Hi guys,
Going to ponder mostly. Most things are at 52-week highs. In my IRA, I guess that's good. I bought several funds last month and have coverage. The energy sector seems to be very volatile. The MIP I own still pays well, so will add on weakness. I have seen new oil fields will come on line next year. There also is a con tango in the futures markets in oil. The Economist (I love this magazine, mind you) has sent out its end of year and 2020 preview. I'm reading now.
Buying very little right now.....maybe YAFFX. It seems to be dead in the water. Will not add to bonds 'til things hit 2% on the 10. I think it's a loser play before that. Still hearing overseas bonds and stocks. How will that work with U.S. and China slowing? The dollar has to fall.....will that happen?
Seems to me a lot of jibber from people who don't want you to sell.......just saying......
God bless
the Pudd

"Vanguard’s flagship funds charge about 10 bps for wrapping the entire stock market, SPY (an ETF, which structurally has lower costs) does it for 4 bps"
Since Vanguard funds have an ETF share class, they share the structural cost advantage of ETFs viz. being able to offload trading costs onto authorized participants. Meanwhile, SPY has a structural disadvantage relative to index funds (whether in ETF or OE format), in that it is organized as a UIT, forcing it to endure cash drag.
SPY invests in 500 stocks, a far cry from the entire stock market. Its ER is 9.5 bp, not 4 bp. VOO costs 3 bp for wrapping the same 500 stocks. (VFIAX is 4bp.) Similarly, VTI which does wrap the entire stock market (at least the US part) also costs 3bp, and VTSAX costs 4bp.
---
"“Sweeping” is a term of art by which money automatically leaves the brokerage accounts to rest peacefully on the balance sheet of a bank every night and then be back in the brokerage ready for the morning bell. ... All discount brokerages have a sweep available"
That's certainly a "sweeping" assertion. What about VBS (Vanguard)? It pays enough on its MMF that a bank sweep would be a losing proposition. Though as Vanguard notes, MMFs are not FDIC insured.
Speaking of which, if the money is back in the brokerage ready for the morning bell, how do brokerages advertise FDIC-insured sweep accounts? The blogger is conflating the practice of banks doing "overnight sweeps" to enhance their profits with brokerages offering sweep accounts.
One can infer he is thinking about the former from his passing reference to bank regs and capital sufficiency ratios - this is a part of why banks sweep money out of customers' bank accounts overnight. See the first full paragraph of this ICI paper on p. 44 (pdf p.54).
Rather, brokerages sweep money into bank accounts until it is needed for settlement, not just overnight. Here is Schwab's disclosure, describing how it keeps most of the money in a Schwab Bank MMA and a small amount in a DDA (demand deposit account, aka checking account).
And E*Trade's disclosure of its Extended Sweep Deposit Account program, which says that you're not FDIC-insured until the money actually hits the target bank. Also, that the money is withdrawn from the deposit banks in order to cover debit balances in the brokerage. Not to move the balance back to the brokerage daily.
---
Payment for order flow? The blog presents this an an unalloyed good; better than market execution plus a cash bonus. Better, but not best. One often winds up losing this way.

It creates an incentive for brokers to send orders to whoever pays the most, rather than the place that might get the best outcome for customers. ...
Canada has banned the practice. The United Kingdom recently put it under review and said in September that nearly all UK-based brokerages acting in an agency capacity had stopped accepting payment for order flow.
For their part, market makers say they give, on average, a better price than the market is offering, usually a fraction of a penny per share.

https://www.reuters.com/article/us-usa-brokers-fees/u-s-online-brokers-still-profiting-from-dumb-money-idUSKBN1WN1UD (Oct 8, 2019)

Hi @Vegomatic
I particularly enjoy this statement from your linked article:
"Registered Investment Advisors (RIAs) aren’t discount brokers and yet have to be mentioned in a discussion of them. A RIA is, basically, an investment salesman who moonlights as an amateur psychologist with better math skills than most psychologists. They mostly charge a percentage of your net worth for amateur psychology, worksmanlike math, and non-expert-but-credentialed investing advice. The investment stores are happy to provide backend services to investment salesmen, because RIAs control a huge portion of the mass affluents’ investable assets."
I'm not picking on RIA's; as they likely save the arse's of many folks who don't know how twitchy they become when their investment choices don't travel the expected path.
I've known numerous folks who have RIA managed accounts and for the most part are probably better monetarily postitioned for not having meddled on their own behalf. My biggest grudge against the large organizations through which RIA's operate is the sweep account methods. At request, I've reviewed several portfolios from those who trust my input (devil's advocate). I found too often, what I considered mismatched investments based on the account holders age, their perceived risk tolerance and other assets; and oversized amounts of account money parked in the "cash" sweep account paying almost zero yield. 'Course we understand this is cash flow at some point for whatever institution the RIA is affiliated. The first sweep accounts I first became aware of were RIA's connected with the U.S. arm of RBC (Royal Bank of Canada, Wealth Management).
I noted to those asking me a few questions, that when 20% of your money is parked in the sweep account waiting for an investment opportunity by your RIA, this portion of your account has a yield of .15% or whatever the number might be at the time; which is likely similar to the yield for a bank or credit union savings account.
This isn't a problem, unless this 20% cash position seems to always be in the account waiting for opportunity. A million dollar account has a $200k portion not even beginning to keep up with inflation.
Have a good remainder.
Catch

Kalzumeus.com: How Discount Brokerages Make Money - June 2019
Excellent detailed discussion, including:
1. What is a discount brokerage?
2. Who are and are not discount brokerages?
3. So how do discount brokerages make money?

- Net interest
- Commissions
- Asset Management
- Securities Lending
- Payment for Order Flow

I believe @hank is largely correct in both the purpose of the guarantee and the increasing lack of knowledge in the industry. On the latter matter one would hope, in vain it appears, that the reason such knowledge is diminishing is because newer, easier, better mechanisms have implemented. To @Sven 's point, the transfer process has improved (e.g. ACATS), but some policies seem stuck in the first half of the 20th century.
The purpose of the Medallion guarantee, like that of a certified check, is to validate the signer's identity and to ensure that assets are available for transfer. This is why a Medallion is required by the institution holding the assets (here Merrill Edge) and not by the institution receiving them (here, Vanguard).
Merrill is unclear on the concept. It is the one demanding the Medallion stamp for my transfer. Yet it refuses to guarantee the cash in my Merrill Edge account. I was told Merrill would only only guarantee assets held somewhere else, and only so long as those assets were being transferred to Merrill. That's not protection; that's greed.
I'm not sure that Schwab's response was much better - Schwab is willing to guarantee asset transfer requests so long at it is on either end of the transfer. Like Merrill, Schwab will guarantee assets that are not in its possession, but only if the assets are being transferred to Schwab.
Merrill's response wasn't even correct. Here's a BofA page (dated Aug 2018) that says BofA will provide customers Medallion guarantees for "transfers of securities held in accounts outside of BofA or Merrill Edge ... Example: Transferring stocks held at E*TRADE to Fidelity".
That page also says that "for your protection, a specialist all Medallion Signature Guarantee for the transfer of securities from a non-BofA or Merrill Edge account. In most cases, the review takes no longer than two business days." Emphasis added. Presumably they won't need two days to guarantee assets that are in a Merrill Edge account.
Policies range from clueless to paranoid. Just to transfer cash. Meanwhile I could simply log into Merrill Edge and they'd happily mail me a check for a 60 day rollover.

https://www.nasdaq.com/articles/rethinking-risk-in-equities-2019-11-25
Rethinking risk in equities
If we’re investing for a long-term goal — and most of us do have horizons of five years or more — then why are we so obsessed with the daily headlines and the gyrations they can spark in asset prices

@JohnN, I agree with all your advice now. Seems to me something changed after you edited the original post. I responded only minutes after the original post went up at around 12:00 noon yesterday. :)
BTW - Love Bogle, but not an easy read for a beginner. Good luck.

Hi @hank and others.
I use to use the Lipper Balanced Index as my bogey. However, it is no longer easily accessable to follow weekly so I've done as hank and chose a fund within my portfolio that has some common traits as my overall portfolio.
With this, I now use American Fund's Capital Income Builder A shares (CAIBX) as my bogey since it, as well as my portfolio, have a global total return perspective with both having an income tilt. Both have about the same income yield (excluding capital gains) which is in the low to mid 3% range with CAIBX having a ten year total annual return of 6.92% (according to M*) while my portfolio has about the same yield but with a ten year average total return of better than 2+% more than CAIBX. A good bit of my portfolio's outsized performance comes by me employing spiff (special investment) positions from time to time.
Interestingly, TRRIX and CAIBX have the same rolling 12 month total return of 10.74% (according to M*) with CAIBX listed with a ten year average total return of 6.92% vs 6.04% for TRRIX through November 29, 2019. In addition, CAIBX is listed with a TTM yield of 3.4% while TRRIX is listed at 1.66%.
Because of my portfolio's outsized performance has made being active, for me, worthwhile as it has put additional dollars in my pocket that I would not otherwise have. In addition, I favor higher yielding hybrid funds as long as they can maintain respectable total returns since this puts more income dollars in my pocket over the lower yielding ones.
I wish all ... "Good Investing."
Old_Skeet

TRRIX's ER is 0.51% which is reasonable.
Similar to this 40/60 balanced fund is Vanguard Wellesley Income fund (35/75 stock/bond allocation). The admiral shares' ER is 0.16% with $50K mininium.

Day trading is NOWHERE as productive (or fun) as it was 10 years ago or longer. Speaking as someone who paid for parts of his PhD via daytrading futures (who has both earned and lost 10s of thousands in a single day), I suggest he first learn about the markets, stocks, and human psychology before even considering daytrading. Frankly I think day trading is becoming fairly extinct given the rise of algos and technology that can out-wit an out-perform the individual human operator and would counsel him against daytrading with anything other than 'fun' money for an occasional kick .... life is too short to be staring at screens all day anyway :)
BTW sure, he can dabble in trading simulators, but trus tme, no amount of 'paper' or 'simulated' trading experiences will EVER prepare a person mentally for playing in the markets for real, live, and with real money on the line.

If your friend is 12 years away from retirement, why is he / she only now taking an interest in investing?
Not much to go on here. Does he have access to a tax deferred plan at work? (I suspect not based on your question.) Does he by chance look forward to a pension or some kind of “buyout” that will assist him? There are many different investment vehicles depending on type of work, tax status, etc. Others here know more about alternatives to the traditional 401K than I do.
Good advice from you to learn more. My biggest source of help in the early going was from co-workers who had been at the game longer. A good global stock fund sufficed for the first 20 years. But I was young enough than not to worry about every market flux. Your friend may not have that advantage.
I’ve found “learning” about investments / investing to be a slow multi-year process (a long learning curve ). One doesn’t just pick up a book or two and suddenly know everything. BTW - I like “The Only Investment Guide You’ll Ever Need” by Andrew Tobias as a good quick easy to read book for the novice investor. He’s updated it over the years. I recently did a quick re-read. Available in print or download at Amazon. Of course, there are longer more comprehensive books for the serious student.

I have good and not so good experience with Vanguard, Fidelity and T. Rowe Price. T. Rowe Price is the slowest and requires medallion stamp on everything.
Fidelity is the easiest, especially when $ is coming into Fidelity. Everything is done online with supporting statements.
Vanguard is a mixed bag. If the entire account is transferred, everything can be completed online with supporting statements. If the transfer is partial, then the paperwork and supporting statements are required - typically it takes 7-10 days.
Each brokerages have their own rules to follow. Some are more troublesome than others. Before the digital age, the transfer process were even worse!

Simple transaction - move IRA cash, trustee to trustee, from one existing account to another. I hit the trifecta - three different institutions doing what they can to make this difficult.
Vanguard (recipient): Hard to transfer cash to existing mutual fund platform account. System automatically opened a brokerage account nd prefilled form with new account. I had to call Vanguard to have the cash go into my existing account.
Vanguard requires all transfers to be submitted by paper.
Merrill Edge (sender): Requires all transfers of $50K out of an IRA to have a medallion guarantee. They have a different limit for a transfer into an IRA, and a different limit for a taxable account.
I asked Merrill on the phone if I could walk into a BofA office to get the guarantee and was told they would only guarantee money coming into Merrill, not out.
Schwab:Won't provide a medallion guarantee to its customers unless the paperwork itself involves Schwab. Even then, my local office isn't able to stamp the docs. What's the point of having a local office if they can't handle the stuff that must be done in person?
IMHO none of these hurdles would disqualify an institution (how often does one move money from one account to another). But surely two decades into the 21st century they could be a little more tech savvy and a bit more customer friendly.

+1
While I don’t currently own TRRIX, I like it a lot. Readers may recall that I’ve long benchmarked against it. It provides an appropriate yardstick against which, I think, for someone in retirement to compare not only total return, but also the short and long term volatility implicit in their investments. A fine fund any way you cut it - though some will criticize it as too expensive in terms of ER.
@Ted - Your Colbert Butterball video is a hoot! :)

Strip away much the text and what the writer is referencing becomes clearer:

Unlike Congress, the IRS has been working on the issue and took an important first step toward reducing RMDs for most retirees. ... Back in January, I observed that if the IRS recalculated these two-decade-old mortality tables and updated the rules, it would be modestly helpful but wouldn’t make that big a difference. ... Now that the IRS has formally proposed a change, it turns out this intuition was right. ... It seems very likely that this rule will become a final regulation sometime in 2020.

Embedded in the column is a link internal to M*:
https://www.morningstar.com/articles/909626/could-the-government-take-the-bite-out-of-rmds

One obvious thing to do would be to adjust the mortality assumptions that drive these RMDs, because they are going on 20 years old. In fact, President Donald Trump directed the Treasury Department to do just that, and when the government reopens, it will likely propose some adjustments. However, while life expectancy has increased, my back-of-the-envelope calculations reveal that such a change would not make much difference.

For a robust analysis, including copious links, see Kitces:
https://www.kitces.com/blog/irs-proposes-new-rmd-life-expectancy-tables-to-begin-in-2021/

What in the world is the writer referencing? A stand alone IRS rule/reg change or an indirect reference to the Secure Act? Tis not too difficult to link some reference, either internal to M* or a valid outside source.
Gzzzzzzzzzzz.....wasted electrons for the write, IMHO.
From Aug. 2019 regarding the Secure Act
Click SECURE ACT link in the linked MFO write just above.

Link or no link, IMHO this is obvious. Target date funds are designed to manage an entire portfolio for a hands off approach. If an investor isn't using the TDF for virtually one's whole portfolio, then the investor isn't buying into that idea, and the glide path won't work as designed.
I've since modified my view to include a couple of variations:
1. TDFs are designed with retirement glidepaths. If one is planning to bequeath an investment to someone, it might make sense to put that investment into a separate TDF with a target date matched to the legatee's age. This expands the ability to use TDFs in a hands-off manner.
2. On the opposite end of the spectrum, some people want to be actively involved in managing their portfolios. A TDF's glidepath may not exactly match what they they want, e.g. they may want equities a bit higher than the glidepath in pre-retirement and a bit lower in early retirement. Such investors could build their own portfolios and manage their own glidepaths. Or they could use a TDF as the foundation ("core") of their portfolio and manage smaller complimentary investments to fine tune their holdings.
Here's the Humble Investor post by "Mark Eckman, a data-oriented CPA with a focus on employee benefit plans."
https://humbledollar.com/2019/11/missing-the-target/

Derf: Sorry about that'
Happy Thankgiving
Ted
https://humbledollar.com/2019/11/missing-the-target/

FYI: USE THE RIGHT tool for the job and you’ll get the best result. If you need to connect two boards, you could use a hammer and a nail or a screwdriver and a screw. Either methods work—and they’re certainly better than banging in a screw with a hammer, which I’ve seen tried. It was not effective.
Participants in 401(k) plans, alas, display similar behavior with target date funds, or TDFs. A TDF offers a diversified portfolio in a single fund, with the mix of stocks and bonds changing as you approach retirement. When used correctly, the fund’s asset allocation should be appropriate for your age—aggressive while you’re young and becoming more conservative as you age. There’s no need to trade or adjust the mix. The fund does that automatically. The evidence, however, suggests many people use TDFs incorrectly.
Regards,
Ted

FYI: For decades, Charles Schwab Corp. quietly plotted to unleash its ultimate weapon against rivals: $0 fees.
Schwab considered eliminating charges in the 1990s after the advent of online trading, and again in the 2000s during the financial crisis, according to a person with knowledge of the matter. Each time, it dismissed the idea as too risky — a danger to its own bottom line.
But with investing costs collapsing across Wall Street, the San Francisco-based company finally took the leap in October — and, in a matter of weeks, it drove a major rival into its arms.
Regards,
Ted
https://www.google.com/search?sxsrf=ACYBGNTBIJnksn8sukNgSElRoUEaMiQEZQ:1574851570290&source=hp&ei=8lPeXaLXDtHwsAWsnKAI&q=Schwab+muscles+its+way+to+the+top+of+a+zero-fee+world&oq=Schwab+muscles+its+way+to+the+top+of+a+zero-fee+world&gs_l=psy-ab.3..33i160.3139.3139..4163...1.0..0.98.98.1......0....2j1..gws-wiz.Bo2jz6-elV0&ved=0ahUKEwiimKyjm4rmAhVROKwKHSwOCAEQ4dUDCAc&uact=5