In the wake of the Republican smash-and-grab tax heist of 2017, many American corporations have had to decide what to do with their freshly repatriated profits and newly distended profit margins, so news junkies have been treated to an extended conversation about investment, payroll, and capital structure. This conversation has been complicated by the insistence of one … [Read more...] about The stock buyback “controversy” is everything wrong with the finance sector in a nutshell
investing
Why I like tax-free internal compounding, and why you might (and might not)
Last month I wrote about a range of available non-retirement investment accounts and broke down some advantages and disadvantages of each. When it came to 529 college savings accounts, reader flyernick had some objections to my math: "On one hand, you’re arguing that at withdrawal, you get to exempt $12000 in gains because of the std. deduction. Then you compare that, 'In a … [Read more...] about Why I like tax-free internal compounding, and why you might (and might not)
Differences between non-retirement investment options
If you're in the right mood, there's something a little bit depressing about the subject of investing: how boring it is. An easy way to think about this is that if you make the maximum contribution to a 401(k) and IRA every year, for 20 years, at the end of that 20 years, you'll be rich. How rich you'll be depends on a lot of factors, but the fact you'll be rich doesn't depend … [Read more...] about Differences between non-retirement investment options
Thinking about Vanguard’s no-transaction-fee ETF announcement
The finance blogosphere has been ablaze the last week with Vanguard's announcement that they'll be eliminating trading fees on an enormous swathe of ETF's that currently cost $7 to buy and sell. Reducing transaction fees is an unalloyed good for investors, but I think there are some interesting additional consequences of the change to think about. What's happening On July 2, … [Read more...] about Thinking about Vanguard’s no-transaction-fee ETF announcement
Cumulative losses as the psychic cost of investing
I was playing around with a pretty cool tool called Portfolio Visualizer and got to thinking about the difference between how finance professionals and ordinary people talk about investing. For finance types, an asset or a portfolio has an expected return, which might be calculated using historical returns or a forward-looking rule like Jack Bogle's "reasonable expectations" … [Read more...] about Cumulative losses as the psychic cost of investing