Don't Quit Your Day Job: The Intersection of Personal Finance, Economics, and Politics.
Today was the all time high closing price for the dividend reinvested, inflation adjusted S&P 500. I know that much of the financial world has been rambling about the continual new highs in the stock market. You haven’t been, though… you read my post earlier this year (or read my Tweet this morning) where I [...]
Well, glad that Fiscal Cliff thing is over. Seriously – we sweated a crisis that was created by politicians, that politicians are now happy they averted. Consider that! Dividend Cliff… Kind of Averted Since most of you readers are also avid investors (check out our stock picks for 2013, and our solid S&P 500 beating [...]
Seriously, folks. This topic is serious enough for me to write two articles about it. Since the last time we covered the forthcoming dividend tax increases, a few things have happened: Barack Obama was reelected President The Senate and the House remained in the hands of the Democrats and the Republicans, respectively (meaning the status quo [...]
Subtitle: Until You Read This Article.
I’m not one for hyperbole… I’m more of a “here’s the data, deal with it” person, but I’ll make a vast blanket statement for you today. You see, you may not care too much either way about the whole ‘fiscal cliff’ scenario, where an expiration of the so-called ‘Bush Tax Cuts’ of 2001 and 2003 would reset to their previous levels. Perhaps you make under $200,000 as a single or $250,000 as a couple, so if the cuts expire and President Obama extends them in a second term you wouldn’t worry too much. Fine – I won’t spend this article discussing what the appropriate level of taxation is for the many strata of incomes earned in this country. However, I do want to draw your attention to the insidious effect of rolling back the 2001/3 cuts – namely, how the code characterizes dividends.
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.
What should you make about the Mark Hulbert article claiming that top market timing newsletters are bullish heading into the new year? After a 27.76% increase in the value of the S&P 500 (not counting dividends) in 2009, how much further does the stock market yet have to run? And what does a bullish consensus among market timers mean, exactly?
Carnivals and awesome links for the week starting September 21.
Master Limited Partnerships are publicly traded Limited Partnerships, most often investing in the extraction and transportation of raw materials. A limited partnership is a limited liability corporate structure which contains Limited Partners, and at least one General Partner. This gives the funds great tax advantages with liquidity advantages coming from their listing on a public exchange. The lack of understanding of MLPs also means they are a great place to start looking for market pricing disconnects and investment opportunities.
