Official Cheating of Working Wives on Social Security

                   

Mrs. Jones worked and had Social Security taxes deducted from her earnings. Mrs. Smith never worked and thus never paid Social Security taxes.

                       

In our example: Their husbands, Mr. Jones and Mr. Smith, both worked and paid Social Security taxes. Both Mr. Jones and Mr. Smith earned the same income for the same number of years and retired at the same time.

                       

Their spouses, Mrs. Jones and Mrs. Smith retired. .Both received one half of their husband’s benefit.

                       

Obviously. Mrs. Jones paid taxes and got no benefits in return. She got the same as Mrs. Smith who made no contribution.

                       

If Mrs. Jones was entitled to more benefits than Mr. Jones, she would get merely some extra compensation, not the full compensation for her contributions.

                       

I have written repeatedly why private Social Security could be fair and remunerative, while Uncle Sam dispenses an unfair plan. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Today's Replica of 1930’s Financial Error

                       

Leave it to politicians to make a mess out of an ordinary economic cycle and blame it on others.

                       

What was a simple sub-prime mortgage problem, that normally would lead to a minor recession, became a near Depression and  now a humdrum economy, because of political meddling and bumbling.

                       

The Great Depression observers see how Franklin D. Roosevelt over-reacted with spending. Then he over-taxed and over- regulated business and created a depressive psychology that prevailed until World War II, which acted as a giant economic stimulus.

                       

The same political meddling and bumbling is occurring today. The extraordinary spending has produced a crises, in the form of senseless, business-stifling regulation and taxes. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

The Easy Rule of 72 to Determine Interest Earned

                    

The Rule of 72 is a quick way to get an approximate reading of interest rates or total returns.

                       

Example: An investment takes about 12 years to double. How much is the annual return? Simply divide 72 by 12 and you get 6. It thus takes about 6% return for the investment to double.

                                           

What if the investment doubles in six years. Then divide 72 by 6 for the answer of 12. The investment is producing returns at about the rate of 12% a year.

                       

Just divide 72 by the number of years to get an idea of return. Or 72 by returns to get the number of years for the approximate time to double the principal.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Securities Prices and Disciplined Strategy

                    

Stock market prices are set, as pros say, at the margin. In other words, just a relatively few current traders set the price of your holdings. Even though you may be a long-term investor sitting on the securities market sidelines.

                       

So, if relatively frequent trading is your investing strategy, it makes sense to be disciplined and keep to your original strategy. Avoid daily market influences on that strategy. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Gold Holdings by Chinese and Indians

                 

Gold jewelry bars and coin ownership have lots to do with gold commodity pricing. As opposed to the influence of gold investors and traders who have no interest in the metal in the form of jewelry.

                       

This preference varies by country. It’s been conventionally very high in China and in India, In the U,S, it’s use is primarily when the inflation risk is high, but primarily when the dollar’s value becomes risky as a reserve currency.

                                           

The value of gold can go higher if the Chinese government begins to think more like Americans running from a weak dollar. But note: The dollar is now far stronger than the Chinese currency.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Importance of Compound Interest Tables

                

Most investors are not familiar with the impact of compounding returns. For example, how much does 1% more return over five years, or more?

                       

Or how much you save over twenty years by holding mutual funds with management fees of 0.3%, as compared to funds where fees are 0.7% or 1.0%.

                       

Most investors thus have no idea of how to measure the performance of their investment holdings.

                       

Yet such tables can be had at no cost from the internet or standard directories. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Be Comfortable When Investing

                  

Seek comfort when investing, so you can sleep nights. Also consider the risk, taking into account your age and family situation. Most media financial suggestions never concern themselves with these essential factors.

                       

Think before you invest about risk/reward considerations. You do sometimes have to strive for less to sleep nights. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

An Alternative to “Cheaper” Penny Stocks

As a follow-up to my advice against buying so-called penny stocks:    Does it always make any difference in quality buying higher priced stocks? You still must determine genuine value.

                       

And most analysts on Wall Street cannot truly do this from outside the companies they attempt to evaluate. Analysts really are often guessing at what goes on in the companies whose stocks they look at. It’s the reason why I always suggest investment in low-cost, indexed mutual funds or exchange traded funds (ETFs). (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Avoid “”Penny” Stocks

                    

So-called penny stocks can’t be bought or sold for pennies any more. They can be priced for a few dollars a share. By definition, they are any very low-priced shares of small companies sold in limited markets. Share values are often doubtful at best.

                       

Their managements’ or promoters issue large numbers of shares, where pricing is low, but where values are often minimal, if they exist at all. What’s more, they control their issues market movements.

                       

Yet, those who ought to know better still buy them. They think something priced low has to be a bargain. That assumption provides the best way to get fleeced. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

                   

Avoid Panic Sales

Too many investors are caught up with the hysteria of panic selling, when it occurs. Yet such panics often occur when market technicians arrive at decisions based on subjective, controversial  observations.

The trick is to stick to the strategy the investor originally used to buy. Review my past comments on disciplined strategy. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole at twitter.)   

How Junky are Junk Bonds?

                 

A decided error has been perpetuated for many years in the lexicon used by both Wall Street professionals and Main Street average investors. It concerns the use of the term “junk” bonds. The term denotes bonds whose credit ratings are less than prime.

                       

Because of the term’s public misconception, too many investors avoid these bonds, despite the fact they have an important role to play in an investor’s portfolio.

                       

The risk of potential defaults can be completely minimized when the bonds are in diversified holdings such as low- cost mutual funds or ETFs. Defaults are factored into bond pricing, which, for the most part, can often provide excellent investment opportunities.

                       

Moreover, the use of Duration Principles can make any bond investment portfolio easily managed.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Variable Annuity Facts

                                        

The early-withdrawal penalty and the early surrender fees of an annuity make it useless for short-term saving. And with a variable annuity you pay higher tax rates and expenses for your funds than you would pay elsewhere.

                       

You would have to hold an annuity for about fifteen years for the benefits of tax deferral to outweigh the extra costs.

Annuity buyers should therefore exhaust all other tax- deferral options before considering that option. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

An Annuity in a Tax-Deferred Retirement Account?

                         

Annuities provide tax deferrals as do IRAs and 401 (k)s.

                       

So never invest in an annuity inside a tax- advantaged account such as an IRA or 401 (k), as you would get no added tax benefits. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Downside of Annuities

                    

You can't withdraw prematurely from an annuity without being penalized. Fixed and equity-indexed annuities are subject to these early surrender fees, specified in the contract. This is usually seven years.

                       

What’s more, earnings are taxed as income, not at the long-term capital gains rate.

                       

Moreover, annuities usually charge more than 1% a year for the death benefit, something you may not require as your objective..(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Percentage Profit Margins are the Evaluation Tools

                    

The public gets mislead when they look at so-called big profits of companies, instead of the percent of profits. The politicians take advantage of this fact when they organize their class warfare against business.

                       

Companies deal in big numbers, which can mean little. What is important are their percentages of profit or loss which can be significant or minuscule.

                       

An example are the petroleum companies which earn a small percentage, a few cents on the dollar after taxes, but the total dollars appear huge when added up in one sum.(See the Earl J. Weinreb NewsHole® comments and@BusinessNewshole at Twitter.)