Friday Reading: Great Deal in 5/1 ARM

By Harry Sit

30-Year Fixed Mortgage Loan Or An Adjustable Rate Mortgage (ARM)? The Choice Is Obvious If You’re Logical by Sam at Financial Samurai

Sam also noticed the great deal presented in 5/1 ARMs. I was paid $900 after all said and done when I refi’d to a 5/1 ARM at 2.625% last year. The rate is somewhat lower again now. I’m holding out for 2.125% for a half-point reduction from my current rate and extending my fixed rate period by one more year.

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The cyclically-adjusted P/E ratio (PE10 or Shiller PE) at Monevator

If you hesitate to invest in the stock market because the P/E 10 is still high relative to its historical levels, it probably means you already reached your risk tolerance. P/E 10 may come down, but a lower P/E 10 doesn’t necessarily mean a lower price. A lower P/E 10 may be achieved by a higher P and an even higher E. A lower P/E 10 does no good if you have to buy at a higher price.

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Is It Safer to Use Multiple Fund Companies? by Mike Piper at Oblivious Investor

Safer? No; one is just as safe as many. Better service, yes.

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Medicine — Still a Pathway To The 1%! by Jim Dahle aka The White Coat Investor at I Am 1 Percent

If the goal is to get into the 1%, I think studying and practicing medicine is too hard. Finance, law, and working for Facebook are probably much easier. They don’t require that many years of schooling and that heavy borrowing.

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The Cost of Living is Too High These Days, Waaah, Waaah! at Mr. Money Mustache

The cost of living definitely depends on how you live.

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The Asymmetric Value of Delaying Social Security Benefits As The Ultimate Hedge by Michael Kitces at Nerd’s Eye View

I agree delaying Social Security would be the ultimate hedge for longevity, high inflation, and low investment returns. It also opens up more years for converting tax deferred retirement accounts to Roth at a low tax rates.

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In Defense of Spirit Airlines’ $100 Bag Fee by Jordan Weissmann at The Atlantic

Spirit Air takes an unbundled approach to pricing most famously adopted by Ryanair in Europe. Despite gripes from some customers, Ryanair is doing well. Customers are the ultimate arbiter in the market.

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Posted on May 18, 2012 under News. Keywords: , , , , .

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2 Comments on Friday Reading: Great Deal in 5/1 ARM

  1. nope on May 18, 2012
     

    Read the Jim Dahle aka The White Coat Investor at I Am 1 Percent article, and I was surprised at the $2 million threshold.

    The Economix Blog says: Based on the Federal Reserve’s 2007 Survey of Consumer Finances: “But for net worth, the 1 percent threshold for net worth in the Fed data was nearly $8.4 million”

    http://economix.blogs.nytimes.com/2012/01/17/measuring-the-top-1-by-wealth-not-income

    NOTE: The Opera browser complained about a certificate expired (Apr-2011) error when I first tried to post this…

  2. TFB on May 18, 2012
     

    Thank you for the note about expired certificate. I will try to fix it. When you measure wealth, you have to be careful with what you include. We have more millionaires than we realize. See previous post Who Is A Millionaire?

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