Thursday, December 30, 2010

Surefire Predictions for 2011

1. The market will go up, down, or sideways
2. The economy will go up, down, or sideways

The point is that nobody knows what is going to happen in the markets, the economy, and the world. Yes, some people will get it right since there are not too many different possibilities, but a broken clock is right two times a day. Predictions are fun to read about or watch on TV around year end but they are no way to run your investment portfolio. Base your investment decisions on verification, not prediction.

Wednesday, December 15, 2010

Is The Bond Bubble Starting to Burst?

Muni Bonds Continue Slide

Treasuries Fall on Retail Sales, Fed

In many ways once this bond bubble bursts it will be worse than 2008. When people invest in the stock market they understand that they are taking risks, they didn't expect what happened in 2008 but at least should have understood that it was possible. Over the past years many investors have flocked to bonds as they have outperformed stocks and appear "safe". Many of these investors have no idea what might be in store for them if this bond bubble bursts.

Monday, December 6, 2010

What About the Estate Tax?

It looks like both sides are starting to talk about some sort of compromise on the Bush tax cuts but I have not heard much about estate taxes.  If we do nothing then on Jan 1 the estate tax rate goes to 55% of any amount over $1 million.  With all this "talk" about wanting to be friendly to small businesses, not too many will make it to the next generation if they have to be sold to pay estate taxes.  The Joint Committee on Taxation found that moving to a $1 million threshold will impact10 times more small businesses and farms than would a Republican proposal with a $5 million threshold.

Tuesday, November 30, 2010

Will Fee Changes Jeopardize Small Investors?

They don't have to.

David Einhorn Talks Gold

Even more interesting he talks about how QE2 could lead to misplaced inflation in commodities. Maybe it will, maybe it won't, but seems to me that it argues for a tactical approach that includes commodity exposure.

Monday, November 29, 2010

Choosing Pension Options

Interesting article in the WSJ this weekend about how companies are chaning the way they calculate lump sum pension options (to their benefit of course), and can do so without notifying employees (like you would have read the small print anyway).  This highlights the fact that you always need to explore all of your options when you retire with a pension, there is no one size fits all.