STOCK MARKET....Brinker commented that the S&P is at 2348 - 2% under its all-time-high. The Dow closed at 20,547.
ANOTHER ARMAGEDDON FORECAST SHOT DOWN....Caller Debbie from Oregon asked if the stock market was in danger of collapsing since Treasury yields were the "lowest they had ever been."
Brinker indignantly responded that what she said simply is not true - that Treasuries have been lower in the past. "It's just another Armageddon Forecast coming out like a tsunami over the past weeks." Here are Brinker's comments thanks to this short clip from dRahme.
BOND MARKET/10-YEAR TREASURY....Brinker didn't talk about bond fund duration today, however he did comment that the 10-year Treasury yield is 2 1/4%.
MARKETIMER RECOMMENDS 20% INTERNATIONAL STOCK FUND ....Brinker said: "Right now, in our investment letter (Marketimer) model portfolios, we are using about 20% ratio international."
Honey EC: While it is true that Marketimer model portfolio I and II have 20% international stock holdings (Vanguard FTSE All-World), it is not true for model portfolio III (balanced) - which has only 10%.
BOB BRINKER SAID: "Schwab is a blue chip firm. Chuck Schwab is a friend of mine and he's been on our show."
Honey sez...Brinker almost never mentions Schwab when recommending brokerage firms to Moneytalk listeners. He almost always mentions Fidelity and Vanguard. With friends like that, "Chuck Schwab" doesn't need any enemies.
NOONE (sic) WORKS FOR $0.06 - ONE SUBJECT, TWO CALLS:
==> Caller Richard from LA asked about a service offered by a brokerage firm that would provide you with a computer printout of selected exchange-traded-funds with a total cost of .06. Brinker argued with him that no one would provide that much service for so little fee.
==> Later, caller Tom from Wisconsin called and stated that Vanguard Total Stock Market Index charges that much. Brinker agreed and stated that he knows because he owns that fund, but that was not what caller Richard was saying.
Honey EC: Now if your head is spinning over those two calls, here is a short clip that contains them both, thanks to dRahme. :)
CONGRESS AIMS TO AVERT GOVERNMENT SHUT DOWN AND REPEAL OBAMACARE....BB comments.... "Dysfunctional" Congress returns from recess next week facing a possible shut down Friday night....if there is any common sense left in Congress, they will temporarily extend the funding.....very costly and a waste.....National Parks will all close....
Thanks to dRahme for a short Moneytalk clip of Brinker's opening monologue.
FRANCE ELECTION (FREXIT COMING?).....BB comments: "France voter turnout makes a mockery of what happens here. They have 80% turnout." It looks like a run-off between LePen and Macron.
Honey EC: If Le Pen can win, she will likely be instrumental in bringing about a Frexit. Thank to dRahme, here are Brinker's comments about the election in France.
PRESIDENT TRUMP PRESENTING NEW TAX PLAN NEXT WEEK....BB said: "The president has promised this Wednesday he will announce the largest tax cut in the history of the United States."
Honey EC: Brinker gave his perspective on the possible upcoming tax cuts. Over the years, I have noticed that he is usually agin' em.....see dRahme's clip and my list below.
BRINKER "DON'T KNOW ANYTHING" BUT....BB speculated about what loopholes and deductions Congress may look at to make up for cuts. Thanks to dRahme for this short clip.
CALIFORNIA'S MORE EQUAL RETIREES.....Caller Susan from the San Francisco area, whose husband was retiring from a State University, needed help deciding whether to take a lump sum or monthly lifetime payouts.
The lump sum offered was $1.8 MILLION. The monthly payouts were indexed for inflation and totaled $10,800 monthly = $130,000 per year.
Susan claimed that her husband "didn't make that much" during his years with the University, but their net worth was about $2 Million. .
Brinker advised her to take the lump sum and invest it in a balanced portfolio of stocks and bonds.
Susan said that her husband was listening to the call and laughing because he agreed with Brinker - whereas, Susan wanted the monthly $10,800.Honey EC: As a Californian, I will refrain from commenting - but I did need to be pulled off the ceiling.
FRANKJ'S THOUGHTS AND COMMENTARY ABOUT TAX REFORM
On today’s show Bob Brinker mentioned some tax reform measures soon to be considered in The Swamp. Don’t assume it will all be rainbows and unicorns – that was the message from Bob and it is also the message from Jason Zwieg, author of The Intelligent Investor Column in the Wall Street Journal on April 22, 2017.
Mr. Zweig warns us that there may be some unappetizing changes to 401(K) plans in the offing. Why? Because an estimate he gives in his column is that if pre-tax 401(K) type contributions are taxed, that would generate $1.5 Trillion over the next decade. This is just too big a pot of money for the Swamp Creatures to ignore.
Will the Trump administration put the kibosh on this? Unknown. Gary Cohn, late of Wall Street and now director of the White House National Economic Council discussed ideas that would remove pre-tax benefits from retirement accounts with the Senate Banking Committee recently.
The four “legs” of a sturdy retirement stool are: a 401(K) type plan, a pension, personal savings and Social Security. Only 13% of employees nationwide have BOTH a 401(K) type plan AND a pension according to the article. What percentage of Congress has both? The number is 100% according to Mr. Zweig. If that was your guess, then go to the head of the class.
What is a Congressional pension worth? The average of recently retired swamp creatures in 2015 was $41,316. But if you’ve been in the Swamp for 30 years or so, you slither away with anywhere between $104,600 and $ 130,500!
The government (uh… I mean the taxpayer-Serfs) match 5% of what the Swamp Creatures choose to put into their retirement fund. Even if they contribute nothing, the taxpayers kick in one percent of their $174,000 salary. That’s $17,400 of free money for Swamp Creatures whereas the maximum for the Serfs is $18,000 and most of that money comes out of their own earnings.
"No man's life, liberty or property are safe while the Legislature is in session." A quote from Gideon Tucker, a 19th Century American lawyer, newspaper editor and politician.
Honey here: Thank you for that educational wake-up call. Brinker didn't mention any of that. He did list these items as possibly being in the crosshairs of "The Swamp Creatures."
- Taxing employer paid health care benefits
- Ending mortgage deductions
- Ending destructibility of state and local taxes.
KION 1460 Monterey