Search found 2207 matches

by Chip
Fri Dec 19, 2008 6:54 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review / Rebalance & Taxable Investment Advice
Replies: 8
Views: 2295

First, congratulations on living well below your means. I suspect you don't know too many people who are doing what you are. But I agree with AnotherCFP that it's extremely unlikely you'll be able to fully retire at 45. The numbers don't add up to me. Also agree with paying off the 2nd mortgage ASAP...
by Chip
Fri Dec 19, 2008 6:17 am
Forum: Investing - Help with Personal Investments
Topic: Calculating Gain on Sale of TIPS
Replies: 4
Views: 1737

Hi again, I think I may have introduced some confusion. When I said OID in the other reply, I wasn't talking about "true" OID, i.e. a discount from par value at purchase. I was talking about the annual increase in principal value of your TIPS due to inflation. For some strange reason this is reporte...
by Chip
Wed Dec 17, 2008 7:02 am
Forum: Investing - Help with Personal Investments
Topic: Calculating Gain on Sale of TIPS
Replies: 4
Views: 1737

Start with the actual purchase price (almost certainly not exactly 14,000, but something very close to it). Don't include any accrued interest paid at purchase. Add to this number the sum of OID interest for this bond over the time you've owned it. You paid tax on that OID (or will pay), so it adds ...
by Chip
Thu Dec 11, 2008 6:41 am
Forum: Investing - Help with Personal Investments
Topic: VAIPX vs TIP
Replies: 8
Views: 2173

SpringMan,

Looks like my guess about proration on VIPSX was incorrect. Roverdog sets it straight in this thread.

Sorry for leading things astray.
by Chip
Thu Dec 11, 2008 6:24 am
Forum: Investing - Help with Personal Investments
Topic: I've created an accounting mess. Keep digging or stop?
Replies: 15
Views: 3479

1. Yes. Exchange all shares into another similar, but not substantially identical fund on the same day. 2. I wouldn't just for that reason. But you're going to fix it anyway because of the TLH. 3. Probably doesn't matter a great deal. Many here seem to like the large cap index. 4. Yes, if you sell a...
by Chip
Wed Dec 10, 2008 4:52 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question
Replies: 4
Views: 1285

Chaz,

Where exactly in Pub 17 can the OP find the answer?
by Chip
Wed Dec 10, 2008 10:36 am
Forum: Investing - Help with Personal Investments
Topic: VAIPX vs TIP
Replies: 8
Views: 2173

SpringMan,

I think you're correct about proration of Vanguard bond fund dividends.

It's probably different for TIP. I think ETF dividends work like stock dividends - if you own on the ex-div date, you get the whole dividend, otherwise you get nothing.
by Chip
Wed Dec 10, 2008 8:40 am
Forum: Investing - Help with Personal Investments
Topic: New Boglehead with new portfolio and a question or two.
Replies: 6
Views: 1634

FWIW, here's what I would do if there are no negative tax implications to making these changes: His IRA: 31% VAIPX (or whatever mix of it and Total Bond you want) Her IRA: 12% Total Bond Taxable: 45% VTSAX 05% VFWIX 07% Prime MM or VMSXX Assuming no other sources of income, this would drop you into ...
by Chip
Wed Dec 10, 2008 8:25 am
Forum: Investing - Help with Personal Investments
Topic: New Boglehead with new portfolio and a question or two.
Replies: 6
Views: 1634

TIPS would be better in taxable than TBM because the interest isn't taxable by NC. One minor annoyance is that the distributions vary significantly with the inflation rate, making tax planning a little more complex. But you are very likely to be better off with munis in taxable. VWITX is currently a...
by Chip
Tue Dec 09, 2008 4:17 pm
Forum: Investing - Help with Personal Investments
Topic: New Boglehead with new portfolio and a question or two.
Replies: 6
Views: 1634

Hi Mike. Glad you delurked. Sounds like you're living the good life. In general, I like the portfolio. A few thoughts: I'm sure you know you're giving up a little bit of tax efficiency by having Wellington in the IRAs and bond funds in taxable vs. all of your equities in taxable. Though it's not a b...
by Chip
Sat Dec 06, 2008 6:47 am
Forum: Investing - Theory, News & General
Topic: TIPs real yields collapsing!!
Replies: 57
Views: 11910

FWIW, based on the pricing Fido is giving me, 7-9 year TIPS prices went up 4.5-5% last week. 16-19 year TIPS were up 8-9%.

Those seem like big moves to me. Too much Boglehead buying? :D
by Chip
Sat Dec 06, 2008 6:42 am
Forum: Investing - Theory, News & General
Topic: TIPs real yields collapsing!!
Replies: 57
Views: 11910

Does anybody keep track of some of the bid/ask spreads? Not on any sort of regular basis, but I have some data points kind of stuck in my head. 1. Back in 10/07, spreads on the 8-10 year TIPS were in the .2% range. The 18-20 year were around .4%. 2. In 9/08 the 1/26 bond had a spread of about .6%. ...
by Chip
Fri Dec 05, 2008 2:26 pm
Forum: Investing - Theory, News & General
Topic: IRA Conversion and TLH
Replies: 5
Views: 1340

If he's pretty confident that his income is going to go up substantially, I'd convert all the way to the 32,550 cutoff. In fact, if he wants to get precise about it, convert even more than he thinks he'll need, then recharacterize the excess after he knows his exact 2008 income next spring. It sound...
by Chip
Fri Dec 05, 2008 2:18 pm
Forum: Investing - Help with Personal Investments
Topic: Rebalance
Replies: 15
Views: 2675

Anyone agree? Yes. I've been 75/25 since retiring 7 years ago, though I changed to 72/28 in 9/07 (exercised some options and bought TIPS instead of equities). Currently at 69/31. I've rebalanced a few times during the downturn, but now feel that my supply of bonds is getting low enough (~9 years of...
by Chip
Wed Dec 03, 2008 8:48 am
Forum: Investing - Theory, News & General
Topic: IRA Conversion and TLH
Replies: 5
Views: 1340

Yes. Conversion income is just another source of ordinary income.
by Chip
Wed Dec 03, 2008 5:44 am
Forum: Investing - Help with Personal Investments
Topic: How much should I convert to Roth?
Replies: 30
Views: 5866

I've been debating the merits of converting even larger amounts to get as much as possible into my Roth Me too. I'm a good bit farther away from RMDs, but still anticipate I won't be able to convert as much as I'd like before they kick in. Since the market's about 40% down, I view a 25% conversion ...
by Chip
Wed Dec 03, 2008 5:04 am
Forum: Investing - Help with Personal Investments
Topic: Carry capital loss over indefinitely?
Replies: 21
Views: 5402

I have never done a tax return with an AGI that is less than the standard/itemized deduction. I guess those taxpayers generally are not required to file and thus have no need for tax assistance. I ran into it last year for the first time (I volunteer in the AARP Tax Aide program). We had many peopl...
by Chip
Wed Dec 03, 2008 4:59 am
Forum: Investing - Help with Personal Investments
Topic: Carry capital loss over indefinitely?
Replies: 21
Views: 5402

now if that AGI excluding capital losses is greater than the deduction, does the amount carried over gradually decrease as that AGI excluding capital losses increases or is there a step drop For each dollar that AGI excluding capital losses is greater than the deduction (up to $3000), one dollar of...
by Chip
Tue Dec 02, 2008 2:09 pm
Forum: Investing - Help with Personal Investments
Topic: Carry capital loss over indefinitely?
Replies: 21
Views: 5402

Yes, unless there is no taxable income. You must use at least $3k of carryover loss per year even if you have no tax liability in a carryover year. Actually, neither of us was correct. If Line 41 of the 1040 (income after deductions, but before exemptions) is negative, that amount of the loss used ...
by Chip
Tue Dec 02, 2008 5:49 am
Forum: Investing - Help with Personal Investments
Topic: Carry capital loss over indefinitely?
Replies: 21
Views: 5402

Is one obliged to use carried over losses each year
Yes, unless there is no taxable income.
by Chip
Sun Nov 30, 2008 2:29 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Advice Appreciated
Replies: 4
Views: 1206

Hi, You should rework your post so that the percentages across ALL of your accounts add up to 100%, rather than 100% for each account. It is the format that most people here are used to. You can use the edit button to fix your original post. I would eliminate the high cost funds from your 457 alloca...
by Chip
Wed Nov 26, 2008 6:27 am
Forum: Investing - Theory, News & General
Topic: Insanity of the 4% safe withdrawal rule
Replies: 123
Views: 19189

4% plus COLA would assume a 4% real return each year. Thats fairly generous.
No. All of the SWR studies assume principal will be invaded, and most of them look at a 30 year retirement.
by Chip
Tue Nov 25, 2008 4:40 am
Forum: Investing - Theory, News & General
Topic: What is your current Age and Asset Allocation?
Replies: 106
Views: 19279

Age 54. Retired 7 years and living off portfolio. Target allocation: 72% stocks/28% bonds Actual: 68% stocks/32% bonds I've rebalanced into the downturn, but am starting to feel a little antsy about the absolute $ in bonds -- I don't want to go below 6 years worth of spending in bonds. So I will onl...
by Chip
Tue Nov 25, 2008 3:54 am
Forum: Investing - Help with Personal Investments
Topic: What is the best TIPS to buy today?
Replies: 43
Views: 8879

Why are I-bonds out of favor in taxable all of a sudden?
The rates are much lower than TIPS and there is a 10K (?) annual limit on purchases. I think those are the main reasons they aren't getting much discussion these days.
by Chip
Mon Nov 24, 2008 4:24 pm
Forum: Investing - Help with Personal Investments
Topic: What is the best TIPS to buy today?
Replies: 43
Views: 8879

Oh well. These TIPS really are a bookkeeping mess in a taxable account, aren't they?
Indeed. Thank goodness for spreadsheet software. :shock:
by Chip
Mon Nov 24, 2008 4:20 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone starting to buy TIPS in taxable?
Replies: 26
Views: 4338

oneleaf, I manage my mother's accounts, and have bought TIPS in taxable for her over the years (she has no tax-deferred space). Both VBS and Fido provide a 1099-INT for the coupon payments, plus a 1099-OID for the principal accrual. You don't have to calculate anything yourself, though I do it anywa...
by Chip
Mon Nov 24, 2008 4:03 pm
Forum: Investing - Help with Personal Investments
Topic: What is the best TIPS to buy today?
Replies: 43
Views: 8879

I didn't see this mentioned, but if you're buying long term in a TAXABLE account, then the lower coupon issues (1/15/2026 and 1/15/2028) selling below par allow you to shelter some of the return as long-term capital gains, to be recognized at the time of maturity. Be careful here. Market discount b...
by Chip
Fri Nov 21, 2008 6:43 am
Forum: Investing - Help with Personal Investments
Topic: "Tax free" TIPs in Taxable Account.
Replies: 4
Views: 1632

I think you're looking at it logically, with the following "but". There is a chance we have deflation the next few years. I think it's a slight chance, but I've seen quite a few things in the markets the last few months that I never thought I'd see. Nominal bonds will probably do better in a deflati...
by Chip
Mon Nov 10, 2008 9:03 am
Forum: Investing - Help with Personal Investments
Topic: Please Validate my TLH Scenario
Replies: 4
Views: 1171

Yes, since these are large $ amounts you will probably want to break up the ETF sales/purchases to avoid having a big impact on the spread. Does the VBS account give you Level 2 quote access? If so, you can see the depth of the "book" for a security at any given time. If not, it may be worth talking...
by Chip
Sun Nov 09, 2008 2:32 pm
Forum: Investing - Help with Personal Investments
Topic: Please Validate my TLH Scenario
Replies: 4
Views: 1171

1. Looks good to me. But I'm just some anonymous guy on a forum.
2. Yes. As I'm sure you know, the ETF trades at VBS settle in 3 business days, while the open end fund trades at Vanguard settle in 1 day.
3. I can't see why. They should be happy you overpaid them for part of the year.
by Chip
Sat Nov 08, 2008 3:22 pm
Forum: Investing - Help with Personal Investments
Topic: Another TLH question from another newbie
Replies: 5
Views: 1339

I didn't think VTSMX had small exposure? So, if I want more small exposure, I should buy it separately - but I should put it in our IRAs before VTSMX? VTSMX does have small cap exposure, at market cap weighting (which isn't a huge amount). That's why they call it a total market fund :P . Many here ...
by Chip
Sat Nov 08, 2008 6:30 am
Forum: Investing - Help with Personal Investments
Topic: Another TLH question from another newbie
Replies: 5
Views: 1339

Reese, Welcome to the forum! 1. The IRS test is "substantially identical", not "essentially the same". While no one here knows for certain (as the IRS hasn't issued a specific ruling on it), I suspect nearly everyone here would say that you can sell VFIAX, VIMSX and NAESX and buy VTSAX (admiral shar...
by Chip
Fri Nov 07, 2008 4:47 pm
Forum: Investing - Help with Personal Investments
Topic: How to deposit "check" from old Roth IRA?
Replies: 5
Views: 1606

Confirming Taylor's take on the issue: I had a similar situation with a check made out to my Schwab IRA (traditional, not Roth), which was at Fidelity at the time the check was issued. Fidelity told me to cash the check, then write one to them for the same amount, and include an IRA deposit form sho...
by Chip
Thu Oct 30, 2008 5:02 am
Forum: Investing - Theory, News & General
Topic: Understanding the details
Replies: 9
Views: 1973

Adding to the good points already made so far: Something to remember about bankruptcy is that the common stock of the company is often (usually?) cancelled when the reorganization is complete, and "new" common stock is issued. But it usually isn't issued to the holders of the old stock -- it usually...
by Chip
Thu Oct 30, 2008 3:49 am
Forum: Investing - Theory, News & General
Topic: Doubting my investment plan regarding bonds
Replies: 41
Views: 7152

I think that switching now would likely set you up for a classic whipsaw. But no one knows what will happen, especially me. I'm feeling a bit of the regret that you are. My bond allocation is about 80% in TIPS, all purchased at what I thought were pretty good yields (2-2.7%). But "pretty good" is a ...
by Chip
Sun Oct 26, 2008 8:57 am
Forum: Investing - Theory, News & General
Topic: Retiree Spending Survey
Replies: 45
Views: 9350

Good idea for a thread, Rick. 1) 7 years. Retired at age 46. Living off the portfolio, no pension, SS or anything like that. 2) About as expected, but it's been more difficult than I expected to stay at the target spending level (3.5% of portfolio, inflation-adjusted). When you have more time it's e...
by Chip
Wed Oct 15, 2008 10:05 am
Forum: Investing - Help with Personal Investments
Topic: Timing a CA muni bond fund swap (NOT market timing)
Replies: 0
Views: 637

Timing a CA muni bond fund swap (NOT market timing)

I manage my mother's accounts for her. In March I took tax losses on the Vanguard California Intermediate and Long Term muni funds (VCADX and VCLAX). These funds were being held at Fidelity, not Vanguard. I swapped into a couple of equivalent (but not nearly as good) funds at Fidelity, and now want ...
by Chip
Wed Oct 15, 2008 5:34 am
Forum: Investing - Help with Personal Investments
Topic: Help with new Boglehead's portfolio
Replies: 4
Views: 1291

The proposed allocation looks pretty good to me, though it's a bit aggressive. How has she held up during this downturn? I like going 100% TIPS at these rates, though it does smack of market timing. Have you seen the idea mentioned here by Larry S. of switching between TIPS and nominal Treasuries ba...
by Chip
Mon Oct 13, 2008 3:52 pm
Forum: Investing - Help with Personal Investments
Topic: Sell 5yr TIPS to build ladder?
Replies: 2
Views: 950

It sounds like a very good idea to me. You're matching the maturities with your needs, and you're locking in a very good real interest rate for a longer period.
by Chip
Sat Oct 11, 2008 8:02 am
Forum: Investing - Help with Personal Investments
Topic: Chip, my Mom's cash was hijacked (snark)
Replies: 2
Views: 1182

Hi again Beth, I'd probably sweep everything to a MMF, and occasionally move a chunk into whatever asset class was below target. It makes the tax returns much simpler when you finally have to start selling assets, as well as giving you a little bit of accessible money if something unexpected comes u...
by Chip
Fri Oct 10, 2008 7:16 am
Forum: Investing - Help with Personal Investments
Topic: Buying / selling Treasuries directly
Replies: 2
Views: 1335

Are there any “gotchas” in costs of buying/selling Treasuries directly that I do not see?
No. Just make sure that you use the unadjusted price if you wish to enter a limit order (the price BEFORE the inflation adjustment). The buyer will also pay you a bit of accrued interest.
by Chip
Thu Oct 09, 2008 3:34 pm
Forum: Investing - Help with Personal Investments
Topic: Crazy Idea???
Replies: 8
Views: 1894

You've got an IPS that it appears you spent a good deal of thought on. Now you're ready to throw it out because we're in a bear market?

I say rebalance just like your IPS says. Nothing more, nothing less. Resist the siren song of greed!
by Chip
Thu Oct 09, 2008 1:01 pm
Forum: Investing - Help with Personal Investments
Topic: Does Mom have too much cash?!?
Replies: 10
Views: 2156

Beth, I'm very sorry to hear of your mother's sickness. It must be very difficult to have to deal with it as well as the financial implications. I would be tempted to split the 200K amongst a medium duration tax exempt fund, TIPS (VIPSX or individual), and maybe a little bit (<20%) of pure equity (e...
by Chip
Thu Oct 09, 2008 5:23 am
Forum: Investing - Help with Personal Investments
Topic: 52 yr old needs help
Replies: 5
Views: 1452

You can access the bonds in the tax-deferred accounts without penalty. Here's how: Say you need $X for immediate spending or to pump up your emergency fund. 1. Sell $X of stocks in your taxable account. Book a tax loss. 2. Sell $X of bonds in your tax deferred account. 3. Buy $X of stocks in your ta...
by Chip
Tue Oct 07, 2008 4:39 am
Forum: Investing - Help with Personal Investments
Topic: Please review my asset allocation/investment plan
Replies: 3
Views: 954

I think you might want to move some things around for more tax efficiency. You could also simplify things a bit. In normal times it doesn't make sense to own a tax-exempt bond fund in your taxable account while you still have room for a taxable bond fund in tax-deferred. Usually what is proposed her...
by Chip
Mon Oct 06, 2008 5:58 am
Forum: Investing - Help with Personal Investments
Topic: Recharacterize ROTH conversion from earlier this year?
Replies: 7
Views: 2464

Regarding this year's earlier contribution to a ROTH, can it be recharacterized and the tax loss harvested? It can be withdrawn, but there won't be a loss to be harvested, since the withdrawal has to be in cash. The loss stays in the Roth. I believe the requirement is to withdraw the original contr...
by Chip
Sun Oct 05, 2008 6:06 am
Forum: Investing - Theory, News & General
Topic: How Much Are You Down NOW?
Replies: 108
Views: 23342

Down 12.0% on a 72/28 portfolio (currently 68/32). I plan to do some rebalancing this week.
by Chip
Sun Oct 05, 2008 4:45 am
Forum: Investing - Help with Personal Investments
Topic: TIPs and Yield to Maturity
Replies: 4
Views: 1206

The TIPs "regulars" on this board seem excited about the current TIP yield, but if I plan for a 4.0% withdrawal rate during my 40 year retirement, 2.5% does sound like such a good deal. Obviously I would have to have other investments that make up the 1.5% difference. Am I missing something? Yes, y...
by Chip
Fri Oct 03, 2008 9:53 am
Forum: Investing - Help with Personal Investments
Topic: Where is WaMu trading?
Replies: 2
Views: 965

It's trading in the pink sheets. If I were you I would sell as soon as possible, assuming you can sell for more than the commission cost. Do NOT use anything but a limit order in that market.
by Chip
Fri Oct 03, 2008 7:50 am
Forum: Investing - Theory, News & General
Topic: 20yr TIPS @ 2.3%, good deal?
Replies: 198
Views: 35546

if we get DEFLATION real rates will likely fall Larry, You've said this several times, and it makes sense in theory, but I don't think it holds true in a severe deflationary environment. Nominal rates for individual investors won't go below zero (people will hold cash in FDIC insured accounts or in...