With some fanfare, Vanguard launched nine new ETFs based on S&P indexes last week. When I first looked at the ticker symbols, I see a mess. All nine funds use a combination of V, I, O, and G. They are VOO, VOOV, VOOG, IVOO, IVOV, IVOG, VIOO, VIOV, and VIOG. After staring at them for […]
You Should Still Beware of A Bond Bubble
As interest rates go down and down, people have raised warnings for a possible bond bubble. Vanguard, being a major provider of bond mutual funds, has published several white papers and articles trying assure investors they should stick to bond funds and not worry about a bond bubble. Unfortunately the arguments put forward by Vanguard […]
Index Funds Or ETFs? How About Both?
Investors should thank Schwab for pioneering free trades on its in-house ETFs. With the pressure Schwab put on the competitors, now both Fidelity and Vanguard offer free trades on select ETFs. The free ETF trades are a gift to investors. Free ETF trades make it really easy for small investors to put together a diversified […]
Luck, Hard Work, and Retiring Overseas
Not too long ago I took a vacation in Costa Rica. I stayed at a Bed & Breakfast. A single mother was running it with her 19-year-old daughter. The mother doesn’t speak much English and I don’t speak Spanish. With hand gestures, we were able to communicate — I suspect she understands English more than […]
Tax Cost Calculator
I usually include a spreadsheet when I post something about numbers and calculation. That way you can play with your own assumptions. I didn’t do one in my post last week Dividend Tax Going Up, Moving to Munis. My bad. Reader Random Poster asked: “If you did not hold any value stock funds in your […]
Dividend Tax Going Up, Moving to Munis
When an investor invests in value stock funds and bonds in both a tax deferred account and a taxable account, there are basically two choices: (A) Put taxable bonds in the tax deferred account and put value stock funds in the taxable account; OR (B) Put value stock funds in the tax deferred account and […]
A Case Study On An Index Linked CD
An index linked CD, aka market linked CD or equity linked CD, is a bank CD with an interest crediting formula tied to a market index. The main attraction of an index linked CD is that the value of the CD can go up with the market index but it can’t go down. The principal […]
Taxes Going Up, Reset Cost Basis?
Reader Kevin asked: “I have several mutual funds with large unrealized capital gains. I expect tax rates will go up in the future. Does it make sense to sell them now while the capital gains tax rate is still low, repurchase them immediately after, and reset my cost basis?” The answer, as usual, is “it […]
Flexibility and Retirement Planning
This is a guest post by Mike Piper. Imagine this scenario: An investor (we’ll call her Susan) retires with a $700,000 portfolio. She plans to withdraw $28,000 in the first year of retirement and adjust that amount upward each year in keeping with inflation. In other words, Susan is using a 4% withdrawal rate–typically considered […]
Opportunity Cost and Paper Loss
Is an opportunity cost a real cost? That’s the question I have been pondering. I was deciding whether to buy an air ticket a few weeks ago. I saw a good price when I did the search in the morning. I was at work at that time and I decided to make the purchase that […]
Low-Minimum Index Funds and Commission-Free ETFs for Small Investors
The deal for small investors is getting better. If someone wants to invest in index funds and ETFs with very low cost, Vanguard is no longer the only choice. Competition is really good for customers. Schwab has 5 index funds that require only $100 minimum initial investment. The lineup is not as extensive as Vanguard’s, […]
No Sugar Coating Please: It Was a Lost Decade
Happy New Year! With the first decade in the new millennium having come to the end, there’s a lot of retrospection in the media. What happened? What should’ve happened but didn’t? In the investing world, some say the decade was a “lost decade” and some apologists say how it wasn’t. I read articles from both […]