Archive - November 2014

1
Build Up Your Savings (Even if You Live Comfortably)
2
What Happened to the Missing Half Trillion?
3
Ways to Protect From Risk of a Crash
4
Tax Planning: Avoid Mutual Fund Distributions
5
Five Year End Moves for 2014

Build Up Your Savings (Even if You Live Comfortably)

Jar of MoneyHow much do you have in savings? We’ll give you a moment to think…if you can’t answer that question because you haven’t really saved very much, pay attention.

It is more difficult to save when you do not make very much money but if you think that people who live comfortably would not have an issue with building up their savings, think again. People at various income levels find it difficult to build up their savings. In an article entitled, “Skimpy Savings: Why It’s Not Just a Low-Income Problem,” LearnVest offered this startling data:

“According to a new report

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What Happened to the Missing Half Trillion?

 

Oil exporting countries used to have a half Trillion dollars annual surplus which they recycled by lending to the Developed world. Now that figure has flipped to a slight deficit thanks to low oil prices. This means the Western world is missing (in terms of opportunity cost) $500Billion in annual new lending originating from OPEC members. The Federal Reserve added (or made a Keystone Cops attempt to add it) $3Trillion in cash to the economy with Quantitative Easing over four years, roughly double the pace of the lost source of OPEC member loans.

The implication is that interest rates …

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Ways to Protect From Risk of a Crash

Are you hedged properly against the risk of a stock crash that may be triggered by the end of Quantitative Easing last month? Stocks have a Price-Earnings ratio PE10 of roughly 25 or about 30 if accounting manipulation of earnings is subtracted out. A normal PE10 should be roughly 15. The implication is stocks are worth about half of their current price, so the SP will drop from 2000 points to 1000 points and stay there.

What are (maybe possible, but with risks) ways to protect yourself from a 50% crash?

  1. Sell your risk-on assets such as stock, rental real
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Tax Planning: Avoid Mutual Fund Distributions

Mutual funds issue distributions to shareholders typically in either early November or late December. These are a taxable event which applies even if the mutual fund lost money after a shareholder bought shares. For example a fund could buy a stock at the beginning of the year, sell at a loss in mid-year and then in mid-year a new investor buys shares in the fund which then go down in value. The new investor, if a shareholder on date of distribution, is “tagged” with a 1099 distribution even if he lost money.

Using Morningstar to screen I found 196 mutual …

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Five Year End Moves for 2014

Wow, it seems like we were just completing our taxes, and yet here we are staring at the end of the year. With only a couple months left in this calendar year, there are a few things we should all look to accomplish to make sure we are maximizing our financial growth.

Here are five items that are time sensitive and should be addressed before we ring in 2015.

  1. Take full advantage of open enrollment

It’s important to take the time necessary to review your benefit elections for 2015. Choosing the right options can be crucial for financial success.  Comparing …

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