also necessary for voting on investment issues. The pamphlet that accompanied the proxy card is very informative.
by Doc
Sun May 03, 2009 4:49 pm
Forum: Investing - Theory, News & General
Topic: Bond Duration/What Is Short
Replies: 3
Views: 1036

http://quicktake.morningstar.com/DataDe ... pshot.html

Based on maturity:

Short 1-4
Intermediate 4-10
Long > 10

The numbers are somewhat less if you use duration instead of maturity.
by Doc
Fri May 01, 2009 7:13 pm
Forum: Investing - Theory, News & General
Topic: what is your fixed income AA?
Replies: 32
Views: 4398

I think most people around here would recommend 50% Total Bond Index and 50% TIPS. Most people who don't follow the philosophy of Larry Swedroe. :wink: Well, what would Larry suggest? Larry suggests TIPS and short term Treasuries (or very high quality short corporates). He doesn't like lower qualit...
by Doc
Fri May 01, 2009 7:13 pm
Forum: Investing - Theory, News & General
Topic: what is your fixed income AA?
Replies: 32
Views: 4398

I think most people around here would recommend 50% Total Bond Index and 50% TIPS. Most people who don't follow the philosophy of Larry Swedroe. :wink: Well, what would Larry suggest? Larry suggests TIPS and short term Treasuries (or very high quality short corporates). He doesn't like lower qualit...
by Doc
Fri May 01, 2009 1:55 pm
Forum: Investing - Theory, News & General
Topic: what is your fixed income AA?
Replies: 32
Views: 4398

MrMatt2532 wrote:I think most people around here would recommend 50% Total Bond Index and 50% TIPS.
Most people who don't follow the philosophy of Larry Swedroe. :wink: