Recently, while reading Lifecycle Investing by Ian Ayres and Barry Nalebuff, I wondered how to calculate my relative risk aversion(RRA). Financial advisors often ask their clients a series of questions to calculate their risk and determine the suitability of different types of investments. These questionnaires are challenged because many people often say one thing but… Continue reading How much risk will I tolerate?
This past week, I sold my bond holdings and spread the proceeds between our US equities and international equities allocation. It was a combination of selling our positions in VTIP, BND and VBIPX, and then gifting appreciated shares of VTEB. Why? Previously, my fixed income target was 15%. Recently, I realized that I wasn’t considering… Continue reading Bond-like Assets
I haven’t filed my taxes yet for 2020. I’m probably going to file for an extension to increase the window of any possible eligibility for stimulus payments. It’s highly likely that I still won’t be eligible, but it’s worth a shot. It’ll be my first time filing for an extension, so there’s some learning ahead.… Continue reading Taxable Passive Income – 2020
There’s no shortage of market pundits predicting impending doom. The current trend of prophecy is pointing to astronomical price-to-earnings ratios and how calamity ensued the last time this happened. If I’m an investor with a lump sum to invest, what do I do? The last thing I want to do is drop it in an… Continue reading Which is the winner? Lump sum investing or dollar cost averaging?
Last October, I shared my target allocations in my tax loss harvesting update. In this post, I thought I’d provide some financial voyeuristic fodder and share what my current allocations, as well as what investments I have in my portfolio. Tax-Advantaged and Taxable Allocations I break out my allocations between my tax-advantaged accounts (workplace 401(k),… Continue reading What’s in my portfolio?
The other day, a friend asked me to tell them what I thought about one of the options in their workplace 401(k), “The Growth Fund of America” by American Funds, ticker AGTHX. To evaluate an investment option, I generally look at three things: objective, fee structure, and benchmark performance. What is AGTHX? AGTHX is an… Continue reading How to Evaluate An Investment Option using AGTHX
I’m not 100% rational. Few (any?) people are rational all of the time. And even though I am aware of psychological traps and my own irrationality, I still find myself occasionally trapped. Familiarity Bias I worked at Dumpster Fire Inc between 2013 and 2017. During my time at DFI, they went public at $40/share and… Continue reading Behavioral Economics
Recently, I spoke with a family member who decades ago, made a decision to prematurely cash out a pension plan prematurely, netting about $5k at the time. Fast forward 29 years later and the cost of undoing the earlier cash out cost $37k, an annualized rate of return around 7.1%/year. To help frame things, if… Continue reading Playing it too safe
A couple of years ago, I closed my Wealthfront account. After closing my account, I set out to DIY a tax loss harvesting system, modeled after Wealthfront. I’m tempted to call it my level 5 asset allocation strategy. Building my own tax loss harvesting system has a few advantages, including: Avoid Wealthfront’s .25% management fee… Continue reading Tax Loss Harvesting Update – October 2020
Each month, I find that there’s a bunch of small topics that don’t warrant their own post but that I want to share nonetheless. Here are some from August. Beach House In North Carolina In the eight years that we’ve lived in Virginia, we’ve rented houses near the beach on the southern coast of North… Continue reading August 2020 Update