Gyroscopic Investing

Do you use a different brokerage or different ETFs for vp? Can you give me some tips how to separate them? Thanks!

mentally and on a spread sheet,
  to much hassle for me to use different brokers or accounts, the most important seperation between them is the "never take money from the PP to speculate in the VP rule", any (all) exchange of funds should be from VP to PP never the reverse...

Spreadsheet.  My Roth IRA is fairly small (about 10% of total investments) so I've made that a pure PP.  Due to the limitations on my 401K investment choices, my 401K is sort of like a PP without any gold (similar to a Boglehead portfolio).  So my VP basically lives entirely inside my Rollover IRA, with some gold thrown in to make up for the 401K's lack of it. 

My method is even easier: I don't have a VP!  :-)

my philosophy and method:

* Same accounts: ok.
* Buy assets for vp that happen to fall within pp classes? eg. gold: ok
* occasionally incorporate assets originally intended for vp into pp? eg. move gold from vp to pp: ok
* move something from pp to vp? Not ok.

If you want to own the same underlying in your VP, just use a different ETF (i.e. GLD for PP, IAU for VP)

blackomen wrote: If you want to own the same underlying in your VP, just use a different ETF (i.e. GLD for PP, IAU for VP)

That's exactly what I do.  There is no overlap of funds between my PP and VP.  Makes my life so much easier. 

I use a separate brokerage.  Too much hassle looking online or at statements trying to mentally separate them. It's also part of my strategy to spread wealth among different brokers to keep all eggs from being in one basket.

I also use separate spreadsheets too, for cheating purposes (against the rule of not checking the PP more than once every few months).

Hello

What are the TOP 5 brokers in US right now?

Thank you.

frugal wrote: Hello

What are the TOP 5 brokers in US right now?

Thank you.

More importantly, what do you want out of your broker? They're all different, and between the members here, I'm pretty sure we've tried them all.

The brokers mentioned on this board always show up on lists of the best brokers when it comes to stock trading and investment, except Vanguard, which has its own (weird) approach to online trading.

Pointedstick wrote:

frugal wrote: Hello

What are the TOP 5 brokers in US right now?

Thank you.

More importantly, what do you want out of your broker? They're all different, and between the members here, I'm pretty sure we've tried them all.

Mainly for a US-PP

TDA or SCHAWB?

frugal wrote: Mainly for a US-PP

TDA or SCHAWB?

I think it is Barron's magazine that publishes an annual list of the best U.S. brokers.  And they give a breakdown of their criteria so you can decide on your own ranking based on the data they gather in the various criteria of interest.

I think if you are not a U.S. resident, the primary concern is going to be how willing and how well the broker deals with your situation.


As for separating PP from VP, I did just spreadsheet separation for several years.  It works.  It's a pain, mostly because sometimes it was hard for me to intuitively grasp the behavior of my PP vs VP.  I couldn't tell what each was doing nor remember what assets or percentage of each asset was PP without updating my spreadsheet. Updating that spreadsheet was a pain and I gave up being 100% correct because when dividends or interest were paid as cash, I had to track those back to their source and divide them proportionally to their allocation between portfolios, as well as dividing any gains on that cash and etc.

I'm sure I made mistakes because when money is flowing in from and out to various sources multiple times every week it is non-trivial to manually proportion both those dollars and the gains on them based upon the days it was present and in what form.  And in the early 2000's I was doing a lot of short-term tbills, so every week if there was at least $1000 I'd buy a tbill.  Actually not quite $1000.  And a few weeks or months later out would pop $1000.  Painful.

Now since 25 Feb 2011, while still maintaining some spreadsheet information, I have one account that is my PP with about 40% of my assets.  Everything else is VP.  A separate account is SO much easier to track and conceptualize/visualize/attribute.

With a separate account it is immediately obvious what is PP and what isn't.  Performance, money added to or removed from whether from additional investment dollars or dividends or whatever, every investment choice, etc. is all obviously PP or not PP.  No subconscious cheating (which humans notoriously do) because if it is in that account it is PP.  Not in that account, not PP.  The end.

Another alternative -

Buy Options (Puts/Calls depending on the direction you want to speculate) on the PP asset.  Figure out when you think it'll reach your price target and pick a Strike price a little shy of that target.  Figure out how much you're willing to risk and buy that # of contracts (rounded down) that fits your budget.

If your trade doesn't work out, you only lose what you paid for the options.

frugal wrote: Mainly for a US-PP

TDA or SCHAWB?

Go with Schwab.
Free purchase in LT Treasuries.
Commission free in SGOL (gold) - SCHO (Cash) and SCHB (Stocks).

Not that it has anything to do with setting up a PP, but I'm a lifetime member of AAII and they just came out this month with the top 5 brokers of 2012, based on a survey of their members.  FWIW, their top 5 of 2012 are:

1. Scottrade
2. Fidelity
3. Schwab
4. TDAmeritrade
5. Vanguard

Here is how AAII describes their methodology:

Each year, we aggregate member responses for the AAII Online Discount Broker Survey and detail the results on our website at www.aaii.com/brokersurvey. Members who participate in the survey are asked to fill out a questionnaire regarding broker reliability and quality, along with individual questions concerning investor trading frequency, securities traded and portfolio size.  AAII’s Broker Survey also provides some insight on what our members are looking for in an online discount broker. The overwhelming majority responded that commissions are the primary factor when selecting a broker, with services and convenience placing second and third, respectively. As a secondary factor, responders mentioned convenience the most, with commissions and services placing second and third.

AgAuMoney AgAuMoney AgAuMoney

escafandro escafandro escafandro

rocketdog rocketdog rocketdog


I'm choosing between SCHWAB / SCOTTRADE / TDAMERITRADE


In the end I think the costs will be near the same with not much dollars difference.

The transferences of money should be similar also...

I think the most important is the which one is more SOLID.

?

Frugal, you asked me months ago for the top brokers and here you are still dilly dallying over the issue.

Pull the trigger!!!

MachineGhost wrote: Frugal, you asked me months ago for the top brokers and here you are still dilly dallying over the issue.

Pull the trigger!!!

not so easy

I will

must do some more research

frugal wrote: not so easy

I will

must do some more research

https://www.youtube.com/watch?v=u6ALySsPXt0

frugal wrote: not so easy

I will

must do some more research

The USA is the world's largest tax haven.  It's not like its not used to dealing with foreigners.  I suggest Schwab for the free ETF's.  If you want physical gold, then Hard Assets Alliance.

frugal wrote: AgAuMoney AgAuMoney AgAuMoney

escafandro escafandro escafandro

rocketdog rocketdog rocketdog


I'm choosing between SCHWAB / SCOTTRADE / TDAMERITRADE


In the end I think the costs will be near the same with not much dollars difference.

The transferences of money should be similar also...

I think the most important is the which one is more SOLID.

?

I think they are all solid.  TDAmeritrade and Schwab both offer over 100 commission-free funds to choose from.  Otherwise, Schwab charges $8.95 to trade ETFs, TDAmeritrade charges $9.95, and Scottrade charges $7. 

I would check out a demo of all 3 trading windows and sample reports if they have them available.  Then just pull the trigger and go with one of them.  If you change your mind later, it's easy enough to switch. 

MachineGhost wrote:

frugal wrote: not so easy

I will

must do some more research

The USA is the world's largest tax haven.  It's not like its not used to dealing with foreigners.  I suggest Schwab for the free ETF's.  If you want physical gold, then Hard Assets Alliance.

rocketdog wrote:

frugal wrote: AgAuMoney AgAuMoney AgAuMoney

escafandro escafandro escafandro

rocketdog rocketdog rocketdog


I'm choosing between SCHWAB / SCOTTRADE / TDAMERITRADE


In the end I think the costs will be near the same with not much dollars difference.

The transferences of money should be similar also...

I think the most important is the which one is more SOLID.

?

I think they are all solid.  TDAmeritrade and Schwab both offer over 100 commission-free funds to choose from.  Otherwise, Schwab charges $8.95 to trade ETFs, TDAmeritrade charges $9.95, and Scottrade charges $7. 

I would check out a demo of all 3 trading windows and sample reports if they have them available.  Then just pull the trigger and go with one of them.  If you change your mind later, it's easy enough to switch. 

tks

I will check and go for one, to have EU-PP and US-PP

In the meantime I have to divide my EUPP in more than one broker in my country

I have all in ETFs because gold is difficult to sell here and having it at home is not good

Cash and Bonds are from European different countries... not direct bonds

AgAuMoney wrote:
As for separating PP from VP, I did just spreadsheet separation for several years.  It works.  It's a pain, mostly because sometimes it was hard for me to intuitively grasp the behavior of my PP vs VP.  I couldn't tell what each was doing nor remember what assets or percentage of each asset was PP without updating my spreadsheet. Updating that spreadsheet was a pain and I gave up being 100% correct because when dividends or interest were paid as cash, I had to track those back to their source and divide them proportionally to their allocation between portfolios, as well as dividing any gains on that cash and etc.

I'm sure I made mistakes because when money is flowing in from and out to various sources multiple times every week it is non-trivial to manually proportion both those dollars and the gains on them based upon the days it was present and in what form.  And in the early 2000's I was doing a lot of short-term tbills, so every week if there was at least $1000 I'd buy a tbill.  Actually not quite $1000.  And a few weeks or months later out would pop $1000.  Painful.

Now since 25 Feb 2011, while still maintaining some spreadsheet information, I have one account that is my PP with about 40% of my assets.  Everything else is VP.  A separate account is SO much easier to track and conceptualize/visualize/attribute.

With a separate account it is immediately obvious what is PP and what isn't.  Performance, money added to or removed from whether from additional investment dollars or dividends or whatever, every investment choice, etc. is all obviously PP or not PP.  No subconscious cheating (which humans notoriously do) because if it is in that account it is PP.  Not in that account, not PP.  The end.

I've had a very similar long term experience.  Separate VP and PP accounts are MUCH easier (for both measurement and discipline purposes) in the long run, even if it means having several extra accounts.  It has the effect of constantly injecting reality into your market actions and reactions.  I rigorously separated my portfolios by accounts 10 years ago and can't imagine going back to depending on a spreadsheet.  Avoid like the plague any situation that will tempt you to subconsiously cheat or engage in creative accounting.  When it comes to investing, especially with an allocation strategy like the PP, human nature will turn you into your own worst enemy very quickly. 

HB Reader wrote:

AgAuMoney wrote:
As for separating PP from VP, I did just spreadsheet separation for several years.  It works.  It's a pain, mostly because sometimes it was hard for me to intuitively grasp the behavior of my PP vs VP.  I couldn't tell what each was doing nor remember what assets or percentage of each asset was PP without updating my spreadsheet. Updating that spreadsheet was a pain and I gave up being 100% correct because when dividends or interest were paid as cash, I had to track those back to their source and divide them proportionally to their allocation between portfolios, as well as dividing any gains on that cash and etc.

I'm sure I made mistakes because when money is flowing in from and out to various sources multiple times every week it is non-trivial to manually proportion both those dollars and the gains on them based upon the days it was present and in what form.  And in the early 2000's I was doing a lot of short-term tbills, so every week if there was at least $1000 I'd buy a tbill.  Actually not quite $1000.  And a few weeks or months later out would pop $1000.  Painful.

Now since 25 Feb 2011, while still maintaining some spreadsheet information, I have one account that is my PP with about 40% of my assets.  Everything else is VP.  A separate account is SO much easier to track and conceptualize/visualize/attribute.

With a separate account it is immediately obvious what is PP and what isn't.  Performance, money added to or removed from whether from additional investment dollars or dividends or whatever, every investment choice, etc. is all obviously PP or not PP.  No subconscious cheating (which humans notoriously do) because if it is in that account it is PP.  Not in that account, not PP.  The end.

I've had a very similar long term experience.  Separate VP and PP accounts are MUCH easier (for both measurement and discipline purposes) in the long run, even if it means having several extra accounts.  It has the effect of constantly injecting reality into your market actions and reactions.  I rigorously separated my portfolios by accounts 10 years ago and can't imagine going back to depending on a spreadsheet.  Avoid like the plague any situation that will tempt you to subconsiously cheat or engage in creative accounting.  When it comes to investing, especially with an allocation strategy like the PP, human nature will turn you into your own worst enemy very quickly.

but keeping all your savings at the same broker its not good

better to have more broker's diversification

because of bankrupt risk