Here’s an article highlighting historical top marginal income tax rates (varying from 7% to 94%) and the historical “implicit” tax rate based on municipal and treasury bond yield spreads.
There are some informative graphs and a strong case is made for high tax bracket investors holding municipal bonds.
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This recent article highlights how fund companies’ expense ratios have increased as asset levels have decreased. That might be okay if rising asset values worked in your favor, but the history of the fund industry indicates no benefit of economies of scale are passed on to the investor. Unless of course you are savvy enough to invest in index funds through certain low cost providers.
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Paul Volcker, the acclaimed Federal Reserve Chairman who helped tame the runaway inflation during the Reagan administration is an outspoken advocate of legislation separating commercial banking and investment banking. A good argument can be made that excessive risk-taking and a “too big to fail” mentality stems, at least in part, from lack of separation of these two functions since the Glass-Steagall Act was rescinded. So why is no one in Washington listening?
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Here’s just one more example of our ridiculously complicated income tax system. Many taxpayers inadvertently claim the Hope tax credit in more years than they are eligible, causing potential tax liability, penalties & interest, and the necessity of filing amended returns.
Enough is enough, the time has come for a serious discussion about replacing the income tax with a consumption-based tax.
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The Social Security Administration recently announced that there will be no COLA (cost of living adjustment) for social security recipients in 2010.
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You get what you pay for. Here’s some advice from the folks at “The Motley Fool,” who predicted the Dow would go to 5,000. The article is dated March 2, 2009, exactly one week before the recent market bottom. Pay particular attention to all of the “doomsday” reader comments at the bottom. The market always turns when fear (or greed) is the greatest.
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“Past performance is no indication of future results.” That disclaimer is required by law on all brokerage firm statements. How about this one: “Fund fees are an indication of future performance.” To state what should be obvious, the higher the fees, the lower the expected performance.
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Investing is an activity that can be characterized as simple but not easy. One of the most difficult parts of investing is hanging in there when things get tough. If you aren’t in the market during the good times, you will never make up for being in the market during the bad times.
Unfortunately, a “wait and see” attitude has harmed many investors since the market bottomed-out in March.
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So, should you convert? It depends on a number of factors and the decision typically isn’t cut and dried.
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There’s been much in the financial press lately declaring “buy and hold” and “diversification” dead.
The problem with that premise is that although diversification is no silver bullet, it works much better than all of its ineffective alternatives.
“Most NBA players aren’t very effective at guarding LeBron James, but that doesn’t mean you could dominate him if you were to step onto the same court.”
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Daily Scripture Verse
