Author: WP ADMIN
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The Arithmetic of Passive Investing
For over three decades, William F. Sharpe’s The Arithmetic of Active Management has been treated as near-scripture for passive investing. Its logic is elegant, its math is simple, and its conclusion seems inescapable: before costs, the average active manager must equal the market; after costs, they must underperform. QED. But what if the arithmetic is…
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VT and Chill is Costing You Money – The Statistical Evidence
This is Part 3 follow links for Part 1 and Part 2. We’ve all heard the advice: “Just buy VT” or “VT and chill”. But as we uncovered in Part 1 of this series The Hidden Cost of “Just Buy VT” , this hands-off approach carries a hidden structural cost. Since 1970, over a 56…
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The Illusion of Neutrality in Total Market Portfolios: Three Engines Driving Returns
This is Part 2 follow links for Part 1 and Part 3. Most investors think portfolio construction is mainly about asset allocation. But there is another layer hiding underneath: The mechanism that determines how portfolio weights evolve over time. Two portfolios can start by owning nearly identical global equities but will produce materially different long-term outcomes…
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The Hidden Cost of “Just Buy VT”
This is Part 1 follow links for Part 2 and Part 3. For years, the default advice for global equity investing has been simple: “VT and Chill” – buy a total-world index fund like Vanguard Total World Stock Index Fund ETF Shares (Ticker: VT) and leave it alone. These funds are designed to provide broad…
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Portfolio Backtesting Tool (1970 – present) with Full Asset Class Coverage
Most portfolio backtesting tools are constrained in ways that matter most: access to limited number of asset classes, short backtesting time span or both. To address these constraints, PrincetonAsset aggregates data from multiple sources into a portfolio backtesting tool that supports a broad set of asset classes spanning U.S. equities, international markets, fixed income, housing,…
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The Curious Case of OBBBA Tax Savings
The 2025 One Big Beautiful Bill Act (OBBBA) reform was intended to make one of the biggest changes to Social Security taxation in decades. Most commentary focuses on the headline feature – eliminating the taxation of Social Security benefits for the majority of retirees – but the real story sits deeper in the details. OBBBA…
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Tax Gain Harvesting: Extreme Caution at Long Horizons
Many investors have heard of tax-loss harvesting, but its lesser-known cousin – tax gain harvesting (TGH) – is often misunderstood. While it might sound appealing to sell appreciated assets to reset your cost basis, the reality is that: over long investment horizons, harvesting gains can actually reduce your after-tax wealth unless your current tax rate…
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IRS Notice 2022-6: Missing Annuity Payment-Timing Convention Creates Systemic 72(t) Penalty Risk
We submitted this letter to the Taxpayer Advocate Service (TAS) systemic issue reporting process, a legitimate, formal channel to bring this problem to the attention of the IRS The ambiguity in IRS Notice 2022-6 regarding the payment timing, annuity-immediate (end-of-year) vs. annuity-due (beginning-of-year), creates significant risk for taxpayers using the Fixed Annuitization Method for substantially…
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PSA: we tested the top 6 “72(t) calculator” results on Google. All of them fail the IRS’s own reference examples.
If you’re planning early retirement with a 72(t) SEPP distribution, you need accurate calculations. We researched the topic and discovered that every popular calculator we tested produces incorrect results when compared to the IRS’s own published examples. The IRS Reference Example: What we found testing the top page Google results: Why this matters: 72(t) is one…
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Understanding 72(t) SoSEPP Distributions
For many investors, tapping retirement funds before age 59½ normally means a 10% early withdrawal penalty. But the IRS provides us with an exception: Sequence Of Substantially Equal Periodic Payments (SoSEPPs) under IRC §72(t). If you follow the rules carefully, you can set up penalty-free withdrawals before age 59½. This post explains who can use…