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littleken

KBB expert rate the 2017 Honda Civic as the top rated Sedans of 2017.

https://www.kbb.com/top-expert-rated-cars/sedan/2017/1/

littleken

http://www.forbes.com/sites/theapotheca ... by-64-146/

littleken

Rate Shock: In California, Obamacare To Increase Individual Health Insurance Premiums By 64-146% http://www.forbes.com/sites/theapothecary/2013/05/30/rate-shock-in-california-obamacare-to-increase-individual-insurance-premiums-by-64-146/ For anyone who is happy or impressed with the California rate...

littleken

As will shortly be evident, I'm naive about how such things work. Apple has a gazillion dollars in cash, on which it is not earning much and apparently has no acquisitions and/or projects that are worth doing. Buying back stock will quiet the stockholders who want to see the cash used to benefit th...

littleken

No. Food and oil have obvious fundamental value. Gold is so interesting/terrifying because outside of certain electronics and jewelry applications it's not that useful. Not sure what is your gender, but I wonder how many woman in the world you can convinced to not want jewelries made in gold. In ad...

littleken

enc0re wrote:On the other hand, once you start thinking about what 'bubble' means you realize that gold is essentially always in a bubble since its fundamental earnings power is almost zero.

Are food and oil always in a bubble? I don't think so, but you probably do based on what you wrote.

littleken

Does it mean in the next 100 years Wellingtin fund will have an average return of over 8%? Maybe. Is it guaranteed? Definitely not. If you shorten the time to just 50 years, 20 years, 10 years, it will be even less certain that the return will be over 8%. Unless you are telling me you are certain th...

littleken

I am going to define a bubble arbitrarily in terms of degree of overvaluation, not in terms of market psychology. The South Seas bubble involved an eightfold up-and-down excursion within a few years. The 1977-1980-1982 price of gold, also eightfold. The NASDAQ Composite Index, 1997-2000-2002, fourf...

littleken

for maximum return with minimum volatility? (Isn't that what we all want?) We all want high return and no risk, but this is not realistic. If you want high return, you have to take risk; if you want low risk, you will have low returns. The only free lunch is to invest in a diversified mutual fund/E...

littleken

The P/E from Robert Schiller is at 22 right now. It was in the 40s back in 2000. 22 is high based on historical figures, but it is hardly a bubble. If it is, it is a small bubble.

littleken

For my tax situation, I don't think I can find an investment vehicle (for example, long term bond or CD holding to the maturity) that gives me guaranteed post tax return of 4.935%. Stock should not be used a comparable due to the high risk. As mentioned by MM Finance, there are risks of owning a re...

littleken

However, when dealing with tax, the rental income of 2200 should be considered post tax as I had to pay post tax $2200 if I was renting. I am not sure what you are doing here. At the minimum, don't you want to compare after tax return against other investments, rather than pretax return? Does your ...

littleken

So if your plan is to contribute $17,500 to a tax deferred account, you can do $5,500 traditional IRA and $12,000 401k, assuming you can still get the full 401k match with $12k.

littleken

Do you qualified for traditional IRA? I do. Is this something you would consider over 401k/Roth IRA? Not necessary. Wouldn't a traditional IRA also drop your taxable income if that is your goal(though I am not sure if this should be your goal to drop to 15% marginal tax )? Maybe I am missing someth...

littleken

It is not very attractive to hold international stocks in a tax sheltered account as you won't get the foreign tax credit. So, if you only have tax sheltered account, you should allocate less to international equity in your asset allocation. You should also access how much tracking error you are wil...

littleken

If one cries "bubble" for long enough, eventually he will be right. The people who said duing 2004-2006 that there were no housing bubble were right, until they were proven wrong. So your statement is correct, but I don't know if it is at all meaningful in this debate. The problem with th...

littleken

If one cries "bubble" for long enough, eventually he will be right. The people who said duing 2004-2006 that there were no housing bubble were right, until they were proven wrong. So your statement is correct, but I don't know if it is at all meaningful in this debate. The problem with th...

littleken

If one cries "bubble" for long enough, eventually he will be right. The people who said duing 2004-2006 that there were no housing bubble were right, until they were proven wrong. So your statement is correct, but I don't know if it is at all meaningful in this debate. The problem with th...

littleken

floydtime wrote:If one cries "bubble" for long enough, eventually he will be right.

The people who said duing 2004-2006 that there were no housing bubble were right, until they were proven wrong.

So your statement is correct, but I don't know if it is at all meaningful in this debate.

littleken

Without going to much into details, i think 2% would generally be pretty safe.

littleken

The longer the DCA period, the lower the risk and expected return. In my personal perference, DCA of loner than 1 year is usually excessive, but you might have a different preference and risk tolerence. There is no right or wrong answer.

littleken

Nicho_1978 wrote:We are also approaching a seasonal period that has proven good for bonds in the pass.

How do you come up with this conclusion? How do you know? What time frame are you refering to? 1 year, 5 years, 10 years?

littleken

Sure. I guess you could say instead that in 20 years from now it is extraordinarily LIKELY that it VIRTUALLY won't make any difference. Do I care if I bought aapl at $20 or $25? Not really. And, if in 20 years your investment really didn't move (or went from 120 to 110)...then the important point i...

littleken

Thanks both for the input. Littleken, I definitely get the impact of the ongoing costs above a rental, but I'm deliberately ignoring that for this purpose. When you say the formula is correct, are you referring to both formulas or just the first, non-inflation adjusted one? It's still not totally c...

littleken

In reply to mbecker, if you want a formula to calculate the breakeven point, you have the correct formula. Probably what is more relevant is the cost you have spent on this house, compare to what you would have spent if you rent during the same period, assuming this is your primary residence.

littleken

I think you'd do better simplifying the first equation. You don't really need a variable for a or c, you can write them in terms of p: a = origination fee + title transfer, etc c = realtor cut of sale d = assume seller pays 1/2 closing s = .02p + p + .06p + .01p s = 1.09p The closing cost of sale i...

littleken

First of all, it is the psychology of investing. Young people who have never faced a market crash (such as the subprime mortgage crisis) as an investor would not know their risk tolerance. If they later found out in a market crash they are not as brave as they thought they are, it might be too late....

littleken

ofcmetz wrote:
littleken wrote:The simple answer is everthing should be considered in your AA, even your human capital, and the kind of company your employer is (cap size, value or growth....).
^ How is including your human capital in your asset allocation simple?

I meant the 'short' answer. Hope you like this word better.

littleken

You cannot assume value stocks has higher risk than growth stocks. It is still subject to debate in the academc world. While it make sense that value stcks has higher risk, it might juet be a free lunch. Is the small and value premium (in terms of return, at least) not subject to debate anymore? It...

littleken

The simple answer is everthing should be considered in your AA, even your human capital, and the kind of company your employer is (cap size, value or growth....).

littleken

We can assume there is a risk, but we don't know anything specific about the harm that results when things go awry. So how can we do any kind of meaningful asset allocation until we have a number? But with value and small all we know is there is a risk of some kind that's paid off the last century....

littleken

If you are young and don't need the money on the portfolio until 20-30 years from now, then it really doesn't matter how much capital gain you have gotten right now, unless you have been making significantly changes on your asset allocations, which you should not. If you are young, you should want t...

littleken

Your desired international stock allocation makes much more sense than your current allocation, since in a roth ira you cannot get tax credit for foreign tax paid, you loss the roth ira advantage by investing in foreign stocks. While there is nothing wrong at your age to have high risk tolerence, if...

littleken

1. Since you retire at a younger age then the 'normal' retirement age, you definitely should be more risk adverse in your SWR, however, you do not necessary need to be more risk adverse on AA, though your AA should depend on other factors, such as SWR. Also, you should review your situation every ye...

littleken

If you are planning to use the money for downpayment in the next several years, then you should put it in safe assets, but that is related to asser allocation. On DCA, the longer you do the DCA, the lower the risk and expected return, since the money will have a shorter time period in the market to ...

littleken

Microsoft excel

littleken

The government remains to be the biggest problem. The low down payment loans are mostly from FHA loans, conforming loans, VA loans, and USDA loans. FHA requires just 3.5% down payment; Fannie Mae at 3%; Freddie Mac at 5%. It is one thing when businesses get into trouble in a free market; it is anoth...

littleken

To me it is hard to predict where the price of houses are headed. If we expect high inflation going forward, maybe we can expect higher nominal price going forward, though this does not tell us the real house price. On the ther side, if we expect interest going up, then this should drive house price...

littleken

Bernanke is trying to convince us that we have to avoid deflation, and zero inflation is too close to deflation thus too risky, so he s targeting 2% rather than zero %. I don' t believe in any of this.

littleken

He owns his own business. Does he have employees? If not, he can set up a solo 401k for himself. tfb brings up a great point that I missed when I first read. If you have a 401k, then you can rollover your pre-tax IRA and SEP IRA to the 401k. Then you can make do backdoor roth contribution, which wo...

littleken

At your age, I would avoid make any non-deductible contribution to a traditional IRA unless you are planning to do a back door roth contribution, which may not be a valid option for you since you have pre-tax money in traditional IRA and SEP IRA. Non-deductible IRA is tax as ordinary income when you...

littleken

You need to ask yourself the following questions: What is the current price to rent ratio for the type of houses you are look at? Do you have preference in buying or renting other than financial reasons? If so, how strong is this preference? What are you going to do with the extra money if you decid...

littleken

My eyebrows lowered when I read the word "intrinsic" in the OP. There is no intrinsic value in a home. There is definitely intrinsic value of real estate, which is the net present value of all future net cash flow, including rent revenue less operating expenses. This calculation can be do...

littleken

It would be beneficial if you provide some of the info below: Does the 75k include closing cost? What are the terms of the mortgage or loan? What is the interest rate and how long is the loan? What is the portion of the property value that is depreciable? Are you going to pay utilities for the tena...

littleken

It would be beneficial if you provide some of the info below: Does the 75k include closing cost? What are the terms of the mortgage or loan? What is the interest rate and how long is the loan? What is the portion of the property value that is depreciable? Are you going to pay utilities for the tena...

littleken

That's why you buy the entire market, you don't know in advance which stocks will go up and which will go down. Over the long haul the market as a whole will increase at a decent rate . There can be long periods of mediocre performance so you should only invest what you can put away for an extended...

littleken

It would be beneficial if you provide some of the info below: Does the 75k include closing cost? What are the terms of the mortgage or loan? What is the interest rate and how long is the loan? What is the portion of the property value that is depreciable? Are you going to pay utilities for the tenan...

littleken

Still can't answer one simple question with a simple reply? Are you asking yourself this question? Price to rent ratio tells you, what? I said it only tells you what multiple of current rent the current market value is. You claim it is an indicator of much more. Please explain without some convolut...

littleken

You are avoiding answering this question. My question to you is whether the price of an asset is derived from its income and whether a real estate is an asset. Is a diamond/art an asset? What is it's income? But seriously, this question should be VERY easy for you to answer if it were true. You ans...

littleken

Enough said. Now we can conclude the price-to-rent ratio is perhaps the most important figure to look at when purchasing a house. How does knowing that market value on a specific day is 10 times rent without any other knowledge? Rents and market value do not move in tandem. You are avoiding answeri...

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