Bogleheads.org

vineviz

Curious if you've evolved away from your "First 20% of bonds should be LTT" position much in your personal portfolio ? Although superficially looks like they make up >70% of your Fixed Income anyways... My thinking there hasn't shifted. I hold LTPZ and LQDI for professional reasons mainly...

vineviz

sureshoe wrote: ↑Fri Apr 23, 2021 7:46 am For example, owning a $500k house, I wouldn't reduce my REIT exposure by $500k because of the house necessarily. Maybe I should.

You should not. REITs and houses (or any real estate, actually) are not interchangeable assets.

vineviz

I agree that the expected real return of a home is likely zero. But we cannot ignore the value of imputed rent, even though we consume it as it is 'produced'. This is abundantly clear if/when someone sells their mortgage-free home and begins renting somewhere. Yes, there are maintenance costs, prop...

vineviz

But I go back to the "so what"? Are people suggesting I do a different stock/bond mix to adjust my risk? I consider investment mix 1 decision. Then, your housing and lifestyle is a different risk/cost decision. The negative bond stuff just sounds like distraction. The "so what" ...

vineviz

bei22000 wrote: ↑Thu Apr 22, 2021 10:18 am You are right. Fidelity has a few zero cost index funds, such as total stock index fund, extended market index fund, international index fund.

Fidelity “zero” cost funds should NEVER be held in a taxable account.

vineviz

If interest rates stay flat, you lose. If interest rates rise, you lose. If interest rates stay flat for a long time and then fall, you probably lose, because you've been long missing out on the higher yields of savings accounts. You're betting that interest rates will fall (and fall soon). Isn't t...

vineviz

17outs wrote: ↑Thu Apr 22, 2021 11:16 am If you are 10 years from retirement but still 75/25 okay to have 50% L TIPS and 50% LTT? Keeping both at same duration has been easy for me.

Sounds totally reasonable to me.

vineviz

Rather than sell VWIGX and purchase Total International Stock (VXUS), and thus pay large capital gains taxes, I am considering using new money to purchase an international value (or perhaps international small-cap value) fund to complement VWIGX since VWIGX is primarily large-cap growth. Does this ...

vineviz

Rather than sell VWIGX and purchase Total International Stock (VXUS), and thus pay large capital gains taxes, I am considering using new money to purchase an international value (or perhaps international small-cap value) fund to complement VWIGX since VWIGX is primarily large-cap growth. Does this ...

vineviz

Thanks for your response. I suppose I could restructure my question as, when does it make sense for someone to hold TIPS in their portfolio? What percentage allocation should be TIPS, and how to get TIPS (using TIPS index funds)? Speaking very generally, it usually makes sense to hold some TIPS whe...

vineviz

Which leads me back to my original post - why the difference ? How can there be a difference ? My only plausible conclusion is the "portfolio analysis" tool must somehow be incorrect - as the other posters have alluded too. It doesn’t logically follow that a difference in definitions mean...

vineviz

I realize this is very generalized and the added complexity in implementation may not be worth it, however, I DO think it is a valid compromise between the opinion of Dr Bernstein and an investor who may have 100% of their fixed income in BND. This seems like a complex solution to an imaginary prob...

vineviz

manuvns wrote: ↑Wed Apr 21, 2021 12:38 pm is it good idea to sell low yield international bond BNDX move the asets to I bonds next month ?

Probably not if you're simply chasing yield: the yield on BNDX appears to be higher than 3.54%.

vineviz

Thanks for your response. I suppose I could restructure my question as, when does it make sense for someone to hold TIPS in their portfolio? What percentage allocation should be TIPS, and how to get TIPS (using TIPS index funds)? Speaking very generally, it usually makes sense to hold some TIPS whe...

vineviz

It comes up fairly frequently because I usually put the extra cash we have at the end of the month into the stock market. So $3000 here, $8000 here, it adds up, but not all at once, and I was looking for a way to think about the problem. The other thing is I share this stock account with my wife, w...

vineviz

REITs are a demonstrably poor way to "soften the blow of a market crash". In a link given somewhere: https://www.bogleheads.org/forum/viewtopic.php?f=1&t=346582 David Swensen also takes the reader through the private REIT "industry" and the harm it causes investors. No doubt...

vineviz

Has this portfolio outperformed 85% VTI and 15% BND? By how much? Was it really worth the time and trouble to put this together? If it's not worth the time and trouble learning about stocks you're wasting time posting here. Has this portfolio outperformed 85% VTI and 15% BND? By how much? Was it re...

vineviz

smalliebigs wrote: ↑Wed Apr 21, 2021 7:22 am No one has ever said leasing was for everyone, nor perfect

The title of this thread begs to differ.

vineviz

Thank you all for your thoughts. I will reallocate my 401K now rather than wait. The 8% ESop won't be changed this year. My income is up in 2021 and there is no sense piling on the tax load. I have toyed with the idea of using the ESOP as my donations to church over a period of several years. That ...

vineviz

What are your views on holding REITs as a way to possibly soften the blow of a market crash? REITs are a demonstrably poor way to "soften the blow of a market crash". From 1994 to present, a portfolio of 100% Vanguard Total Stock Market had a maximum drawdown of -50.9% and a portfolio of ...

vineviz

I'd like to understand the argument towards using LQDI. Do you just want to add credit risk and hedge inflation risk? That would be the use case, yes. For some of my clients with portfolios containing less than 60% in stocks, I've found that a combination of LQDI and a TIPS fund (e.g. Schwab US TIP...

vineviz

Has this portfolio outperformed 85% VTI and 15% BND? By how much? Was it really worth the time and trouble to put this together? My guess is that Vineviz did not know 10 years ago that his portfolio would be outperformed by a US Total market fund. Maybe if you have a time machine you could go back ...

vineviz

Thus I would instead prefer to use the phrase “your net home value is a bond.” I don't know if that's less confusing, but it's certainly less accurate. Your home isn't a bond. It's a real asset (i.e. "real estate") that does not produce a fixed amount of income. So it's not a bond. Again,...

vineviz

Thus I would instead prefer to use the phrase “your net home value is a bond.” I don't know if that's less confusing, but it's certainly less accurate. Your home isn't a bond. It's a real asset (i.e. "real estate") that does not produce a fixed amount of income. So it's not a bond. Again,...

vineviz

coachd50 wrote: ↑Tue Apr 20, 2021 8:59 pm Can you sell portions of the bond fund for cash? If yes, then having both a mortgage and bonds is NOT the same as having neither one.

This isn't true, and would be irrelevant if it were true.

vineviz

Thus I would instead prefer to use the phrase “your net home value is a bond.” I don't know if that's less confusing, but it's certainly less accurate. Your home isn't a bond. It's a real asset (i.e. "real estate") that does not produce a fixed amount of income. So it's not a bond. Again,...

vineviz

It is 100% correct to say that If I hold 60k in equities, 40k in bonds that I have 100k in assets and that any mortgage balance should be subtracted from that when calculating my net worth. It is NOT correct to say that I no longer have the bond fund. And no one is saying you "no longer have t...

vineviz

finite_difference wrote: ↑Tue Apr 20, 2021 7:15 pm Thus I would instead prefer to use the phrase “your net home value is a bond.”

I don't know if that's less confusing, but it's certainly less accurate.

Your home isn't a bond. It's a real asset (i.e. "real estate") that does not produce a fixed amount of income. So it's not a bond.

vineviz

The only salvation from a rotten investment would be the 3.5% bonus at the stroke of 20-years. 20 years are an extremely long time and 3.5% ain't such a jackpot. What, if 10 years from now interests have considerably risen ? One would have already missed out on the interest differential (about 0.6%...

vineviz

I presently hold a total bond fund like Vanguard BND/Fidelity FXNAX, in my 401k account, along with total stock market funds in taxable/401k accounts (85 stocks/15 bonds). I read about TIPS in a few investing books. 1. Does it make sense to sell some of my bonds to buy TIPS? Eg, does it give divers...

vineviz

While that is not what you are talking about- That is the only concept that is appropriate to your examples. I understand you are trying to say that mortgages "cancel" fixed income holdings. As I have pointed out, that just isn't the case. You disagree with me because you’ve misinterprete...

vineviz

Would anyone sell his Bonds allocation (in a taxable account) to buy i bonds? I am considering this idea, but not sure if it worth the hassle and paying the taxes. Unless you've got very long term bonds in your taxable account, it's hard to envision that you've got much of an unrealized capital gai...

vineviz

The only salvation from a rotten investment would be the 3.5% bonus at the stroke of 20-years. 20 years are an extremely long time and 3.5% ain't such a jackpot. What, if 10 years from now interests have considerably risen ? One would have already missed out on the interest differential (about 0.6%...

vineviz

I guess I’m hung up on the term “negative”. If it’s a negative bond then you need to add more bonds to balance it out. The implication is the opposite, actually: you almost certainly should reduce the marketable bond holdings, using the capital to increase the equity holdings and/or reduce the mort...

vineviz

You seem to be the only person talking about net worth here. I have no clue why it keeps coming up. Asset allocation and net worth share similarities conceptually, but they aren’t the same concept. ??? You are the one that keeps bringing it up. Every time you try to use your analogies or say 50+10-...

vineviz

Not your first or only bonds. You should already own enough bonds for rebalancing your AA, as I/EE Bonds are not suitable for this purpose. I just want to observe that it is true that savings bond are not generally suitable for rebalancing this is not a disadvantage: investors should not own bonds ...

vineviz

How could it possibly be otherwise? Because there is a difference between asset allocation (and the reasons one chooses the allocation) and a net worth equation? Sure there's a difference between those two things, but it's equally true either way: if you don't have a net positive exposure to bonds....

vineviz

Triple digit golfer wrote: ↑Tue Apr 20, 2021 7:17 am
Nice chart. If history is any indicator, I should get at least 6% on a 60/40 portfolio over 30 years.

It’s not an indicator, sadly.

vineviz

Not your first or only bonds. You should already own enough bonds for rebalancing your AA, as I/EE Bonds are not suitable for this purpose. I just want to observe that it is true that savings bond are not generally suitable for rebalancing this is not a disadvantage: investors should not own bonds ...

vineviz

How could it possibly be otherwise? Because there is a difference between asset allocation (and the reasons one chooses the allocation) and a net worth equation? Sure there's a difference between those two things, but it's equally true either way: if you don't have a net positive exposure to bonds....

vineviz

I am in my early 50's. My current AA is 87% (80 domestic and 7 foreign) stocks, 2% bonds and 10% cash. Roughly 1M total of which 75% is in my 401K. It worked well for me last year, but I know I am playing with fire and not good FIRE. In the early days of my 401K the match came as my companies stock...

vineviz

A dealer can do anything you can do, except they can do it cheaper and better. Anyone who thinks they an execute an arbitrage in this market is almost surely missing some key information. I’m not suggesting an arbitrage on the user car price. I’m suggesting a call option on the depreciation. You we...

vineviz

But to say that in #2 above that you are 100% stocks just doesn't seem to be appropriate. To say that the net effect of having them both is the same as having neither is just not true as I have illustrated. It is appropriate because it’s true. If you buy something and sell that same thing , your ne...

vineviz

What I mean by "not an allocation issue " is that while it is obviously true that someone with 100k in assets with an allocation of 60/40 and a mortgage of 40 has a net worth of 60k because the mortgage is subtracted from the assets to find that figure, (net worth issue) I don't believe i...

vineviz

Curious if you've evolved away from your "First 20% of bonds should be LTT" position much in your personal portfolio ? Although superficially looks like they make up >70% of your Fixed Income anyways... My thinking there hasn't shifted. I hold LTPZ and LQDI for professional reasons mainly...

vineviz

The investor gets a statement showing so every month. They get TWO statements each month: one shows they owe the bank $100 and one shows that the bank owes them $100. What's the net position they have with the bank? $0. This is the "cancelling out" that I want people to understand. Many p...

vineviz

You are a big expected returns guy. This strategy has one going very conservative fairly early on in accumulation phase. That would certainly seem to leave a lot of gains on the table relative to a more aggressive asset allocation. For fear of paying taxes on gains. We contributed about what this p...

vineviz

You are in the market for a new Honda Accord. You intend to keep it forever. Let’s say the selling price is $25k, and Honda expects the car to depreciate $10k in the first three years. Your total lease cost is $10k + taxes + interest. At the end of the lease you have the option to buy out the remai...

vineviz

The investor gets a statement showing so every month. They get TWO statements each month: one shows they owe the bank $100 and one shows that the bank owes them $100. What's the net position they have with the bank? $0. This is the "cancelling out" that I want people to understand. Many p...

vineviz

I sold my 2004 CR-V with 185,000 miles on it to CarMax for $1,800 and I highly doubt the were going to sell it on their lot. I got the impression that they are very much dedicated to meeting their on-line offer. When I took the car in, as soon as they heard I had an on-line offer, the whole process...

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