Wise Words and a Cheap Joke
BUY AND HOLD
“I have a friend,” writes an e-mail correspondent, “who was a stockbroker (prior to that he was a lawyer). He later made his fortune as his own full-time trader of options, and now is the CEO of a software company. So he’s no idiot. He recently said, ‘I set up little stock portfolios for my children. After I bought the stocks for their portfolios, I just let them be, and didn’t touch them. For my own portfolio, I actively bought and sold stocks, and watched the market closely. AND I’M AMAZED TO SEE HOW MUCH BETTER MY KIDS’ PORTFOLIOS HAVE DONE THAN MY OWN.’ More evidence that the buy and hold strategy seems to be a good one.”
A.T.: Yep.
VARIABLE ANNUITIES
An amazingly expensive way to translate what would have been lightly taxed long-term capital gains into more heavily taxed ordinary income at withdrawal. And yet they still sell like hotcakes — including a not inconsiderable number that get bought for … hold on to your hat … IRAs, which are already tax-deferred. As reported last year in The Wall Street Journal, “17% of the $627 billion in variable annuities are in Individual Retirement Accounts.” The only thing dumber would be buying low-interest, tax-free municipal bonds for an already-tax-sheltered IRA.
EXTROVERTED ACTUARIES
Q. “Do you know the difference between an introverted actuary and an extroverted actuary?”
A. “The extroverted actuary looks down at your shoes when he’s talking to you.”
OK, that was a cheap joke. And not true, either.
Tomorrow: free long distance (in case you’re the last to hear), and an apology for passing junk e-mail on to you.
HOUSEKEEPING NOTE: Currently, an alternative route to this column is www.andrewtobias.com. As of February 1, that will be the ONLY way to reach it. To keep reading, please adjust your bookmark. Also, please note my new e-address: atobias@andrewtobias.com.
Quote of the Day
Governments are necessarily continuing concerns. They have to keep going in good times and bad. They therefore need a wide margin of safety. If taxes and debt are made all the people can bear when times are good, there will be certain disaster when times are bad.
~Calvin CoolidgeSearch
Request email delivery
Recent Posts
- Jan 26:
Strength - Jan 24:
The Inauguration . . . PRKR, BOREF, CNF - Jan 22:
The Other Pillow Guy* - Jan 21:
How Great Was That? - Jan 20:
You Respond To Umair Haque - Jan 19:
The Three Big Lies - Jan 18:
Two Harvard Grads Still For Trump - Jan 15:
Of Insurrection, Inequality, And Your Stocks - Jan 14:
Meanwhile . . . - Jan 13:
Ronald Reagan Speaks
- Jan 26: