WYLIE MONEY

Actively Managed Mutual Funds Out Perform Index Funds!

noreply@blogger.com (Healtyboy) — Wed, 06 May 2009 11:17:00 +0000

For the first two months since I hypothetically invested in affordable mostly managed mutual funds (there are a few index funds where no competitive actively managed fund was available) the funds I picked have outperformed comparable Vanguard Index funds.

Though note that the Index portfolio did slightly better today. I think for a few days on my recent trip the index portfolio pulled ahead.

They are really close though. The big surprise to me has been how poorly the ETFs have performed. I would have thought they would have been more or less in line with the index mutual funds, but they have fallen almost 1% behind.

Etrade fixes minimum investing in mutual fund issue

noreply@blogger.com (Healtyboy) — Wed, 06 May 2009 11:16:00 +0000

So before I left town for a while, I was trying to resolve an issue with my Etrade account. My man Justin got back to me and the issue was resolved, but I took a break from posting about financial matters while I was on the road. I did update the message in the upper right corner of this site to indicate that the issue was fixed though, so it would not look like Etrade was not following up!

Basically, the minimum additional purchases for two mutual funds I own were not allowing any additional investments under $1000 each. Morningstar listed the minimum additional investments for an automatic investment plan purchase as $100. When Justin called me up and left a message it should be fixed, I went into the 'Automatic Investment Setup' screen and could see the new $100 minimum amounts showing.

Now that July has rolled around, I will wait for the first down day on the market and try and add $100 each to these funds and see if it lets me.

Rebuilding New Orleans

noreply@blogger.com (Healtyboy) — Wed, 06 May 2009 11:15:00 +0000

I'm back from New Orleans and have had some time to digest what we did and what we saw. After trying to come up with a way to understand and to organize my thoughts about what I experienced there, I am left with no concrete summary. I have no overarching understanding of where the city is or what it might look like a year from now, five years from now or how long it will take for New Orleans to be 'rebuilt.' My feeling is that New Orleans remains deeply wounded, and a year from now, much of the city will still be a mess.

Our time there was short and our contribution to the many homes being built as part of the Musicians' Village was relatively small. Our view of the city was limited- all of us were lucky enough to get tours outside of just the French quarter where we stayed and the Upper Ninth Ward where we worked, but in one week you can only do and see so much.

But we saw so much and contributed a great deal- much more than I thought we would.

At first we worked on a row of houses that were near completion and helped prepare an area of the worksite where at least a dozen homes were starting to go up- where it seemed like a new floor was being started every other day.

Later in the week, we worked on two houses: one just springing from the earth, the other perhaps two-thirds done. We each jumped into specific projects: fixing the flooring, soffit and fascia installation, painting the trim, etc. Mostly we jumped into the middle of ongoing projects and left before they were complete. Five days is a short time in terms of home building. Regardless, each day hundreds of volunteers from all over the country and right down the street, showed up in the early morning sun and hooked up with team leaders to pick up where the work left off the day before. We worked hard and each left our mark.

Photo by Jenna Logue

Our work with Habitat was more or less what I thought it would be. I did not know the exact work we would do, but the experience was not surprising except the size of the overall project. The number of homes being built at once and how scale impacted the experience of being onsite was more intense and a little less organized than I thought it would be. What I really did not anticipate at all was how our team of eight would interact, our encounters with Berklee alumni, how raw the wounds sustained during the flood still are and the response to our journey by people we met.

It would have been tough to predict how the eight of us would interact as few of us knew each other well before we left. I was surprised by how quickly everyone opened up. I imagine some of us are generally slower to warm up to new people than any of us were on this journey. All of us are very grateful for this opportunity, and I do not know what factors exactly enabled us to connect, coordinate and keep our energy so high from the first moment to the last. Adrenaline, gratitude, good people, good luck, great organization (Roya rocks!)- there were a lot of elements that came together to make things work so well, and I want to add my voice to the chorus of thanks to each of the seven traveling builders I shared this time with and to Berklee and each of the individual advocates who initiated and funded this opportunity.

Photo by Jenna Logue

Shortly after we were selected for this experience, we were notified of an alumni dinner we were to attend, planned for Wednesday night. Not being a Berklee Alumnus and not working in Alumni Affairs, I was not sure what to expect. What happened was a wonderful group of Berklee students from decades ago to 'coming this fall' showed up. We talked about recent changes at Berklee and they shared their stories: Berklee stories, Katrina stories, New Orleans stories and musician stories all overlapping and interwoven.

The memories of the flood, told by alumni, the police officer who gave us a ride home from the work site, and other people we encountered each day, are so fresh that you almost forget that almost 2 years have passed. Driving around parts of the city and seeing entire neighborhoods standing ruined and vacant, it is hard to believe that almost 2 years have passed.

The local news reported that 60 percent of the pre-flood population has returned. They measure this by the number of addresses receiving mail. By this standard, people living at addresses with homes that are totally uninhabitable but have FEMA trailers hooked up to the property's sewage and electricity are being included in the totals of 'people who have returned.' They may be back in New Orleans, or maybe they never left, but they are not yet home. I saw hundreds of examples of this and only drove around a few streets.

As the week went on and we met new people, a distinct pattern emerged. People wanted to tell their stories. The grief was still front and center in the telling. Us listening and being there, caring and wanting to hear, was deeply appreciated and when folks heard what we were doing, they were genuinely grateful. You imagine that when people hear you are volunteering to build affordable low income housing that they will say something like 'That's great' or 'Thanks for doing that' but the response I heard time and time again was that what people heard us describing was not just building housing for people who need help affording it. They heard that we traveled a long way to help rebuild a city that needs help and is not getting enough. They heard that we worked at a place that understood that this mattered enough to make it happen. Many of the people who thanked us will not benefit personally from what we did. They did not personally know anyone who would benefit directly. Many will probably never even see the Musicians' Village or ever travel through that particular part of the Upper Ninth Ward. But every 'thank you' was conveyed from someone who felt personally grateful. I think this comes in part from the rawness of the memories of the flood and loss each survivor suffered.

I think this also comes from the clear disconnect between the promises made after the disaster- promises that New Orleans would not be abandoned to what remained of her own devices- and the reality, which is that streets still lack street signs. Buses still rest on their sides. Intersections do not have traffic lights. Flotsam and jetsam is still washed up in piles, in alleys, in yards. Housing plots still hold carcasses of houses or stand void of anything save a concrete slab and tall weeds. Law enforcement is exhausted and the residents are exhausted. Spray painted warnings on shells of former homes warn that looters will be killed. A bartender we met one night described how her boyfriend was walking home the night before and had been shot at. Several musicians described how the more time passes without residents being able to recover and return in a timely manner, the more non-natives are moving into the city and booking the gigs that locals used to claim. Then, when former residents are able to return, they can't find work.

Photo by Jenna Logue

It is my hope that more people will find or create opportunities like the one Berklee created and that fresh political energy will either see the need and act out of obligation or, at the very least, recognize that fulfilling the promise to not abandon New Orleans is work that will more than pay for itself once started in earnest.

Photo by Jenna Logue

Our hammering, painting, pouring concrete and our listening was fulfilling work that gave us as much as it gave the soon-to-be homeowners who worked in the hot sun beside us and the survivors we met as we walked awhile in the cracked but not abandoned streets of New Orleans and the Parishes.

-Christopher Jones
June 2007

Last day in New Orleans

noreply@blogger.com (Healtyboy) — Wed, 06 May 2009 11:11:00 +0000

Last Friday was our last day on the work site. At the end of our trip, Carol from Denver gave us a tour of the Lower 9th Ward. We saw a bus, still on its side. Whole streets were completely cleared out. Only overgrown weeds remained. Other parts were coming back, but many, many residents are still living in trailers next to their homes.

We also took a quick tour of the Alfred Lawless Senior High School. Back in the day, this school was bustling with activity. Today, it remains uninhabitable.

So here is the house I was working on for the second half of the week. Just under the roof you can see the f channel- the thin white strip that the soffit fits into.

Here is out group on the last day!

Day 3 with Habitat for Humanity in New Orleans

noreply@blogger.com (Healtyboy) — Wed, 06 May 2009 11:02:00 +0000

Today (tonight) is day 3 of our 5 day effort. Yesterday, we were greeted in the morning by one of the residents, Riccardo Crespo of the Musicians' Village we are working on.

He also played for us on his front porch during our lunch break!

Yesterday we continued to rearrange the work site but most of us also found some building related work. I helped set fence posts and will try and track down a photo of that later.

Today we showed up and managed to hook up with a crew working on two houses with a lot of remaining work.

I paired up with a couple of Memphians and we worked on installing fascia and soffit all day.

First we nailed in a strip, the length of the house. Then we started measuring out how wide to cut the pieces that go under the overhang (photo by R. Hochschild).

Kris, Roya, and Matt were hammering away at the foundation of the house next door. Roya is in the front with the black hat. Kris and Matt are wearing the yellow hard hats. Kris is in a blue shirt, Matt to her left in a white shirt, leaning over.

This evening we met up with a group of Berklee alumni and a few soon to be first year students for some food and conversation, which was a blast! Then we headed over to Frenchman street with a couple of Alumni and heard some excellent music...

I made the local news!

noreply@blogger.com (Healtyboy) — Mon, 20 Apr 2009 08:54:00 +0000

My local paper ran a story about this trip! I am quoted as saying that ""I know what a big hot Southern city on the Mississippi is like." My family has lived in Memphis for a couple of decades, but as much as I might be familiar with heat like we worked in today, or southern cooking and living next to the Mississippi, I know very little about New Orleans or about a city as wounded as this one, as I learn more and more each day. money

Here are a couple of 'houses' on the same streets as the homes we are building. money

The same news article quotes: "A lot of neighborhoods are still devastated," said Habitat for Humanity spokesman Aleis Tusa.. "It's strange to think two years later we have people living in FEMA trailers." money

Strange to think, but true. money

Day one with Habitat for Humanity in New Orleans

noreply@blogger.com (Healtyboy) — Mon, 20 Apr 2009 08:52:00 +0000

We got up early in the morning and took a cab over to the Musicians' Village site. The project managers gave a safety talk and then tried to figure out which way to send us. There were several hundred volunteers and it was turning into the hottest day of the year so far (they told us) and they had an event planned for later in the day so I'm not sure they were as coordinated as usual. money

Truth is, there was plenty of work to do in both directions! money

Some sites are just getting foundations: money

Other houses are almost done: money

We spent most of the day moving supplies from around the homes near completion to the site just breaking ground. money

In the afternoon, the first wall was raised on the 41st home in the project! money

We Made it!

noreply@blogger.com (Healtyboy) — Mon, 20 Apr 2009 08:51:00 +0000

We took off from Boston the morning and made it to New Orleans early afternoon. We walked around the city a bit after we checked in to our hotel. More than one building, even in the French Quarter is in rough shape, but signs of construction are evident as well. Here is the view up a debris chute: money

Buskers were doing their thing: money

And sometimes, the passers by joined in!

We walked down Bourbon street on our way to get groceries for lunch tomorrow: money

I'm off to sleep as we are getting up early to head to the Musicians' Village and see what our work for the week will be! money

The entire team is contributing to a blog and some of these posts will appear there as well. money

Heading to New Orleans!

noreply@blogger.com (Healtyboy) — Mon, 20 Apr 2009 08:50:00 +0000

I mentioned before that I am am going to New Orleans for a week with a group of my colleagues from Berklee College of Music to work with Habitat for Humanity on the Brandford Marsalis and Harry Connick, Jr. inspired project to build a Musician's Village in the Upper 9th Ward. money

Well I'm packing today and off tomorrow morning. money

It has been a busy week as I have been preparing so I have mostly ignored the rollercoaster ride the portfolios I have been tracking on this site have taken over the last few days. I intend to continue to ignore the markets for a while longer and focus on this amazing opportunity. Part of the reason, my investing strategy is to (hypothetically) invest in a diverse group of mutual funds and setup a system of for continuous investing, is so I can ignore it when I need or want to and this is one of those times! Following the progress of individual stocks or companies requires much more continuous attention to news about those holdings as things can change pretty fast. If I had the time, inclination, or hypothetical finances I think I would need to follow such a strategy, I might give it a try. But I don't. money

I was interviewed about my upcoming trip to New Orleans by my local paper this week and will link to the story when they run it. money

Also, the eight of us going will be contributing to a blog about our experience and I will add the link to that here when we are ready to roll it out. money

More about the trip soon!

What the heck is Janus Contrarian?

noreply@blogger.com (Healtyboy) — Mon, 20 Apr 2009 08:49:00 +0000

When I noted the market was tanking today, I decided to make my hypothetical investment for June in the second fund of the "WylieMoney Slowly" portfolio. In this portfolio I am adding one of the 20 funds I researched each month, starting in May 2007. money

The second fund I originally chose was a Global Equity fund: MDISX. money

Well according to Etrade, this fund is closed to new investors:

But according to Morningstar, this fund is not closed and is available through Etrade: money

Regardless of whether this is a mistake on Etrade's site or not, getting someone to help you is not worth the effort. money

So I decided to pick my original runner up, Janus Contrarian JSVAX. This brings me to the title for this post. money

Back in November of 2006, it was open to new investors and it was categorized as World Stock or Global Equity. But tonight, as I look it up, it is not. Morningstar lists it as Large Blend which means it invests primarily in Large Cap American companies. money

Morningstar also shows that it is a Large Cap Growth fund. Note the red dot.

But more curious to me is the allocation of 37.8% in non-American companies!

Why does this matter? Well funds are compared to their peers. So if your peers are domestic funds and you have been gaining profits from surging international markets, you are going to look great compared to your peers:

But if your peers are World Funds which invest in stocks all over the world, you are not likely to look as stellar:

Well MDISX is 70% invested in international companies so it certainly has more of an international focus now than JSVAX but JSVAX has a 39% turnover ratio so who knows what it looked like last December, much less what it will look like in 6 months. money

Regardless, I'm calling it a Global Equity fund and I added it to the WylieMoney slowly portfolio tonight as of today's closing price. money

Ummm Etrade... anybody there?

noreply@blogger.com (Healtyboy) — Sat, 18 Apr 2009 08:33:00 +0000

I went in to Etrade's Boston branch with a customer service question on May 25th, 2007. money

Mutual Funds allow different amounts for "Additional Minimum Investments" and "Additional AIP Minimum Investments." Morningstar.com lists these differences and lists Etrade as a provider for which these minimums apply. money

I tried to set up an AIP for SSEMX through Etrade's website and was told the minimum I needed to invest in the AIP was $1000, not the $100 listed on Morningstar's site. I called Etrade and was told that as soon as I paid the additional $1000 on top of the $2500 I already invested when I first bought the fund, THEN I would be able to lower the AIP to $100. money

I then did research and other funds I own did not charge me an additinonal "Initial AIP Minimum", if I already owned the fund so what I was told was not consistently true in the interface. money

So like I said, I went to the Branch office on 5/25/07 and explained the issue to a representative who understood, agreed that the answer I got over the phone was not consistent with what we saw in the interface and forwarded the question to people people who would be able to figure out what is going on. money

I have yet to get a follow up. money

I called the Boston Branch phone number a couple of times but have yet to reach a person. Today I left a message. Then I called Etrade's main customer service line and got a customer service rep who looked up the extension of the person I spoke with at the downtown Boston branch and gave it to me and I called that number and left a message. money

Please call me and let me know the answer to my question- Why can't I set up an AIP plan using my funds "Additional AIP Minimum" amount of $100? money

FYI- the AIP page on Etrade's site says "Automatic investments require a minimum investment of $100 or the fund minimum, whichever is greater." money

Lazy Portfolio continues to catch up

noreply@blogger.com (Healtyboy) — Sat, 18 Apr 2009 08:32:00 +0000

With today's nice sell off, the Lazy portfolio made up more ground, but the WylieMoney portfolio held on to its tenuous lead with a 1.98% increase since I invested on May 1st. money

I have added a summary over on the right which I will update going forward. money

Today is the day I am adding fund #2

noreply@blogger.com (Healtyboy) — Sat, 18 Apr 2009 08:31:00 +0000

Today is the day I am adding fund #2 to the WylieMoney Slowly portfolio. Sadly, fund number 2, MDISX has closed to new investors through Etrade. It does not appear to have closed to new investors in general and Morningstar shows it available through Etrade, but you can't buy into it through their interface so I am adding a different fund (JSVAX). I'll explain more later tonight. money

A chart for Ian

noreply@blogger.com (Healtyboy) — Sat, 18 Apr 2009 08:31:00 +0000

Ian gave me grief about a lack of charts so here you go. So far, everything is tracking pretty close together so the chart is not terribly informative. I did try to make it pretty...

Managed Mutual Funds, Index funds and ETFs...

noreply@blogger.com (Healtyboy) — Sat, 18 Apr 2009 08:27:00 +0000

...are going every which way these days. Since I first invested, the WylieMoney portfolio wins. Year to date, the Vanguard portfolio is ahead. And today, ETFs did the best. I will invest in fund #2 sometime this month when the time is right. money

I am still waiting on a response from Etrade and will try and follow up tomorrow at lunch.

I'm also switching my employer sponsored retirement plan from one of our two options to the other. I'll explain why soon. money

Finally, I leave for New Orleans this weekend and plan to write about the trip here! money

Golden Gate National Recreational Area

noreply@blogger.com (Healtyboy) — Tue, 14 Apr 2009 10:59:00 +0000

A reader known as Sir Ack wrote in and asked about my Bunker picture and pointed out that it did not look like something you would find in Golden Gate Park. He was right and right to guess that I meant Golden Gate National Recreational Area! Thanks for pointing out my mistake! MONEY

I think this is where the bunker is, but if anybody has more info, please let me know: MONEY

Yodlee hooks up with Zillow!

noreply@blogger.com (Healtyboy) — Tue, 14 Apr 2009 10:58:00 +0000

I have talked about Yodlee before. Let me re-iterate that this totally free service is amazing. I use it to keep track of over 20 accounts! MONEY

Now you are probably thinking that 20 accounts is a few too many, and I can understand that. But when you start to count each account you have, checking, savings, visa, discover card, Roth IRA, 401(k)/403(b), and then double that if you are married, you get up there pretty quick. When I bought my hybrid, I opened several credit cards with 0% balance transfers to get 0% financing over an extended period of time. So on and so forth. With a tool as nice as yodlee.com, why bother closing accounts? MONEY

So I have my mortgage set up in yodlee, and pay my bill each month there. But I had to create a custom entry and enter the estimated value of my home as a manual account to get a realistic picture of my finances overall. Until this week that is. MONEY

I was browsing around one night and saw a link called "Real Estate Center." I clicked it and there was an option to set up my address in a tool that automatically goes to zillow.com and grabs the estimate. If you own a home or are shopping for a home and have not checked out Zillow, you should. It complies local sales information and tabulates home values and contains tons of tons of great information on top of a really neat interface that uses google maps and microsoft's visual earth. MONEY

And like yodlee, zillow is free. MONEY

So now Yodlee goes out and grabs my account values as well as my home's estimated value and pulls all the info together and provides charts and graphs of changes in value, spending, and now equity in my home = zillow estimate - mortgage! MONEY

WylieMoney Portfolio continues to slide

noreply@blogger.com (Healtyboy) — Tue, 14 Apr 2009 10:57:00 +0000

Close call, but the Vanguard funds beat my picks by .02% today. My funds are still ahead since my 'purchase,' but year to date they are tied. ETFs continue to fall behind. MONEY

Mostly Managed Portfolio Loses Ground...

noreply@blogger.com (Healtyboy) — Tue, 14 Apr 2009 10:56:00 +0000

...but still remains in the lead! MONEY

First of all, last week I went to Etrade's office in downtown Boston and explained my issue to Justin, who forwarded it to the 'Mutual Fund Department' with a link to this site. So if you are here looking for the details of my issue, click here or on the link in the upper right corner. Basically your site is not allowing me to set up an AIP plan with the additional minimum for AIP plans for the fund SSEMX which is $100. MONEY

On to the competition! MONEY

As of today, the WylieMoney portfolio is still ahead, but not by much. I think today's slight under performance is due to some dabbling of a few of my fund managers in emerging markets which did poorly before American markets caught fire. The year to date totals for WylieMoney and Lazy are remarkably close. I wonder how long that will last. MONEY

Anyway, I made a little chart of the the random dates that I have managed to document the total value of the accounts. This does not represent day to day performance as I only have totals from 8 days over the last month, but once I have several months of data, the graph should be loosely indicative of trends. MONEY

Etrade, don't do this to me!

noreply@blogger.com (Healtyboy) — Tue, 14 Apr 2009 10:52:00 +0000

Arrrrggghhhh. MONEY

On this site I have put together a pretty detailed hypothetical portfolio available for purchase through Etrade. I have not gone into great detail about if I would actually buy these funds if I could or if I own any of them. MONEY

I do own some of them but I do not own all of them. Some of the categories I researched here, are categories for which I already own a Mutual Fund that I bought years ago. Even though the fund I picked for this hypothetical portfolio might look a little better than the fund I own, it is not worth it to me to sell my fund and pay the capital gains tax and then invest the leftover money in a new fund, at this point in time. Also I do not own funds for each of these 20 specific categories. MONEY

One of the funds I do own is SSGA Emerging Markets SSEMX. I bought it back in May of 2006. I have also managed to save enough to add $100 to my initial investment at a couple of points since then (not every month though!). Since I bought it, my holdings in this fund have increased 27.46%! Not bad for one year. MONEY

This is a risky fund and that risk has been well rewarded over the short term. I imagine it is only a matter of time before Putin does something so un-democratic that western investors balk and sell Gazprom in droves or China's speculators finally try and jump ship or Chavez convinces the rest of South America to 'reclaim' their private businesses. I do not know what it will be, but something will send emerging markets into a downturn. MONEY

In fact, yesterday, SSEMX was my second biggest loser down -2.03%. My biggest loser, if you're curious, was PNRZX. If you click that link, you'll see that PNRZX has been on fire over the last 5 years. I personally have only gained 10.30% since buying in just over a year ago. Not too bad, but not great given the recent gains I missed out on. My only fund that increased in value yesterday was BTTRX, a WylieMoney pick, up 0.14% on the day. MONEY

Even though I do not think it necessarily the best time to buy an emerging market fund specifically, I did try and add another $100 to my holding several days ago and was denied.

The entire reason I bought this specific fund and recommended each of the WylieMoney funds over sometimes better funds in each category is the $100 minimum for additional investments. I am still trying to figure out what happened here, but the last time I added $100 to this fund was in February. Now the minimum that Etrade is letting me add to my holding is $1000. So something changed in the last few months. Despite trying to save and invest as much as I can, I cannot afford to add $1000. And I should not have to darn it! Here is what Morningstar claims the fund allows: MONEY

What I suspect happened was that SSEMX changed its 'Additional Minimum Investment' to $1000 recently. You can see above it is $1000 now- I do not remember if it was that way before February. Fine. Gone are the days I can add $100 whenever I have the $100 to add and think the timing is right. I am willing to set up the Automatic Investment Plan or AIP for this. The Additional AIP minimum is listed as $100. MONEY

Etrade allows you to set up an AIP that invests in a few different intervals: MONEY

If I can come up with $400 a year to add to this fund, I could choose the "Quarterly" option and be all set, right? Not so fast! Here is a picture of the option I get when trying to set up the additional AIP investments: MONEY

So I called Etrade and here is what they tell me. Despite the fact that I already paid at least an initial $1000 when I first invested, to set up an AIP now, I have to pay another $1000 before I can reduce the AIP investments to $100. Since you can start and stop an AIP at anytime, this leaves me wondering if I should not have just bought the fund through this screen and set it up with an AIP plan for once a year that I never intended to make on that schedule and then just adjusted the frequency and amounts as desired. MONEY

But this does not make sense. I should not have to pay different amounts based on which screen I used to buy the fund. Does this make sense to anyone else? Do all brokerages and funds that have different minimums for AIPs and and non-AIP subsequent purchases make you pay a separate 'Initial Investment Amount' to both buy the fund initially and then set up the AIP as well? MONEY

This is not what is going on at Etrade either, at least not consistently. Another WylieMoney recommended fund I own is American Beacon Large Cap Value Planahead AAGPX. Here are the details for this fund from Morningstar:

So to set up an AIP to automatically invest $50, I should have to first pay another $2500. But I don't. Here is my option in the drop down menu: MONEY

I'm going to try approaching Etrade again and see if I can find out more. MONEY

Habitat for Humanity Project to Build a Musician's Village in New Orleans!

noreply@blogger.com (Healtyboy) — Thu, 09 Apr 2009 14:17:00 +0000

Berklee College of Music is sponsoring a group of employees to go to New Orleans and work with Habitat for Humanity on a project to build a Musician's Village in the Upper 9th Ward!

How cool is that?

Harry Connick, Jr., Branford and Ellis Marsalis came up with the idea to build 70 homes and a Music Center.

Many of my colleagues applied for this sponsorship I was fortunate enough to be one of the ones chosen! Yesterday, I met the other 7 people who are going and I am excited! We head down in June and will be there for a week.

Mostly Managed vs 'Lazy' Vanguard Index funds

noreply@blogger.com (Healtyboy) — Thu, 09 Apr 2009 14:15:00 +0000

I promised weekly updates and failed. I'll try and come up with a good system I can keep on top of.

My negligence is not due to shame from the WylieMoney portfolio lagging behind. Far from it. Not only is the Wylie portfolio ahead since I 'hypothetically invested' in it, it has pulled ahead of the lazy portfolio year-to-date as well. Also, I realized that the reason the ETF portfolio appeared to be ahead of all the portfolios was that a few of the options, including two of the Bond funds, have not existed for a year and were being left out of the calculation so I am leaving out the ETF YTD number.

I included today's performance as well. The one-fund WylieMoney Slowly 'portfolio' is way ahead both year to date and since I 'invested' but note that its loss today is over twice that of the more balanced portfolios. And when I add the second fund in June, a Global Equity fund, I do not anticipate it will settle down...

Here are the details of each Portfolio. Click the image for a larger view:

WylieMoney

WylieMoney Slowly

ETFs

Lazy

If you want to sign up for Etrade, I've got a deal for you!

noreply@blogger.com (Healtyboy) — Thu, 09 Apr 2009 14:14:00 +0000

I know of at least two WylieMoney readers who have signed up for Etrade. I just got an offer as a current Etrade user- If I refer a new user I get $50 plus the new user gets up to 100 commission free stock trades to use within the first 30 days of opening an account. The offer lasts through June 30 and does not count toward IRA or other retirement accounts. So if you are thinking about signing up, let me know and I'll shoot you the details of the deal I have.

I don't know any folks who are gonna benefit from being able to buy or sell 100 different stocks in a month, but hey, you never know. And if you did want an account and wanted to buy some GE and AAPL stock right off the bat, well this deal would save you about $20 and give me $50.

Don't pick Etrade just for this. Pick a brokerage that best addresses your needs. I was chatting with a couple who recently decided to open a brokerage account and one of their needs was a direct connection to a person they could establish a relationship with to work with at the brokerage to help them through the process of opening and managing their account. Etrade does not meet this need and was clearly not the right choice for them! I'm sure Etrade would disagree and probably offers this kind of support for a fee, but finding a financial planner or analyst you trust is an entirely different matter. This couple has such a planner already so Etrade did not make sense.

I have shared some of my thoughts about Etrade before. The tools Etrade offers are simple and fairly sophisticated. They have been expanding functionality since I joined which is great. Calling customer service, however, is rarely an encouraging experience. It has taken me many months to resolve past issues. I imagine their service reps are good at explaining how to use the site. But when the site is not working like they think it should be, they are not good at finding out why. I will soon be writing a post about a new problem I am having with Etrade. Their interpretation of individual Mutual Fund policies does not consistently match how their tool interacts with those policies. More about that soon.

So, after this hard sell (hehehe), if you want to open an Etrade account, please email me at wyliemoney at gmail dot com. But do not open an account if you do not plan to maintain a $10,000 balance after the first year as Etrade will sock you with inordinate quarterly fees.

Is Netflix a Good Deal?

noreply@blogger.com (Healtyboy) — Thu, 09 Apr 2009 14:14:00 +0000

Netflix, Blockbuster, cable, going out to Theatres... there are many ways to get your fix, if you love the cinema.

I signed up for Netflix in August of 2005 about 21 months ago and have rented 154 movies so I watch on average 7.3 movies per month. I have 275 movies in my queue so I will not run out of films I want to see, anytime soon. I am on the '3 movies at a time' plan which costs exactly $18.89 so the cost of watching 154 movies has been $396.69 or $2.58 per movie. I have not paid that much however.

If you have family or friends who give gifts for birthdays or holidays, and you use and enjoy Netflix, if those family or friends like to give you gifts you will actually enjoy and ask you for ideas, you can suggest a gift certificate for Netflix. I am blessed to have such family and friends and clearly enjoy Netflix and have said as much and have gotten a few certificates as gifts since I signed up. Combining these gifts (Thanks again!) with the first two weeks I got free from Netflix (you can occasionally find a month free for new users) I have spent $170.01 so I have actually paid $1.10 per movie.

There are no good video stores near my house. There is a blockbuster, but it has terrible selection and is often out of new releases. Plus, Blockbuster is evil.

For a while they had a corporate 'values' issue with movies that included content too adult for Americans. As a result of this 'issue,' they used their clout to force film distributors to censor certain films. Bad Lieutenant and Last Tango in Paris are a few I tried to rent which is how I learned about this 'policy' from Blockbuster. These were not 'made for TV' edits or cuts the studio did on their own with or without the directors and producers approval. These were 'censored for Blockbuster' versions.

I have no problem with a video store only carrying titles it wants to carry, for values or profits or any other reason. But to carry a movie that does not fit with your values, so you can profit from it, but force the distributor to come up with a censored version to somewhat assuage your guilt strikes me as hypocrisy. Is hypocrisy itself a 'value?' Does using Blockbuster mean this is a value you support?

Blockbuster copied Netflix' idea and now rents movies through the mail. Plus, you can go straight to your local Blockbuster and turn in your home delivered movies and get new films without having to wait for the next home delivery. This is a great idea. The one friend I have who switched from Netflix to Blockbuster took two movies to Blockbuster, but only had one return envelop with her. You can actually stuff a couple of movies into a single envelope and return them no problem through the mail, but Blockbuster would not take both movies without individual mailers, apparently unable to pull off what the US Postal Service has mastered so she actually had to pay for the second movie she wanted. Also, she went in looking for a specific new release which they did not have in stock.

I imagine your mileage will vary depending on your local Blockbuster branch, but let me present an alternative approach.

I use and am a fan of Netflix but sometimes I too want to watch a movie at home that is not one of the three I have from Netflix. Instead of running to Blockbuster, I hop down to my local Library. Although it does not carry as many titles, it has far better selection including a wide variety of independent and foreign films as well as many of the more popular TV series on DVD. It carries uncensored versions of the films it stocks which is nice and I pay $1 per rental and can keep each title for a week. So while $1 extra is not the same as 'included in the price of my rental program' I'm happy to pay my local Library $1 per movie.

Netflix is not perfect. Sometimes the discs are scratched or arrive broken and sometimes returning a broken disc means getting the same broken disc in the mail a few days later. They have some videos available for streaming over the internet, but this service is not available on a Mac which is what I have.

Regardless, for me, Netflix is worth it. Since I can get most TV programs I am interested in on DVD via Netflix I actually do not need cable. More about that soon.

Are hybrids a good deal?

noreply@blogger.com (Healtyboy) — Thu, 09 Apr 2009 13:42:00 +0000

Wired recently ran a story on revised EPA miles per gallon estimates. In particular, the estimates for Hybrids were significantly reduced:

As an owner of the Civic Hybrid since 2001, I am happy to report, that the revised estimate is pretty much spot on.

What interested me the most were the revised estimates for the regular Civic. I knew the old hybrid estimates did not reflect my experience and assumed the regular Civic estimates were off as well so I never felt I had good data to answer the question: "Are hybrids a good deal?"

First of all, no one buys 'hybrids.' One buys 'a hybrid.' And as the chart above shows, not all hybrids provide the same benefit over their non-hybrid siblings. Speaking of siblings, both of my brothers have Toyota Priuses. The Prius has no exact non-hybrid counterpart, but it gets better mileage than the Civic Hybrid and the standard Civic is not a bad comparison to the Prius for comparison's sake. We are fans of the hybrid, but do the numbers back our enthusiasm?

I have 83,200 miles on my Civic Hybrid. Comparing how many gallons of gas I have used and how much it has cost me to buy that gas compared to how much gas I would have bought with a regular civic, I find I have saved a couple of thousand dollars. I used a gas price of $2.70 since that is the figure used in the Wired article. I also run the numbers at $2.50 a gallon.

83,200 / 42mpg = 1981 gallons @ $2.70 per mile $5348.70 (@ $2.50 = $4952.50)
83,200 / 29mpg = 2869 gallons @ $2.70 per mile $7746.30 (@ $2.50 = $7172.50)

I have used 888 fewer gallons saving $2397.60 @ $2.70 or $2220 @ $2.50 per gallon. The hybrid cost several thousand dollars more than the standard model, but I got a significant tax credit so I have basically broken even. And with gas now over $3 per gallon, I stand to come out solidly, if only slightly, ahead.

Part of the recent adjustment in gas mileage estimates for hybrids has to do with the impact of not idling. When I come to a complete stop, at a stop light for example, my engine shuts off automatically. The EPA used to consider this with Miles Per Gallon estimates. While I agree that this does not impact the miles per gallon rate, as I am not traveling, the gas I do not burn, sitting in traffic or at a stop light, IS gas I do not use. So the savings noted above are underestimating my actual savings a bit.

So I use less gas, save a little money, pollute less... but some of you are asking- why not take public transportation? I live outside of Boston, unwilling to pay half a million dollars for a home closer to where I work, and unwilling to pay rent when I could get a mortgage on a house with payments close to my rent (back in 2001) just outside the city. So biking or taking a bus is out of the question.

We do have a commuter rail station near our house. The monthly pass for this is $210. My wife and I work in Boston so we commute together. Our cost to use the train would be $420 per month or $5040 per year.

$5040 per year. I actually took the train this morning -we use it when we need to. It lost power and had to stop completely and restart twice so I was a bit late getting in.

$5040 per year. We bought our hybrid in 2001 and have used it to commute for 6 years. With the cost of using the commuter rail over that period of time ($30240), I could have bought a new hybrid, paid for all the gas and tolls and had money left over to buy a mutual fund.

The interwebs are sticky full of "hybrids are lame" and "hybrids rock" articles and now I have added another. My 2 cents are- it depends on which hybrid and how you will use it and what other options you have for transportation as to whether it is worth it or not. In some situations, like mine, I came out slightly ahead. If the car holds up, I'll come out moderately ahead. And polluting less and consuming less gas has its own value on top of the $ savings!