Happy Friday. It’s tax season. Unfortunately for mutual fund investors, this can be the time of year you realize your fund was down, but you still owe taxes. Because of its structure, a mutual fund puts you in the same boat as other investors. If some head for the exits, the manager is forced to liquidate positions to raise cash. Some of the positions he sells could be at a long-term gain creating a taxable event. It’s a lot like going out to dinner with ten of your college friends, and then two of them leave before helping with the bill. Not cool. When Vanguard founder Jack Bogle … [Read more...]
What’s Happening to Charles Schwab?
Remember, Charles Schwab operates as a bank too. One of the reasons I like doing business with Fidelity Investments is because it’s not a bank and because it is privately owned. It’s not under the gun to meet Wall Street’s quarterly estimates. It’s a family business. Justin Baer and Charley Grant report on Schwab's current predicament in The Wall Street Journal, writing: The downfall of SVB Financial Group, the parent of Silicon Valley Bank, has sent investors rushing to look for other banks that have also lost deposits and are sitting on paper losses on their bondholdings. Schwab’s … [Read more...]
Prepare for the Predictable
Sometimes preparing for unpredictable events like hurricanes, wildfires, and blizzards is easier to do than preparing for the most predictable event of all, getting older. Right now, there are some people who would have a better chance at fighting off a zombie apocalypse than retiring in comfort. According to a new study by Fidelity Investments, 52% of American households will fall short of having enough money in retirement to cover the everyday essentials. Fox News's Breck Dumas reports: Americans' retirement preparedness has dropped and a majority of U.S. adults are now projected to not be … [Read more...]
Is Vanguard Voting Against Your Political Beliefs?
You’re not supposed to talk about religion or politics in the investment business. Your Survival Guy broke that rule on day one. I’ve always felt it’s important to know who you’re dealing with. The big firms try to play it right down the middle. They try to please everyone and no one at the same time. They don’t talk politics. Until now. And not on purpose. Let me explain. When the mutual fund industry rode index fees down to zero, they became victims of their own success. Suddenly, they needed a new way to skin the cat. Imagine the conference room discussions. “Bob, we need to get … [Read more...]
Call It the Difference between Normal and Crazy
In The Wall Street Journal, Judy Shelton explains the problems with the policies implemented by the Federal Reserve and the federal government over the last few years. She concludes: Normalization after the pandemic, however, might have fundamentally changed the landscape for lenders even as it confounded the Fed’s operating model. This may explain why financial conditions began improving in the last two months of 2022 despite the Fed’s tightening. A report from the Federal Reserve Bank of St. Louis notes: “Looking toward the future, it may be important to track the correlation of the … [Read more...]
“I Need Preservation of Principal and Growth”
Is there anyone more important than you? You’ve made some promises: In sickness and in health, family first, love thy neighbor, etc. You’re the reason there’s so much to worry about. But in my conversations with you, you don’t always know—you. Let me explain. You’ve worked a lifetime to get to where you are. You have savings you can’t afford to lose. You need your money to last for the rest of your life. And like clockwork, you tell me this: “I need preservation of principal and growth.” Uh, huh. And then I think to myself. “I’ll also have the crème brûlée without the cals, thank … [Read more...]
DEMOCRATIC SENATOR: Biden’s ESG Veto “Absolutely Infuriating”
After both the House and a bipartisan group in the Senate passed a bill to strike down Joe Biden's executive order encouraging the use of ESG in retirement accounts, Biden used his first veto to kill it. The veto angered Democratic Senator Joe Manchin of West Virginia, who called the veto "absolutely infuriating." Al Weaver reports in The Hill: Sen. Joe Manchin (D-W.Va.) teed off on President Biden’s decision earlier on Monday to veto a bill that would have nixed a Labor Department rule on environmental, social and governance (ESG) investing. Manchin, who was one of two Senate Democrats to … [Read more...]
Are You Fairly Wealthy? I’m Listening
Did you catch the Sunday New York Times article on the supper clubs in Palm Beach? Look, Your Survival Guy loves Palm Beach, especially lunch at the Brazilian Court, but a supper club? Sounds expensive. But wait a second. When I started running the numbers, I thought, “Self, it could actually work.” That is, if it’s the right one. You don’t have to be an uber-wealthy billionaire to have a nice life. Look for more supper clubs to show up, especially away from super high tax states. Welcome to Florida. OK, you really can’t make up these headlines. Pension funds rethinking private equity … [Read more...]
How Long Is Your Water Supply Chain?
How long is your water supply chain? Do you have an artesian well that bubbles up to greet you each day? That's about the shortest your water supply chain can get. You don't even have to use electricity to pump it out of the ground. Perhaps you have a deep well with lots of water, but you still need to use electricity to pump it out of the ground. That's a problem when the lights go out. What about city water? That works as long as the system is kept in good repair. But is your water trucked in from far away in tankers from a dwindling river? That's where many Arizonans find … [Read more...]
Your Survival Guy’s BEST Insider’s Guide to Key West
Happy Monday from New England. Your Survival Guy’s thin blood is adjusting to the cold, having just returned from a tropical island getaway to Key West. I’m here to report that the Conch Republic is alive and well. And notice it’s not a democracy. The Republic is where you go to get that neighborhood walkability without all the sensibilities. Tops on our list are lunches at Louie’s Backyard and the Thirsty Mermaid. Say hi to Patty at Louie’s and Ionela and Ava at Thirsty, and enjoy your cheeseburgers in paradise. Both are fab. And be sure to hit the waterfront at the Half Shell Raw Bar to … [Read more...]
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