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by lakpr
Wed Mar 27, 2024 11:45 pm
Forum: Personal Investments
Topic: CA roll traditional IRA into work 401k
Replies: 9
Views: 431

Re: CA roll traditional IRA into work 401k

Blake7 wrote: Wed Mar 27, 2024 11:18 pm Search the McMullen v. Haycock court ruling. ERISA funded IRAs have the same protection as a 401k in CA.

https://www.irahelp.com/forum-post/7317 ... on-vs-iras
This McMullen case keeps getting brought up, but a very prominent lawyer, Jay Adkisson, disagrees with you. You cannot NOT encounter Adkisson's name whenever you search for "asset protection".

https://www.forbes.com/sites/jayadkisso ... bably-not/
by lakpr
Wed Mar 27, 2024 10:03 pm
Forum: Personal Investments
Topic: CA roll traditional IRA into work 401k
Replies: 9
Views: 431

Re: CA roll traditional IRA into work 401k

cosmos wrote: Wed Mar 27, 2024 9:10 pm They are not bad they even have vanguard TDF or a few of them so not a complete wash. Ill have to look at the fine print though my last 401k didnt take any inbound rollovers. Just curious if others have done this before as it never occured to me to reverse the streams like this.

My first 401k in 1997 had like 3 funds with over 5% ER which I believe is what prompted this IRA opening all those years ago and I have just been rolling 401ks in as i change jobs.
I did rollover my previous Rollover IRA to employer 401(k) in 2017. << I am not in CA, but in NJ, and my reason for the rollover is to clear the decks for Backdoor Roth >>
by lakpr
Wed Mar 27, 2024 9:05 pm
Forum: Personal Investments
Topic: CA roll traditional IRA into work 401k
Replies: 9
Views: 431

Re: CA roll traditional IRA into work 401k

If you are in California, it is really a no brainer to roll your traditional IRA into work place 401(k), for their rock-solid ERISA protections. How expensive / inexpensive are the choices in your workplace plan?
by lakpr
Wed Mar 27, 2024 5:11 pm
Forum: Personal Investments
Topic: First ever job, help with 401k portfolio
Replies: 14
Views: 722

Re: First ever job, help with 401k portfolio

Trillotrix wrote: Wed Mar 27, 2024 5:07 pm Thank you! I actually already have begun putting money into a roth IRA during my internships, 100% into VTI. I think I'll do the same for my 401k.
Super-glad to hear that! You are well on your way for financial excellence / financial independence; you don't even need any advice from anyone here.
by lakpr
Wed Mar 27, 2024 5:05 pm
Forum: Personal Investments
Topic: First ever job, help with 401k portfolio
Replies: 14
Views: 722

Re: First ever job, help with 401k portfolio

@Trillotrix, Welcome to the forum. Here is something for you to ponder. Two investors A and B. A starts contributing from the moment he lands a job, $10k per year, for 10 years. Then does not contribute a single dime for the rest of his career. B on the other hand, dawdles. He does not contribute for the first 10 years, but then contributes the same $10k as A per year, for the rest of his career. Both invest in identical investments. Let the "career" be 20 years or 30 years or 40 years or 50 years. Who do you think will have more money at the end of each of these spans? It is ALWAYS Investor A , with the only caveat being that the growth rate across those 20/30/40/50 year spans be positive. For B to win, the only possibility is if...
by lakpr
Wed Mar 27, 2024 4:33 pm
Forum: Personal Investments
Topic: HSA question
Replies: 7
Views: 670

Re: HSA question

Yes, you can contribute from your bank account to the Fidelity HSA. The only "downside" of doing it this way is that you will not get the FICA tax break that you do when contributing through the payroll. Then again, if your income is more than $160k (only the earner income, not the household), you are anyway contributing the maximum to the Social Security and Medicare (FICA taxes), so the contribution or non-contribution of the HSA through payroll isn't going to make any difference. If you are in this situation, it is advantageous to actually just opt for the HDHP plan from your employer and contribute to the Fidelity HSA yourself. *UNLESS*, if the employer is kicking in a match based on your own HSA contributions into the specifi...
by lakpr
Wed Mar 27, 2024 12:03 pm
Forum: Personal Finance (Not Investing)
Topic: $90K 48 mos loan at 3% OR outright purchase
Replies: 42
Views: 2019

Re: $90K 48 mos loan at 3% OR outright purchase

Domadosolo wrote: Wed Mar 27, 2024 11:29 am
WhiteMaxima wrote: Wed Mar 27, 2024 11:24 am Pay with FIA 2% reward credit card. Pay off balance with your cash next billing due.
Interesting… Pay loan ?
I am SURE that the car dealer will not accept credit card payment for the entire $90k. Dealerships now have a maximum that is allowed to be charged; $2.5k to $3k depending on the dealer. So you will get $50 to $60 perhaps.

When I bought my car ($45k worth) two years ago, $2.5k on credit card, rest by check.
by lakpr
Wed Mar 27, 2024 12:01 pm
Forum: Personal Finance (Not Investing)
Topic: $90K 48 mos loan at 3% OR outright purchase
Replies: 42
Views: 2019

Re: $90K 48 mos loan at 3% OR outright purchase

123 wrote: Wed Mar 27, 2024 10:45 am Pay cash. A boglehead has bigger fish to fry with their time (any loan will involve a transaction reconciliation effort). Yes, "A penny saved is a penny earned" but the amount of juice you get from the squeeze has to be considered.
Beg to differ. A penny saved is worth 1.3 to 1.4 pennies earned :beer
by lakpr
Wed Mar 27, 2024 11:43 am
Forum: Personal Investments
Topic: Fidelity 401k what to invest in?
Replies: 16
Views: 1202

Re: Fidelity 401k what to invest in?

Based on your agreement above, you are looking for a 50:25:25 split between US/ex-US/fixed income. I would rather split it this way instead. $23k max for 401k $7k max for Roth IRA $10k max for purchases of I-bonds The Roth IRA I would hold only FSKAX. One single fund, no need to mirror your asset allocation in every account. Or FZROX, if you are certain you will never need to leave Fidelity (Zero funds are not portable to other brokerages). Within the 401(k), I would split between Fidelity 500 Index fund and Fidelity Global Ex-US Index fund: $13k for US equities and $10k for ex-US equities So now you will have $13k + $7k for US equities ($20k), $10k for ex-US equities, $10k for fixed income. 20:10:10, or 50:25:25. There are two main reasons...
by lakpr
Wed Mar 27, 2024 9:44 am
Forum: Personal Investments
Topic: Portfolio Suggestions
Replies: 5
Views: 696

Re: Portfolio Suggestions

Let me take a stab at this post. 1) The mention of "To fund a backdoor Roth IRA" makes me think that you are in the 24% tax bracket or higher, as one can directly contribute to the Roth IRA in the 22% tax bracket. Is this correct? 2) $80k in the 403(b) for someone who is 48 years old, is a bit light for retirement savings. In your shoes, I would be looking to max that out every year, unless the choices within the plan are godawful. If maxing out the 403(b) means your take-home paycheck is insufficient to meet monthly living expenses, so be it. Withdraw from the brokerage account for living expenses. Money is fungible, and indirectly you will have moved the money from a taxable account to a tax-deferred (or tax-advantaged, should y...
by lakpr
Wed Mar 27, 2024 9:21 am
Forum: Personal Finance (Not Investing)
Topic: $90K 48 mos loan at 3% OR outright purchase
Replies: 42
Views: 2019

Re: $90K 48 mos loan at 3% OR outright purchase

Domadosolo wrote: Wed Mar 27, 2024 9:09 am
lakpr wrote: Wed Mar 27, 2024 8:09 am It depends on your ……<deleted valuable content>
…. ? I don't think the squeeze is worth the juice.

Pay cash.

[ Before someone points out - treasury interest is not state taxable or local taxable. But the numbers don't move significantly to alter the conclusion ]
5* for your detailed analysis.
appreciate it. Thank you for that.
:sharebeer
:beer Thank you for the kind words
by lakpr
Wed Mar 27, 2024 8:09 am
Forum: Personal Finance (Not Investing)
Topic: $90K 48 mos loan at 3% OR outright purchase
Replies: 42
Views: 2019

Re: $90K 48 mos loan at 3% OR outright purchase

It depends on your marginal tax bracket rates (including state and local taxes if any). The money market interest is taxable, whereas car loan interests are not tax deductible on any of these tax forms, so if you are in a 24% tax bracket + 6% state tax bracket (for example), the pretax cost of this car loan interest is 3% / (1 - 24% - 6%) = 4.3% approximately -- which should be compared to the alternative investments. If you are in 32% Fed + 10% state as in California, then the equation changes to 3% / (1 - 32% -10%) = 5.17%. Note also that, to compare apples to apples, you should take the comparable yield available on a 2 year long investment (since there is reinvestment risk with the money market funds, their yield is not expected to be a...
by lakpr
Tue Mar 26, 2024 7:57 pm
Forum: Personal Investments
Topic: withdrawing $300 K for property purchase
Replies: 5
Views: 816

Re: withdrawing $300 K for property purchase

I don't see how you can be "likely 22% tax bracket, no matter what", if you are withdrawing $300k, *IF* the funding source is tIRA. Are there non-deductible contributions in there?

Regardless, I would seriously consider withdrawing from a tIRA and pay taxes up to the top of the 24% tax bracket, since in two more years this tax bracket will be no more. The 2017 brackets will reappear, will be 10%, 15% and 25%. Therefore paying taxes now at 24% instead of taking a mortgage and withdrawing in the future at 25% may be better.
by lakpr
Tue Mar 26, 2024 7:53 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please help me organize the fixed income part of my portfolio

Northern Flicker wrote: Tue Mar 26, 2024 6:49 pm
lakpr wrote: Tue Mar 26, 2024 4:53 pm
Northern Flicker wrote: Tue Mar 26, 2024 4:26 pm Are you prepared to agree to discuss risks other than preservation of original principal as market value of holdings in your postings?
Likewise, to answer your question, no I will not stop pointing out that the principal is at risk with Total Bond / any bond funds in general.
You didn't answer my question.
Yes I did; perhaps bold lettering of the question and answer will help.
by lakpr
Tue Mar 26, 2024 5:57 pm
Forum: Personal Finance (Not Investing)
Topic: How many credit cards do you have
Replies: 89
Views: 4092

Re: How many credit cards do you have

gunny2 wrote: Tue Mar 26, 2024 5:31 pm Wow - for those with dozens of cards, may I ask why?
In my case: Sign up bonuses, followed by downgrade to a no-annual-fee version of the card if one is available, then simply sock-drawering them. [ 12 open cards, with 3 actively used at any given time ]
by lakpr
Tue Mar 26, 2024 4:53 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please help me organize the fixed income part of my portfolio

The next time I see advice to invest in a Total Bond fund without the risks being explained, I will be sure to drop you a PM to give you a chance, so you can educate the poster before I jump in with my "safety first" advice. Deal? Are you prepared to agree to discuss risks other than preservation of original principal as market value of holdings in your postings? But to answer your question, no, I'm not here to correct any posting you disagree with on demand. There are many postings on BH I disagree with, including many that recommend a total bond market index portfolio without considering the investor's full situation. I can already say that I do not recommend total bond for the OP. 70% stocks is an aggressive stance for an age ...
by lakpr
Tue Mar 26, 2024 2:25 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

Northern Flicker wrote: Tue Mar 26, 2024 1:14 pm
lakpr wrote: Tue Mar 26, 2024 6:09 am
Northern Flicker wrote: Tue Mar 26, 2024 2:32 am There are many tradeoffs to consider. Cash investments have reinvestment risk.
Were these tradeoffs spelt out exactly when recommending bond funds?
Often, yes.
I don't believe that.
Northern Flicker wrote: Tue Mar 26, 2024 1:14 pm
lakpr wrote: Why am I being taken to task to suggest be mindful of the safety of the principal?
Because focusing solely on safety of principal can expose you to other risks that you likely are not considering. Safety of principal matters, but so do other risks.
The next time I see advice to invest in a Total Bond fund without the risks being explained, I will be sure to drop you a PM to give you a chance, so you can educate the poster before I jump in with my "safety first" advice. Deal?
by lakpr
Tue Mar 26, 2024 6:09 am
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

Northern Flicker wrote: Tue Mar 26, 2024 2:32 am There are many tradeoffs to consider. Cash investments have reinvestment risk.
Were these tradeoffs spelt out exactly when recommending bond funds? Why am I being taken to task to suggest be mindful of the safety of the principal?
by lakpr
Tue Mar 26, 2024 1:31 am
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

Northern Flicker wrote: Mon Mar 25, 2024 10:11 pm I'm not confusing anything here. Recommending that someone eschew all bond funds because you were unhappy with the performance of a total bond index fund is not helpful or sound advice.
Recommending investment in any bond fund without even discussing the risks of such funds is not a sound advice either. The one common feature of all bond funds is they are subject to interest rate risk, and no guarantees that they will keep the principal safe. Is it really bad advice to suggest looking for alternatives that keep principal safe?
by lakpr
Mon Mar 25, 2024 8:26 pm
Forum: Personal Finance (Not Investing)
Topic: 6.5% 30 yr mortgage in NJ - know anyone that can beat that?
Replies: 9
Views: 1393

Re: 6.5% 30 yr mortgage in NJ - know anyone that can beat that?

Parkinglotracer wrote: Mon Mar 25, 2024 8:01 pm Thank you - great find on the PFCU. 6.25 % APR. no points.
Glad to be of help! Fair warning though ... I have seen posts on both reddit and on this forum that PFCU is, shall we say, "slow" in processing mortgage applications. If you are in a hurry to close, perhaps you might want to also pursue a backup lender. You just have to keep pestering PenFed every couple of days ... or, so I heard.

I did take a fixed rate home equity loan from PFCU, but that's not the same thing as a mortgage.
by lakpr
Mon Mar 25, 2024 6:53 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please help me organize the fixed income part of my portfolio

@bonesly,

If I am the one "converting" people away from bond funds, you must be feeling happy that I am batting zero so far, and bond funds recommendations have won every "contest to convert".

If you care to look at any of my posts -- retired@50 linked to one immediately above -- you will note that I have specifically added warnings that I am going against the Boglehead orthodoxy, and to really evaluate both points of view and take the best path. I point out the risks, but those who are recommending bond funds do NOT.
by lakpr
Mon Mar 25, 2024 6:10 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

UpperNwGuy wrote: Mon Mar 25, 2024 6:08 pm So you haven't realized any losses so far? You've simply watched the market value of your holdings take a dip and gotten frustrated? How do you feel about the recovery to date?
Still down 11% or so. No I don't feel happy about it. Total Bond stole my money and yet to give it back
by lakpr
Mon Mar 25, 2024 6:02 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

While it is an error to recommend total bond as a 1-size-fits-all bond portfolio, it is at least as significant of an error to say that one needs a 7-year horizon to invest in any bond fund, regardless of duration. I think you are confusing the cause and symptom. The symptom (me rejecting bond funds) came about because of Total Bond Fund being peddled as one-size-fits-all for more than 13 years I have been on this forum (cause), and my annoyance began only in 2022, and progressed to distaste only in 2023. lakpr, please answer four questions: 1. How much did your Total Bond holding "lose" in 2022? 2. What portion of those "losses" did you recover in 2023 and YTD in 2024. 3. Were any of those losses "realized" o...
by lakpr
Mon Mar 25, 2024 1:53 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

Northern Flicker wrote: Mon Mar 25, 2024 1:50 pm While it is an error to recommend total bond as a 1-size-fits-all bond portfolio, it is at least as significant of an error to say that one needs a 7-year horizon to invest in any bond fund, regardless of duration.
I think you are confusing the cause and symptom. The symptom (me rejecting bond funds) came about because of Total Bond Fund being peddled as one-size-fits-all for more than 13 years I have been on this forum (cause), and my annoyance began only in 2022, and progressed to distaste only in 2023.
by lakpr
Mon Mar 25, 2024 5:23 am
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

Northern Flicker wrote: Mon Mar 25, 2024 2:56 am
lakpr wrote: Sun Mar 24, 2024 5:48 pm
Jimsad wrote: Sun Mar 24, 2024 5:42 pm So are you saying no retirees should have any bond funds in their portfolios ?
Right. No. Not unless they are willing to wait for 7 years to "make up" any adverse impact to their bond funds.
Bond funds are available in a wide range of durations, so I don't know why you have a constant 7 years as the required investment horizon.
Because the Total Bond Fund is being proselytized on this forum. Take just this thread and see how many mentions of VBTLX are made
by lakpr
Sun Mar 24, 2024 10:59 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

sunrider6 wrote: Sun Mar 24, 2024 10:51 pm At which point the price of the fund would rise again….
Probably, but at the end of 7 years you would have ended with $35 in interest payments plus $60 because I felt like it. You can reinvest $95, and get $2 per year for another 7 years then, and remember I am not even promising $2. You just have to take a leap of faith that you will get back your principal after 7 years or 10 years. JUST TO GET BACK YOUR MONEY.. you have to wait 10 years or longer.

If it sounds like a good deal to you, be my guest. I call it crappy deal
by lakpr
Sun Mar 24, 2024 10:49 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

One more question - why is preserving the principal in nominal terms your priority for a safe asset? One could just as well say that preserving one's real value of that principal be the baseline goal (and then there is risk to holding cash since the interest yield - inflation is certainly not constant and often negative). For bonds, as long as you are holding them for their duration, you shouldn't care about the fluctuation in share price because the lower price just means more of your return is in interest payments. However, I fully get if, for behavioral reasons, dropping share prices in a bond fund would be problematic, then that's a good reason to shorten the duration on your fixed income holdings. Let me make you a deal. Give me $100,...
by lakpr
Sun Mar 24, 2024 10:47 pm
Forum: Personal Investments
Topic: Bond choices in 401k
Replies: 35
Views: 3316

Re: Bond choices in 401k

Zekeman wrote: Sun Mar 24, 2024 10:11 pm Yes I am able to invest above that amount. I have a treasury direct acct and have a inflation series savings bond as well as rolling a chunk of cash monthly through short term notes.
I assume this post is in response to mine. If so:

Excellent, then you can perhaps follow my strategy and slowly shift away your fixed income to taxable account than 401(k).
by lakpr
Sun Mar 24, 2024 10:41 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

One more question - why is preserving the principal in nominal terms your priority for a safe asset? One could just as well say that preserving one's real value of that principal be the baseline goal (and then there is risk to holding cash since the interest yield - inflation is certainly not constant and often negative). For bonds, as long as you are holding them for their duration, you shouldn't care about the fluctuation in share price because the lower price just means more of your return is in interest payments. However, I fully get if, for behavioral reasons, dropping share prices in a bond fund would be problematic, then that's a good reason to shorten the duration on your fixed income holdings. Let me make you a deal. Give me $100,...
by lakpr
Sun Mar 24, 2024 9:49 pm
Forum: Personal Investments
Topic: rollover IRA assistance
Replies: 3
Views: 369

Re: rollover IRA assistance

Would multi year guaranteed annuities (MYGAs) suit your purpose?

These are offered by insurance companies. Below link provides sample quotes for a 70 year old, from A rated or better insurance companies. I see quotes up to 5.35% guaranteed for 7 years.

https://www.blueprintincome.com/fixed-a ... 55D&age=70
by lakpr
Sun Mar 24, 2024 8:40 pm
Forum: Personal Investments
Topic: Bond choices in 401k
Replies: 35
Views: 3316

Re: Bond choices in 401k

Well true but I have missed out on the post COVID rally and want to reengage but am potentially close to retirement so value preservation is important. I’ll have to give-off a chunk of $ into a brokerage link to invest on a more customized basis. Are you able to invest more than what the maximum allowed in 401(k) ($23k for folks younger than 50, $30.5k for folks 50 or older)? I am 54 years old, in NJ, and for me too, value preservation is extremely important. So I am investing ENTIRE 401(k) contributions to the S&P 500 index fund in my 401(k) plan, $20k annual for buying Series I Savings Bonds, and another $10k or so in Treasury Bills that I am rolling over. Note that the T-bills are in TAXABLE account, not 401(k) plan. This is contrar...
by lakpr
Sun Mar 24, 2024 5:48 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

So are you saying no retirees should have any bond funds in their portfolios ? Right. No. Not unless they are willing to wait for 7 years to "make up" any adverse impact to their bond funds. Comes down to "willingness to take risk", and even more specifically, WHERE to take that risk. Here is one comparison I did about a often-touted 60:40 portfolio. For kicks, I removed the 40% allocation to bond funds, replaced it with 10% stocks and 30% CASH (no risk to the principal). The returns are almost identical as you can see ... Annual Rebalancing No Rebalancing The difference here is that, with the 60:40 portfolio your ENTIRE portfolio is at risk. With a slightly up allocation to stocks but deciding to take no risk on your &...
by lakpr
Sun Mar 24, 2024 5:21 pm
Forum: Personal Investments
Topic: Bond choices in 401k
Replies: 35
Views: 3316

Re: Bond choices in 401k

Zekeman wrote: Sun Mar 24, 2024 5:15 pm So it’s basically a very safe (very low risk) guaranteed return of roughly 3-4% now…would that be a fair characterization?
COMPLETELY INCORRECT. It is neither safe, nor low risk. The return right now is between 3% to 4%, that part of it is the only one that is accurate.

Google directed me to a fact sheet for this fund, but dated June 2022. Not quite the recent most one, but conveys my point:

https://my.voya.com/static/epweb/pdf/ffs/CDJ2623090.PDF

Look at all the negative numbers in the first four rows of the "Performance" section. If you are/think you will be happy with those kind of returns, and deem them as "very safe", well, please be my guest!
by lakpr
Sun Mar 24, 2024 4:27 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

I understand (and FWIW agree with) the argument that you take risk on the equity side and keep the "safe" portion of the portfolio really safe ... but this is usually interpreted to mean 10-year TIPS or something similar since cash generally has a negative real rate of return. It sounds like lakpr is just arguing that he prefers a very short duration bond to a longer duration bond holding. This might be the case if you need access to cash quickly, but it seems like if you have a longer horizon, generally a longer duration holding is better. Anything else starts looking like market timing. Not really. I am arguing for holding anything that is not subject to principal risk. Series I Savings Bonds have, by the "bond math" ...
by lakpr
Sun Mar 24, 2024 4:22 pm
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

Are you saying nobody who is 8 years from retirement should invest in bond funds? I understand bonds have interest rate risk and can drop but even in 2022, did they not drop less than stocks ? Right now , it is good to be in money market funds but their rates are expected to drop with rise in interest rates which is expected to occur soon ; that is why I am trying to move from them Also I have a decent amount in taxable in stocks so if another 2022 happens in bond funds , I can sell some stock funds for any expenses not covered by other income like renal income , SS etc In my view, anyone who has less than the "duration" of the total bond fund (which is approximately 7 years) before a major life event for which investments are ne...
by lakpr
Sun Mar 24, 2024 1:43 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

I reject a binary choice. I don’t want that much volatility. Bonds give me less volatility and higher return. Total Bond could return 5% for many years. Correction. Bonds GAVE you less volatility. Past tense. There is no guarantee that Total Bond WILL give you 5% for many years. Same with stocks. No one stopping you from investing in Total Bond, but I will oppose its peddling as "safe" or even "less volatile" choice. It is neither. Total Bond Fund will be less volatile than Total Stock Market over any time period you care to name. 2021 to till date. Stocks returned 10% and total bond fund returned negative 11%. Sortino ratio, which is the measure of volatility is 0.75 for stocks versus -0.99 for bonds. Worse than stocks...
by lakpr
Sun Mar 24, 2024 9:06 am
Forum: Personal Investments
Topic: Involuntary closing of an IRA
Replies: 3
Views: 387

Re: Involuntary closing of an IRA

File a CFPB complaint immediately, and watch the Edward Jones folks hop like a cat on a hot tin roof.
by lakpr
Sun Mar 24, 2024 8:42 am
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

What's your opinion? That investing decisions that include recency bias and emotion need to be made very carefully. OP, as you learn more, reread the post bonesly made. (I definitely don’t have enough knowledge to add anything “real”) Ah, the "recency bias" argument. When I asked why did the bond fund drop between December 2023 and February 2024 (by 1.5%, look it up), the answer was "do you expect the market to ignore the latest data available"? That "latest data" was that the inflation ticked up in January and therefore the expected rate cuts in 2024 will not happen at least until third quarter 2024, if then. But bond fund apologists want me to ignore that not-so-latest data available on the bond fund returns...
by lakpr
Sun Mar 24, 2024 8:12 am
Forum: Personal Investments
Topic: Kids W2 form
Replies: 4
Views: 512

Re: Kids W2 form

You can contribute $5753 to a Roth IRA in the kid's name and have him NOT touch it for the next approximately 50 years until his retirement!!
by lakpr
Sun Mar 24, 2024 8:09 am
Forum: Personal Investments
Topic: Please help me organize the fixed income part of my portfolio
Replies: 131
Views: 8404

Re: Please hep me organise the fixed income part of my portfolio

Not sure if I am understanding your comment correctly but the monthly dividend dollar value is based on the number of shares and presumably if the NAV is dropping interest rate on the bonds being purchased are higher and the dollar amount goes up albeit slower than I would like. True? Your understanding is correct. Then again, I wrote this below in another post, translating the Total Bond fund into plain English. What's your opinion? https://www.bogleheads.org/forum/viewtopic.php?p=7776700#p7776700 Would you consider investing with me? Here are the outlines of the offer. 1) Give me $100, I will give you back $4.5 every year for the next 6 to 7 years. This I promise. 2) At the end of the 7 years, You can choose to keep the money with me, or...
by lakpr
Sat Mar 23, 2024 9:54 pm
Forum: Personal Investments
Topic: Retirement and AA advice for my 24 yr. old daughter
Replies: 60
Views: 4006

Re: Retirement and AA advice for my 24 yr. old daughter

yogesh wrote: Sat Mar 23, 2024 9:38 pm 401k
VINIX

Roth IRA-
VTSAX

rollover Roth IRA-
VTSAX

taxable account-
VTSAX
Opens up the risk of accidental wash sales, with the same investment VTSAX in taxable and IRA
by lakpr
Sat Mar 23, 2024 9:29 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

I reject a binary choice. I don’t want that much volatility. Bonds give me less volatility and higher return. Total Bond could return 5% for many years. Correction. Bonds GAVE you less volatility. Past tense. There is no guarantee that Total Bond WILL give you 5% for many years. Same with stocks. No one stopping you from investing in Total Bond, but I will oppose its peddling as "safe" or even "less volatile" choice. It is neither. Total Bond Fund will be less volatile than Total Stock Market over any time period you care to name. 2021 to till date. Stocks returned 10% and total bond fund returned negative 11%. Sortino ratio, which is the measure of volatility is 0.75 for stocks versus -0.99 for bonds. Worse than stocks.
by lakpr
Sat Mar 23, 2024 6:31 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

rkhusky wrote: Sat Mar 23, 2024 6:18 pm I reject a binary choice. I don’t want that much volatility. Bonds give me less volatility and higher return. Total Bond could return 5% for many years.
Correction. Bonds GAVE you less volatility. Past tense. There is no guarantee that Total Bond WILL give you 5% for many years.

Same with stocks.

No one stopping you from investing in Total Bond, but I will oppose its peddling as "safe" or even "less volatile" choice. It is neither.
by lakpr
Sat Mar 23, 2024 5:51 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

You still have higher volatility with the 70/30 portfolio and similar under-performance from 2001-2021. I see no reason to lock up substantial money in low-yield investments that aren't going to be withdrawn for 20-30-40 years. Intermediate bonds are quite safe in that time frame. If you want to start gliding down to MM 5 years before retirement, that would make more sense. The idea of keeping 30% of the investment in "safe" assets is for dry powder. Re-deploying to stocks when they are down. I don't know how to incorporate that into portfolio visualizer, where if the stocks are down 20% or more pretty much liquidate the entire "safe" assets to plow into stocks. If one is definitely investing for 20-30-40 years, AND you...
by lakpr
Sat Mar 23, 2024 5:43 pm
Forum: Personal Investments
Topic: VBILX vs MassMutual Stable Value Diversified HELP please
Replies: 12
Views: 821

Re: VBILX vs MassMutual Stable Value Diversified HELP please

Do you have 15, 20 or more years before you expect to need this money and are willing to ignore short term ups and downs to potentially earn an extra 1-2% per year above the stable value fund? Then the intermediate bond fund might be best. If an investor does have 15, 20 or more years, why would you NOT invest in stocks? Why bond fund? Because there are no guarantees that stocks will outperform bonds over those time periods. If you are bothered by a 15% loss in a bond fund, how will you react to a 50% loss in your equities? Maybe you will be fine, saying “well it’s equities so I expect that kind of loss but do not expect any losses from my bonds”. More than a few people may panic and sell. Sometimes bonds go up and stocks go down. Sometime...
by lakpr
Sat Mar 23, 2024 4:39 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

I dont see that. The underperformance is $300, so $30 per year. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=IWCt6lcu0z0zYZogEr72L I was talking about your previous plot: Annual Rebalancing I guess the under-performance was for a longer period. Cumulative under-performance from 1993 looks like about even in 2001, -7% in 2003, -6% in 2008, -13% in 2010, -14% in 2012, -12% in 2015, -10% in 2018, -9% in 2021. That's a long time to have double digit under-performance. I was mistaken about the $20K underperformance, it looks more like $10K (if you get rid of the Balanced Fund comparison, you can go back to 1987, and then you see $20K under-performance). 2001 - 2012 looks like the biggest drop in comparable performance, abou...
by lakpr
Sat Mar 23, 2024 3:22 pm
Forum: Personal Investments
Topic: Some reasons to help me avoid the US/exUS debate
Replies: 42
Views: 3090

Re: Some reasons to help me avoid the US/exUS debate

I invest in international equities strictly for the diversification benefit. Not for returns. In fact I expect them to be the dogs in my portfolio, and for this reason I carry them in my Traditional 401(k). So ironically, Uncle Sam commiserates with me when non-Uncle Sam equities fare badly. 80:20 split. And the reason I settled on this split is because it captures 84% of the diversification benefit, based on a 2012 paper from Vanguard. That paper also said a 70:30 split captures 95% of the diversification benefit, and a 60:40 split captures 99% of the benefit. I looked at it as 80:20 split being the start of diminishing returns, and settled here as the happy place. No one can convince me that I should increase the allocation to internation...
by lakpr
Sat Mar 23, 2024 3:16 pm
Forum: Personal Investments
Topic: NetBenefits: How to *immediately* start contributing to after-tax 401(a) after 457 is maxed out?
Replies: 3
Views: 392

Re: NetBenefits: How to *immediately* start contributing to after-tax 401(a) after 457 is maxed out?

I wouldn't try to be too cute. Just divide $23k by number of paychecks (for the 457 plan), and shovel the excess per paycheck into the 401(a) plan.

Contribute to both simultaneously, I mean.
by lakpr
Sat Mar 23, 2024 2:51 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

10% drop in Total Bond is no big deal. If Total Bond drops 50%, we’ll be in uncharted territory. The point is that if you are seeking safety for a portion of your assets, Total Bond is the wrong place to be. Highlighting the risk of a stock market drop but not highlighting the risk of the bond market is being biased; it is implicitly endorsing bond funds as "safe". Bond funds are NOT safe. There are options. Short term bond fund for spending in 5 years. Ultra short bond fund for spending in 2 years. MM for spending this year. Generally, but not always, more safety equals lower returns. Please see my response to @Klangfool above, more safety does NOT mean lower returns. A 70:30 between stocks and cash returned just $1,200 less tha...
by lakpr
Sat Mar 23, 2024 1:20 pm
Forum: Personal Investments
Topic: Pulled out of Target Fund 2045 to rebalance, more aggressive
Replies: 98
Views: 5644

Re: Pulled out of Target Fund 2045 to rebalance, more aggressive

10% drop in Total Bond is no big deal. If Total Bond drops 50%, we’ll be in uncharted territory. The point is that if you are seeking safety for a portion of your assets, Total Bond is the wrong place to be. Highlighting the risk of a stock market drop but not highlighting the risk of the bond market is being biased; it is implicitly endorsing bond funds as "safe". Bond funds are NOT safe. There are options. Short term bond fund for spending in 5 years. Ultra short bond fund for spending in 2 years. MM for spending this year. Generally, but not always, more safety equals lower returns. Please see my response to @Klangfool above, more safety does NOT mean lower returns. A 70:30 between stocks and cash returned just $1,200 less tha...