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Residency Evil posted:Not sure if this the right thread or not, but do you guys know of any accounts that offer something like: I think #1 is going to kill most of these. As you said, 2-4 or 1 seems to be the options. Most of the sweep accounts offer something over 0.01% but I don't think they ever hit the multiple whole % numbers that like ally et al did. I think you would need to decide what you want to take a min/max hit on.
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Jul 16, 2021 16:55
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Residency Evil posted:Not sure if this the right thread or not, but do you guys know of any accounts that offer something like: M1 Finance seems pretty close here?
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Jul 16, 2021 17:40
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H110Hawk posted:I think #1 is going to kill most of these. As you said, 2-4 or 1 seems to be the options. Most of the sweep accounts offer something over 0.01% but I don't think they ever hit the multiple whole % numbers that like ally et al did. I think you would need to decide what you want to take a min/max hit on. Fair enough. I've got a downpayment sitting in an account and 0.01% (Fidelity) seems kind of low. It'd be nice to consolidate things a bit more, but maybe that's not possible. CubicalSucrose posted:M1 Finance seems pretty close here? Huh, yeah, for sure. 1%/year also beats Ally. Only been around for 6 years it seems like though?
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Jul 16, 2021 18:54
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dividend aristocrats chat Someone tell me why it's a bad idea to do a one-time buy something like 100 shares of KNG ($49/share = $4900 investment) and reinvest the dividend ($0.49) quarterly and then just forget about it and enjoy the $200/yr avg return Also looks like there is NOBL which does the same thing, but is $93/share, I'm guessing this is a management fee thing Should I even care about dividend stocks? Presumably the winning bet here is to have enough cash to buy enough of one thing that you can reinvest the dividend each period and buy one or more of the thing Let's assume I'm already doing the 15% of my income thing with the 33/33/33 split
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Jul 17, 2021 10:29
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Here’s an evidence backed argument for why dividends don’t matter. https://youtu.be/f5j9v9dfinQ Links to papers in the video description.
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Jul 17, 2021 11:44
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Ok so I listened to that in the background all the way through to the end, he makes his opening thesis that: for picking individual stocks, dividends are not automatically a flag for picking stocks that outperform the market NOBL and KNG are ETFs, like Vanguard's Dividend Appreciation (VIG) and High Dividend Yield (VYM), or tangentially like S&P 500 Growth (VOOG), so I'm not using dividends to pick individual stock, rather I'm asking If I am already full-up on my Bernstein 33/33/33 split, is it a bad idea to buy in to a high yield dividend ETF like NOBL or KNG for fairly reliable recurring income from dividends, or should I invest elsewhere? I could see a game plan where over a 4-5 year period I funnel 50k into NOBL for a 2k/yr return in perpetuity As always I guess the game is growth vs risk That's a good video though, he goes into some detail about the tax hazards of taking dividend income annually and how that can gently caress with your income tax liability
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Jul 17, 2021 13:16
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Hadlock posted:Ok so I listened to that in the background all the way through to the end, he makes his opening thesis that: here's a chart of the VOO (S&P 500) total return vs total return of various dividend ETFs over 3 trading years: https://stockcharts.com/freecharts/perf.php?VOO,NOBL,KNG,VIG,VYM,SCHD&n=756&O=011000 (edit: if you remove KNG you can get a much longer timeframe) Different dividend stock indexes (ETFs for the purposes of this post) behave REALLY differently over time and you should be aware of what the index of a particular ETF actually tracks. In general, they tend to underperform a simple S&P 500 or total market index over a long enough time horizon. Schwab's SCHD is the exception, which has tended to keep pace to within some year-to-year noise. Personally, I do not see a use case for dividend ETFs if you are in the 'accumulation' stage and are not seeking a way to tilt your portfolio toward, say, a value factor (in which case there are other ETFs for that, too). If you're living off your portfolio and have to pay monthly bills via dividends or bond distributions, it could be a very different story. Dividend ETFs may be very useful then, depends on an individual's particular circumstances. As you note, there are also tax implications if it's in a taxable account. edit #2: here's the longest timeframe comparison I could create between the S&P and two dividend ETFs. please note that VIG very recently changed the index it tracks. https://stockcharts.com/freecharts/perf.php?SPY,VIG,VYM&n=3686&O=011000 pmchem fucked around with this message at 14:05 on Jul 17, 2021 |
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Jul 17, 2021 13:50
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If you believe the market is efficient, then there is no difference in value between two stocks that are identical, except for the fact that one pays dividends but the other doesn't. Assume no growth in either stock: Stock A is worth $10 and doesn't pay a dividend Stock B is worth $10 and pays a $1 dividend. Stock B is now worth $9 and you have $1 cash. Both scenarios you end up with $10 value. I would argue that in a world where you can own partial shares, owning dividend stocks is a small disadvantage because you cannot choose when the taxable event occurs. That being said, the disadvantage is pretty small, and if the rest of your portfolio is still diversified, there's nothing wrong with going the route you described. Edit: above post uses evidence instead of theory. Thanks a lot, finance 101
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Jul 17, 2021 13:51
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Residency Evil posted:Fair enough. I've got a downpayment sitting in an account and 0.01% (Fidelity) seems kind of low. It'd be nice to consolidate things a bit more, but maybe that's not possible. Ally itself has only been around since 08 or 09. Ally was a divestiture of a General Motors finance division if I remember right. There’s a lot of posting here (me included) on trying to find a replacement to a HYSA ever since the pandemic happened and savings accounts went from 2% interest to 0.5% (where Ally savings is and probably most HYSAs). It’s a bit of a bummer (for me included), but people here are reminded that the first priority for emergency savings is liquidity. It’s taken me a while to accept, but I stopped looking for a better HYSA because of that principle. Plus I know how my bank works, and 0.5 is still…..fine. Plus, most programs , like a HM Bradley that s few people found and use here, have either deposit and/or usage requirements , and it’s just too much time for me to juggle that , plus I won’t use a debit card for my day to day transactions in any way. There can be credit union options, but none near me or they have requirements like military vet, so also a limited option. I think my personal long term goal, is I may slowly start a backup / extra emergency fund through I Bonds, but that is not liquid for a year , or really as liquid as you’re describing in general, so it both can’t be a replacement , and honestly it’s better off making sure your Roth is maxed out for the year first. This long post is basically me lamenting my 2% Ally savings going away, but in the grand scheme of things it’s not really an impact on my overall savings / portfolio, but it was really cool to have a 2% savings rate. Rip.
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Jul 17, 2021 14:06
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pmchem posted:Personally, I do not see a use case for dividend ETFs if you are in the 'accumulation' stage and are not seeking a way to tilt your portfolio toward, say, a value factor (in which case there are other ETFs for that, too). If you're living off your portfolio and have to pay monthly bills via dividends or bond distributions, it could be a very different story. Dividend ETFs may be very useful then, depends on an individual's particular circumstances. Yeah, ok this nails it, I think, thanks When I'm old and gray and ready to retire dividend stocks would be a better choice than right now. Right now I'm in a race to get to a specific number in a short period of time.
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Jul 17, 2021 14:23
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Duckman2008 posted:This long post is basically me lamenting my 2% Ally savings going away, but in the grand scheme of things it’s not really an impact on my overall savings / portfolio, but it was really cool to have a 2% savings rate. Rip. 2% savings was so great, was particularly motivating when saving up for the house to get an extra hundred each month. Fortunately for me the timing worked out that we bought when the savings rate cratered but so did the mortgage rate. But now that’s over and recovering that cash after all the housework we had to do and rebuilding the emergency savings, would be nice to have a percentage on cash again.
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Jul 17, 2021 15:45
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My parents are selling their house and are wondering what to do with the money so I told them not to rely on my or any family members’ advice, other than to get a fee-only financial advisor/fiduciary. They insist I be a part of this process so I figure I’ll find a local one on NAPFA?
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Jul 17, 2021 21:14
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jokes posted:My parents are selling their house and are wondering what to do with the money so I told them not to rely on my or any family members’ advice, other than to get a fee-only financial advisor/fiduciary. They insist I be a part of this process so I figure I’ll find a local one on NAPFA?
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Jul 17, 2021 21:53
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Average Joe On Investing makes some compelling cases for going after, not just dividends for their own sake, but quality dividend stocks. Involves a lot more attention and tweaking than dumping it all in SCHD and VYM, but vigilantly screened dividend stocks can lead to significantly greater long-term return than a three-fund portfolio. Worth mentioning that Average Joe is all for indexing as a long-term strategy, too, but he's an example of a dividend investor who rises above shallow investment YouTubers.
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Jul 17, 2021 22:04
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Also I think it used to be the case that stocks paid much larger dividends and you could make some real money that way, but they don't do that anymore. Am I making this up?
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Jul 17, 2021 22:07
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Space Fish posted:Average Joe On Investing makes some compelling cases for going after, not just dividends for their own sake, but quality dividend stocks. Involves a lot more attention and tweaking than dumping it all in SCHD and VYM, but vigilantly screened dividend stocks can lead to significantly greater long-term return than a three-fund portfolio. Worth mentioning that Average Joe is all for indexing as a long-term strategy, too, but he's an example of a dividend investor who rises above shallow investment YouTubers. hadn't heard of him, but he links his exact portfolio here https://dashboard.m1finance.com/sha...de=Hz9hZnTO5-PQ and its top holding is SCHD. shame that m1 only gives price return instead of total return; it's difficult to compare his portfolio since inception to alternatives (like pure SCHD). that said, I wouldn't be surprised if he managed to pick some good quality stocks to outperform a dividend ETF. the "quality" factor itself has generally outperformed dividend funds in recent years: https://stockcharts.com/freecharts/perf.php?SPY,QUAL,FQAL,SCHD,VYM&n=565&O=011000 it's also not surprising that a 100% US equity portfolio had led to better returns than a 3-fund in recent years, almost regardless of factor. total bonds and international have deeply underperformed in the past decade or so. (some people might argue they're not even intended to improve total return)
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Jul 17, 2021 22:36
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I just plowed my money into a target date fund and set up an auto transfer and auto invest to hit the cap for 2022 and future years. Will max out 2021 with additional deposits too, and just... not think about it.
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Jul 17, 2021 22:52
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Upgrade posted:I just plowed my money into a target date fund and set up an auto transfer and auto invest to hit the cap for 2022 and future years. Will max out 2021 with additional deposits too, and just... not think about it. This is a good thing!
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Jul 17, 2021 22:56
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Tricky Ed posted:This is a good thing! agreed and in case it wasn't 100% obvious, I was not endorsing that avg joe strategy
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Jul 17, 2021 23:00
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SpartanIvy posted:how long until one of your family members convinces them to put it all in Bitcoin? My dad is pretty uhhhhhh peak boomer so that’s a huge concern. Every minute it’s in cash is very stressful for me lol
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Jul 17, 2021 23:24
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So I have a few brokerage accounts, that are taxable, and not IRA/Roth. If I'm correct, there's no real way to move funds from these accounts into an actual Roth IRA account, without moving everything into cash first, and then also taking the associated hit with taxes/capital gains that happens when doing so, correct? If taxes in this scenario are unavoidable, I'm curious if it's better to bite the bullet sooner than later, or to begin moving funds out over time instead.
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Jul 18, 2021 00:07
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Space Fish posted:Average Joe On Investing makes some compelling cases for going after, not just dividends for their own sake, but quality dividend stocks. Involves a lot more attention and tweaking than dumping it all in SCHD and VYM, but vigilantly screened dividend stocks can lead to significantly greater long-term return than a three-fund portfolio. Worth mentioning that Average Joe is all for indexing as a long-term strategy, too, but he's an example of a dividend investor who rises above shallow investment YouTubers. Well yeah, if you can magically get lucky picking stocks, you too can maybe get lucky returns. Something something GE.
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Jul 18, 2021 00:49
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After I maxed out my Roth with FZROX/FZILX, I've been dumping more of those in my taxable account week by week. I just realized that they're a lot less desirable in taxable accounts long term because of zero portability (Have to liquidate, take a tax event, and then move to a new brokerage) and less tax efficient compared to VTI/VXUS equivalents. If I just sell them at the cost I bought and buy VTI/VXUS, there shouldnt be any weird tax bullshit that hits me from selling, since I wouldnt have made any substantial gains, right?
Meow Tse-tung fucked around with this message at 12:35 on Jul 19, 2021 |
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Jul 19, 2021 12:33
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I don’t think there will be tax issues, but read up on any policies your brokerage has regarding buying and selling mutual fund shares in quick succession. (And it looks like you’re using Fidelity, which has them.)
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Jul 19, 2021 14:38
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Killer_B posted:So I have a few brokerage accounts, that are taxable, and not IRA/Roth. You can only buy into ROTH at a rate of ~$6,000 a year, right? You don’t have some other mechanism for getting things in there? In which case, no, don’t bite the bullet on selling your appreciating assets and leaving them in cash to gradually move over. Sell the assets as the room opens up for you every year. E: even better if you can manage it: keep your taxable investments and buy into the ROTH/IRA with new cash. doingitwrong fucked around with this message at 14:50 on Jul 19, 2021 |
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Jul 19, 2021 14:46
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Killer_B posted:So I have a few brokerage accounts, that are taxable, and not IRA/Roth. "It depends" Scenario A: - You've got $100k in taxable accounts with a $5k basis and you're expecting to be at like the 35% marginal tax bracket this year. Probably not a good idea to sell anything and instead yeah use new money to move into that Roth. (And you might need to Backdoor the Roth). Scenario B: - You've got $4k in taxable accounts with like a $3900 basis (and you've held the invested securities for like 3 years) and you only expect to have like another $3k total to be able to invest throughout the rest of the year. In this case, you might think about pulling out and moving to Roth really quickly. (And you might reevaluate your investment selections).
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Jul 19, 2021 15:06
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Upgrade posted:Another question: once you’ve maxed out your tax advantages vehicles, is the only option to just plow it into the market? I guess I could buy SPY! Hey so I posted this image back in 2019 probably, it might be slightly out of date, but I was trying to find my post with it and I post in this thread way too much lol so I'll just post it again.  Most of us only use two or three items on this chart but I tried to be as comprehensive as I could at the time and there's some niche things here that may be available to a random goon.
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Jul 19, 2021 19:03
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Leperflesh posted:Hey so I posted this image back in 2019 probably, it might be slightly out of date, but I was trying to find my post with it and I post in this thread way too much lol so I'll just post it again. if you don't have 'cash stuffed in your mattress' categorized as tax-free withdrawal, I question your choice of mattress
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Jul 19, 2021 19:45
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Good day to have a previously scheduled rebalance  .(Don't time the market) Untagged fucked around with this message at 20:03 on Jul 19, 2021 |
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Jul 19, 2021 19:46
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Okay, I'm going to ask the stupid newb money question here: with stocks being down a lot today, any thoughts on whether it's worth it to throw some money into the down market? I have some fluid income that I'm happy to throw into my Betterment index fund, if anyone thinks it'll pan out. I'm not planning on any big purchases, just wondering if it might be a smart move for the future. I'm not really worried either that this downturn is anything other than a blip, but if it is...eh.
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Jul 19, 2021 19:49
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UnSmith posted:Okay, I'm going to ask the stupid newb money question here: with stocks being down a lot today, any thoughts on whether it's worth it to throw some money into the down market? I have some fluid income that I'm happy to throw into my Betterment index fund, if anyone thinks it'll pan out. I'm not planning on any big purchases, just wondering if it might be a smart move for the future. I'm not really worried either that this downturn is anything other than a blip, but if it is...eh. Untagged posted:(Don't time the market)
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Jul 19, 2021 19:59
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pmchem posted:if you don't have 'cash stuffed in your mattress' categorized as tax-free withdrawal, I question your choice of mattress lol I guess implicit in the image is that if you make no gains, there's no taxes on your gains but if you somehow make capital gains from the mattress method I suppose you'd not have a tax-free withdrawal unless you lie on your taxes
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Jul 19, 2021 20:00
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Don't try and time the market That said buying during a slump is mathematically better than buying at the top of the market
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Jul 19, 2021 20:02
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I have not sold anything at an auction house but if you consign something with them and they sell it for a profit... do they send you a tax form? Or is that something you'd have to handle yourself?
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Jul 19, 2021 20:05
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Hadlock posted:Don't try and time the market Yeah. If you have money to invest and the market does poo poo itself and drop 50%, then by all means go for it. You're just not going to be able to predict that in advance.
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Jul 19, 2021 20:10
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My google search came up with other stuff and I checked the OP, can someone link one of those articles illustrating how selling in the down market can backfire. Something like the 2 friends, one who invested steadily and the other who tried to time the market? I’ve got a friend who panics every time there’s an adjustment.
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Jul 19, 2021 20:20
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You’re probably looking for the tale of Bob, the world’s worst market timer.
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Jul 19, 2021 20:22
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I remember there was a particular article that listed reasons why every year back to 1929 or something was a bad year to get in the market, the point being that you can die waiting for a perfect year. If nothing else, you can draw his attention to the tax impact of pulling out regularly. Gazpacho fucked around with this message at 22:00 on Jul 19, 2021 |
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Jul 19, 2021 21:33
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Strong Sauce posted:I have not sold anything at an auction house but if you consign something with them and they sell it for a profit... do they send you a tax form? Or is that something you'd have to handle yourself? For a single sale of moderate dollar amounts, they'll provide you with the documentation you need (exactly what the item(s) sold for, their commission, and the money they gave you), but you need to handle the tax stuff yourself because they don't have a record of your cost basis in the thing you sold, or even necessarily which state you live in, etc. For example, my wife has some art items that sell from a place in colorado, they mail her a document each year listing the dollar amounts but that's it, we have to handle the tax implications ourselves. For larger amounts, such as transfers of money of $10k+, there's reporting rules (to combat money laundering I believe). If you're operating as a business buying and selling things, there's forms for that. If you're selling hundreds of items on ebay or with paypal etc. for $20k a year or more, you may receive a 1099-k related to all those electronic transactions.
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Jul 19, 2021 21:51
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Gazpacho posted:If nothing else, you can draw his attention to the tax impact of pulling out regularly. Having less dependents will lessen your tax burden.
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Jul 19, 2021 22:32
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