When the Wealthy Flee, Who Pays for Government?
It is important to analyze your political situation. Is your state taxing you unfairly? Is there an alternative? I wrote this piece on October 8, 2018 to encourage Americans to think about what happens when wealthy taxpayers flee punitive taxation. Who will pay for a state's government when there's no one left with any money? My friend Chris Edwards, director of tax policy studies at Cato and editor of www.DownsizingGovernment.org, outlines the hypocrisy in the way states run their tax schemes. He points out that states' biggest tax payers are sensitive to the top marginal rates, and when … [Read more...]
Still Sure Indexing is Right for You?
I have been warning investors of the dangers of indexing for some time. With correlations among assets down near all-time lows, it is only a matter of time before something has to give. Now what seemed like a safe bet has become a volatile up-and-down roller-coaster ride for investors. The Editorial Board of The Wall Street Journal writes: Stocks bounced back Wednesday, but before that the tech-heavy Nasdaq had slumped 12% since its August peak. Falling FAANG stocks—Facebook , Apple, Amazon, Netflix and Google parent Alphabet—have swung the S&P 500 into a correction zone. Netflix tumbled … [Read more...]
Consumers Battle Apple’s Pricey iPhones by Keeping Phones Longer
Are you willing to spend more than $1,000 on a smartphone every two years? For more and more consumers, the answer to that question is no. Average smartphone users are holding on to their phones for longer periods of time, and Apple phone owners are waiting even longer to buy new models. Sarah Krouse reports in The Wall Street Journal: Pricier devices, fewer subsidies from carriers and the demise of the two-year cellphone contract have led consumers to wait an average of 2.83 years to upgrade their smartphones, according to data for the third quarter from HYLA Mobile Inc., a mobile-device … [Read more...]
The 3 Components of Investor Success You Should Care About
On Wall Street, traders and speculators are closing their doors. The Wall Street Journal’s Rachael Levy recently reported: Boston-based hedge fund Frontlight Capital LP is shutting after fewer than three years in operation, people familiar with the matter said. Four other hedge funds earlier this month announced they were closing, as investors re-evaluate a once-highflying industry plagued by weak returns. Through September of this year, Frontlight’s fund, Frontlight Enhanced Macro Master Fund I, LP, lost 4.17%, according to a document reviewed by The Wall Street Journal. The fund lost … [Read more...]
You Must Save for Yourself, Because No One Else Will
In 1991, 35% of employees were participating in defined benefit pension plans. By 2005 that number had fallen to 21%. In March of 2018 only 17% of American employees had access to some sort of defined benefit pension plan. Companies are getting rid of their defined benefit pension plans, fast. If you rely on your company to save for you, it's time for a dose of reality, you must save for yourself, because no one else will. Pensioners from legacy companies Sears and Xerox are watching as their benefits are being stripped away. Around 100,000 pensioners from Sears are hoping the Pension … [Read more...]
Paul Volcker Explains the Folly of a 2% Inflation Target
Writing in Bloomberg, "Tall Paul" Volcker, who as Chairman of the Federal Reserve in the 1980s near singlehandedly tamed America's rampant inflation, explains why a 2% inflation target is dangerous. He writes: In 1996, Federal Reserve Chairman Alan Greenspan had an exchange with Janet Yellen, then a member of the Fed’s Board of Governors, that presaged a major — and, I think, ill-advised — change in the central bank’s approach to managing the economy. Yellen asked Greenspan: “How do you define price stability?” He gave what I see as the only sensible answer: “That state in which expected … [Read more...]
Why the U.S. Can Beat China in a Trade War
Though it won’t be pain-free, if U.S. / China trade relations continue to devolve, it is the U.S. that is likely to come out on top. America’s multinationals are already engaging in contingency planning in the event of further tariff increases. Bloomberg News reports: Earnings reporting season is underway, and analysts are eager to hear from executives about how an escalating trade war between the U.S. and China is impacting their businesses. A common theme is that they are ready to relocate supply chains if the cost of importing Chinese goods becomes prohibitive. U.S. President Donald … [Read more...]
Vanguard GNMA Anchor to Windward
When times are tough, Vanguard GNMA continues to pay income, much like it does when times are good. For me, GNMA is an anchor to windward no matter which way the wind is blowing. And even though Young Research, which provides research and analysis to investment advisor Richard C. Young & Co., Ltd., recommends laddering U.S. Government and Corporate bonds, you could do a lot worse than owning some GNMA. Originally posted on Yoursurvivalguy.com. … [Read more...]
A Disaster to Remember
At Yoursurvivalguy.com, I regularly warn you away from the novel, the trendy, and the unproven strategies that keep the Wall Street fee-machine cranking. I want you to survive the investing gauntlet, not to be chewed up by schemers or inept profiteers looking to take your money. Risky hedge funds, cryptocurrencies, and unsavory pension fund strategies are all traps I have encouraged you to avoid. If you've been investing over the last decade you have surely heard of Bernie Madoff and his scheme to defraud investors. But if you have been investing for a bit longer like me, you'll remember a … [Read more...]
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