Income Investors: Be Not Afraid
The Problem Without congressional action the Bush tax cuts will expire in 2013. Expiration would lead to higher income taxes for all brackets, and lead to dividends being taxed at marginal income tax rates for middle-and upper-income filers. The potential for higher income tax rates on dividends is scaring... Read the full story
The Riches Your Family Deserves
If you know how compound interest works, you’re in good company. Einstein referred to it as the eighth wonder of the world. Compound anything at 10% for 60 years and you have 300 times more than what you started with. Do that with your money and you’re a genius. Time and money are the key ingredients... Read the full story
A Dubious Tax Proposal
President Obama is on the campaign trail promoting the Buffett Rule that the Senate will likely vote on in coming days. The Buffett Rule would slap a minimum tax rate of 30% on anyone who makes more than $1 million per year. Billionaire Warren Buffett came up with the idea. Apparently, he was disturbed... Read the full story
Facebook’s Fatal Flaw Exposed
Has he gone mad? Mark Zuckerberg, Facebook’s CEO announced this week that his social networking company is buying Instagram. Facebook is paying $1 billion—a 100% premium to the company’s valuation only one week ago. Instagram is the creator of the identically named photo sharing / editing app for... Read the full story
Hearts of Gold
Kids are sponges. They remember what you tell them about saving money. They’re also like jukeboxes when it comes to singing back songs. But they might not always understand what they’re singing about—take, for example, “I made enough money to buy Miami / But I pissed it away so fast” from Jimmy... Read the full story
Gas Prices Threaten the Economy
Tight global oil supplies and tensions with Iran (among other factors) have pushed retail gasoline prices back above $4 per gallon. When gasoline prices surged to near $4 per gallon last year, economic growth slowed as purchases cut into consumers’ discretionary spending power. Should we expect another... Read the full story
FOMC Minutes Paint a Dismal Picture for Savers
If you were unlucky enough to have to read the minutes of the Federal Reserve Open Market Committee (FOMC) released yesterday, you may have been disturbed by what you found. Within the notes on the view of the Federal Reserve Governors and Presidents in attendance (a.k.a. participants) you would have... Read the full story
Record Junk Bond Yields
Low interest rates have understandably pushed investors into junk bonds. More money has flowed into junk bonds this quarter than any quarter since 1980. The average yield is 7.98%, another record—the lowest since 1980. Investors can blame the Fed’s zero-rate policy, thanks to which a 10-year Treasury... Read the full story
America’s Standard of Living at Stake
Are consumers confused? Earlier this week the Conference-Board’s Consumer Confidence index fell slightly on concerns consumers have over the short-term health of the economy. But they seem more bullish long-term. Lynn Franco, director of the Conference-Board’s Consumer Research Center said “Consumer... Read the full story
Economic Mirages
Yesterday the markets were looking for the Durable Goods report to show an increase of 3% in new orders. The numbers disappointed however, with growth of only 2.2% reported. You can see an odd pattern for the last seven months on our chart—lackluster growth sandwiching two optimistic months of 3% plus... Read the full story
