Minnesota BH Qtrly Meeting 8-12-2017 + Summary

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Peter Foley
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Minnesota BH Qtrly Meeting 8-12-2017 + Summary

Post by Peter Foley » Sun Jul 30, 2017 7:14 pm

Who: All MN Bogleheads & guests
What: Quarterly MN Boglehead meeting
Where: Southdale Library full meeting room, 7001 York Ave. S, Edina. NOTE LOCATION CHANGE
When: Saturday, August 12, 9:30am - 11:30am
Why: To continue learning from each other and helping each other out with regard to personal investing. ...and it's a fun, great group to be around.


Detailed Agenda:
9:30 Introduction/Greetings

9:40 Main Plenary Session
MN 2017 tax law changes (brief) See summary in later post.
Bogleheads’ 10 Basic Principles and the discussions that may ensue See summary in later post

10:00 Breakout Session 1 (40 minutes)

Risk tolerance and Asset Allocation
Investment Policy Statements
Q&A Investing FOR Retirement
Q&A Investing IN retirement
Diversify: Why (Callan Table) and How (how many assets classes, how many funds)
Stay the course - monitoring and rebalancing

10:40 Switch groups

10:50 Breakout Session 2 (40 minutes)

Risk tolerance and Asset Allocation
Investment Policy Statements
Q&A Investing FOR Retirement
Q&A Investing IN retirement
Revised Fiduciary rules and their impact on investors
Medicare

11:30 Adjourn, stack chairs

If you want more detail about any of the breakout topics feel free to post a question (or comment) and we will provide more detail.
If you are not on the MN BH e-mail list you may want to print out this agenda for the meeting.
Last edited by Peter Foley on Sun Aug 13, 2017 10:12 am, edited 4 times in total.

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Peter Foley
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Peter Foley » Mon Jul 31, 2017 7:31 pm

An additional note - two of the individuals leading discussion topics indicated that it would be a helpful (not necessary) to bring a laptop or an I-pad.

The session regarding monitoring and rebalancing will focus, in part, on some of the on-line tools available to help with those efforts.

a2z
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Re: MInnesota BH Quarterly Meeting August 12, 2017

Post by a2z » Tue Aug 01, 2017 5:55 am

Once again the MN-BHs have another terrific line-up of topics for discussion. Be reminded, they've changed the meeting place to Southdale Library.

a2z

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Re: MInnesota BH Quarterly Meeting August 12, 2017

Post by Peter Foley » Wed Aug 02, 2017 7:00 pm

There were three Minnesota tax law changes in the 2017 Special Session, House File 1 that may affect Bogleheads - this is one of the topics covered in the August meeting:

1. Estate tax reform
2. State income tax deductions for contributions to 529 plans
3. Some limits on the taxation of Social Security Benefits.

More details at the meeting.

Financial Engineer
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Re: MInnesota BH Quarterly Meeting August 12, 2017

Post by Financial Engineer » Sat Aug 05, 2017 8:47 am

The market is surging to new highs. What to do? Check your investment policy statement, that's what! I'm looking forward to a good discussion on the topic.
Do you think the market is pricey? | | S&P 500 CAGR from 1929 peak (CAPE = 32.6) to 1982 low (CAPE = 6.7) was 3.8% real (7.3% nominal). | | Stay the course.

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Re: MInnesota BH Quarterly Meeting August 12, 2017

Post by Peter Foley » Sat Aug 05, 2017 7:16 pm

It is especially important to have an Investment Policy Statement in writing. It helps check one's emotions. Two thoughts come to mind - "Oh dear I am missing out on this rally and I need to buy more." and " This must be a bubble, I need to get out!"

A quote from Professor Terrance Odean who studies investor behavior: "The most common thing investors wonder is:'Where is the market headed?' What they should ask is: 'When do I need the money?'"

The latter can be addressed in an Investment Policy Statement.

Financial Engineer
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Financial Engineer » Sat Aug 05, 2017 10:08 pm

A quote from Professor Terrance Odean who studies investor behavior: "The most common thing investors wonder is:'Where is the market headed?' What they should ask is: 'When do I need the money?'"

The latter can be addressed in an Investment Policy Statement.
Great reference. I believe Odean's quote points to separating one's savings and investments into buckets based on time horizon (i.e., when you need the money). In my own experience lack of doing this has led to selling low, and doing it well has lead to calm amidst big changes. Of course if this is written into one's investment policy statement it is all the more likely to be faithfully performed. Thanks for the fodder for the discussion next weekend.
Do you think the market is pricey? | | S&P 500 CAGR from 1929 peak (CAPE = 32.6) to 1982 low (CAPE = 6.7) was 3.8% real (7.3% nominal). | | Stay the course.

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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Peter Foley » Sun Aug 06, 2017 8:28 pm

We are about a week out from our quarterly meeting.

Does anyone need more details regarding the breakout topics?

I'm moderating the one on risk tolerance and asset allocation. Have you thought about the potential limitations of risk tolerance questionnaires? How do you feel about risk when the market is up by 20% over 7 months? Time for a bear market? What do you do? What do you feel you should do?

Can you address risk by simply modifying your asset allocation, or perhaps by just rebalancing? There are a number of theories that could be explored.

ARLJLKL
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by ARLJLKL » Wed Aug 09, 2017 11:08 am

I am looking forward to this, as always.

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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Fallible » Wed Aug 09, 2017 6:01 pm

Peter Foley wrote:We are about a week out from our quarterly meeting.

Does anyone need more details regarding the breakout topics?

I'm moderating the one on risk tolerance and asset allocation. Have you thought about the potential limitations of risk tolerance questionnaires? How do you feel about risk when the market is up by 20% over 7 months? Time for a bear market? What do you do? What do you feel you should do?

Can you address risk by simply modifying your asset allocation, or perhaps by just rebalancing? There are a number of theories that could be explored.
These are the key questions for all investors riding this long bull market so it's an especially relevant breakout for the times. :thumbsup

Fallible
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a2z
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by a2z » Wed Aug 09, 2017 9:02 pm

Bring your questions, problems and concerns to this Saturday’s MN-BH program at 9:30-11:30 Southdale Library in Edina http://www.hclib.org/about/locations/southdale. There will lots of opportunities to address those issues you've been mulling over. Check out the various breakout sessions in the program announcement.

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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Peter Foley » Fri Aug 11, 2017 1:42 pm

The meeting is tomorrow at the Southdale Library, 7001 York Ave. South. We will try to start promptly.

I am listing again the planned breakout sessions and am posing a couple questions to those reading this post: Posting your answer here on the forum will be helpful in terms of planning future meetings that better meet your needs.

1. Do you like the format of having a few breakout topics repeated? (The first 4 breakouts are repeated.)
2. Do you like the approach of having two very broad based breakout topics where a broad range of questions can be asked with - I expect - a range of answers coming from those attending the session? See bolded topics.

10:00 Breakout Session 1 (40 minutes)

Risk tolerance and Asset Allocation
Investment Policy Statements
Q&A Investing FOR Retirement
Q&A Investing IN retirement

Diversify: Why (Callan Table) and How (how many assets classes, how many funds)
Stay the course - monitoring and rebalancing

10:40 Switch groups

10:50 Breakout Session 2 (40 minutes)

Risk tolerance and Asset Allocation
Investment Policy Statements
Q&A Investing FOR Retirement
Q&A Investing IN retirement

Revised Fiduciary rules and their impact on investors
Medicare

Financial Engineer
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Financial Engineer » Sat Aug 12, 2017 6:58 am

See everyone at 9:30 today. Looking forward to it.
Do you think the market is pricey? | | S&P 500 CAGR from 1929 peak (CAPE = 32.6) to 1982 low (CAPE = 6.7) was 3.8% real (7.3% nominal). | | Stay the course.

Dottie57
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Dottie57 » Sat Aug 12, 2017 8:34 am

Financial Engineer wrote:See everyone at 9:30 today. Looking forward to it.

I'll be there. Should be interesting.

Dottie57
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Dottie57 » Sat Aug 12, 2017 3:10 pm

Good meeting and interesting topics.

Thanks!

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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Peter Foley » Sat Aug 12, 2017 7:22 pm

While some of this will go out in an e-mail, here are a couple items from the plenary session:

Legislative changes signed into law during the Minnesota 2017 legislative Session:

Section 7. Subtraction for contributions to 529 plans. Allows an income tax subtraction of up to $1,500 ($3,000 for married joint filers) of contributions to any state’s section 529 college savings plan or prepaid tuition plan. The subtraction excludes amounts that are rolled over from other college savings plans. The subtraction is limited to taxpayers who do not claim the 529 contribution credit in a later section. Effective beginning in tax year 2017.
Section 10. Subtraction for Social Security benefits. Authorizes a subtraction of Social
Security benefits for purposes of calculating Minnesota taxable income. The subtraction equals the lesser of the amount of benefits, or: $4,500 for married joint filers and surviving spouses; $3,500 for single or head of household filers; and $2,250 for married couples filing separate returns. The subtractions are phased out by 20% of provisional income over $77,000, $60,200, and $28,500, respectively. Effective beginning in tax year 2017. The subtractions and income thresholds are adjusted annually for inflation beginning in tax year 2018.
Section 33. Estate tax; subtractions. Modifies the calculation of the subtraction available for purposes of calculating the Minnesota taxable estate. The qualified small business and farm property subtraction is modified to reflect the increased general exclusion amount, beginning for estates of decedents dying in 2017. For estates of decedents dying in 2020 and thereafter, the general exclusion amount is $3 million and the qualified small business and farm property subtraction equals $2 million. Effective for estates of decedents dying in 2018 and after.
(b) The following exclusion amounts apply for the year of death:
(1) $2,100,000 for decedents dying in 2017;
(2) $2,400,000 for decedents dying in 2018;
(3) $2,700,000 for decedents dying in 2019; and
(4) $3,000,000 for decedents dying in 2020 and thereafter.

Here is a link to the State Revisor's Office if you want to read the text of the Omnibus Tax Bill HF 1:
https://www.revisor.mn.gov/laws?view=se ... 017&type=1

Bogleheads' Basic Principles and related discussion topics (of potential interest if you are planning a meeting).
Develop a workable plan – Can lead to discussions about goal setting in a number of areas, resources on the internet (Vanguard Principles for Investing Success), retirement calculators, asset allocation, diversification, risk.
Invest early and often – Can lead to discussion about budgeting, debt payoff, short term savings goals, house loans, savings versus mortgage payments, where to invest IRA or Roth, automatic deductions, periodic investing versus lump sum investing, short term versus long term goals,
Never bear too much or too little risk – Can lead to discussion about risk tolerance and behavioral finance, asset allocation, the intertwined factors of need to take risk, ability to take risk and willingness to take risk, and theories about AA parameters related to the aforementioned factors.
Never try to time the market – Can lead to discussion about risk, rebalancing, periodic investing versus lump sum investing, what to do with a windfall.
Use index funds when possible – Can lead to a discussion of active versus passive funds, why investors in index funds under perform the indexes, fees, how much international, in which account should specific funds be held, target retirement funds (not all of which are equal).
Keep costs low - Can lead to discussion listed under index funds, also what to do when you have no low cost options in a tax deferred plan, getting a company to change its 401k plan provider, 401k rollovers and conversions, annuities, paying for asset management, robo-advisors.
Diversify – Can lead to a discussion about how much or how little is enough, how much international, types of bond funds, various often recommended portfolios (coffeehouse, permanent, etc.), employee stock plans, which assets in which accounts.
Minimize taxes - Can lead to a discussion about marginal tax rates, when to take SS benefits, controlling long term capital gains taxes, tax loss harvesting, donor advised funds, bundling itemized deductions, estate taxes, Roth conversions, tax efficient withdrawal strategies, RMDs.
Keep it simple – Can lead to discussion about portfolio components, how many accounts to hold, Roth conversions, target retirement funds, owning individual stocks, investing in what you understand, annuities, how many funds is too many, do you need a slice and dice portfolio, simplifying as we age to reduce complexity, estate planning
Stay the course – Can lead to discussions about controlling risk, monitoring and rebalancing, when to change your investment policy statement including when to changes your AA, transitioning from working to retiring, various theories regarding asset allocation can changes in asset allocation over time.

therub
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by therub » Sat Aug 12, 2017 9:25 pm

Peter Foley wrote:
Sat Aug 12, 2017 7:22 pm
Section 7. Subtraction for contributions to 529 plans. Allows an income tax subtraction of up to $1,500 ($3,000 for married joint filers) of contributions to any state’s section 529 college savings plan or prepaid tuition plan. The subtraction excludes amounts that are rolled over from other college savings plans. The subtraction is limited to taxpayers who do not claim the 529 contribution credit in a later section. Effective beginning in tax year 2017.
I wasn't able to attend today. I presently am a MN resident and contribute regularly to Utah 529s. Is there any reason to open a MN 529? I don't think they're transferable between states, and based on the language above I think I will still be able to deduct/credit contributions. Stay the course?

Thanks.
Fees are the rub.

bwb100
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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by bwb100 » Sat Aug 12, 2017 9:55 pm

Another MN 529 question. Is the 529 state income tax deduction capped at $3000 for joint filers or $3000 per 529 recipient?

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Re: Minnesota BH Quarterly Meeting August 12, 2017

Post by Peter Foley » Sat Aug 12, 2017 11:12 pm

I have not seen how exactly the change to add a 529 plan deduction will be implemented. Rules will be adopted and forms will be designed to handle how the deduction works and what evidence one might be asked to produce to claim the deduction.

Here is the language in statute:
Subd. 23. Contributions to a section 529 plan. (a) The amount equal to the contributions made during the taxable year to a qualified account is a subtraction.
(b) The definitions under section 290.0684 apply for the purposes of this subdivision.
(c) The subtraction under this subdivision must not exceed $3,000 for married couples filing joint returns and $1,500 for all other filers, and is limited to individuals who do not claim the credit under section 290.0684.
EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2016.
I understand this to mean any qualified 529 plan, so continuing with the Utah plan should be okay. The wording above tells me it is limited to $3000 for a married couple, it is not a deduction per plan funded or recipient.

Do note that this is my understanding. While I regularly worked with state tax law when employed in state government it was not as an attorney who interpreted the law and not an a person who wrote the rules that determined how laws would be implemented. Ergo, my disclaimer.

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Re: Minnesota BH Qtrly Meeting 8-12-2017 + Summary

Post by ARLJLKL » Mon Aug 14, 2017 3:09 pm

There was a gentleman's name who came up in both breakout discussions I attended. He is a retired engineer (if I recall correctly) who has been used by many local Bogleheads in the past for fee online financial advice. It was also mentioned that he may no longer be taking on new clients soon. If anyone happens to have his contact information can they please send me a private message?

Thank you.

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