What is the best investment strategy for a portfolio that will mirror the S&P 500? Would it be dumb to just practice a 'buy and hold' strategy with such an investor (b/c I am an extremely uninformed investor)?

Invest in an index fund?

I have a question I was hoping someone could help me with. Does a LIBOR swap refer to an interest rate swap aka a derivative, or is it referring to the daily LIBOR rates that are published.

For example, I mean would a libor swap be some deal two banks made or the 1 year LIBOR that is published by the bba?

yes it is a derivative based on LIBOR rates. it is the amt a party will pay to swap their floating rate debt for fixed rate debt (called a "fixed payer swap"). you can do these swaps on treasures, libor etc. so a "LIBOR Swap" is just a swap on LIBOR.

Barron

if someone has 100k to invest, is buying a class A stock with Berkshire Hathaway just entirely ridiculous? friend recommended this to me.

You will need to borrow another 15k to buy one share. Having said that: it's probably not a bad decission but you can probably do way better by having a diversified portfolio. Look into the stickied thread on top.

always know why you're buying a stock

Any chance someone could help me with this please ? Thanks.

1.) i want to know what site i should use to invest. i think i want to buy a couple stocks and maybe an etf or mutual fund or two once i figure out which i want. id only be investing a total of like 10k at the most right now. my plan is to hold whatever i buy for like a few years, so i dont anticipate making a lot of trades. halp.

2.) i cant understand why it seems an ETF would be cheaper to invest in than a mutal fund that tracks the same index. i see that ETFs let you trade intraday and seem to have flexibility benefits, but i dont see any detractions to them. and when investing like 3k (min for mutual fund), it says ETFs are cheaper as well. so if im investing like 3k in one of these, would i ever want a mutual fund if the same index is tracked in an ETF? (i was looking on vanguard btw)

ETFs are generally more tax friendly, but if you intend to benefit from reinvested gains and dividends, i.e. compound over time, you can set up a mutual fund to do that automatically with no charge. For an etf, you would have to pay another trade commission. Aside from that, you should post what you intend to invest in so it would be easier to answer rather than generalize.

As to what firm, go with one of the big ones like Fidelity, Vanguard or T. Rowe Price. Check out who offers the best deals for trading, all offer MF's. Vanguard just started free etf trading (for vanguard etfs).

How much possible downside could there be in the Vangaurd Total Bond Market Fund?

Im trying to decide if im going to stick a lot cash just sitting into this fund, but I dont want to expose it to a lot of risk/swings of the market as I may or may not want to use this money within 2-3 years

Question on credit scores.

I have a pretty good credit score (760+). I have no credit card debt in my name. My wife has some credit card debt in her name. Her credit cards don't show up on my credit report.

I'm about to start graduate school. I've qualified for student loans that exceed my tuition (they include some amount for living expenses, that i don't need, because I'm going to be working full time).

So, I'm thinking about taking out the maximum in student loans so that I can pay off the credit card debt that is in my wife's name.

I currently have no debt in my name (no student loans yet, no credit card balances, no auto loan, etc) except my mortgage. I'm the primary wage earner in our household, and we're going to be looking to buy a 3rd home in a couple of years, so I want to keep my credit score high.

Will taking out more-than-necessary in student loans adversely impact my credit score?

Thanks,

Josh W.

I suggest you post this in its own thread.

Do I have to do anything (like take a series 7 for example) before I manage a single friends money in the US? Will my broker be able to assign the correct tax liability like 80% me 20% friend? At what point would I have to start a fund, take the tests etc? More people, a certain amount of money?

Curious about my best options as far as repaying student loans go.

I graduated in December and they're going to start rolling around. I've got a part-time job (glorified internship) and I make minimum wage essentially.

Parents will undoubtedly help out with some of the loans but I don't want them to pay for the whole thing obviously. Also, I live @ home for time being so my debt is 0 and my expenses are essentially 0.

Loans and rates include: $5500 @ 6%, $1000 @ 6.8%, $2750 @ 5.6%.

Any advice would be much appreciated.

Technically, for every 1% in interest rates moving one way or another the NAV will change by a % of the duration of the portfolio represented.

So, VTBIX would drop 4.5% (4.5 year duration of the portfolio) for a 1% interest rate increase. So with the NAV at 10.43, the NAV would drop 46.9 cents if rates went up 1% today. Obviously the shorter the duration of the fund the technical answer is the less volatility in the NAV based on interest rates moving.

Other options at Vanguard with shorter term portfolios are:

Vanguard Short-Term Treasury 2.3 year duration but yielding 1.46%

Vanguard Short-Term Federal Fund , 2.4 yrs yielding 2%

or my fav Vanguard Short-Term Investment-Grade 2.3 yrs yielding 3.6% but w/ obv more risk from having a portfolio of corp. bonds.

duration obv related to holdings. lots of ways to hit those targets though so you also wanna check the holdings themselves, types of debts they own etc.

SECTOR WEIGHTINGS (%)
Sector VFSTX Category Avg
Utilities N/A 2.36
Business services N/A 4.07
Financials N/A 44.97
Telecommunications N/A 16.27
Media N/A 0.21
Consumer goods N/A 4.93
Energy N/A 17.13
Hardware N/A 0.21
Health N/A 0.00
Software N/A 0.00
Consumer services N/A 0.21
Industrial materials N/A 9.64

niiiiiiiiiiice and diversified. that said though, if your investment horizon is short enough, the credits look pretty solid.

BOND RATINGS (%)
Sector VFSTX Category Avg
US GOVERNMENT N/A N/A
AAA 31.57 53.87
AA 18.84 9.12
A 24.48 15.45
BBB 14.89 14.95
BB 0.86 1.76
B 0.19 1.21
BELOW B 0.90 0.69
OTHER 8.27 2.94

TOP 10 HOLDINGS ( 15.55% OF TOTAL ASSETS)
Company Symbol % Assets YTD Return %
CMT Market Liquidity Rate N/A 8.04 N/A
US Treasury Note 0.875% N/A 1.61 N/A
US Treasury Note 3.5% N/A 1.11 N/A
Barclays Bk 2.5% N/A 1.06 N/A
US Treasury Note N/A 0.72 N/A
Citibank Ccit 2008-A5 4.85% N/A 0.71 N/A
Westpac Bkg 2.25% N/A 0.64 N/A
Verizon Wireless Cap 3.75% N/A 0.60 N/A
Chase Issuance Tr 2008-4a 4.65% N/A 0.54 N/A
Ba Cedit Card Tr 2008-5a FRN N/A 0.52 N/A

sorry for formatting. vanguard doesn't seem to show portfolio holdings on their site.

Barron

In light of all the foreclosures within the past year or two, I was wondering if banks own large amounts of houses that they need to get rid of. Banks are not in the business of owning tons of property, finding buyers, etc. So I've wondered if this offers an opportunity to buy large amounts of bank owned properties at discounted prices. For example, maybe a bank gave out loans of $200K for 100 homes that are now worth $100K, so they own $10M worth of real estate. I would think someone in the real estate investment world could buy up that $10M at cents on the dollar. Are people in fact doing this? If not, why not? Is it because the banks don't actually mind owning lots of property? Or do investors just anticipate housing prices to decline more?

everyone always banks "aren't in the business of owning property." that's true, but i still don't get why that should incentivize the banks to make massively -EV decisions and unload houses for way less than they're worth.

Agreed. I limited my examples, including VFSTX to what is avail at Vanguard within the 2-3 year window OP specified.

I also failed to mention the effect on NAV the turnover of the portfolio would have although that can be complex depending on the type of bond fund and the manager. I limited my answer to the direct question.

An example of an intermediate term bond fund I would consider with more research would be HABDX which currently holds 51% cash although I'd confirm that with the company (Harbor) before pulling the trigger. It has a 4.5 Yr duration, a avg credit rating of AA and yields 3.71%.

I don't know. Playing devil's advocate, I guess I'd say the bank might incur high costs to unload the houses, in other words, when all things are considered, it's +EV to sell them all to one buyer at cents on the dollar.

As a disclaimer I have no real knowledge of how this works but here in Vegas it seems to be "common knowledge" among RE people that the banks are holding back a large supply of houses so they dont flood the market. Also if you call banks and make an offer on a house they own they absolutely entertain offers in my limited experience.

If I have a personal account and an IRA, should I be putting my Dividend earners in the IRA so I dont have to pay the tax on them. ( I reinvest the divends).

Then put my non dividend plays into my personal account?

Do any smart frugal investors lease cars?

Can someone enlighten me on what this might mean for a company's stock price:

XXXXXXX today announced that it has filed a universal shelf registration statement with the U.S. Securities and Exchange Commission, or SEC. When the shelf registration statement is declared effective by the SEC, XXXXXX will have the option to offer and sell, from time to time in one or more offerings, up to $100 million of common stock, preferred stock, debt securities, warrants to purchase any of these securities, depository shares, units or any combination of such securities. In addition, when the shelf registration statement is declared effective by the SEC, certain selling stockholders identified by the registration statement will have the option to offer and sell, from time to time in one or more offerings, up to 4,500,000 shares of common stock. Specific terms and share prices of any future offering under this registration statement will be established at the time of any such offering, and will be described in a prospectus supplement that comScore will file with the SEC.