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Talking stocks, trading, and investing in general - Page 695

post #10411 of 10759
Originally Posted by lawyerdad View Post


post #10412 of 10759
Originally Posted by GreenFrog View Post


Classic triple candlestick. Means the market will drop at least 1% tomorrow, unless it doesn't.
post #10413 of 10759
Market did drop and I just bought 15k more VOO. smile.gif
post #10414 of 10759
Seems like the top 3 performing asset classes (in Portfolio Visualizer) since 1987 are Mid cap value, Micro cap, and Emerging markets.

Been having fun creating asset mixes that combines the best of three worlds.

Some bonds for good measure.

Trying to identify the closest corresponding funds in Vanguard to bookmark for later.
post #10415 of 10759

Past results and all...

post #10416 of 10759
I'm mindful of that; mostly just having fun playing with historical data and avoid reading financial headlines…
post #10417 of 10759
That is indeed quite the free program. Roboadvisor sans advisor.

The problem with factor premia is that factor rotation is like sector rotation or plain old stock picking: in the long run very tough to generate consistent excess return net of fee/trading/tax. Recall that 85% of "professional" active managers fail to do so over five years.

Better to just sit with 30%broad and break up the rest with momentum low vol small cap/SMID and value. High div is just a value avenue btw. Quality/profitability overlay in these or separate. US EAFE EM equal weight here too for these.

Then, instead of guessing when, pick a day once or twice a year, and rebalance to these targets. ie you're unemotionally selling high and buying low. Miss the best time to do so? Who cares. Demz the days. Your temporal approach will likely fare better than marketwatching and over/underreacting over many years.

Over 15 years (a full cycle) you get (should have)...100bps over the global broad market equity risk premium. So 9 not 8 if things rock..6 not 5 if things suck. Annualized, btw, so this is hellamore than it sounds.

Not particularly exciting...But at least you get it! Lol
post #10418 of 10759
Also, don't forget that buying emerging markets and micro-caps in 1987/88 was not easy, and would have been very expensive if successful. Often trading costs are more or less equal to alpha targets.
post #10419 of 10759
general tax question for you guys... let's say I have income and the decision is whether to put it in a non-registered account or an RRSP. If I put a chunk of $5,000 now into RRSP I gain back taxes, which will be 5% incrementally on that amount, and then the money will be growing within the shelter too. So it seems like an obvious yes. However, the pay will continue to scale up with time and by next year I'll be within another tax bracket and could make a $10,000 contribution in which case it'll be 5% back on the first $5K and 10% back on the next $5K. So either $5K each year or $10k in year two. Does it make any difference? I think I'm just losing out on a year's worth of growth with the first $5K contribution right?

Part of the question is that when I withdraw it in future, my current income is quite a bit lower than it might be when I retire, in which case does it make sense to even contribute now at all since I'm getting back only a bit of tax now but could get back 10-15% more tax in 2-3 years if I made the contribution then in future.

So in short, i can contribute now at a low bracket and get back a bit of tax and let it grow for a few years, or keep accumulating RRSP contribution room and save money in a non-registered account and when my income hits high enough that it's a bigger tax bracket and also closer to being above what my retirement income would be, then in future I'd start contributing it to the RRSP account. Which makes more sense to do?

Hopefully this makes sense and I'm not confused about it.
post #10420 of 10759

Usually for tax brackets the incremental amount is what is taxed at a higher rate.  For instance, you make $10,000 and you are in the 7% tax bracket so you pay $700 tax.  Next year you make $12,000 and are in the 10% tax bracket.  For the first $10,000 you are only charged 7% then the incremental $2,000 is taxed at the 10%.  So your total tax should be $900 instead of $1,200.


I don't quite get the full understanding of your situation but I always save money and usually the first X% is protected from current taxes and then I save some after tax where the gains are protected from tax when I withdraw it.  It is a balancing act and usually depends on your income if it makes sense.

post #10421 of 10759
Yeah for the Canadian retirement vehicle he mentions if you "crash" it early ya pay your current marginal rate on exit but generally these are supposed to grow tax deferred til an exit schedule begins at 71, where in theory you're not up in a high bracket 'cuz you're retired. ie nothing is tagged to when you contributed.

*dont forget to max out your TFSA with income first as that's tax exempt and probably in existential peril from the Libbbiez to boot!
post #10422 of 10759
Yep, TFSA already maxed out.

So I understand how the marginal tax rates work, as per the example above, the first $10K versus $12K.

The question I'm asking is does it make sense to claim $5K this year and get back 5% ($250) and then next I claim $5K but becuase my income is higher now I get back 10% ($500), so total is $750, plus growth I had for a year on the first $5K+$250, or to claim $10K in year two to get back 10% tax because it's a higher income amount ($1000 return but no growth for a year or two)?. The numbers seem to support waiting until the higher tax bracket/income amount but I'm not sure if I'm missing something from the calculation besides one year's worth of growth that would make them a bit more comparable?

My understanding of retirement funds is that you're deferring taxes, so ideally you're contributing when your income and therefore taxes are higher than they will be when you take the money out (retirement). As an incentive for saving then so the gov doesn't have to carry you, they give you back the tax right away and you can let the principle and taxes compound until you retire, then you draw it all out and pay full income tax but ideally at a lower bracket.
post #10423 of 10759
Were talkin about moving $5K of bonds from open to RRSP now and $5K in y2 or $10K in y2, yes? Well, you'll probably want to reduce your taxable income as much as possible immediately so 5K and 5K.
For example, i made a $10K RRSP contribution last year, and my Total Income is reduced by exactly that much to get the Taxable Income.


ie there's a deemed (taxable) disposition ie capgain *now* on the transfer-out + the FMV lowers your taxable income so much on the transfer-in now + the additional year of sheltered yield that this will be a total $benefit > even if you think you'll be in a twice-as-much bracket next year for a better quantum ducked on taxable income.

BTW are you sure your combined tax exposure doubles exactly?


If so, congrats! :P
post #10424 of 10759

With the example given, it sounds like you get a guaranteed 5% return versus whatever the market returns.  That is up for you to decide but last year I had maybe a 1% return vs this year which is currently over 5% but it is not under my control.

post #10425 of 10759
In all seriousness, you're talking a few hundred bucks, so do what you feel is correct and don't worry about it. If anything I'd view what the compounded extra year's of returns might end up being and go that way.
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