Bogleheads.org

Northern Flicker

1. Most forum members here loose total return by allocating to bonds. If the bonds stops them from worrying about financial trouble, it is worth is. The same can be said for dividends. If the regular dividend payments reduce your stress during downturns, it is worth it. Dividend-oriented stocks can...

Northern Flicker

Stocks are more liquid today than when indexing was less pervasive. Illiquidity is a barrier to arbitrage. Liquid markets are generally more efficient than less liquid markets, so I would guess that the market is more efficient today than when index investing was a smaller slice of market activity. ...

Northern Flicker

It is very difficult to imagine what retirement portfolio and income management will look like when someone is say 35-40. But a portfolio of stocks with s higher than average dividend yield may drive more realized income than you want or need, push you into a higher medicare IRMAA bracket, and have...

Northern Flicker

Tingting1013 wrote: ↑Sat Apr 17, 2021 12:29 pm It means don’t hold long term bonds.

It’s terrible advice.

Actually it refers to not taking risk on the bond side that has equity correlation, especially not taking credit exposure risk.

Northern Flicker

Well, there is a behavioral component to dividends. Investors receiving regular higher dividends might be, from a behavioral perspective, more likely to stay the course. The biggest enemy to the average investor's performance is themselves by far - selling low (fear), buying high (FOMO), they often...

Northern Flicker

It is true that depletion of shares would not follow a straight line for 25 years because everything is not static. I was not offering the pount to be taken literally, but to demonstrate that buybacks at a high enough level harm liquidity. The flaw in the logic is not that buybacks increase the valu...

Northern Flicker

Stock buybacks have limitations. Share buybacks reduce liquidity of the remaining shares. Consider a utikity company that has a history of delivering about a 4% dividend. Stock buybacks would buy back all of the shares in 25 years. At some point in the process liquidity problems would make share buy...

Northern Flicker

Well, there is a behavioral component to dividends. Investors receiving regular higher dividends might be, from a behavioral perspective, more likely to stay the course. The biggest enemy to the average investor's performance is themselves by far - selling low (fear), buying high (FOMO), they often...

Northern Flicker

No, but a company with Y dollars of cash on hand is worth Y-Z more than if it instead had Z dollars of cash on hand, all else equal with Z < Y. Cash on hand unquestionably adds value to the conpany relative to not having it. Another way to see it is if you buy a share of stock at the moment before ...

Northern Flicker

Company values aren’t based entirely on the total cash on hand, or cash on hand minus debt. No, but a company with Y dollars of cash on hand is worth Y-Z more than if it instead had Z dollars of cash on hand, all else equal with Z < Y. Cash on hand unquestionably adds value to the company relative ...

Northern Flicker

Company has a value of X dollars. Company distributes Y dollars of cash from its coffers. Company then has a value of X - Y.

Northern Flicker

Kenneth French has studied the dividend phenomenon and has documented that, historically, dividend paying stocks have provided higher total returns, with lower standard deviation of those returns, compared to non-dividend paying stocks. This may be a case of investors being willing to pay a higher ...

Northern Flicker

If I’ve missed other threads on this, feel free to re-direct me to those threads! I’ve been looking at various value etf’s for lcv, scv, and international value. The problem that I’m seeing is that many of the holdings aren’t value stocks, they’re just bad companies that are cheap for a reason. Are...

Northern Flicker

All of my taxable investments are Vanguard index fund ETFs and I am interested in moving them to do a different custodian. Vanguard offers the use of hardware keys (Yubikey) but since they allow a SMS backup, it doesn't provide any additional security. (SMS two factor authentication has its own set...

Northern Flicker

What size allocation are you targeting? I don't know how people model crypto using the usual MPT analysis tools to even begin to answer this question in an empirical manner. Well one problem is that even a small amount of crypto has in the past caused a sharp increase in volatility. It is not a div...

Northern Flicker

In general, TDFs throughout the industry have increased the stock percentages at a given age (i.e. implemented a glide path that is less steep over a large segment of life course. This has been motivated by observations about lifespan, length of retirement etc. that define a longer horizon than pre...

Northern Flicker

Looking at 2040 funds... T Rowe Price's 2040 fund is about 76% stock: https://www.troweprice.com/literature/public/country/us/language/en/literature-type/quarterly-factsheet/sub-type/mf-single-class?productCode=TRJ&currency=USD FWIW, T. Rowe Price has two series of target date funds. The above ...

Northern Flicker

Vanguard is neither actively managing the allocation for these funds nor timing the markets with the allocation. They increased their int'l stock allocation and added int'l bonds in response to research they did on how it may reduce volatility. These were strategic changes. Strategic changes have ti...

Northern Flicker

Wire the money. No pull, no wait, $30 or whatever (or free if you have money at Fidelity or many brokerages). Or, and this is probably what I would do, call their bluff and walk. "I'm not thawing my credit, I don't remember my PINs and I drove 2.5 hours to get here. If I leave I'm not coming b...

Northern Flicker

Also, if you have the cash to do the HSA contribution but are just trying to convert the tIRA funds, you can do an HSA contribution and Roth conversion for the same amount. There is no net taxable income, and it is equivalent to the QHSAFD plus a Roth contribution in the same amount, but you don't n...

Northern Flicker

CloseEnough wrote: ↑Thu Apr 15, 2021 7:22 am Suggest taking a look at TIREX (TIAA Cref real estate fund). I think a small but meaningful allocation to REIT is good for diversification.

All you need is a large enough portfolio to meet the $2M minimum for TIREX with your REIT allocation. TCREX has a $2500 minimum.

Northern Flicker

abuss368 wrote: ↑Thu Apr 15, 2021 8:32 pm I believe in many respects we are dancing on the head of a pin. It simply does not matter.

Tony

That certainly is not the case if you buy individual health insurance on an ACA exchange and qualify for a premium tax credit, or are on medicare and trying to stay under IRMAA limits.

Northern Flicker

Dividends force you to realize those gains based on their schedule. So, if everything else is equivalent, as you mentioned, selling stock is better than dividends. There is a reason to prefer capital gains and no reason to prefer dividends. Agreed. There also is a 2nd issue. Suppose a mutual fund i...

Northern Flicker

Do you have a reason for buying REITs other than a comment from your advisor? I find his stated rationale ("you have cash"), while it might be a good point to invest in *something*, I find the pivot to REITs, *specifically*, to be worthy of more elaboration for investing in a particular s...

Northern Flicker

...Intentionally or not, Vanguard is effectively burying the cost of managing their Target Retirement and LifeStrategy funds within the cost of the underlying funds, and the amount isn't small. In fact, it's probably 5 or 6 bps of expenses being reported on the financial statements of the underlyin...

Northern Flicker

Wire the money. No pull, no wait, $30 or whatever (or free if you have money at Fidelity or many brokerages). Or, and this is probably what I would do, call their bluff and walk. "I'm not thawing my credit, I don't remember my PINs and I drove 2.5 hours to get here. If I leave I'm not coming b...

Northern Flicker

And I believe it was Alex who raised an interesting point, why the heck are the expense ratios on the Target Retirement funds more than their underlying funds? Example: Target 2025 fee is 0.13%; TSM is approx. 0.04%, International Index is 0.11% and Total Bond is 0.05% - so HOW do they arrive at a ...

Northern Flicker

If you have zero REIT exposure, then you are not holding a market index fund. Whether you add a REIT fund can only be answered in the context of reviewing the portfolio. If sidelined cash needs to be deployed, and you are not just deploying into an existing asset allocation, then that is implying th...

Northern Flicker

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Northern Flicker

What they should consider is instead of having a few years of low taxes followed by high taxes for the rest of their lives (after 72), it may be better to "level" their Taxable Income throughout all their reaming years, in order to "level" out their taxes. They can make a big di...

Northern Flicker

It is currently set up to convert our 401(k)s to Roth which will hurt us from a subsidy viewpoint. We will make the calculations at that point to determine which is more valuable to us. Have you considered that maybe it would be worth it to give up a year or two of subsidies (costing you an additio...

Northern Flicker

Holding a treasury fund instead of packaging treasuries in BND makes their interest state-tax-free.

Northern Flicker

Your asset level also means you likely don't need to make that tradeoff. But cash is not the lowest risk asset for funding the first 17 years of a retirement. Color me curious... What do you view as lower risk? That said, I'm not approaching this from a "lowest risk" viewpoint. More "...

Northern Flicker

My view is that if portfolio liquidity is properly managed, a very large cash position will just be a drag on returns while meeting a need for more liquidity than is required. If the portfolio has N years of expenses in intermediate treasuries and N years of expenses in some combination of i-bonds,...

Northern Flicker

My view is that if portfolio liquidity is properly managed, a very large cash position will just be a drag on returns while meeting a need for more liquidity than is required. If the portfolio has at least N years of expenses in intermediate treasuries and M years of expenses in some combination of ...

Northern Flicker

Asset allocation changes have market timing risk. Nobody can predict the future. I don't think this was an active management decision so much as a change in market position of the product. It is still undesirable for investors in the fund.

Northern Flicker

If you don't want to be an attorney, maybe a master's in legal studies is worth considering? Here is some info and an example:

https://legalstudiesmastersonline.northeastern.edu

Attorneys posting to the thread may be able to offer an opinion of such a degree.

Northern Flicker

VNM is +1.72%. Good morning, Vietnam stonks! I wonder how long it will take before people stop turning up their noses at these markets. So far 35 years and counting. Tony 35 years? FM and VNM haven't been investable that long. Believe Portfolio Visualizer goes back to 1986!😂🤣 Tony With which countr...

Northern Flicker

It had been in existence for over 25 years when they made the change.

Northern Flicker

This I don't understand. Don't we have to be employed with a high deductible health plan to contribute to an HSA? Can a retired person (not employed) with a high deductible health plan (if there are such things) contribute to an HSA? You can contribute to an HSA and get the deduction whether or not...

Northern Flicker

One other thing to be aware of: There is a “once per lifetime” annual funding option [“Qualified HSA funding distribution” in IRS-speak, see Publication 969] from a tIRA which moves money directly from tax-deferred to tax-free. I did that in 2020. The once per lifetime is a technicality. All this r...

Northern Flicker

000 wrote: Even Vanguard has bailed on strategies in its fairly tame active funds (Precious Metals / Mining fund...

That fund originated in 1984.

Northern Flicker

If living in or near natural or wooded areas but not wanting birds nearby, where do you propose that the birds should live?

Northern Flicker

Seasonal wrote: Doing things to improve the economy tends to help stocks and other assets.

Improving the economy also tends to increase tax revenues for the govt.

Northern Flicker

It doesn’t matter what you call it, this is just one of the many tools the Fed and the government have to print more money—stimulus checks, lowering taxes, buying t bills, it’s all just adding to money supply. We have been printing money very aggressively since 2009. Stimulus checks and tax cuts th...

Northern Flicker

My main issue with VPGDX is that the asset allocation has been actively managed to an extent that it seems like tactical asset allocation to me. Until 2020, it had held int'l stock at well above global market cap. I think the change to the current portfolio was in June 2020 but the change from month...

Northern Flicker

They did hold some CAT bonds the last time I looked at their portfolio, but it was somewhere around 15% of assets if I remember correctly. They do say this in the prospectus, which suggests they may rely on the risk modeling done by the seller or broker for what they are buying if I am interpreting ...

Northern Flicker

It doesn’t matter what you call it, this is just one of the many tools the Fed and the government have to print more money—stimulus checks, lowering taxes, buying t bills, it’s all just adding to money supply. We have been printing money very aggressively since 2009. Stimulus checks and tax cuts th...

Northern Flicker

As I understand it, reinsurance companies sell slices of their reinsurance portfolio with contracts that would essentially be de facto actuarial risk swaps. There is unlikely to be much of a secondary market for these, so this depends on the interval structure functioning as expected. The asymmetry ...

Northern Flicker

I would like more information about this. Who actually managed the fund and did they use actuaries? It would seem to me that properly valuing reinsurance contracts would be a big part of the business and it is hard for me to believe that Stone Ridge left this out. Sort of like running an actively m...

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