Friday Reading: The Golden Age of Investing
First an update to my real world "double the bond yield" experiment. As promised, Chase paid me the $200 bonus for opening a checking account.
My $1,500 will stay there for six months. I will give them eight months. It will still work out to be a CD paying 20% APY.
The Chase promotion is over but the Citibank one is still going until Oct. 31. It’ll be effectively a 11% CD in the first year, 4.8% in subsequent years. See previous post A Basic Checking Account That Pays More Than A High Yield Savings Account.
***
Do We Live in the Golden Age of Investing? by Matthew Amster-Burton at MintLife
The Golden Age refers to unbelievably low fees on massively diversified investments. After the expense ratios get below 0.1%, I get numb. 0.07% or 0.06% doesn’t make a that big difference. I must say the ’80s and ’90s were the golden age of investing. I missed it. I didn’t have much money back then.
***
Retirement Planning with No Children by Mike Piper at Oblivious Investor
Children provide a safety net if parents run out of money. If you don’t have children, I agree you have to be more conservative and make sure you are always covered. I would worry more about logistics support than possible financial support. Can you find a trustee who arranges for elder’s aides?
***
Investing For College Student by Mike at Long-Term Returns
Mike gets good questions and he gives good answers. I wish I knew about investing in index funds when I was a student.
***
Come On People: Debt Is NOT Slavery by Kyle at Amateur Asset Allocation
I agree. I’m in debt but I’m not in slavery. The credit card balance I haven’t paid yet is 20- to 55-day debt that I keep rolling over. My mortgage is a debt I owed for years. I wish I was able to get into student loan debt when I went to business school. I would’ve been able to go to a better one. Instead I had to find one that let me go for free.
***
Vote Brisketarian! by Scott Burns at AssetBuilder
Some wishful thinking from Scott Burns. I agree with most of them except this piece: return fraudulently taken overpayments of employment taxes collected since 1983 to workers. I would like to see the Social Security Trust Fund redeem its non-marketable Treasury bonds for marketable ones and diversify away. Make the trust fund a real one as they do in Canada.
***
Low Yield時代のAsset Allocation by 通りすがり at 狡兎三窟
This blog post in Japanese referred to my post Tax Efficiency: Relative or Absolute? After using Google Translate, I still can’t figure out if the author agrees or disagrees with me. Anybody reads Japanese? I also wonder what investors in Japan do as they have been living with ultra-low interest rates for so long.
If the author of this article is a reader of my blog, please contact me. I think Americans can learn a lot from the experience of Japanese investors in how to deal with low interest rates.
***
Rethinking Bonds In Taxable at White Coat Investor
I can understand this one written in English 
. I’m glad the good doctor agrees with me.
***
Are low interest rates essentially just a tax on the wealthy by Wealth Effect Blogger at Your Wealth Effect
Although I don’t like low interest rates and I’m doing everything I can to counter them, I would have to answer "No" to this one. Except the very short-term rates, interest rates are set by supply and demand. They are not a tax because they don’t fund government functions or redistribute to others in the population. Pension funds investing on behalf of middle class workers suffer from low interest rates as much as the wealthy.
Blog Carnivals
Carnival of Personal Finance #384 – Time for a Laugh Edition hosted by Miss T. at Prairie Eco-Thrifter included by my post Tax Efficiency: Relative or Absolute?
2.2% Rewards Card $444 Bonus
Earn 2.2% toward travel on all purchases with Barclaycard Arrival World MasterCard. No caps and no foreign transaction fees. 40,000 bonus points if you make $1,000 or more in purchases in the first 90 days. $89 annual fee waived in the first year (40,000 bonus miles pay for 5 more years after that). Learn More
Software picked, likely related posts:
Comments
2 Comments on Friday Reading: The Golden Age of Investing
-
David C on November 2, 2012
Regarding Scott Burns column… ~2 years ago he actually addressed the thought of investing the Social Security trust fund (to be fair though you are NOT suggesting the fund should be invested 100% in US equities):
Securing our employment tax payments is a complicated issue because the amount of money involved is huge. Basically, it would overwhelm the financial markets, so there isn’t a good answer. The total value of the U.S. equity market, for instance, is about $11.5 trillion. The Social Security Trust fund is about $2.5 trillion. The unfunded liabilities of the Social Security program were another $5.7 trillion in the 2009 Trustees report.
-
Harry on November 3, 2012
I would leave that for smarter people to figure out. The Canada Pension Plan went from nearly 100% in fixed income in 2000 to a diversified investment portfolio today consisting of about 1/2 in equities, 1/3 in fixed income and 1/6 in real estate and infrastructure. Granted it’s not very large (C$166 billion), but the Canadian equity portion could pose a similar challenge to the Canadian stock market. It seems the Canadian stock market took it just fine.
Tell me what you're thinking, but please don't spam. See comments moderation policy.
Buy My Book
Connect
Follow @TheFinanceBuff
