Everybody knows 2008 was a bad year for investing. It may seem odd to some people that I never bothered to calculate my rate of return during the year. That information just isn’t so useful to me. I have no control over what the market does. Most of my investments are already in index funds […]
3 Reminders About Year-End Mutual Fund Distributions
I wrote on Tuesday that I bought PIMCO CommodityRealReturn Strategy Fund D (PCRDX) on Dec. 5, 2008. It’s a good segue to today’s post. As luck had it, only a few days later, my jaw dropped when I saw the price of the fund dropped 25% in one day. It turned out it was just […]
Ratings in Magazines Versus Actual Customer Experience
Good customer service is worth paying for. I think everybody understands that. But in this age of easy price comparison, we sometimes forget. Fellow blogger indexfundfan is having trouble with TradeKing, an online discount broker. TradeKing is holding his money hostage for 60 days. According to TradeKing, it was rated #1 in customer service by […]
Diversifying Portfolio with Commodities Futures Fund
I first heard about commodities futures in the last bear market. In 2002, commodities futures returned something like +25-30% while the S&P lost 22%. People were saying back then commodities futures were a great investment because they had “equity-like” returns while being uncorrelated with the stock market. This characteristic would add diversification to one’s portfolio […]
Reforming the 401k: Good Ideas and Bad Ideas
When stock market crashed, people’s 401(k) accounts crashed with it. Needless to say people are not happy. They are saying 401k’s don’t work. Wall Street Journal published an article How to Fix 401(k)s by Anne Tergesen. It listed many proposals for changing the 401k’s (and 403(b)s and 457’s). I think some of the proposals are […]
Catch a Wild Ride with REIT
If the Vanguard REIT Index Fund (VGSIX, or its EFT share class VNQ) were a person, I’d say he must have bipolar. In the past few weeks, its prices changed from one end to another in rapid cycles. It could not make up its mind whether it wanted to go up or go down. One […]
Risk Tolerance Metric: Loss to Income Ratio
A common asset allocation advice is by the age of the investor. There is that rule of thumb “age in bonds” which says a 30-year-old should have 70% in stocks and 30% in bonds and so on. That of course does not take into consideration the investor’s risk tolerance. However, risk tolerance is somewhat vague […]
Old Money Versus New Money
If you make a change to your portfolio, say you add some more money into a fund, do you check the price the next day and see if your move made money? I do, and it doesn’t make much sense. If I have some money in a fund, I don’t check the prices every day […]
Tax Loss Harvesting and Missing the Best Days
When news about the $700 billion bailout plan first came out last month, the U.S. stock market staged a big rally on September 18 and 19. The S&P 500 index rose 8.5% in two days. Respected author Larry Swedroe posted this on the Bogleheads forum on Sunday, September 21: “It is often discussed about TLH […]
TIPS During Deflation
[Updated on Oct. 28, 2008. All yields are real yields, after inflation/deflation adjustments.] While the stock market was in turmoil, the real yields on Treasury Inflation Protected Securities (TIPS) rose to an attractive level. The real yield on 10-year TIPS broke the magic 3% number, a level that hasn’t been reached for many years. Many […]
Overbalancing Continues
The stock market crashed last week. I continued with overbalancing although I slowed down the pace from my original plan because it’s hard to keep up with the speed the market was dropping. Both the U.S. and international broad market indexes crossed the 40%-off mark. My target stocks/bonds ratio is 70/30, up from 65/35 when […]
Crime and Punishment
There is no doubt the financial market crisis is perpetrated by Americans. American homeowners decided to speculate on housing prices. American lenders lent irresponsibly. American borrowers decided not to honor their debt. American financial institutions packaged and sold mortgage backed securities to other American investors and to investors around the world. American bond rating agencies […]