One of the highlights of the forum were if you get your questions answered, hopefully. And I'd like to start off by introducing the panelists. And just so you know, they're in alphabetical order, so we don't have a packing order. Our first panelist is director of personal finance for Morningstar and senior columnist for Morningstar.com. She's the author of 30-Minute Solutions, a step-by-step guide to managing your finances. She's also co-author of Morningstar Guide to Mutual Funds, 5-Stars Strategies for Success, a national bestseller first published in 2003. And she's the author of the book's second edition, which was published in 2005. Before assuming her current role in 2008, she also served as Morningstar's director of Mutual Fund Analysis. She served as editor of several of Morningstar's publication over the years, including Practical Finance, Morningstar Mutual Fund, and Morningstar Fund Investor. She has worked as an analyst and editor of Morningstar since 1993. She holds bachelor's degree in political science in Russian East European studies from the University of Illinois at Urbana-Champaign. Please welcome Christine Benz. Our next panelist is a retired urologist who helped co-found efficient frontier advisors. He's written several titles on finance and economic history. His two finance books, The Intelligent Asset Allocator and The Four Pillars of Investing, as well as the content of his website, EfficientFrontiers.com, has made him uncomfortably popular with the financial press. He's also a big believer in the value of the creative non-fiction process. He's written two volumes of economic history, The Birth of Plenty, and A Splendid Exchange. His latest book, The Investor's Manifesto, has turned out to be another winner. He holds both a PhD in chemistry and an MD. Please welcome one of the smartest guys I know, Dr. Bill Burns. Our next panelist will schedule to be Laura, and Laura was not able to make it, but those who were looking and wondering why Laura wasn't here, she is tied up in Mexico City and couldn't get away. She sends her warm regards to the crowd, and her mother, the Queen Mother, is representing her. Our next panelist is CEO for Portfolio Solutions, a low-fee investment management firm. He earned his BS in business administration from the University of Rhode Island and a Masters of Science in Finance from Walls College. Laura holds the prestigious CFA designation. He's written five books on low-cost investing, including all about index funds, all about asset allocation. His ETF book is considered by many to be the Bible of the ETF industry. He was also a member of the Book Committee for the Pograd's Guide to Retirement Planning, and his latest book, The Power of Passing, Investing, has received wide acclaim. And if that's not enough, he's also a Ford's columnist. Please welcome Rick Perry. Our next panelist is the author of personal finance books, including the recently published Social Security Made Simple. He's also written a popular blog, Oblivious Investor, which currently has more than 9,000 subscribers. He's a Missouri licensed CFA, and his writing has been featured in a number of places, including Money Magazine, AARP, Forbes, CBS News, and Morningstar. Please welcome one of the talented young rising bold-headed stars, Mike Piper. Our next panelist is the founder of Wealth Launching, an early-based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to $50 million. He's mocked on a fairly regular basis by some financial professionals for his hourly fee model, and models obvious inability to make him rich. He's also the author of How a Second Greater Beats Wall Street and writes the irrational investor column at CBS MoneyWatch.com. He teaches behavioral finance at the University of Denver and is an adjunct faculty member at Colorado College. He's got a lot of meaningful credentials after his name. He's a CFA, a CPA, and an MBA, and claims he can still keep investing simple. His goal is never to be confused with Jim Framer, the first to welcome Allen Law. In 1998, our final panelist created the Kulfi House Investor in an effort to bring a simpler and smarter investment philosophy to individuals and corporations across the nation and around the world. His work has been featured in the Wall Street Journal, the New York Times, Business Week, Time, and he's been a regular contributor on NPR's Morning Edition. For 13 years, he worked with retail and institutional accounts for Smith, Barney, and Seattle. Like Rick, he eventually saw the light and came over from the dark side. He now works as co-owner and financial advisor of the Soundwarp wealth management in Kirkland, Washington. In his spare time, he enjoys mountain climbing, cooking with friends and family, and he loves to golf in the rain. Please welcome another one of the good guys, my friend, author, Bill Shortlake. Here are the questions and the one-person answers. If somebody else has got something to add, please don't consider the question answered just because of one person. If you've got something to say, we'd like everybody to contribute. The first question, and it pays to be the recording secretary because you gave your question a little right to the top. The question's from Victoria. It says, a question for the panel about the order of distributions in early retirement. Investor has some sums in the traditional IRA and taxable accounts. The investor's goals are as follows. One is to collect Social Security at the age of 70, complete the traditional IRA by the age of 70 when the RMDs would have started, and limit annual traditional IRA withdrawals to stay within the 25% tax bracket. And the investor has some flexibility in the order of drawing money from the traditional IRA and taxable accounts. One extreme withdrawal... Are we... Are we all the others? Victoria, you're really... You're working me out here. One extreme withdrawal or convert from the traditional IRA in the beginning of the retirement and live off the taxable accounts the remaining time to age 70. So that's one scenario. The other extreme delay the traditional IRA withdrawals and conversions for as long as possible. Now the questions. Which is... Which is incredible. And what are the main considerations when deciding between the two options? What was the second option? The first option... What was the second option? Second option is the other extreme is delay the traditional IRA withdrawals and conversions for as long as possible. I live... I've always said investing is simple. I've never said taxes are. The answer is clearly it depends. And it's probably not an either extreme. You don't want to get rid of your entire traditional IRA even under the RMD if you can take it out of the 0% tax bracket.  You don't ever want to let some of your, you know, be below zero. You at least want, even if you don't need the money, do a broad conversion with the difference. So the answer really is it depends and it's probably not an either extreme. Now we're going to have the real CPA. That was a good answer. I think in the first place it's a good idea to prioritize traditional IRA distributions prior to age 70 if you're holding off on Social Security until age 70. Because what typically happens or often happens once you start receiving Social Security benefits is that your marginal tax rate ends up being higher than the actual tax bracket you're in. Because there's this range. Local Heads Guide to Retirement Planning they called it the tax hump. I thought that was a pretty good term. Where each additional dollar of income doesn't only cause, so for instance if you're in the 15% tax bracket each additional dollar of income doesn't only cause 15 cents of income tax. It also causes either 50 cents or 85 cents of Social Security benefits to become taxable. So even if you're in the 15% income tax bracket once you're receiving Social Security your marginal tax rate can actually be 22 or 27%. And so sometimes it can be advantageous to go ahead and prioritize traditional IRA distributions prior to receiving Social Security. So that's something that Victoria already posited in her question, which is a good idea. So I'm not answering her question I'm just emphasizing part of it as a good idea. In terms of actually which of those two extremes I think Alan is right, that it's going to depend and neither extreme is probably the right answer. I think Van Gord touched on it last night too that you want to diversify your future tax obligations. We never know what is going to happen. For instance if you converted everything to the raw and they put a value added tax or a national sales tax you're going to get hit again. So you may want to consider having some needs to diversify the possible unknown future tax situation. All right, we'll move on to the next question. It's from Mr. Prius. Morningstar recently published a paper entitled, Bait and Switch, Glad Path and Stability. Among other things it shows how the glad slopes of several companies' target funds have changed. Key world prices have been consistent but aggressive. Van Gord's made a huge change in 2006. The deli has literally been all over the map. I'd like to hear your comments on Glad Path, instability and the legitimacy of the target date fund approach. I can tackle that because the question reference is a Morningstar paper and it is something that our team keeps a close eye on and that's why they only recommend pretty skinny down group of target date series. Van Gards is among the ones that we consider the best. We also do like the T-Row plan. It is generally more aggressive than most others. American funds and J.P. Morgan's also received top ratings. But certainly the stability of the Glad Path figures into our assessment. We're also looking at a lot of other factors as well such as costs and quality of underlying options when we decide whether or not to recommend these products. But I do think that the target date funds, there's a huge disparity and we have seen some, frankly, some performance chasing going on among the target date providers. One notable change that we saw among a lot of the plans in the wake of the bear market was to make generally the Glad Paths more conservative at what in hindsight is obviously an opportune time to have done so. So I think this should definitely be part of anyone's analysis if they are considering using a target date product. We normally recommend the people who ignore the, we're getting to the legitimacy, the second part, the legitimacy of the target date fund approach. And I am a big fan of the target date approach with some qualifications. One is you need to look under the hood and ignore the date and look for the fund that has the your desired asset allocation.  So it has a lot of advantages and it's a hands-off approach and I think it's ideal for the default option on 401k. The only problem is that everybody at the same age is probably going to get stuck in the same fund which is not the best approach but you can do a lot worse than a target date fund for what they work for you. Yes, sir. I'm just going to put out one clarification because you might hear these terms out there when they're discussing target date funds and the two terms are, is it a to fund or a through fund? A to fund means on the day that you, that target date, the amount of money that's in your fund should be, the money that's in your fund should be at all cash. So the allocation will go from some point in equity all the way down to the target date and it will be 100% in cash on the target date. That's a to fund. Then there's a through fund. I think what Morningstar has done is give you an index of the through funds which say you're going to a target date for retirement and on that target date you're going to have an allocation to equity spill that might be 30%, it might be 40%, it might be 20% but you're going to go through that date. So just that you have heard these terms before there are target date to funds and target date through funds. Well, a while back I wrote a column for Morningstar and it was titled Fixing Target Date Funds and one of the recommendations I made in that is if you're going to look at a target date I thought that it might be helpful to have a 2050 moderate conservative and aggressive which might help the young people select something that identifies them and even though they all have the same target date they would have different allocations based on being aggressive, being moderate or being conservative. I would like to see that adopted in the industry but I don't think that it's necessarily as complicated as it sounds. You wouldn't necessarily end up with three particular funds for each year because the aggressive or one year might be the same as the moderate and the other year. So actually they would be in the same fund the same fund. And I'd like to see that I think that would be helpful for young people when they come out because some people are conservative some people want to be aggressive and I think that would help make us select a better selection. I would just like to make an additional comment on target date funds. I saw by the show of hands yesterday afternoon that very few people here actually have target date funds most of you choose to manage your own underlying pieces and that's fine. But I am passionate about this idea of benchmarking yourself to see how well you're doing. So I suggest for most investors creating a simple custom benchmark that mirrors your own asset allocation and consists of the most vanilla index funds that you can find. So that's one benchmark one simple benchmark that I think you should hold yourself to is to look at whether you are doing as well as that as a target date fund geared to someone in your general age band and set of situations. So I think that that's just a good way to see whether you are adding or subtracting value and maybe you have something completely different going on so the target date fund isn't relevant to you but I think for a lot of people it will help them be honest with themselves about how well their security selection and how much it's contributing to the bottom line. There are two of the key features that the average investor would have to work on that they don't have to do with target date funds are both the automatic rebalancing and the getting more conservative as they age. Those are two things that investors have to do on their own if they have individual funds but they don't have to do that with target date funds. What kind of thing, George? You know, managers of target date funds are people too and I would say that if you can't be right on the asset allocation be consistent and as much as I love target date funds which harness the power of inertia I generally don't recommend them because the asset location for tax efficiency can be done by buying the individual funds. Yes? Just a question. What are the target date funds rebalanced? Daily. You just mentioned that it's an advantage of target date funds. This may be a stupid question because I have a research to ask but I know Dr. Burns will probably explain it. If the market took a 50% correction in 2008 wouldn't a target date fund by rebalancing the daily take a greater than 50% correction? Yeah, that's a good point. The problem is that when you're running a large institutional fund you don't have a lot of choice but to rebalance daily. David Swinson made a virtue out of that in his book. It's not a virtue. Being able to rebalance and immediately for the individual is a superior strategy for the obvious reason that you want to give the market a little bit of time to run both on the upside and down side before you pull the trigger for the obvious advantage in 2008-2009 as well as on the way back and as well as on the way up before that. Yeah, there are a number of studies in fact I read one morning story a few years back and I think 18 months was the ideal time for rebalancing. The problem is you can argue about whether you should do it on your birthday every year or whatever but the problem is that a lot of people don't rebalance and the target date funds do that.  The more you want to manage your portfolio that's fine but what we're talking about is kids coming out of college getting their first job and now HR hands them a packet that's got 40 funds listed and they don't have a clue of what to do so they put 2.5% in every fund and there's 10 funds in there but with 10% in each of the 10 and 4 or 5 out of the large growth funds or whatever so the target date funds I think are a great starting point for young investors Alan talked correctly mentioned that the fund location is incorrect but for a lot of investors their 401k is their only investment so in that case there is no location because they don't have a taxable account but if they have taxable and non-taxable then the point is well taken that you want to put your equities in your taxable account and new bonds in your tax deferred accounts which implies that you're ideally talking date funds. Well I mean my point really was the overall risk of a target fund in a situation like 2008 the equity portion is not going to have you know use a simple example of the market drops 1% 50 trading dates in a row and they rebalance each day as such as an approximation the equity portion of portfolio is going to take a 20% greater product than if you don't rebalance every day because you're rebalancing and buying the equity portion it's almost continuously 1% every day you're taking a greater product putting more risk in the portfolio the equity portion. It's not as bad as all that because you're not rebalancing every single day within the fund you're simply rebalancing you know within flows and outflows so that you know when the market is rapidly moving up or down before during and after the crisis they're certainly not rebalancing back to policy every day it probably took them several months to catch up at the end so it's not quite as bad as doing it rebalancing every day which would be a disaster. I know that next question is controversial so we'll get to that it's a question from JV Clark 02 do you recommend including social security and or a fund benefit plan index to inflation as part of one's bond allocation and if so how do you compute their value? This is my favorite question every damn year and the answer is you can either do it one of two ways but you can't have a public account you can either let's say you're someone who needs $70,000 a year to live on and you're getting $30,000 in Social Security so you have a residual need of $40,000 a year you can either say that I'm going to annuitize or capitalize Social Security is worth $300,000 $500,000, $200,000 but I have to spend $70,000 a year out of my workflow so in other words you capitalize it into your bond but then you fully own all of your living expenses as a liability that's method A method B is to say I only need $40,000 a year to live on then you sure as heck cannot capitalize your Social Security intentions as a bond allocation because if you say that the third alternative is the incorrupting which a lot of people love to do is they say ha I'm going to capitalize my Social Security I now have a $300,000 bond in my portfolio and I only need $40,000 to be able to live on that can't be that so you do one or the other I think that's a little change in your position I think in the previous years or at least because I thought you were saying do it no no no you do one or you do one and the other but Jack is a big fan of doing a capitalizing it and one of the downsides to capitalizing it is you end up with a huge bond allocation based on your Social Security so you end up with a much larger equity position because you're counting your Social Security as bonds and when you want 50-50 and Social Security is more return we will say 30% you got 20% bonds you got 80% equity and the rest of your portfolio and at a time when you're retired because we're talking about Social Security I think you end up with way too much risk for the average investor Mel I'm not sure if I mentioned this last year if we did talk about this but I was speaking with Harold the financial planner about this very issue during the 2008 downturn and he is against using Social Security as part of the bond allocation and he said it simply doesn't work from a behavioral standpoint for the reason you mentioned that you would say to clients during a market environment like that oh your bond position is doing just fine and the client would say what bond position I have only stocks and I'm down 35% he said that just it doesn't fly with clients and the risk level of the equity portfolio is just too much for people to stand I wrote an article with Frank Israelson who is from Brigham Young University and I posted on the website all the time and it's called is a pension and bond and also gets into Social Security and the simplest way of doing this is from a cash flow basis I built a couple of years ago one of your choices is to do it from a cash flow basis so I'm not going to use the word capital which is simply as Bill said you have $70,000 a year of liabilities that's what your spending is in retirement you're getting $30,000 of that covered by Social Security your liability from your savings is $40,000 a year therefore what asset allocation should you have that will give you $40,000 a year that's the easiest way of doing it so it's not part of your bond allocation it's simply covering some of your liabilities and to look at your asset allocation overall you just will get what is not being covered by Social Security or pension I think that's just the simplest way of doing it the next question is about wide modes it says are wide modes the real deal or are they the flavor of the month as far as I'm concerned the flavor of the month because I've been hearing about wide modes since wide modes wide modes wide modes wide modes these are companies that are considered to have wide they call it wide modes because they have the technology they have the patents and things like that they have to protect them from competition so I think in the old days they had the modes to protect the castle the castle is the company so the assessment of a company's mode or lack thereof is a big part of our analysis process for individual companies and Mel shorthanded it exactly right it's a company's sustainable competitive advantage this is not a concept that is original to Morningstar it's really a warm concept and the idea is that the company with a sustainable competitive advantage would enable you to own it for a longer period of time with that ability to fend off competitors over time we analyze our performance of the stock ratings which do hinge both on valuation and whether a company has a mode and what we see in general is pretty good performance from that combination of characteristics so both low valuation as well as whether the company has a mode in general the performance is better in down markets than it is in very buoyant up markets so our mode rating won't look so good in a 2009 type environment where a lot of companies that were just lucky to be alive did the best the mode ratings did very very well during the bear market and have done fairly well over a full market cycle as long as we've been examining them there are certainly other companies that do some assessment of the same general thing we're looking for but that's the general performance characteristic strong downside performance less strong performance in rallies are we talking about picking stocks? I guess I don't know about that I have to ask how long it will take I mean that's one way of doing it if you want stocks you know someone put a gun to my hand and made me pick stocks the criteria that I would use would be obvious qualitative indicators of corporate governance does the CDR flyer and the corporate jet for personal reasons has any highly placed person in that corporation bought a piece of real estate costing more than 10 million dollars if you look at those companies that have those characteristics and know all of them they have market returns that are very very much lower in the stock market so so that would be I would never pick stocks but if I had to pick stocks I wouldn't get wide amounts I'd simply avoid the companies with more lead credit management selection is better than any place sorry Christine okay the next question is for Bill Bernstein it says in your recent article in Money Magazine you said to have your retirement expenses covered by tips short term bonds would you consider Vanguard's short term investment grade bond funds to be a good substitute for individual short term bonds if you don't mind taking a 10% capital haircut during the next crisis then sure so yeah pretty much covers it these are questions that were just I might have a little more time reading them because of the handwriting but these were turned in just recently by the people who are here so if I call your name please stand up just so we can acknowledge you Paul Stratton Paul Lason with all the investors hunting for yield please discuss how bad non-exchange traded REITs and similar investments are so how bad are non-exchange traded REITs and similar investments wow that's a good question I I've heard a lot of bad things about non-exchange traded REITs lately there's been a lot of fraud and is that faking to the price I guess that would be my question you can't package these things together and sell them as an index once you get concerned as well so why are you getting paid for taking all of this risk out there fraud, this risk of liquidity you would yield on these things would have to be very high I think to make up for those risks to even consider it and then of course if you do you would only consider it for a very very small portion of your portfolio okay the next question is from Lady Geek or Bill Schulteis we weren't done with that just real quickly I had just drafted an article investments from hell and non-traded REITs in there non-traded REITs had lost a lot of money during the same period that the Vanguard REIT index fund is up a hundred and some odd percent non-traded REITs are great for brokers selling them not so good for the consumer buying yeah I subscribe to a period called investment news which is written for investment professionals professionals and the reason why I do it is because they're very good at spotting a new new thing a year or two ago there were a lot of articles about non- traded REITs they were usually accompanied by a picture of a guy a very expensive suit and no neck and I subscribed to that on magazine just for that reason because it's a really good way of spotting early the next investment scandal they interviewed me in that magazine in the same rag investment news there's been a lot of press over the last couple of months on how these non-traded REITs have had to be re-valuated or repriced and it just got hammered and I think the question is again how much do you put in your portfolio which is probably not very much and so is that potential added yield really worth the potential risk of the portfolio you're not knowing what's going on with that part that you have allocated to those non-traded REITs okay the next question is for Bill Schulteis from Lady P says here eloquently worded post about what the requirements are for managing other people's money is an inspiration for those who wish to become financial advisors well this form has a generally negative attitude towards financial advisors it's mainly due to the cost of portfolio management please expand on the roles that financial advisors play other than portfolio management well you know a couple of things that are interesting number one just in chatting with so many of all of you over the last two or three days in the response from that post on forum it's amazing the number of you who have considered who want to help people now that you can do that in your spare time or you can like some of us get compensated for it but the need is phenomenal I look at Rick, Rick can you stand up over there you know the stuff that Rick is doing and he actually happens to be in my neck of the woods is phenomenal where's Chad, Chad would you stand up you know so many of you folks are saying hey you know I want to take this modal head type past the philosophy and help people and there isn't there's an enormous opportunity to help people people are screaming for help last night we were talking to some of the folks in Vanguard the amount of energy that Vanguard is putting in to helping advisors help investors is off the charts I mean they're really seeing not only helping advisors but setting up their own systems and their own projects to help investors is just enormous opportunity and I think that the the benefits of embracing a passive philosophy with clients and people that you want to help is there's a multitude of benefits number one you know you're going to capture the asset classes return so performance never becomes an issue you know when we sit down with clients we never talk about performance like oh should we be in this fund or that fund that's a non-issue what we're talking about or the financial planning issues that matter most of all and I have to commend you Sue and the other folks who have put together that great great resource on the global insight and also I think that you talked about the Canadian site nor would you stand up back there the amount of effort that you've put forth in helping people work through the financial planning process because that's where you know so interesting the fees on what Vanguard is doing you know the fees on the investments are just you know contracting to zero and what they're doing is they're spending this time on addressing the financial planning and the investment help for people so that's where the real value is is in helping people and so you know again I would encourage all of you who are considering taking this and helping people to continue to pursue that because there's never been a time in our country where people are looking for help more than they are today it's just it's wonderful wonderful opportunity and I'm sure that a lot of other of you have something to add on it well I think that in following along with this where each individual can make a difference is the lady from Venus Arizona here there she is in the back now there's an individual who is working with a group of high-powered women in the Phoenix area who make a lot of money but don't have a clue and she's working with a group to educate them so everybody can take a step like Rick did on his own and like she did on her own to help people who are looking for help or who need help so each individual can make a difference even if you're only helping one or two people they can make an impact did he got a follow-up? I got the follow-up that's what you're talking about what planning is about so the follow-up is also your insight on how most people view investing and is like how should a local head convey our investing approach to a person who not only has no idea what we're talking about because it is intimidated by the difficulty of managing investments is that the follow-up you were talking about about the concept of investing as part of the bigger financial planning estate planning, taxes that type of thing investing is part of a financial plan and we're focused on investing not the bigger picture which I think is more important one of the things has been so impressive John Mobile said it here yesterday and they articulated it again at the Vanguard presentation last night is the importance of keeping the investment so that you can in fact focus on all those issues that you bring up so interesting and my favorite story is last fall some folks came into our office a couple of 45 years old they're both professionals and the husband says what do you think of what's going on in Greece and he said should we have some gold in our portfolio and after two hours of chatting with them they're leaving and the wife says to the husband we really gotta figure out how much we're saving and so you know two weeks ago somebody asked me a question like what do I think of Europe and really for me as a 52 year old investor as an investor I couldn't care less what's going on in Europe it's totally irrelevant to me what the start market is over the next two years what's important is how much my wife and I are saving and are we saving enough so that the glide path through retirement allows us to meet our financial obligations and that's what people need clarity on I mean it's a you're alluding to something which is a much bigger problem than the investment process which is the entire consumerist at this of this country I mean people inside this room generally we call paperclips but that's not what people outside of this room are doing and good luck with changing that we just want to comment on investment management is one slice of the entire big picture the question is how do you get advice on the entire big picture and how do you pay for it and there's a lot of different theories about once you do your estate planning once you do your financial plan once you do your tax planning first how you pay for that and secondly if it all leads up to hiring somebody else to actually manage your money, manage your portfolio how do you pay for that so it's I believe the unbundling approach to this where if you need estate planning you pay for estate planning if you need financial planning other people believe in a bundled approach where you pay one higher fee annually for everything and I think you have to decide how often you're going to use those other products and how you have to pay for it I wonder the belief that it should be unbundled and you pay it and you go for the other stuff and the actual ongoing investment management and you pay it and as a management that's why I believe my belief is actually opposite of that I feel that bundling really makes the most sense I've never been able to figure out how you can create a financial plan without taking all those different aspects into consideration how much risk you need to take I mean there's so many factors that go into that and it just it's you know I just can't see how you go down the street to a financial planner does a financial planner make decisions on how much you're going to risk you're going to take and how you allocate your portfolio and if the financial planner says okay you're going to have a 60-40 portfolio then does the financial planner articulate that to the investment advisor or does the client articulate that to the investment advisor and when stock market crashes and the person needs to have their hands held do they call the financial planner or do they call the financial advisor I just think that this is all so intertwined that I mean for some people who are able to do it my hat is off to them but I think it's a very integral process I guess I would fall somewhere in between Rick and Bill and that I think it really depends on the individual and what they have going on in their lives certainly for people with more complicated situations small businesses for example or something else like that then maybe the more holistic approach might make sense but I have really gotten to be in favor of the hourly model for a lot of investors like you who might need help with a more surgical type of problem where you have a specific question such as the first question about the tax planning issues related to taking retirement distributions that seems like a great place to check in with the tax advisor you don't need to be consulting with that tax advisor on a regular basis but just to get some guidance on how to proceed to me that seems like a great way to go so I come down with sort of splitting the difference it really depends on who you are and what your needs are thank you Christine I change my view on why the better there is one thing Christine brings up a great point that for a lot of people who have a good handle on the investing process and don't need the wisdom of the full gamut of financial planning hiring someone on an hourly basis makes a ton of sense the reality is that from the Boglehead's perspective I think that the Boglehead crew is very very unique very very few investors have the capacity to know how to piecemeal it out effectively I think it depends a lot on the size of your portfolio the bigger my portfolio the less interested I would be in paying an assets under management fee for estate planning or tax planning advice that's the second point I just want to say thanks for that question because I think on the forum we tend to get lost in really small small obscure details of portfolios and I just think it's great to pay attention to talk about other topics that just don't quite get as much coverage tax planning retirement planning social security things like that how much of your portfolio do you anonymize I do things that need to take risk you can't assess that the willingness to take risk you can do on a survey profile and it's very inaccurate because it changes over time but understanding the need to take risk is very important and one of the ahas I've had in the last ten years is that people who come to me very pessimistic about running out of money have saved a bundle and those that are very optimistic haven't saved much and when you think about it it's those that were worried about it a little pessimistic that actually deferred spending lived below their and those that were optimistic about it you know spent every penny they had okay the next question is regarding the full ahead philosophy as listed here and there are ten items on the list first the develop a workable plan two is invest early and often three is never bear too little or too much risk four is diversify five is never try to time the market six use index funds when impossible seven keep cost low eight minimized taxes nine invest with simplicity and ten stay the course and it says if there's anything you would add if you could to that philosophy and I would say number one has to be live below your means all the rest of the stuff is totally irrelevant if you don't learn to live below your means so I I think that the number one item that needs to be added to that list is live below your means could I change one of the things on the list sure as the author of the all about index funds and probably a proliferant reader and analyst about index and index investing I would scratch that one about index funds to use index funds when possible there are some index funds out there that are in asset classes I wouldn't use for instance municipal bonds there aren't any good municipal bond index funds really there's an ETF out here MUB which is okay but it has one third the number of bonds has the Vanguard Intermediate Care Municipal Bond Fund which is actively managed and the fee is more than twice the Vanguard Intermediate Care Municipal Bond Fund which is actively managed so even though it is possible to use an index municipal bond index fund I would use it same thing with high EU corporate bonds I don't want to use an index fund of high EU corporate bonds I would rather use a Vanguard high EU corporate bond fund which is no longer open to investors but there's a TIA credit institutional fund which is pretty good we're using so when possible is not the best word maybe we can just change the word when feasible when something but not just when possible how about just use low cost funds low cost I think is key are you looks like you're taking notes these are things that we have on the weekend we want to take these comments if we use the FAA funds they are not index funds like I said last night but they are not they don't follow an index what index does the DFA fund DFA indexes whatever whatever their computers stay out is what they follow Jack's made that point several times there's nothing magic about indexing in fact indexing does have a certain disadvantage particularly if you're trying to match and read a balance against a great big popular index that's actually a disadvantage for those of you who want a large cap index fund don't use the index fund try to use the 500 fund use the large cap index fund that will pretty reliably at least two or three horizons outperform DFA index and maybe cause it doesn't happen I would recommend changing minimize taxes to maximize after tax return until my clients if they want to minimize taxes they're going with your job that's one of the reasons why people don't pay off their mortgage I'd lose the tax deduction but it's the inverse of a bond it's the opposite of a bond you pay taxes on your total bond fund which is yielding 1.7% you've got a 3.5% mortgage you end up paying more taxes but more importantly you have a greater after tax return the next question is from Frank he says most about all the conditions that led to the 2008 meltdown are still in place when will the next meltdown occur? the next meltdown to occur is in China that's why it will occur because of Chinese financial institutions are hiding bad assets it's getting worse that's why we had a beautiful talk last hour we had a very nice grant that pulse grant and if you looked at the right side of the grant you saw that pulse was wildly oscillating up and down we have an unstable financial system and the answer to your question is maybe tomorrow maybe in 10 years but financial history tells us that these things occur about once a decade and I think that our system the instability in our system that we can see in the next probably tells us sooner rather than later I think from a portfolio perspective looking back in 2008 it was not fun it was a nasty environment but also I look at the Boglehead philosophy and also Jack Bogle's simple wisdom of having your age in bonds now I know a lot of people are critical of that simple wisdom but to me that really proved its mettle in 2008 we had people who were retired and had only 30 to 35% of their portfolio in the market it wasn't a total disaster the portfolio was down 70-10% but it wasn't as if they lost 50% of their money Robert Schiller had the wonderful opportunity to listen to him shortly after the market crashing there's lack of understanding of the simple concept of asset allocation and so I think it's important that all of us instead of trying to look at what's going to happen around the globe admit that we're going to have bear markets every couple of years I mean it might be a 20% drop it might be a 35% drop but it is going to happen it's a part of life and to allocate your assets accordingly a question from Trisa what do you see evolving in terms of the municipal debt problems and municipal bankruptcies and impact on related investments let's look at the expected rates of return that states are looking at in order to balance their budgets I guess going forward on their retirement portfolios and I think the average is annualized we checked the yield on the total line market index yesterday it was about 1.5 and let's say state has half the money in fixed income might be a little bit conservative 40% of fixed income that's yielding 1.5 what do you need to get on the other side of the portfolio to get to 7.5 it's an enormous rate of return now the stock market in my opinion maybe we're going to get 7% rate of return unless there's tremendous multiple expansion and we use to go back up to 30 but let's say that we use to stay around 15 maybe a 7% return on equities going forward so where does the money come from well it comes from alternative investments all the alternative investments are going to compound at 30% compounded annual rate of return for every single state do you believe it I don't either so there's a problem I mean the little purposes the rates of return on pension funds are about 2.5% too high and once you actually factor in what the actual rate of return will likely be on these pension funds and every single state almost every state out there is a deep deep deep financial trouble and whenever you see the widespread adoption of a particular style of investing a whole lot to your wallet type what we're seeing and Rick wrote about this in Forbes seven weeks ago and what you're seeing also with the largest pension plans Rick wrote about it with university investments is that everybody is adopting the Yale model which basically says better have a few allocation of alternative assets pension funds private real estate private equity commodities whenever you have so much cash chasing so little opportunity the potential for disaster is enormous and you know just simply Rick has talked about one dimension of it just now which is that the arithmetic doesn't compute if you have one and a half percent stock origins you have to get I don't know 11, 12, 13 percent stock origins but that's not the real ticking time bomb the real ticking time bomb is all the crap that people are chasing in all of their portfolios these days One comment I would add specifically on munis is that I think you really do have to look at the credit quality of the portfolio that you're investing in and also fees go hand in hand with credit quality so that's one reason I personally invest in Vanguard's muni bond funds because the credit quality is generally higher than the peer group in part because the low cost help the funds look competitive on a yield basis because so they don't have to venture into junky portfolios I thought there was an interesting report that came out a few months ago it was issued by a government agency that looked at the default rate among municipalities over the past decade or so and a lot of people cite that data and say well muni default rates have really been quite low over time this report looked at once you added non-rated municipal bonds into the mix actually the default rate was much higher I can't remember what the specific number was but it was much higher than had previously been discussed so I think you do have to be careful and generally try to keep the credit quality of any muni portfolio high if you're owning a junkier high yield muni portfolio that maybe want to limit that to the margins of the portfolio Christie even if you're just considering you know a very high quality municipal municipal bonds and you're looking at the historical rate I think I question the validity of those historical data because we're living now in an era with entitlement and pension obligations that we've never had to live with before I don't think that those previous data are as relevant as as we might like to think they are could I add I'm just wanting to answer I just want to there are many more defaults out there than what the media is calling a default if you're a pensioner and you're getting a pension from the state of Rhode Island and the state says we're cutting your pension isn't that a default it's just not a default on the bond it's a default against an obligation so that's what a default is so there's going to be a lot of defaults out there federal government will default I mean not default on their treasury bonds but they're going to default on some other obligations call it Medicare, call it Social Security and hear what you call it it's going to be defaults it's just not going to be called a default but that's what it is not like these pension grants we're getting to the end of the road they were saved of course by the world stock market that really helped them out but basically a lot of these obligations are coming due because as America ages more and more people are retiring the obligations are coming due where they have to pay out so I think there's probably a lot more of the whether they're official or unofficial bankruptcy so that's my opinion that's worth a lot but that's my opinion can I say one thing I'm actually more pessimistic than Bill and Grant there's about 2.3 trillion of unfunded pension and health care liabilities assuming an 8 or 7.5 or 8 percent return and Jack Bogle showed a slide yesterday with the expected GB return of 4.6 percent so the math doesn't add perhaps the US government bills the communist colonies out perhaps they're able to renegotiate those divine benefits but there is a ton of risk I did talk to Jack Bogle about it yesterday and he's worried as well and thinks that it could be right but he's less worried than I am you'll be pleased to know that I still have my medical rights since I'll be able to administer ECT right after this I have a quick question for the planners though does that mean that for clients who have textual portfolios that would call for bonds does that mean that you're bypassing munis I always hedge my bet that I'm not necessarily smart at the market that munis make up about 7 percent of the US debt so I would not certainly would not do more than 10 or at the very most 14 percent because again if stocks don't do well then the pension liabilities the shortfalls are going to get larger and larger and you want your fixed income to be the shock absorber with stocks you don't have the next bubble but we will and you want your bonds to be backed by the US government in my opinion is that 7 percent or 10 percent of the bond portion of the portfolio or of the bond portion of the portfolio what are you saying? but you're talking say that again I'm sorry if you're saying that I have 70 percent of my own fixed income in CDs CDs that have withdrawal penalties so I just opened up a CD this week at a credit union paying 2.2 percent it's 5 years but it has 120 day early withdrawal penalty which is like a put to sell it at 0.73 so if you compare the 1.5 1.6 total bond portfolio I'm earning more I'm 100 percent US government back and the total bond has a 5.1 year duration which means if interest rates go up by 1 percent then it would go down by and that's not a prediction by the way it's just a possibility then total bond fund would drop by 5.1 percent where as I could pay that early withdrawal penalty and get my money out and we invested at a higher rate it's a non-band guard solution I'm just staying with the band guard Intermediate General Municipal Bond Fund it says thousands and thousands and thousands of securities in it now I used to manage individual municipal bond ladders or build a municipal bond ladder for each client based on the state that they live in I don't do that anymore I'm not nearly smart enough to do that anymore I used to be smart enough to mess with nobody now I just stay with the very, very, very broadly diversified band guard municipal bond funds and I think we'll be okay and you're actively managed if you want to move away a small portion of your taxable bond allocation you can get $10,000 in high bonds which are tax deferred you can get $20,000 per couple if you've got a trustee you can get another $10,000 you can get $5,000 back on your tax return so you can get a smaller amount in the good old days you can get $30,000 per person at those days of government you can still get $20,000 that's to your tax deferral and they're currently yielding $2.2 even though fixed rate is zero so they're yielding 2.2% I think the next rate has just been calculated at 1.76 so you'll get 2.2 for the first 6 months you'll get 1.76 for the second 6 months so that takes you up to the year you can redeem them the more attractive it becomes available in addition to that they're very flexible inflation raises in the top of the head and your rate goes up you can hang on to them you can use it for tax shifting moving it from your current high tax rate into the future with your guitar and you've got a lower tax rate it also is free from taxes so if you're in the state like New York or New Jersey California with high state taxes you can avoid those so there's a lot of benefits it's just to see and invest more than 10,000 per person but that's one option at this time we're going to take a break and we'll resume with the Q&A after we break


This is usually how you're taught to have a sales conversation with a potential client You're supposed to help them to get in touch with their pain again The pain that your business solves let them sit in that pain and feel how bad it feels And then you're supposed to help them dream about what's possible What's possible if the problem were solved and and then you're supposed to say hey Guess what? I am the bridge between the pain and the goal and here's why I'm so great Here's are my credentials and and then here I'm gonna overcome your objections now What are your objections? Of course you you find that out and you overcome them as quickly as you can etc So all of that feels probably to you it feels kind of inauthentic It's not the kind of conversation you would have with a with a future friend You're not trying to kind of manipulate them through a certain series of emotions until they buy right so No, you don't have to do that What if you can simply be authentic and honest in your with your potential client and just say hey Here's what I do first of all you before you say here's what you do you get to know them and us in a from a from a space of wanting to connect and Understand really what their situation is and see if you can really help So that's really what you're trying to do is like how can I help you in this? Conversation and and does it make sense for you for me to help you further right and and then okay? Here's what I do. Here's what I charge. Do you have any questions? How can I help you you know and clarify whether or not it makes sense to work with me? Well, this is exactly what one of my clients just did with her potential client and she felt great about it and Not surprisingly the potential client said great. Let's work together So here's the thing though regardless of whether the potential client said yes, here's the key She can continue to be honest and authentic Going forward. She doesn't have to because when you start a relationship from a place of Having to manipulate them through this emotion then that emotion and trying to get them to a yes You have to you're gonna feel like you have to keep doing something like that going forward because you haven't been authentically you from the start So this is my encouragement to you is please if you're gonna have sales conversation with potential clients be authentic Be honest be in a space of connecting to see if you can really help them Or maybe you refer them on to somebody else don't assume that you're gonna be getting every single client is perfect for you Does that make sense? So always be Serving always be in in the space of helping the potential client and you will do great over time So until the next video, I'm George Cal always open to your comments and your questions and I wish you Authentic conversations going forward. Take care


You need a financial advisor with the freedom to focus on your specific needs. Whatever your goals, Reeve Potter can create a game plan tailored to you. Call Reeve at 432-0777 at Pikeville, Kentucky to learn more. A multi-employer, mega job fair will be held at the Mountain Art Center and boast 24 businesses with more to come. We are looking for 80 job seekers. So if you have been laid off, if you have been just out of work for a while and you're looking to get back in, if you've got a job, but you want a better job, you know, you are welcome at this job fair. We specifically have employers related to energy. So we've got coal, we've got natural gas. We have healthcare employers. We've got construction. We have transportation, Sandy Valley transportation, correctional officers. There's just a wide gamut of employers who are coming. So if you are interested in any number of fields, we can accommodate that. With mega events like this one, it's easy for job seekers to apply with multiple potential employers in one place. By applying to multiple businesses at once, you increase your chances of getting a job you're looking for. You don't necessarily need to bring anything, but it's always a good idea to have your personal ID, your state ID, and your social security card when you come to these kind of events. If you have a resume, please do bring it. But actually we are going to be offering VIP access to folks who register with the event beforehand to meet with a career advisor to actually create or update their resume. So you can get in early when people are fresh, when people are ready to hear from folks, when they're ready to shake hands before lunch, before everyone's tired. And this is a great opportunity to not only help yourself get your resume in the best possible shape, but it's also an opportunity to give yourself the best shot that you can. An early access VIP pass is available to those who register with career advisor and update and or complete a resume. A large number of employers coming to one location. So this is going to be the place to be on Wednesday the 27th.  They're going to be people from places like adult education. Some of the career Kentucky career center partners who are going to be there. So no matter what your job status is or what you think your needs are, you can come to this job fair and find out about the services that are available for free. That can help you. The multi employer mega job fair will be held at the Mountain Art Center in Prestonsburg on Wednesday, April 27th from 10 a.m. to 3 p.m. and is free for anyone to attend. For Mountaintop News, I'm Kelsey Dean.


When installing any door window sensor, first locate the raised guides on one side of the sensor, which will need to match up to the raised arrow on the magnet when installed. The gap between the raised markings on the sensor and the raised arrow on the magnet should be less than half an inch. Ideally, the sensor should be placed on the fixed frame of the window and the magnet should be installed on the moving window. If this is not possible due to the size of the frame, it is most important to mount the sensor flush on the surface. Best practice is to leave a minimum of a fourth an inch gap between the magnet or sensor on the window and the edge of the window frame. Often, windows are hung out of square, or the vinyl, wood, or metal parts can swell due to weather conditions. Leaving a space will ensure that the magnet does not contact any part of the frame when opening the window, which could cause the magnet or sensor to be knocked off. Another best practice is to leave a half an inch to one full inch from the edge of the window in the closed position. This also eliminates any chance of the frame knocking the magnet or sensor out of place. Track the LARM monitoring services.


Hello everyone. We are here to promote the 2022 population and housing census. We are here to ask for your support. We need you to cooperate with our enumerators when they visit your home. The information I am collecting is confidential under the Statistics Act. I declared an oath of secrecy that could result in criminal penalties if I disclose any information. The same goes for persons working for the Statistics Department. Okay. I hear you.


COVID-19 undoubtedly turned our lives upside down. Among the many disruptions it caused, it challenged our existing monitoring systems in many different ways and we needed real-time data to be able to answer the questions of our stakeholders. Over the years we had built and cultivated networks of experts in a range of relevant fields and we have also developed infrastructures for near real-time data gathering from open sources including darknet markets. So when the pandemic struck we were able really to immediately mobilize these resources and provide relevant timely analysis of what was back then and what continues to be a dynamically evolving situation. Since I'm already exploring and investing in ways to provide more timely content and the pandemic undoubtedly definitely accelerated this work. More than ever objective remains to better anticipate emerging threats and to inform policy decision-making as well as operational responses.


There are three broad theories about evolution and food. One is that humans have become adapted to the products of the agricultural revolution over the last 10,000 years. Two is the paleo view, that 10,000 years, that's a blink of an evolutionary eye, and that humans have adapted to paleolithic diets with lots of lean meat. But why stop there? The last 200,000 years as mostly stone age humans represents just the last 1% of 20 or so million years we've been evolving since our common great-ape ancestor. During our truly formative years, the first 90% of our existence, one might say, our nutritional requirements reflect an ancestral past in which we ate mostly leaves, flowers, and fruits, with some bugs thrown in thanks to wormy apples to get our vitamin B12. For this reason, another approach that might improve our understanding of the best dietary practices for modern humans is to focus attention not on the past, but rather on the here and now. That is on the study of the foods eaten by our closest living relatives, given the bulk of our ancestral diets and the lack of evidence supporting any notable diet-related changes in human nutrient requirements, metabolism, or physiology compared to our fellow great-apes. This could explain why fruits and vegetables are not only just so good for us, but vital to our survival. We're actually one of the few species so adapted to a plant-based diet that we could actually die from not eating fruits and vegetables, from the vitamin C deficiency disease, scurvy. Most other animals just make their own vitamin C. But why would our body waste all that effort making vitamin C when we evolved hanging out in the trees just eating fruits and veggies all day long? It's presumably not a coincidence that the few other mammals unable to synthesize their own vitamin C, like guinea pigs and bunny rabbits and fruit bats, are all, like us great-apes, strongly herbivorous. Even during the Stone Age, we may have been getting up to 10 times more vitamin C than we get today, and 10 times more dietary fiber, based on essentially rehydrated human fossilized feces. The question is, are these incredibly high-nutrient intakes simply an unavoidable byproduct of eating whole plant foods all the time, or might they actually be serving some important function like antioxidant defense? Plans create antioxidants to defend their own structures against free radicals. The human body must defend itself against the same types of pro-oxidants, and so we have also evolved an array of amazing antioxidant enzymes, which is effective, but not infallible. Free radicals can breach our defenses, cause damage that accumulates with age, leading to a variety of disease-causing and ultimately fatal changes. That's where plants may come in. Plant-based antioxidant-rich foods traditionally form the major part of our diet, and so we didn't have to evolve that great of an antioxidant system. We could just let the plants in our diet pull some of the weight, like the not bothering to make vitamin C thing. Let the fruit do it! Using plants as a crutch may well have relieved the pressure for further evolutionary development of our own defenses, meaning we'd become dependent on getting lots of plant foods in our diet, and when we don't, we may suffer adverse health consequences. Even during the Stone Age, this may not have been a problem. Only in recent history did we start giving up on whole plant foods. Even modern-day paleo and low-carb advocates may be eating more vegetables than those on standard Western diets. You know, there's this perception that low carbers are chowing down on the three Bs, beef, butter, and bacon. But that's just a small minority. What they are eating more of is salad. The number one thing an internet low-carb community said they were eating more of was vegetables. Great! If people want to cut their carb intake by swapping junk food for vegetables, that's not the problem. The concern is the shift to animal-sourced foods. Greater adherence to a low-carb diet high in animal sources of fat and protein was associated with higher mortality, for example after a heart attack, meaning they cut their lives short. If there's one takeaway from our studies of ancestral diets, perhaps it's that diets based largely on plant foods promote health and longevity.


hardening your security subsystem, which is not an official Microsoft product. It's basically on a research estate for now. A bit about me. My background is mostly in systems and security. I got my PhD from University of Cambridge System Research Group, where I mostly worked on hard-resisted compartmentalization and confidential computing and basically systems abstractions for better defense in depth mechanisms. Currently at Microsoft LSE team, I'm working on security-related topics. Let's get this started. First, I will discuss the scope of the project. Basically, try to explain what is the actual problem we are trying to resolve here. Then I will explain some of the technical background for some of the components we rely on. Then I will discuss hardware shields abstractions, the abstractions that we are adding to the kernel with different like hardware or the hypervisor backends. They will conclude this talk with discussing some of the current limitations for the current prototype and the future work and some of the opportunities for collaborations. As you know, a secure operating system is essential for keeping the entire systems and all of our applications in a secure state. Yet or operating systems are still vulnerable to many, many different attack vectors. Because of their monolithic design, because of their complexity or because they're written in unsafe languages and so on. A recent paper actually that is cited here investigated existing attacks on Linux kernel. Their security analysis shows that most of these attacks, about more than 75% of attacks on the kernel, are related to memory safety issues and also lack of proper privilege separation. So this is actually the majority of attacks on the kernel. But this is a very hard problem. It's still an open problem on systems communities to enable proper privilege separations on the monolithic systems or like having the proper OS hardening. But we had amazing progress on control for integrity techniques and buzzing techniques, but these are still not enough. Good news is that the recent hardware features for like better, more efficient privilege separation for basically better like memory, better targeting memory safety issues, like pointer authentications, like tagged memory, introducing like memory protection domains. And these features are helping existing like privilege separation techniques to be more efficient. So we can like scale the security solutions on the kernel. Hypervisor based security is actually one of those like techniques that is very old. It's used for like all kinds of security checks and like operating system because well hypervisor is running on a higher privilege layer and it can be like really useful for deprivileging the actual operating system for enforcing like address space protections of the kernel for verifying image like integrity for UFI protections for even kernel module protection and all kind of like monitoring attacks from the kernel side. But since like they usually add a lot of they very usually adding a lot of like performance overhead and they're not used that much for like fine grain privilege separation on the kernel or for more dynamic kind of like security features. But recently we see that with like better hardware virtualization support, we see these kind of techniques are getting more attention that these are getting like more practical that can be even used for more dynamic sort of like monitoring or enforcing like security checks. So that's why like we see more progress on like different kind of hypervisor for example like Hyper-V like adding introducing like virtual trust levels that Windows VBS like support for all kind of like security features like create guard like device guard and all kind of this kind dynamic also security features through Hyper-V. We also like had Hickey introduced like by Mikhail recently and Zen for a long time like has this like more kind of dynamic memory protection features giving you like different view of like through the like address space. So you can have some sort of like better compartmentalization features on Zen through alt P2M feature that they have. So hypervisor based security is getting like more practical now because of better hardware that we have. On the other hand, we also see more fine-during like hardware memory isolation features, memory protection features to our platform. One of these cases are like ARM Morello architecture that is basically extending existing ARM 64 architecture like V8.2 with cherry hardware capabilities that are basically like adding hardware-based metadata to every pointer for assigning like permissions to that protected capabilities to assigning object types to making sure that like every region like bonds checking on like hardware base and these capabilities can be used for like scale level compartmentalization and the system from bottom up. So they extended the existing like architecture ARM architecture and all of the instructions like for example for load the store like execute all of these like there is also a capability base version like load capability like store capability with some additional like capability on the instruction for example for ceiling like making capability immutable and all these like extensions are also added in every privileged layer in ARM. So for example in the secure mode you can also have compartmentalization so for example the secure world that we already had like for example trust on architecture it was a one kind of one way trust between like the secure world and normal world now you have like kind of mutual this you can have the mutual distrust between the regions so there is a lot of like possibilities for better privilege separations on systems now. So both of these techniques this like approaches virtualization based security and these kinds of hardware based like finer grain like protection features these are like can complement each other and there are privileged separation solutions based on both of like these like solutions and for hardware shield abstraction we were looking at the state of the art for these two approaches and we want to like have the abstraction that is providing a minimal like security primitives that can be used like an extensible and like a scalable vary for hardening Linux scared as security subsystems such as like email like lsm's and like evpf and we were looking at like what are basically this these minimal primitives that can have a different back ends it can the enforcement and like isolation it can happen with like virtualization based security and when it's not efficient anymore when it's like like it's more useful and we have like a better hardware like finer grain hardware protection like chain or like memory like tagging features like mte pack like protein authentication we can then switch to like enforce the actual like isolation through those features and this way we can have like a scalable and more kind of practical solution that we can find the right balance between performance and like security so between these like primitives the main thing in common is like memory isolation like that is provided that can be provided with both of these approaches then there is code and data signing and authentication and then there is the concept of like a compartment the domain of like it isolated execution and the abstraction for managing these kind of domains so hardware shields are going to provide these abstractions a common abstractions but the enforcement the isolation can happen it can be provided by either like visualization based security or like finer grain like hardware protections like cherry or mte or pack so for early prototype and the first attempts to actually find out like what these abstractions is going to look like with target cherry abi for arm64 based kind of like a platform and heki like hypervisor based kernel integrative features on kvm for x86 and 64 there reason for these two completely different like designs and like different security architectures as shields back in is that well cherry on arm is providing us like with a kind of a scalable compartmentalization and privilege separation by design so we don't have like the like limitations for the number of like isolated like regions we don't have like for example the limitations that we have if we pick mte or pack pointer authentication on arm there are limited for example like tags available for coloring and here with cherry we have kind of like that environment that we can define what would be an ideal kind of estate for our privilege separation mechanism and on the other hand for like x86 between different kind of like hypervisor based securities unlike hyper v and like zen and heki we pick heki because like the difference between like zen based and hyper v based and heki is that zen and hyper v like they define like explicit like trust domain like doming dom zero based or like a vtl one for example secure kernel and hyper v that in those domains you can like basically those are your like secure kernel you define all of your security specific primitives there and like then you need to like interact with that kernel so it's it's a very explicit like trust like level between the hypervisor and that secure channel and your like operating system but heki since it's a kvm based like enforcement and it's kind of like it has a different architecture but still it provides like the memory protection and like marginal based like like isolation for the kernel and all of this feature so without like if we have a like if we can find like a better security interface that also works with heki it's going to definitely work with like other kind of like virtualization based security so these two can give us like a good way of like view from two different kind of architecture two different designs for coming up with like what are these like minimal security primitives that we can like implement on shields for like a scale level and extensible like a privilege separation that can be used for hardening like Linux security subsystems so the first like primitive that we need for children is memory protections like the abstraction to basically define like which parts of the kernel addresses space should have like which kind of permissions and the enforcement isolation should be protected by like the hardware or the hypervisor so this is easy like because both like hypervisor based security like heki and like marlo like cherry and this is the first like primitives that they all support so we just needed to provide a wrapper around like their functionality so we added like a wrapper of shield protect address that basically on kvm-based like platforms it uses heki protect memory like hypercal and on moral law it's basically using cherry instructions for like address set for font set and assigning the permissions then the region is protected by cherry capabilities so we need this like as the main building block for like the isolation of like the shields and this actually memory protection the first thing that is being used like when you have the memory protection be assigned like a specific like hashes like signatures like and software based kind of capabilities that I described later and all of these like security sensitive like metadata and things that we need for like other primitives for code signing data signings and these are like these are needed to to be protected by this memory protection feature so we first need this building block to store all of the security sensitive like metadata that we use for other primitives to be protected like as read only and protected by a hardware or the hypervisor the second like primitives that we need for shields are code and data signing and authentication because isolation itself is essential for example for selenux policies we want to isolate the policy but we also need an authentication mechanism to measure the integrity and make sure that like this policy is like not modified and provide the proof for that so shields like implement a very few set up like signing like authentication functions for pointers for values and for like code regions and all of these like functions are also tied to like a specific random context that we call it shield tag per like privileged task extract that is basically part of a part of a general task that is assigned when a task is actually using shields so this part is actually like may change in future if you have a better way of like having a authentication for like users user space tasks that they use shields but for now we're having like this tag per privileged tasks and internally these functionalities are also using like kernel cpash like a short input hash and the values that like measurements and all of these are like marked as read only true like the previous like memory protection like abstraction that we talked about so for kvm there is like new hypercalls for doing this operation and also marking the result as read only and for more law we actually have this ceiling capability for making the values in immutable and we also have signing and authentication like capabilities that's only with those capabilities you can do these operations and store basically the values to protected read only protected parts so the third like primitive is that the concept of an isolated execution unit or compartment or protection domain and all of the management abstractions for that is still going to be a future work it's not developed we don't have a prototype for that but even with the like memory protection and the authentication and signing like primitives we can start improving the security of our current like security subsystems like excel looks for example for excel looks we have this new security excel looks shield like option it's a mode of execution that when you are in that mode for example like shields are going to avoid any kind of like much excel looks execution mode for from enforcement to to permissive or disabling it it also using like shields memory protection and like also authentication to make sure that the policies like excel looks policies are read only with abc cache as well and all of like internal like basically sensitive data structures like excel looks policy map and hash all of these are also like protected to buy like shields that the back end can be like different back ends so for prototyping on like chariot that's basically our first like implementation we used more love android channel for that we extended like the android kernel for with these primitives shields primitives and because like for on android we could have more love is like compiled lib sd nooks they basically you need to like have a cross compile with a specific cherry like compiler and things like that and for now i haven't tested like anything on real arm like real arm with fvp like but it's a very good development environment it's a little bit slow with but on fvp for example like if you go to like more love project and you can you have a simple script with like initializing the fvp with android software stack and then you can have like a very kind of easy development environment for that so since this is a short talk i'm not going to more technical details now just note that there's a lot of things we need to do and this is like an early stage project especially from like user space api we haven't implemented that yet and it needs to be really secure because we don't want to open up new attack vectors for attackers to launch even stronger attacks like by misusing or privilege operation by misusing or like interactions with the hypervisor so we plan to implement that like on trust and also like make sure that all of like the intersections are like logically and also like from implementation perspectives are secure also we need to after we got feedback from the first patches we need to think about the integration with other linux security features like for hardening evpf for example or sitcom and things like that similarly there are other hardware security features that can be integrated to shields for example pks like protection domains on a supervisor mode for intel that basically intel actually has a prototype for using that for hardening evpf like verifier so integrating things like that or using like empty and packed on arm devices when there is no cherry available these are like important future words that we can like implement better privilege separation tools for linux gather with that i'm happy to take any question please contact me if you need more details and if you have any questions and thank you for your attention does anyone have any questions fantastic talk really really like the the material i work with the zanaut p2m subsystem a lot i'm practically a maintainer of it so i'm really happy to see this kind of work making it into the the linux kernel my question is about the potential with evpf would it is it envisioned to be able to run evpf programs within the kernel in kind of an isolated mode where they are running in execute and with only execute and read permissions without being able to actually modify the rest of the kernel kind of being isolated yes i actually like evpf it's so i picked first like a silinux because like it's like it's not easier but it's like kind of more like a straightforward and evpf and for for that actually it's actually like our next plan the verifier itself and also like the policies but it's a very large code base so the main thing like at first i want to make sure is that like these like small primitives are good enough you know for like because we also need like a lot of performance like evaluations like the current state i assume like it's going to like add maybe like up to 10 percent like overhead so if we come up with like an optimized version that is not going to like even make it evpf make it make evpf a slower than definitely and yeah we also need a lot of feedback from open source community i'm going to launch like basically make things open source probably in like by end of this month or so and then we can work on the optimization part but actually the Zen alp to premiums like a really has a really nice design so i would be really happy to catch up if we can have like integrated these two together fantastic and you answered my second question is whether you're going to be open sourcing your stuff i'm looking forward to it so yeah thank you any further questions okay thank you very much for joining us over zoom thank you


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