Welcome to the Hotel California of Investments: Indexed Annuities. With surrender fees as much as 10% per year lasting as long as 10 to 12-years, “You can check out any time you like, but you can never leave!” Take caution: Because as money flows into indexed annuities remember that the big winners are certainly the insurance companies and the salesmen (who make 5 to 8 percent of the sale). Penelope Wang explains at Consumer Reports: Unlike regular annuities, which give a fixed payout, returns on indexed annuities rise and fall with the stock market. But these annuities don’t invest in … [Read more...]
Stocks Cap Their Best First Three Quarters in 22 Years
Despite the ongoing trade war and skirmishes in the Middle East, stocks posted their best three first three quarters since 1997. Gunjan Banerji writes in The Wall Street Journal: The S&P 500 is now sitting just 1.6% below July 26’s all-time high, but it has also risen a mere 2.2% from a year ago after a brutal selloff last fall—encapsulating the sideways trading pattern that has gripped markets since the beginning of 2018. The quarter ended on a relatively quiet note. The S&P 500 ticked up 0.5% to 2976.74 Monday, paced by Apple, which closed at its highest level this … [Read more...]
Low Cost of Living Isn’t Just for Retirees
You know how important location can be for retirees. Sunshine, access to services and entertainment, and proximity to family are all factors that can make a big difference in retirement. The most important of all though, is cost of living. Taxes, housing costs, and energy costs are especially important to those living on a fixed income. Your Retirement Life: How Do You Know Where to Live in Retirement? Maine’s Governor wants to Live in Florida, Here’s Why Where to Live to Save for Retirement. It’s Not Where You Think Where to Live to Make a Living? Try this Southern Gem Your … [Read more...]
Here’s Why Millennials Are Abandoning Big Cities
Big cities may get all the press but what we continue to see is a migration away from them and into the burbs. As Joel Kotkin and Wendell Cox point out here in New Geography: When Amazon decided to locate its second headquarters in New York, it cited the supposed advantages of the city’s talent base. Now that progressive politicians have chased Amazon out of town, the tech booster chorus has been working overtime to prove that Gotham, and other big, dense, expensive cities, are destined to become “tech towns” anyway, because of their young, motivated labor pools. That argument may sound … [Read more...]
How to Run a Meeting like Amazon’s Jeff Bezos
Here’s an excellent rundown by Justin Bariso at Inc., on how to run a meeting like Amazon’s Jeff Bezos: Bad meetings: We've all experienced them. Whether it's poor planning, too much talking, or lack of preparation, bad meetings waste precious time and money. But Amazon founder and CEO Jeff Bezos may have cracked the code for making meetings more productive. By means of his annual letter to shareholders, as well as a recent interview, Bezos gave some insight into what the Amazon meeting culture looks like. It all comes down to following three simple rules. "Two pizza" … [Read more...]
Here’s Why Sanders’ Tax Plan Could Usher in a Wave of Tax Avoidance
“Enough is enough,” Bernie Sanders said Tuesday. “We are going to take on the billionaire class, substantially reduce wealth inequality in America and stop our democracy from turning into a corrupt oligarchy.” Except there’s one small problem. The billionaire class he’s after would apply to married couples with a net worth of at least $32 million and individuals with $16 million. That’s not the billionaire class. Uncle Bernie’s tax would rise to 8% for married couples with assets of at least $10 billion. Believe me, if he thought being a billionaire was tough, try finding the … [Read more...]
Vanguard is Telling You the Problem with Indexing
If you want to understand the problem with index investing, then consider what the king of indexing is doing. Recently Vanguard announced its robo-only advisor service. If you signup for this, you will not speak with a live representative and you will not be allowed to invest in non-Vanguard funds. When you step back and consider all of the advertising Vanguard is doing for its actively managed funds the reason becomes crystal clear. I want you to pay attention here. Indexing or passive investing will destroy the wealth of the masses asleep at the wheel. You will not be one of them, I … [Read more...]
Your Retirement Life: Is Vanguard Throwing Caution to the Wind?
You may have read that Vanguard is moving into a digital robo-only service. My take? Well, first off, when you sign-up for Vanguard advisor services you’re only going to be offered Vanguard funds. You will not be investing in my preferred, dividend centric stock approach. You are treated like all of the other sheep loaded into the mutual fund pen. Second, I believe Vanguard is essentially throwing in the towel (they’d never admit it) about their index funds and the problem with how big they’ve become. Offering a robo-only service will be a backdoor way for Vanguard to steer investor … [Read more...]
The Fed is Clueless
Don’t be head-faked by the Federal Reserve’s 25bps cut in the Fed Funds Rate (FFR) this week. Because the real story is in Repo where demand for Treasuries has been through the roof. If you look at my chart on the 10-year Treasury you can see this problem began not in 2019 but at the end of May 2018. Most investors, including the Fed, don’t understand bonds. The bond market, like stocks, is ruled by supply and demand just like real estate, for example. Something is going on with the plumbing of the global monetary system that the Fed is clueless about. For more … [Read more...]
The Rich and Famous: How to Invest Like Jay Leno
If you want to see Jay Leno’s home in Newport, RI all you have to do is leave my office, turn on to Bellevue Avenue and head out to Ocean Drive, and you’ll see it right there on the water. “Leno and his wife first admired the house around 30 years ago, when he was in Rhode Island for a standup gig,” explains Fred Albert in Newport Life. “In 2017, the couple drove by it again — only this time, they stopped. ‘Let’s see if it’s for sale,’ Leno said, taking advantage of a departing gardener to slip through the open gate and drive up to the front door, where a caretaker greeted him.” Albert … [Read more...]
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