Showing posts from January, 2019

Rent vs Own

Whether to rent or buy your home is a serious question. There is no correct answer. It depends on your financial situation. In many cases, renting can be the better decision.  Sometimes, renting can be less expensive than owning the same house. Take into consideration the total cost of ownership, which can include mortgage insurance (if you don't put 20 percent down), insurance, property taxes, maintenance and repairs.  Some other good advice from Schwab: Don’t buy a home primarily as an investment.  Even if you live in an area where prices typically have appreciated, you can’t be sure that will continue. If financial return is the primary consideration, other types of investments, such as stocks or bonds, might be better for you. Owning a home is as much a personal investment as a financial one. Before you commit, assess your job stability and desire to stay in a particular location. As a rule of thumb, unless you plan to own a property for at least five-seven years,

Wall Street Wrap

The overall market just didn't indicate much of a direction this week. The SPY (ETF that tracks the S&P 500) opened and closed within last week's open and close.  For the week, the S&P 500 fell 0.2% while the Dow and Nasdaq each inched 0.1% higher and the Russell 2000 finished flat. The two-year U.S. Treasury yield closed the week at 2.60% and the 10-year finished at 2.75%. Housing weakness is a cause for concern. Keep your eye on this (I found the report on Seeking Alpha ). This may signal trouble in both economic growth and the markets. (What I like about Seeking Alpha is their very comprehensive and flexible system for email alerts. I even get my broker's articles via this system.)  Good news: U.S. will become net energy exporter in 2020s. The EIA released its Annual Energy Outlook  for 2019, which includes projections out to 2050. Some of the key takeaways include the projection that the U.S. will become a net energy exporter in the 202

Beware Your Broker

Most brokers or financial management firms will advise you to be fully invested "year in, year out."  Even my own broker, Schwab, recommends this. In a recent article, they recommend: Is market volatility keeping you on the sidelines? History and context make a strong case for investing in stocks, provided you maintain a long-term perspective. Equities have historically outperformed other asset classes and also provided the best defense against inflation. Diversifying your investments and staying invested long-term are essential for minimizing stock market risk. The article goes on to explain that long-term, the market has out-performed cash investments, such as savings and money market accounts, as well as bonds. What is long term. 91 years!  There are many studies that show even for 20 or 30 year periods, this is true. The stock market is the way to go. But there is a problem with this advice. I've had two full-blown analysis of my financial and portfoli

Tom Brady: 10 Rules for Success

After last night's win over the Kansas City Chief's in the AFC championship game in OT, New England Patriot Tom Brady will go to his 9th Super Bowl, the only player in the NFL to do so. Here's a video for a view into his mindset, what has made him go from a below-average QB in his first two years in college, to one of the most successful players of all time. When this video was produced, he'd been to the Superbowl 6 times and won 4. He currently has 5 Superbowl wins. 

Trading: Thoughts from the trenches

Some ideas about trading. Trading stocks and other assets such as futures, is different than investing. Trading has a very short-term outlook. But these ideas can also benefit the investor, who looks at long-term wealth-building for retirement and other purposes. It's OK to be both, but my suggestion is to only "trade" about 10 percent of your total portfolio.  Trading should be boring, like factory work. If there is one guarantee in trading, it is that "thrill seekers" get their accounts ground into parking meter money.  Amateur traders turn into professional traders when they stop looking for the "next great technical indicator" and start controlling their risk on each trade. If you focus on the money, you will start to impose your will upon the market in order to meet your financial needs. There is only one outcome to this scenario: you will hand over all of your money to traders who are focused on protecting their risk and letting their winners

Top 10 Financial Mistakes

1. Excessive/Frivolous Spending 2. Never-ending payments 3. Living on borrowed money 4. Buying a new car 5. Spending too much on your house 6. Treating your home equity like a piggy bank 7. Living paycheck to pay check 8. Not investing 9. Paying off debt with savings and the big one:  10. Not having a budget and plan. Read the details here:  Top 10 Most Common Financial Mistakes

Don't be controlled by these 5 things



Protecting America's national home Immigration has been ingrained in the American consciousness from our earliest days, as many people left foreign lands to make a new life here. While President Trump did not invent the concept of making America great, his call for protecting that greatness stands in sharp contrast to those who see nothing special in our nation at all. But when you consider that so many have come together to make this place their home, a wall with a door that opens to those we want in not only makes sense, its purpose is clear. Miss Ocasio-Cortez Goes to Washington Walking onto the floor of the new Congress must’ve been like visiting the planet of Tatooine where Obi-Wan Kenobi stumbled into a hive of misfits in that Star Wars cantina bar scene. There's Wisdom In Crowds But Madness In Mobs The market considered and reconsidered comments from Jay Powell yesterday as it seesawed in a tight range.   Finally, stocks gained momentum into the close.  The sessi


From Seeking Alpha:  Stocks tipped slightly into the red on Friday to break a five-session win streak, but clinched a solid week of gains in which the Dow rose 2.4%, the S&P 500 added 2.5%, the Nasdaq jumped 3.5% and the Russell 2000 rallied 4.8%. The week was also the calmest in three months, as the S&P 500 did not post a move greater than 1% in either direction during any day, the longest quiet period for traders since early October.  In the bond pits, the two-year U.S. Treasury ended the week at 2.55% and the 10-year yield settled in at 2.70% following a market-friendly consumer inflation report posted on Friday. WTI crude oil snapped a nine-day winning streak with a 1.9% decline on Friday to $51.59/bbl.  Next week's big events include the Detroit Auto Show and the Super Bowl of retail conferences.  Don't let the short-term rally fool you. Pay attention. In 2008, when the market went into bear territory, there were 10 straight days of gains before movin


Democrats are already scrambling for your tax dollars It's only January 2019, and the 2020 election cycle is upon us. Who can tax the most? A headline from the Washington Times :  ' Over 90 percent?' Liberals eyeing White House vie for title of highest tax raiser The story goes on to read: Democrats eyeing bids for the White House also are competing to see who is willing to go the highest in raising taxes. Rep. Alexandria Ocasio-Cortez, a New York liberal who is too young constitutionally to become president, nevertheless set a benchmark when she suggested in a “60 Minutes” interview Sunday that rates for the wealthy could top out at up to 70 percent. Julian Castro, an Obama administration Cabinet official who has announced a testing-the-waters presidential committee, quickly jumped on the bandwagon by telling ABC News that it’s time the wealthy be tapped for their “fair share.” “There was a time in this country where the top marginal tax rate was over 90 percen

Investing Advice: Start Now

Dude, you don't need a lot of money to start Once you have your emergency fund of $1,000 -- and I prefer and recommend $2,000 -- it's time to think about investing long-term for the future. And of course, you've gotten rid of your consumer debt: credit cards, shopping store installments (furniture, etc), and that  pesky car loan. But you can start small even as you're working on those goals. The sooner your start, the more wealth for retirement you'll have.  For example, if you're now the young age of 25 and invested $5,000 a year for 10 years, and then stopped, based on an 8% annual return, you'd have $615,000. If you wait until you're 35, and invest keep investing each year until you're 60, you'll have $431,000. (There are plenty of retirement calculators on Google search). If you're just now getting started, and don't have much -- or any -- money in your investment account, there are tools to help you out. Don't worry about

Psychology debunks the idea that we’d be happier if we lived somewhere else

Several times I've had the idea -- or the wish -- that if I could just move to another locale, another state, another country, another planet -- beam me up Scottie -- my life would improve. Not that my life was all that bad. Yes, I had some terrible times, but maybe geographic change might be just what I needed.  I think this is the case for most of us: A new start. In my case, the military made the choices for me, whether I wanted to or not. In my first 21 years of active duty, I was assigned to 11 different bases. But I brought all my shit with me.  Since retiring, I've lived in four different cities. And sometimes, besides the hassle of moving, it has been fun, most of the time. But still, I brought myself along. But I many times believed that my current challenges might be different, better, solved, if only I could make a fresh start. Maybe do better by my kids, save one of my marriages, but life doesn't work that way. Life is hard. How you react to it makes the


The wall is not about morals, or money. It's about a temper tantrum by Democrats who do not want Trump to get his way.  What immoral principles that Nancy Pelosi says are we violating? Though Nancy Pelosi represents San Francisco and idiots environs, she has said a lot of dumb things*; this is off the top.  Immorality: "The state of quality of being immoral, wickedness." Her use of the word doesn't even fit the dictionary definition. It's all politics. Sadly, many will believe her, especially her lunatic base in San Francisco. Walls are immoral, but only because Trump wants The world's earliest known civilization was also one of the first to build a defensive  wall . During the 21st century B.C., the ancient Sumerian rulers Shulgi and Shu-Sin constructed a massive fortified barrier to keep out the Amorites, a group of nomadic tribesmen who had been making incursions into Mesopotamia (1). Let's name a few others: Great Wall of China, the Alamo,

What happened when a Trump Supporter Challenged Me About the Wall

Vicky Alvear Schecter wrote in Medium | Poltics on Dec. 27, 2018 using her headline above. I thought it was pretty well written -- at least she made an attempt to keep her liberal bias out of it -- regardless of a few  illogical fallacies .  But she does make an attempt, in an effort to avoid her liberal bias, as she ponders  " order not to be accused by bias, I explained that I would only use conservative sources to prove my point." To me, that's bias to start out with that premise. And I believe her premise is that she is against the wall. That's her stance. But she makes some good points, but some are skewed, even though she attempt to take a "conservative" approach, even by citing some "conservative" sources in her footnotes. Here's the first problem: if she wanted to avoid bias, why not just stick to the the historical facts as written (when you can find them without bias), and not concern oneself with bias. "I must rej

10 Life-Changing New Year's Habits

In general, what I've understand about New Year's resolutions is that they don't work for most people. Since I'm like most people, I don't bother with resolutions. If I don't really have any goals set, then why would they work now. What's more important is to always have written goals: short-terms (daily and weekly), mid-term (monthly) and long-term (yearly). use the steps below to get started -- not just started. Make them a habit.   Most resolutions fail about the third week in February. But new habits to replace old habits take a bit longer. Plan for at least 66 days. Not sure where that number originated, but 60 to 90 days seems to be the consensus.  Here's some goals passed on to me by an instructor at the Online Trading Academy . So hats off to Larry Jacobson, in my opinion one of the great instructors, thought I haven't met a bad one yet at the Academy. His points are excellent, but I've re-written them slightly to suit my own