I know you’re in a real estate mood now that the election is done with… so let’s talk about it more, if only tangentially. Hey DQYDJ readers, remember that whole real estate bubble popping thing which started a few years ago? Now, there is plenty of blame for that little incident to go around, but […]
When you own a website, sometimes you need to type out an article and lay out your lamentations about the decline of something in your culture. Usually, this coincides with hitting a certain age and believing “that wasn’t the case when I was a kid”. I don’t have any excuse like that; my cynicism is a reaction to a perfect storm of articles in recent days which, far from moving the Overton Window, broke the window and ripped out all the framing. Heck, it probably knocked down the wall.
Today we’re going to delve into Income Equality, a topic which has been fresh in the American collective consciousness ever since the Great Recession ended. Gini Index If you click the above image, you’ll see a graph from the St. Louis Fed (Census Bureau Data) showing a measure known as the ‘Gini Index’ headed up […]
Remember a few weeks back when we discussed stock market investing using the Kelly Criterion to determine asset allocations? Today we’re going to go in a different direction and use Kelly for what it was intended – betting!
The Kelly Criterion is a formula you can use to determine the proper size of a bet when there are known odds and a definite payout. With a little hand waving and some basic math (as I proved a few weeks back), you can also use it to help guide your investment decisions – namely when determining the size of a position you should take. Let’s hop into some calculators.
One issue you run into a lot when you are discussing optimal savings strategies is the inability for people discussing their returns versus the S&P 500 to produce a fair comparison. They will say, for example, that the S&P 500 index was at the same level as it was at some time in the past – so therefore investing in the index was a waste of time.
It’s time to correct this nonsense. I have taken Robert Shiller’s data on the historical S&P 500 index and created a dividend reinvestment index going back to 1876.
You recently completed a very verbose series here at DQYDJ on investor psychology, the failure of the Efficient Market Hypothesis, and how to improve on buy and hold. If you survived all of that, you’re probably wondering: “hey PK! You mentioned in the EMH article that you trade stocks on valuation. How do you know that you’re doing the right thing?”
Good point dear reader, and to tell you the truth, until I ran the numbers this weekend I wasn’t quite sure. However, lucky for you and my ego I have now run the numbers and am ready to share my investing history.
You’ve got an IRA, right? This site has been preaching the tax benefits of both traditional and Roth IRAs since the beginning… and we aren’t going to stop now. So hopefully you’ve been diligently saving in your IRA, with the hope that some day you’ll have a couple million dollars in there (or at least a good amount of funds you can tap in retirement).
Mitt Romney, it was revealed in financial disclosure documents, has an Individual Retirement Account worth somewhere between $20.7 and $101.6 million dollars. Note that IRAs have a small limit when compared to 401(k)s and other employer retirement accounts, so this came as somewhat of a shock to people with IRAs. How did Mr. Romney achieve such an impressive sum in his retirement account?
Our tax visualization last time was interesting, but this one might convey more data. Once again, or source for tax data is the IRS’s publication 2010 Data Book. Just like last time, note these are tax collections, and the IRS annual year ends in September. True revenue is after all refunds and credits are finalized, but this data is interesting to see the amount of tax collected – and how it makes it’s way to Uncle Sam.