STOCKS.. Today Brinker did not mention the stock market performance, but recommended dollar-cost-average new money into the market.
PRESIDENT TRUMP'S TAX REFORM PROPOSAL....Most of the program was about President Trump's new tax proposals. Thankfully, dRahme has provided us a clip of some of Brinker's prognostications about it. dRahme: Taxes, Taxes, and More Taxes
FLIP-FLOPPING YOUR $4 MILLION STOCKS AND BONDS LOCATION....Caller Dave in Las Vegas has (50%) stock investments in his tax-privileged account and (50%) income producing in his personal account - and he needs to switch them around.
BB explained that it is always better to have stock market holdings in personal accounts and fixed income in sheltered for general tax purposes. He explained how to do it as a sideways move about 7 minutes into the following clip:
Thanks to dRahme: Taxes and Flip-Flopping stocks and bonds the same day.
VANGUARD HIGH-YIELD BOND FUND (VWEHX)...BB said: "That's a wonderful investment during periods of economic expansion - as you've seen. But just keep in mind that if you get a recession, that fund is vulnerable."
Honey EC: Yes, Brinker learned that lesson the hard way. He had his Marketimer subscribers invested in VWEHX when the economy and market crashed in 2008-09. I received several emails during that time from subscribers asking me for advice when the fund dropped out of bed. I always told them to hold on - that it would come back, and it did.
Brinker then sold VWEHX in 2011, and all Vanguard Ginnie Mae Fund in 2013. Both have done extremely well since then - Much BETTER than the funds he replaced them with.
DEFLATION WOULD BE A DISASTER...BB comments: The FOMC inflation target range is 2% because they want to avoid any possibility of deflation. Deflation would mean lower prices, lower wages and lower corporate profits - leading to lower earnings. Also debt would become much more difficult to service....."It would be a financial disaster."
MONEYTALK MULTI-MILLIONAIRE'S CLUB TODAY:
1. Dave in Las Vegas with net worth over $4 million and a flip-flop problem. (Hear the call in the link above.)
2. Irene in Kern County, with net worth of about $2 million wanted to know where to get more than the 2%.income she was now getting. Brinker explained that his Marketimer fixed income portfolio was now getting 2.9%, but it had more risk than a Certificate of Deposit. (To hear Irene's call go to the end of the Wall Street clip below.)
3. Bill in Chicago with net worth over $2 million had a huge decision to make about accepting a lump sum Social Security payment of $18,000 which would reduce his monthly benefits microscopically. Brinker pointed out that this money represented about 1% of Bill's net worth.Thanks to dRahme: What's up next week in the Canyons of Wall Street.
FRANKJ'S MONEYTALK GUEST-SUMMARY
Bob’s third hour guest this first day of October 2017 was Alan Blinder of Princeton University. The guest is the author of the book, “After the Music Stopped,” and is a former vice chair of the Federal Reserve’s Board of Governors. Professor Blinder has been such a frequent third hour guest, Bob might be running out of SWAG for him. By now, the professor must have the MoneyTalk Star Ship pen and pencil set, coffee mug, baseball cap, windbreaker and briefcase. (Editorial comments in italics as usual.)
We kicked things off with a discussion of Quantitative Tightening, an activity of the Fed, due to start very soon. The guest complimented the Fed’s pre-announcement of the concept and details of this policy. They will reduce the Federal securities held on their balance sheet from $4.5 trillion to $2.5 trillion over many years. This should not create disruptions since the market handles $0.5 trillion in gov’t securities each day.
If Quantitative Easing LOWERED interest rates, how much will QT RAISE interest rates?
Prof. Blinder said the “up” in rates as a result of QT will not be as big as the “down” in rates that resulted from QE. Going forward the Fed is following two tracks: 1) they will gradually raise the overnight Fed funds rate, and 2) they will normalize their balance sheet (QT). QT will go on in the background. If course corrections are needed he said they would do that via the Fed funds rate.
PCE vs. CPI: The Fed uses the Personal Consumption Expenditures Index (PCE) to assess inflation. This index is skewed a little more toward the consumption of items that consumers may buy using credit. Prof. Blinder said if he were the shot caller he’d use the CPI because it’s what the public understands.
Don from Sacramento asked the question that many people would have liked to ask: When the Fed reduces its balance sheet where does the money go? The guest said in the past when bonds matured, the Fed bought new ones. Now they will no longer do that. He also said the reserves the Fed holds will shrink.
OK, I’m not sure if Don was enlightened, I know I was not.
Mindy from Florida sought more information on Prof. Blinder’s criticism of the government’s plan to “block grant” money to the states for Medicaid. He said the administration wanted to give Medicaid money to the states for ten years and then end it – that was his criticism.
Professor Blinder: I think you realize the federal government’s proclivity for EXPANDING entitlement programs far outstrips their record for reducing or ending them. In case you don’t know this is true, I’ll assign you some reading: “The High Cost of Good Intentions” by John F. Cogan of Stanford University and the Hoover Institution. Published in 2017. This book examines federal entitlement programs from the Revolutionary War up through Obamacare.
Bob asked why the 10 year German bond was paying one-half of one percent interest while the US Treasury 10 year bond was paying 2.3%. The guest said the German bond rate is based on the expectation that inflation will remain below the inflation in the US.
John in Naperville, IL said Milton Friedman’s approach to monetary policy would be to target economic growth at 2-3% per year and call it good. This gave the guest a chance to take a swipe at the Chicago “school” of economics – the second swipe in the interview. He said this was what was done in Paul Volcker’s first three years as Fed chair and it led to “tremendous fluctuations” in interest rates.
Lest we forget, Paul Volcker was appointed to bring runaway inflation to heel, and he did it.
Bob added that by doing what Milton Friedman suggested “you’re betting on Congress to do the right thing.” Bob and Prof. Blinder had a little chuckle over that one.
The guest answered “Yes” to Alan’s question from Kansas City on whether he would issue 50 and 75 year bonds in the low interest rate environment.
The topic of Fed Chair Janet Yellen’s expiring term in February 2018 led to some condescending comments from the guest. Bob threw him a softball by asking what advice Blinder would have for the President on choosing the next Fed chair. The guest said he wouldn’t expect to be asked such a question and didn’t think any advice would be listened to, then went on to say President Trump should “ beg her to stay.” He said he thought the President would expect her to pledge loyalty to him and that is not what a Fed chair does.
Bob wouldn’t let it go and asked Prof. Blinder if offered a re-appointment, would she accept. He said he didn’t know but used some of his answer to refer to the “general swamp” the Trump team has created.
The interview was pretty much your normal love-fest between Bob and Alan. It is a lock that he’ll be back before too much longer. Bob mentioned several times Prof. Blinder’s popular opinion pieces in the Wall Street Journal. As a reader of that paper and his columns, as well as the comments about his opinions, I can assure all here that his opinions are not popular with everyone.
And we get it you do not like the President since you referred to him repeatedly as “Trump” and only once that I counted as President Trump.
Honey here: Thank you for that outstanding summary, Frankj. I enjoyed reading it more than I enjoyed listening to the Professor. I find it very distressing that he was so willing to trash President Trump with opinions since he is an "educator." And I wonder why, if the Fed Chair is not supposed to be political, is he so in the tank for Janet Yellen.
Also, Blinder's claim that the president would "expect her to pledge loyalty" is nothing but nasty gossip spread by a media that doesn't worry much about the truth these days. Blinder CANNOT back that up with any kind of proof or documentation.
KKOB770
48 comments:
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Bob Brinker is now spewing his "never saw a tax I didn't love" political views right now.
Of course, he never lets anyone debate or add to, anything he spews....
The slobbering, anti IRS, tea-billy is getting way too much air time..2:39 MST
Missed the first part, was Bob too busy playing golf to get the October news letter out?
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No word about Marketimer yet.
Bob said the Oct MK would be available to subscribers by midday tomorrow,
BB is quite the Drama Queen on tax cuts. I don't get it. Why is spewing such nonsense? He is purposely miss characterizing what little he knows of the proposal. The quick analysis of what I hear and read is:
1. It will take some time to vet.
2. Most of it is common sense long overdue changes.
3. Our current tax law is a mess and horrible for business especially small.
4. To date changes are not that earth shattering, most nonpartisans think tempered measures.
5. It's a mixed bag and will probably be revenue neutral given that tax base could grow substantially. High tax rates don't always prove to improve tax revenues, but do slow economic growth that can cause more harm. Tax revenue is a science, not merely an accounting job, Meaning the dynamic economy will adjust to the tax ramifications and will either grow the economy or hurt.
Another hard part to simplify the code and lower overhead costs for tax compliance. A complex tax code is always inefficient and is currently costing billions within useless burdens that lower standard of living per loss of productivity. Just stupid cost that does nothing other than employ more bureaucrats.
Second hour. Call of Fame. A guy sitting on a nest egg of $2 million is calling about a SS deal that amounts to $98 less per month for him.
The nuch was on MTP this am. He said tax plan would increase debt by 1.5 Trillion over 10 years but the bill v baseline would reduce this by half trillion and with the magic of growth he is expecting 2 Trillion in growth from the tax package which nets to 1 Trillion reduction for their plan. VooDoo economics Bush 41 used to call it.
Only problem for the tax bill is Corker and other conservatives, independents etc who are against using dynamic scoring are only looking at static score of 1.5 Trillion and are already against this tax bill.
As I have been saying all along this tax plan proposal is not going to pass whether under 50 or 60 vote rules. Listening to da Brink., today it sounds like they will have trouble getting this turkey under the budget reconciliation rules which would only require 51 votes in the Senate vs the normal 60 vote margin.
Let's see what the markets think tomorrow or even later this evening in the futures. It might be hard to determine if latest tweets on N. Korea (Rex T. saying open direct channels now with NK; Trump tweeting to Rex wasting your time relax we will handle NK).
My view is no negative reaction by the markets... except maybe for NK tweets cause anyone with a clue already knew the tax reform was never going to pass. So market was going up on earnings and outlook and maybe whatever greenshoots were given for reg reductions if any at all.
GDP hit in 3rd and 4th Qs do to storms reversed out by rebuild in later quarters net zero impact longer term.
smile
There was a caller from Nevada that had a flip-flopped portfolio:
$2M IRA in stocks (VTSAX Total stock market)
$2M after tax in bonds (CDs=$850K, VWEAX=$500K, ...)
Bob told him to just do all the transactions in one day to put the bonds in the IRA and the stocks in the after-tax part.
If he sold $2M VTSAX in IRA account, and bought the same $2M VTSAX in the after-tax account, would his basis in VTSAX be the date of the IRA purchase? Maybe the caller should talk to a qualified IRS agent.
Know that the current tax code is a mess and most want change. This is long overdue. The markets are excited that finally something may get done. Even if a small portion makes it through the sausage process, good news. They have a good shot of substantial improvement and the CIC has ability to cut through the usual demagogue rhetoric control as usual.
Really, our original system of Federalism worked wonders to systematically percolate change through the test bed of independent states. The nation should purposely work with state jurisdictions for volunteer changes within tax code. IOWs let states invent different ways to tax or finance federal government within their own borders. Good to promote creative solutions and loosen the constrictive force of fed control. This should be the power of positive government. To foment ever better solutions through the state test bed. Change should be emboldened, then measured for success. We are currently stagnating within a feather bedding of federal swamp water that becomes ever more prehistoric and obsolete. This is why knowledgeable people want government to stay away from regulating the internet. Their solutions are poor and worse than the disease.
Can anyone provide a link to where one can get the latest percent advisors bullish, advisors bearish, and advisors prediction correction ?
Thanks in advance.
warning will robinson... Shiller CaPE 30.83 similar number seen in 1929 but under a different stock market tulip craze... only higher number was in 2000.
http://www.multpl.com/shiller-pe/
stay alert
smile
SuziePie said..."If he sold $2M VTSAX in IRA account, and bought the same $2M VTSAX in the after-tax account, would his basis in VTSAX be the date of the IRA purchase? Maybe the caller should talk to a qualified IRS agent."
No. Since the IRA is tax privileged, any sales in the IRA have no effect whatsoever on the basis of identical securities subsequently purchased in the taxable account. He would not be declaring capital gains or losses for funds sold in the IRA.
You might be thinking of the Wash Sale Rule. The caller from Nevada should consider any possible Wash Sale consequences for securities sold in the Taxable Account. If he is selling any bond funds at a loss, for which he will want to claim a capital loss on his tax return, he would not want to repurchase the same fund, or a fund consisting of the same bond index, within 30 days inside of the IRA.
Why does the Marketimer state the Price/earnings ratio for the S&P 500 index to be in the 17-18 times range? The Wall Street Journal website http://www.wsj.com/mdc/public/page/2_3021-peyield.html shows the P/E ratio to be: 24.22
My Accountant informs me that if the "Pass through income" provision gets passed in its current proposed form (which he doubts), I would hit the jackpot! So........it is something to look forward to!
My late entry finished last on Sunday. $1000 down the tubes!
I personally liked the Program yesterday especially on taxes!
Gabe
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More record-setting economic news:
U.S. manufacturing activity hits 13-year high; construction spending up
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Rex...I haven't received my Marketimer yet from my donor in Colorado who subscribes for me, since I am not allowed to buy it.
Rex said:
Why does the Marketimer state the Price/earnings ratio for the S&P 500 index to be in the 17-18 times range? The Wall Street Journal website http://www.wsj.com/mdc/public/page/2_3021-peyield.html shows the P/E ratio to be: 24.22
Rex,the number you are looking at in the WSJ is trailing earnings but Brinker uses forward earnings. Current P/E of the S&P is 17.7 looking at the source I use:
https://www.factset.com/earningsinsight
Holy smokes, Honey. Really? Does Marketimer have you on a "denial of service" list? Wow!
Thanks again to Frankj. Awesome as usual.
To answer Rex's question, the difference in PE numbers is probably dependent upon if trailing earnings (those from 2017) or estimated future earnings (those from 2018) are used. Future earnings are usually higher if the economy is growing, thus reducing the P/E quotient.
It seems like nobody on the radio is willing to say where the money goes when the Fed sells the bonds and doesn't reinvest, so we can only assume. Since they got the money from the printing press (remember all the hyper-inflation theorists bouncing off the walls) in order to purchase the bonds during QE, then maybe they give it back to the treasury to be stored for future use. Or maybe they use it to roll cigars with. Maybe that's why Paul Volker smoked so many.
Ironically, just found out that an old friend's son works for the Kansas City Fed. His parents probably don't even know what the Fed is. Fell out of my chair laughing.
Drake, Upper Saddle River
I was disappointed that Bob did not provide a reasonable reply to the caller re: Fair Tax.
My thought is that there are no congress person with authority to provide leadership in at least presenting the Fair or Flat tax for discussion at the congressional level. Perhaps, too many lobbyists lining the pockets of our leaders. Just my thought.
Thanks,
Gabe
Rex said... "Why does the Marketimer state the Price/earnings ratio for the S&P 500 index to be in the 17-18 times range? The Wall Street Journal website http://www.wsj.com/mdc/public/page/2_3021-peyield.html shows the P/E ratio to be: 24.22."
This question seems to come up on this blog several times a year. Its a great question because the subject is so confusing. As stated in the referenced article, the WSJ P/E is based on trailing REPORTED earnings. I'm not a current MT subscriber, but, as others have stated, BB typically looks at estimated future earnings, specifically future OPERATING earnings. Besides the difference between trailing and future, there can be a big difference between reported and operating earnings.
https://m.briefing.com/investor/Learning-Center/Ask-An-Analyst/what-is-difference-bewteen-reported/
P/E type market indicators are horrible for short term analysis, but of value for picking up on a general trend. Historically, very high ratio would indicate the upside in future should be less than normal. Going forward a CAPE above 20, stock returns 5%. Problem with this thinking is the returns are still good. Did you ever hear the phrase, "the market can stay irrational a lot longer than you can stay solvent".
Stocks and bonds are pricey. Both within 90% of historical highest tiers. Both are expensive and at the same time. This hasn't happened before. So, the common advice of stock to bond ratio may not be as good, present day. What to do? Most will buy and hold to average out investment returns. Some will attempt market timing such as BB suggests, but this often is poor decision guide. Nobody has come up with a sure bet or accurate methodology. Human nature often violates historical patterns, even economic theories. I read only 1% can beat the market. The phrase it's more important to have time in the market not to time the market.
My Scottrade agent would like to offer the service of balancing investments within all financial sectors as a way to lower risk. The thinking goes no way to know which sector will do good or bad, so invest in all. I'm thinking a general index fund would do the same for free. However, I'm leaning to apply sector investment strategy per TAA methodology for a portion of investments. Global emerging markets is one that historically offer lower downside risk and better returns when compared to times of high domestic stock prices. This may improve safety and returns. At least do as BB recommends and just buy the total market index and be done with it.
Should we buy gold? Well, all I can say about gold is not knowing or understanding the commodity other than the emotions attached to ownership. That, and experiencing at ever corner someone is hawking gold. I think the real money in gold is offering advice to purchase it.
It may be the U.S. economy can trudge ahead with growth per better tax law and increase confidence. That the regulation industry can be choked off a bit to allow more common sense regulation. All of this in the works and we may be within an awaking of the voting public to keep the country sailing straight. All of this at a time when coming off a time in history with minimal or stuffy economic shepherding. Good that the boat didn't tip over and steadily inched forward. But, I've read and experienced times in history when this setup will spring much economic growth (pent up) when allowed and encouraged. Think of Jimmy vs Ronald years.
The national debt is massive and is currently stifling economic growth, but if GDP can inch forward, the effect lessons and like compound interest growth, so will economic growth. Lot of headwind to these events, but much potential to tailwind as well. Time will tell.
John Mauldin has a piece found in News Max that is very interesting. I do believe an accurate viewpoint of economic stimulus and one reason why I'm bullish on the economy long term. His piece is a take on success of government intervention vs product invention.
We have an avalanche of new technology coming. The U.S. still attracts the best brains and business leaders within world community. We have national leadership that understands the place of government and how to unleash business activity. So, basically I've seen no other time like this given my proclivity for keeping up with technology and Engineering career to understand such.
I will give you one little tidbit, that almost no one has read. A forestry company has and continues to develop a drone system of assessing timber value, growth rates, etc. You know this technology hasn't changed much even back to Revolutionary times. To date one would have to walk about with tape measure and clip board to make the assessment. The drone technology can fly around and accomplish in hours what would take weeks of manual labor only the drone can do it much more accurately. Oh, did I mention the drone can also strap on a seed pistol for tree planting. A tree seed is encased in protective pro-growth cocoon that improves plant success almost to 100%. Yah, it flies about with gps data and plants to optimal spacing. Nowadays, a work team has to go out with tractor planter and follow up with shovel planting.
GPS, drones, data gathering, sensors, and computational control are in the process of revolutionizing forestry and agriculture. Same with robotic control and robot technology. Transportation, supply chain, biofuel, power generation, nuclear power, materials, etc.
These types of developments make the case that even retirees should have one leg within stock markets. The potential is just to big especially when considering the risk of low returns and risk of losing economic sustainment. Ten, twenty, or much more is a long time to suffer low returns on your hard earned money.
http://www.newsmax.com/Finance/JohnMauldin/fed-qe-work-start/2017/10/02/id/817139/
A Medicare hike is in the works on higher earners. CNBC 10/3/2017.
Gabe
Any word from the October Marketimer about where Bob predicts the S & P will end up.....mid-2500's? Seems to be a moving target and already over 2530 as of today. Can Bob keep up with the "Trumpped" up market? LOL
A melt-up brewing?
Gabe
Gabe do you mean a melt up for higher stock prices?
Or did you mean a meltdown?
Warden Gordon Borden:
I mean...higher stock prices!
Thanks,
Gabe
I'm still racking the old noodle to come up with helpful uses for MorningStar Portfolio Manager.
I use My View to sort in descending order on 3 or 5 year return. Once that is done I can easily see where my SPY performance position is and everything below that is subject to performance scrutiny and becomes my preliminary scrub list. I then cross check the scrubs list with info. from portfolio xray stock style box to further intersect with say those funds/stocks or etfs which move me away from my stated bent for growth style box.
The final scrub list is comprised of etf's stocks or mutual funds which under-perform the S&P 500 over a 3 or 5 yr period and which are also either value or blend style box plays not growth.
The scrub list is used as a sell list to raise funds to reinvest back into the growth area of my portfolio and continue my out-performance of the S&P 500.
smile
Four (4) entries this weekend. One of the races in a $35,000 purse. Good luck to my stable.
This market is in a tear! Tempted to shave off a smidge
Gabe
Maybe it really is different this time🤑
Fear and greed index at 95!
No fear.
Pavlov's Cat
Perhaps I need to remove my "Worrywart hat", but I am concerned about something:
Looking back over the past 12 months at "the market" we have achieved gains that would "normally" take 36 months (on average).
The stocks/ETFs I have been looking at keep flashing "overbought" Then, when I look at them again the next morning, they are flashing "even more overbought."
As I look at scans, charts, graphs, company news, etc., I am unable to find anything even remotely appealing from a risk/reward standpoint.
Am I missing something? Generally, Q4 is an excellent time for investing, but will it be so this year? Will 2017 close at 300%, 400%, 500%... or perhaps 1,000% of normal returns? Anything is possible I suppose, but I ain't buyin' it.
JC
I am trying something new since Jan.
Every time market reaches 10% above last new High I sell 10%.
JC: Is this time that it is different?
Gabe
Jerrod: How "overbought" does VXUS (Total Intl) look at this time? Better value than VTI?
JC, if you have not already done so, perhaps you should listen to the podcasts on Macro Voices. It will be worth your time.
Regards
Whitefish
Whitefish, I checked the peak oil analysis as I've for years followed another expert's column who sells investment newsletter. Robert Rapier has been in the business for entire career as Engineer. He is now a consultant. I will just say this guy has been wrong on most of his calls. He does inform, but I've come to the conclusion that no one can predict the market let alone Saudi Aramco.
I've read some investors are now steering clear of U.S. bond and stock market. Holding more cash and equivalents and pursuing GEM investments. Apparently, they do better when U.S. stocks sell at premiums. Consumer products are way oversold, no safe haven there.
The melt up in the fun phase. I have been interviewing applicants for rentals. Wow, everyone wants a short lease as they have house fever. They are mindlessly throwing money at the purchase. Quicken is now offering 1% down loans. Realtors are really stoking the fire. I'm one who does think mortgage tax write off should be eliminated as Realtors can hype the benefit to first time buyers. The market need for housing has been distorted by the deduction.
Someone said this is the most hated bull market. No one trusts it, but no one can afford to withdraw from it. Did you ever hear the phrase, "the market can stay irrational a lot longer than you can stay solvent". This time it may be different as bonds investments are over priced as I've read. A investment colum said treat it like you would picking up a porcupine. Also, what is sobering is the high debt load that many countries took and the risk that entails. I would feel better with a slow growth pattern then a melt up.
I've read one analysis saying the Fed success as they self promote, comes at a high risk to markets. Paraphrase something like, the natural price of equities is distorted per Fed long term intervention. Think of the bandaids they apply to keep markets always going up with less concern. To big to fail attitude and government backing of investments. This author believes when a generational correction happens these safeguards will have proven to cause more harm. This may be the Black Swan type thinking, but when reviewing the historical graphs of markets, makes one think it could happen. I don't think anything could be done about it without much more risk in attempting to hide from the possibility. They do suggest some prepping, emergency plans, etc is low cost insurance. Paying off debt is good insurance as minimal leverage.
Unfortunately, this Market is in a quandary not really able to decipher what the heck is going on and depending upon sticking their finger to the wind and see which way the wind is blowing. Forecasters, Advisers and the like are as confused as ever in their attempt to evaluate its movement. It is like a horse trainer attempting to evaluate a maiden race and his horse's chances.
Good luck to all!
Gabe
Trees, while i try to refrain from posting here, I will confirm your view on real estate. As I personally had an agent tell me they couldn't sit down with me until the middle of next week! This is in an senior community.
Regarding generational shifts/fault lines. the podcast interviews on Macro Voices with Neil Howe, Mark Yusko and Mark Grant are thought provoking. As far as the most hated bull market it might actually be the most loved bull market ( in financial assets) as everyone including state governments and pension plans are exposed to it. When this ends, and it will, an entire generations savings could be wiped out. If that happens given our demographics, the earth will be shaking beneath our feet.
Lost another tenant that was counseled to improve credit rating. He kept a minimal balance on credit cards also a small loan. His credit jumped 50 points in a few months. He is walking arm in arm with his new best friend the realtor. What is so funny with these starry eyed lust driven investments that if you offer the advice that it's a good time to sell, but a horrible time to buy, they smirk. I'm guessing their new best friend has alerted them to the misdeeds of Landlords. Really, these folks believe the Landlord is getting rich with their hard earned money. I do think their mentality is such that every mortgage dollar goes to make them richer. The rents could be invested in a house whereupon they gain tax write offs, appreciation, and cheap living at a constant cost. If they ever talked to an accountant they would realise the fallacy of such get rich strategy. They never think of value only ability. They never think of savings or financial investment as a comparison. The cost to flip or sell/buy homes is horrendous and they only think of out of pocket expenses and what they can show friends.
You know this is exactly the behavior I experienced back just before the great recession. Couldn't keep tenants and only the low credit score people applied. It is funny that rental property runs opposite to stock market and the economy. During a downturn applicants beg to be considered.
@Biker - Thanks for clearing up the Wash Sale Rule for me. It is nice to have such knowledgeable people on Honey's blog!
Better sell MGM Resorts International stock just as Kirk Kerkorian did a few years ago. Just heard that Vegas victims have filed liability claims against Paddock's estate and MGM and the concert promoter. No doubt it will involve $100's of millions.
It certainly generates some thinking about the process. Seems like a court would need to issue a judgement concerning the percentage of liability of each defendant entity. Then each plaintiff, to include deceased victim's probate estates and surviving victim's legal counsel, and anyone else who incurred a damage from this horrible deed, would sue in court for a piece of any assets owned by the defendants. It will be defended vigorously by the defendants and likely take years to settle.
Curious as to whether the deceased victims would get an automatic higher priority for a payout, sorta like a bankruptcy where the bond holders have first priority over common stock owners to whatever is left.
Any attorneys care to weigh in?
Handled two probate estates for deceased family members last year. Witnessed the full gamut of a long, laborious process by-the-book for a pauper who passed in a city, versus a quick sweetheart timeline for a wealthy man in a small town because his attorney was neighbors with the probate judge.
It all comes down to people interacting with people.
Not Perry Mason, Not in Duluth
Vanguard just issued an email saying inflation will track just below 2% annually due to technology, Amazon, demographics, and oil supply. I think they are implying we are in a new era, and that high inflation conditions which cause a recession may be something of the past.
Just sold an investment home of mine, it's a 2 bedroom , 1 bath built in 1983 and about average condition but needs some modernization. The final price (includes closing credits to the buyer for closing costs and some home repairs required in home inspection) was 13% greater than the county tax assessment, 12% below the original listing price, and 11% below the Zillow estimate.
AD
Hey Biker--or anyone?
I sold a stock from a taxable account and bought it back a few days later for a traditional IRA account. So the stock was not actually sold according to the wash rule. Could I claim a loss on my 1040?
Tito
@Tito:
http://fairmark.com/capgain/wash/wsira.htm
@Tito
Yes, if you incurred a capital loss based upon the purchase price (cost basis) and the sale price.
And just remember, whatever you transact in your IRA is completely separate from your taxable account. That's why it's called a taxable account. You gotta pay taxes and account for it.
But an IRA or 401k is like an invisible account until you take the money out. You can make transactions up the wahzoo (as they say in Jersey) but Uncle Sam don't care until you receive the dough, the bread, the coin, et al.
Can you front me a thou?
Frankie, Jersey City (hangin' out at Siperstein's)
Frankie in Jersey: As stated in the article link I gave above, yes, you can violate the Wash Rule by buying the stock back in an IRA and claiming a loss. And you would probably get away with it. But you would be found to be in violation if audited. I most certainly do not recommend that Tito should claim a loss on his 1040.
Frankie,
You can take money out early from the IRA via a SEPP. If the money is from a Roth IRA, then you don't have to pay tax on the annual withdrawals of the SEPP since the money was already taxed. You can withdraw 4% of your IRA each year.
http://www.investopedia.com/articles/retirement/02/112602.asp
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