I assume TIAA-CREF isn't funding death squads, but I haven't checked.
I looked into Calvert Investments a while back but got distracted by other things (oooh! Shiny!). They seem to be a reasonable socially/environmentally screened set of funds.
I'd be interested to see how screened funds performed through the crash. My unscreened 401(k) took a horrible shellacking.
I use all my money to buy cigarettes for children.
Where should people put their money in 2013?
50% Arby's stock, 50% bitcoins.
Last week was the perfect time to invest in Zipcar.
Arby's is privately owned by Roark Capital Group--you can't invest in Arby's stock.
My retirement savings are in whatever plans my employers made available. Although somehow by accepting various default choices I've ended up with some TIAA-CREF accounts and one Vanguard account instead of having everything conveniently in one place. CREF has a fund called "Social Choice" or something like that that makes some claims to being more ethically responsible, but it wasn't clear to me it makes much difference from the limited poking around I did.
4: Looking up Arby's (81.5% owned by Roark Capital--yes named for Howard Roark from The Fountainhead--and 18.5% The Wendy's Company) I learned that the one near my ancestral home was the first licensee beyond the original restaurant in Youngstown. Drove past it over the holidays and marveled that it was still there.
Someone once tried to sell me on a "sin" fund, that was all about investing in companies like RJ Renolds and Exxon.
I assume TIAA-CREF isn't funding death squads, but I haven't checked.
Well, as long as they're funding ethical death squads...
The joke, of course, was that it was a deeply immoral device for extracting money from gullible investors.
No sensible capitalist would be so over-exposed to one kind of risk.
7: Actually, we have the same default companies here. They do it to keep your contributions and the university contributions separate. If you leave before vesting, the university wants it money back.
Where should people put their money in 2013?
Is there a way to short the US credit rating? (Without just shorting treasury bonds, which isn't really the same thing.)
81.5% owned by Roark Capital--yes named for Howard Roark from The Fountainhead
Wow. I had no idea. Screw it, then: all in on bitcoins!
14 cont:. (Google suggests you can do this (of course you can), and that George Soros did it in 2011 (of course he did), but I'm still not sure I understand exactly the mechanism by which the trade works, or whether it's available to mere mortals.)
Baseball cards are due for a resurgence. Invest now while prices are still low!
9- Actually, Chipotle, although the window has closed:
Gift cards. Now it's time to check out and also time to ask yourself: "What's my highest-performing investment of the year?" The answer is Chipotle. From now until the end of the year, whenever you buy a $30 gift card, you can use that receipt to get a free burrito WITH ANYTHING ON IT through Jan. 2013. That is why I now have $180 of Chipotle gift cards, for myself. You see, it's essentially a buy 4 burritos ($30), get one free deal. i.e. a 25% return on investment. Now you just have to use the gift cards through 2013, ideally running out of gift cards on Nov. 1st, 2013, when you can start investing in gift cards again.
Maybe all my 1990 Topps Craig Worthington rookie cards will finally start showing some return on investment.
I sometimes eat at Chipotle, but I never get the burrito. That's just empty carbs.
>i>you can use that receipt to get a free burrito WITH ANYTHING ON IT
I would like a burrito piled with mounds of gold!
Surely one of these days all those 90s "collector's edition" comics with the hologram covers that are still stashed away somewhere in my parents' house are gonna be worth something.
Maybe I will invest in a dedicated html-checking monkey.
I can't really buy any land, but I may be able to invest in a hedge that encroaches ever so slightly on my neighbor's property.
When I last looked at Calvert funds, they seemed to be heavily concentrated in the health care sector. Better than weapons manufacturing, yes, but not exactly an ethical industry.
In the interests of maintaining liquidity, I keep all my savings on my Metrocard.
More seriously: other than very-low-fee index funds, all fund options are bascially scams, so I actually started investing roughly half of what little I have to invest in low-fee index funds and then just doing individual stock picking with the rest. Which I know economic/finance theory says is moronic*, but hey, one year into this my individual picks are hugely outperforming the market, so I should probably be a billionaire financier or something. And of course that's just blind luck, but I am not actually convinced this is a worse strategy--don't studies show that the level of fees is the number one determinant of long-run portfolio performance? Buy stocks yourself and you pay no fees (other than nominal trading commissions). And if the market's efficient (nb: it's not, of course, but that's what drives all the theory), then as long as you buy enough different stocks to be roughly diversified (which research shows is many fewer than are held by most investment funds), it shouldn't matter which stocks you buy. Throw darts at the WSJ if you want, etc. (Most people these days check stock prices online instead of in the WSJ, but you shouldn't throw darts at your computer monitor.)
*Actually, I don't think this is right (as most of the rest of my prior paragraph explains). People selling financial products say individual stock picking is moronic; academic literature seems to me to be more nuanced. People selling you products often say things like "don't fool yourself into thinking you can't beat the market!"; left unstated is the corollary: "let us fool you into thinking we can!"
14. TIPS, foreign bonds, precious metals or maybe resource extraction companies.
I avoid defense contractors, but that's about the extent of my ethical avoidance. Are miners ethically OK? Brazilian steel companies? retailers? stock exchanges? Bonds from republican counties? Subprime mortgages today?
There are a very few non-indexed funds that I would consider looking at; I think that the only one I have OKed for a relative seeking advice on picking from an employers menu is PIMCO.
29: Yeah, a lot of CREF's "Social Choice Fund" investments seem to be pharmaceutical companies....
My 401k, which is just the date-targeted fund since we don't have many options at work, claims to have had a 14.5% rate of return last year. Sadly S&P 500 performance was 15.5%.
Unless you're 18, a date-targeted fund will have some non-trivial proportion of bonds.
Here's a Grauniad article saying that most of these "ethical investment" funds invest in fossil fuel companies.
31 -- I've been doing the same thing, but with a 90/10 split between fund and individual stock picking. I beat the fund by quite a bit as well, and pursued a strategy that is moronic on its face: investment based on sentimentality. And not paying attention for many months at a time. I did better at this is 2011 than 2012, but still did ok.
I have to pick a new fund for my 90% this week.
investment based on sentimentality. And not paying attention for many months at a time.
This is my strategy as well!
I'm a traditionalist: mattresses.
Throw darts at the WSJ
I already do that.
They ejected me from Borders for that.
Probably to use my investment results to achieve billionaire financier status I'll need to come up with a more impressive sounding description of my investment strategy.
I cut-and-pasted 31 and sent it to my wife as part of an ongoing dialogue on our investing strategy. (Actually, the two of us are in pretty good alignment other than a massive gulf in our views on how much attention needs to be paid to the details once you embark on the broad strategy. I'm on the Operation Ignore side of things. Of course she has several cherry-picked examples of the pitfalls of that approach which she uses to bash me over the head with from time to time.)
40: and now it's out of business. Whose investment strategy is sound now?
Odd coincidence -- just saw in morning mail that Neil Aronson, managing partner of Roark Capital, is on the cover of the January 2013 issue of Franchise Times.
I would have really been happier to have continued to not know that Franchise Times existed.
Most of what I have goes to index funds, but I also invest small amounts in out-of-the-money options. Usually I loose the small amount, but there is an occasional big fat payback, which leaves me somewhat ahead on balance. For day-to-day drama, its a lot more interesting than individual stock picking, because daily price fluctuations on the order of 25% are a common thing.
41: Managed Fee Minimization Balanced with Individualized Traditional Value Assessment.
ManMinBalVal.
Balanced Latent Sector Asset Cluster.
BalL SAC.
46. Me too. The market for these is apparently a very small number of crackpots until about 6-9 months to the expiration date, when larger investors take an interest. Bid-ask spreads are huge.
Rearrange 47 a bit and you can get to: "ManBal FeMinIn Ass".
I could call it "The Transexual"?
Can someone translate 46 and 49 to plain English?
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OT: okay, so clearly you've made a computational error when w+x+y+z ≠ (w+x+y+z), but is there any easy way to fix it? I've checked my work a half-dozen times.
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If you identify companies that you believe will fall sharply in value by January 2015, you can buy an instrument that will rise in value when they do fall. Banks and funds are only interested in these things much closer to their expiration date, so the difference between what the few possible sellers bid and buyesr ask can be 40% of the price rather than a penny or two for stocks. Basically you're taking out insurance on something that you don't own.
Keynes noted that the market can stay irrational longer than you can stay solvent.
52: set w+x+y+z to equal (w+x+y+z) and you should be all set.
52: Protip: Don't include questions like this in your investment newsletter.
Mostly an index fund, a bit in some probably bullshit supposedly lower-risk ("balanced") mutual fund.
Of course, at the moment I get better returns from paying off student loans early than anything I could buy.
52: Have you checked for rounding errors?
52: Try [(w+x) + (y+z)] and see if you don't get a third answer.
I found the error! It only took me 7 times going back through the math. It turns out w+x+y+z does equal (w+x+y+z), it just doesn't equal (w+x+y+z+k).
Only if we assume k isn't equal to zero.
58: What a relief for heebie! All her tests would have had to be revised.
Only if we assume k isn't equal to zero.
Or if you're on k when you do the calculation.
It's extremely difficult to invest both ethically and successfully without actually starting your own business.
It's extremely difficult to invest both ethically and successfully without actually starting your own business.
And, as we all know, starting one's own business is like a stroll in the park.
It's much easier if you don't have strong ethics.
And, as we all know, starting one's own business is like a stroll in the park.
Yes, that's a reasonable implication from what I wrote. And as we all know, strolling in the park is for rapists.
I found the error! It only took me 7 times going back through the math. It turns out w+x+y+z does equal (w+x+y+z), it just doesn't equal (w+x+y+z+k).
It all comes out to a wonderfully delicious example of ressentiment and delusion from my perspective.
reasonable implication
What fun would that be? Besides, if you hold out B as an alternative for some other difficult thing A, isn't it reasonable to comment on the absolute difficulty of B?
you leave little room between "stroll in park" and "absolute difficulty." I don't.
Predictably, I buy index funds, don't worry about the ethics of the companies I've bought into, and give to efficient charities.
68: "absolute" as opposed to "relative."
Further to 70: I should have written that more clearly.
71 - fair enough. Starting your own business does take a lot of effort, but then lots of people do it successfully, with lots of effort. Making a lot of money through investments without doing unethical stuff is probably a less likely win, though it takes less effort either way.
I had to sort out how to invest my retirement this week. I went with TIAA-CREF with 80% in a US low-fee index fund and 20% in an international low-fee index. I briefly thought about "ethical options" but those will be actively managed (which, as urple says is a scam) and probably not ethical anyway.
If there was a "silicon valley index fund" I'd have put some money there, as that seems to me to be the main ethical blue chips.
While all the other kids were doing coke and having wild sex in their late teens / early twenties, I was a drug-free virgin making risky investments with other people's money in the NASDAQ bubble as part of a dorm-room hedge fund. We tripled our money in four months and then lost almost everything.
Now that I'm older and wiser, my advice would be the same as urple's in 31: do all your investing through low-fee index funds. People who claim that they can outsmart the market are usually scamming you. We certainly were with our dorm-room hedge fund, and the pages of nationally respected publications are full of ads from more respected scammers. Index funds from companies like Vanguard are the alternatives to these scams.
Most people just invest in S&P 500 index funds, which is a perfectly reasonable option, but I buy mid-cap and small-cap indices instead. Given the sheer amount of money people pour into S&P 500 indices, I worry about those things getting overvalued. Mid-cap buyers can also profit when their stocks get added to the S&P 500 and all the index funds have to buy it at the same time.
I do this with ETFs (exchange-traded funds), which are index funds that can be bought and sold like individual stocks. If you're looking for ticker symbols, most of my money is in VO, VB, and VOE. I also have a little VWO for international exposure.
73. Vanguard has an IT ETF and fund, based on an MSCI index.
Seriously, the only ethical profit is IT? If that's OK, maybe entertainment or casinos, both of which are environmental lightweights. Would an ethical entertainment portfolio have included playboy?
How well are ETFs regulated? I am leery about what will happen if to a poorly-capitalized or poorly-run ETF in times of real market stress.
The reasoning behind dividend-growth funds makes sense to me. They wind up being older large cap companies, but with finance excluded, which is IMO perfect for a passive choice for the next few years.
Vanguard wasn't one of my choices.
74: I remember a friend of mine explaining to me, sometime in the late '90s, that he was making tons of money in the market because he'd figured out that you just had to look to see when the stock price was going to change direction, and sell then.
Later, he lost a ton of money.
While all the other kids were doing coke and having wild sex in their late teens / early twenties, I was a drug-free virgin making risky investments with other people's money in the NASDAQ bubble as part of a dorm-room hedge fund. We tripled our money in four months and then lost almost everything.
In 1997 my dad found out that our local Unitarian Fellowship had all their money parked in something like the local credit union, and convinced them to invest in tech stocks. They did phenomenally well, compared to zero growth, and used the money to move to a much larger, nicer venue. And probably other more philanthropic things. I don't think they got burnt when the bubble popped.
I know people who bought houses off of profits from just Amazon stock. There was really a pretty big window where you could do that and end up happy. Probably bought the house early enough that it's gained a bunch of value, too, even after the crash.
In the late 80s, my dad had something modem-like, and he would yell at us not to pick up the phone and then download all the stock market prices. Then he had this software which computed the moving average, based on whichever time-length window you picked. (I think he usually did two weeks to a month.) Then he worked up elaborate theories which boiled down to "Did the stock cross the moving average?"
It all seemed like excruciatingly fascinating wizardry to me, especially because I was in 6th grade or so, and read The Westing Game at about the same point, and whatserface is a stock market whiz along with being a generally awesome heroine.
The lesson, of course, is that you should make sure to time the market just right.
In the late 80s, my dad had something modem-like, and he would yell at us not to pick up the phone and then download all the stock market prices.
I'm going to go ahead and say that this was, in fact, a modem.
I was told there would be no epistemology.
This seems a good thread to ask: several years ago, I was saving more money than the annual IRA contribution limit, and therefore made a second non-IRA investment account with my bank to put it in. My IRA account is a Roth, but I'm not adding to it due to student loans. Tax-wise, it would make sense now to take that smaller account and transfer it into the Roth? Or would that not boot me anything? (Or is it a question better suited for an accountant?)
Sounds right to me too. In your shoes I'd be tempted to cash it out to pay off the student loans, but I recognize that that's insane -- tax sheltered investment is going to have better returns than paying off low-interest debt.
86: If I'm understanding your situation right, it seems good to take money out of the smaller account each year and add it to your Roth. This just shifts money into the "money you don't pay taxes on" category.
86. Maybe you've done this already, but I think it's a good idea to have money that's not behind a retirement wall. Nobody plans to be unemployed or to have family members get sick. 6 months gross if you can swing it makes sense to me, I think that's in line with magazine-level personal finance advice.
For similar reasons (you maybe can't get the money back) prepaying loans is more sensible if you have backup provisions, actually pretty risky if you do not.
Of course, given my 56.2, I suppose the rational thing would be to dump it all against my student loans (I have emergency savings elsewhere). But somehow I can't bear the idea of my retirement savings diminishing. Perhaps I can compromise and dump half.
Your student loan interest rates should be pretty low. Are they not-that-low?
Thanks, all.
88: Not low-interest in the current environment: all either 6.55% or 7.65%. I don't see myself doing better than that on the market, argal paying down the principal is better in terms of interest-that-will-not-accumulate than investment returns would be. Or am I missing something?
Or are you failing to include the 'no taxes on withdrawal' aspect of the Roth in your calculations? Because that's pretty big.
94: Probably; I've just been thinking in terms of rates of return, not calculating out scenarios.
6.55% or 7.65%.
Jesus Christ, you can get cars loans cheaper than that these days. Pay them down aggressively.
My student loans are all locked in for 30 years at 1.625%.
Even the federal grad student loans are all at 6.55% or higher at this point, I think. And it's actually 6.8% if you don't autopay. My plan, if I ever get the paperwork done for the job I supposedly will start in the spring, is to pay as much as I can above the regular 10-yr plan payment schedule. But I have basically no savings of any kind, certainly no retirement.
I say "even the federal" because I have the impression that private loans were worse deals. Maybe they're actually better sometimes, but the interest floats or other terms - future balloon payments or whatever - could be worse in the long run. I never went that route so I don't really know.
But I have basically no savings of any kind, certainly no retirement.
Ditto. Steadily decreasing debt, steadily [but not as fast as I'd like] increasing salary, so it's not all bad. But the idea of either i) real savings, or ii) a mortgage, still out of reach.
My student loans are all locked in for 30 years at 1.625%.
Right. I don't think mine are quite that low, but they are about 2%. I'd never pay those off early. That said, it isn't like I have any plan to make my non-existant piles of money "earn" money. For all the investing I do, I might as well pay off some low-interest debt if I get two nickels to rub together again. (Whenever I do have any money, I fix something around the house.)
I fix something around the house
Or maybe get A/C or something.
On the bright side, I've just been doing some number-crunching and realized that because I've been striving to pay off extra principal whenever possible, but my regular monthly payment hasn't changed, I'm on track to be fully paid off significantly earlier than schedule.
Can I just say how much I resent feeling that I'm forced to invest in securities? Since I've had any money to invest for retirement, what I've invested (in the 401K options my jobs have given me) has done about as well as stuffing the mattress with bills would have. My emergency fund is in a ridiculously low interest savings account because I hate all this shit.
Next two priorities are the new home exterior paint I've needed for a few years and an outdoor shower.
outdoor shower
Ooh, I've known people that have one of those, and it always seems like a great idea.
the job I supposedly will start in the spring
Are congratulations in order (or already past), or is this just a minor thing?
I actually, seriously did have a distant relative die and (indirectly) leave me around $40K, of which I have drawn down a little under 20% because I am currently insolvent. Student loans would eat up a lot of the rest if I let them, and I've been dithering about what to do with it -- although one grimly likely scenario is that I'll just burn through it all while unemployed between June and [unknown date]. It's far from clear whether this was a good or a bad time for a windfall, since on the one hand I "need money," but on the other hand I should probably get money by investing in Amazon in 1994 working and not spend my child's college fund on enticing houseplants, cappuccini and pity pastries.
The SRI funds paralyze me. Must... passively... "do"... good... but it can't really be possible...
Hm. It looks like I've been misleading myself by thinking in terms of annual return/interest, because my retirement savings will be earning returns for a far longer period than my loans will be accruing interest. Better think about how to apply this.
unenclosed outdoor shower
Far better than walking around nude inside the house with the window-shades up.
Are congratulations in order (or already past), or is this just a minor thing?
A real thing and a bit above, in terms of pay/benefits what I expected to get, if I got anything in the field. It's not permanent, but it's still a couple of years and if I manage to be successful I should be in much better shape for the next round of job applications. I still can't quite believe things have apparently worked out, given how poorly I was doing on the job market when I suddenly got a couple interviews.
(I accepted the offer (over the phone) a couple weeks ago but the winter holidays have really slowed down the making-things-official-so-I'll-sleep-better process, which is part of the reason I haven't really mentioned it before.)
I understand the idea if you have a pool but in the absence of a pool what the hell would anyone do with an outdoor shower?
6.55%? If you weren't some random person on the internet I'd offer to pay off the loans for you now (depending on the remaining principal) and have you repay me at only 5-6%.
If you're near a beach it's useful too; more so than with a pool, due to sand.
113: I too thought the rate was ridiculous given prevailing interest rates, and that I might be able to get such a loan from some random institution, but at a glance "consumer" loans are normally much higher-rate, presumably because unlike home and car loans they're unsecured, and unlike student loans they're dischargeable.
Outdoor showers are awesome. Useful? Who cares. They're great.
Well sure a beach is basically a pool for these purposes. But I did not think Megan lived near a beach.
Doesn't Halford have an outdoor sex grotto shower?
I live near a sandy river beach, so there's that. It'd be easier to bathe the dog after he rolls in dead salmon too. But if all I ever did was rinse off in unheated water on hot summer days (in a nicer setting than turning a hose on myself), it would be well worth it.
Also, congrats on the job, fake accent.
Okay, an "outdoor" shower that you accessed from your indoor bathroom--like the people from Austin in this article--would be wonderful and awesome. But outdoor outdoor? I don't see it.
122 before I saw 120, which okay actually makes sense.
Mine would be semi-enclosed, with some shielding and some relying on sightlines for privacy, which I don't need all that much of anyway.
119 --thought about but decided against one, for now. I do have an outdoor gas fire pit that is the best.
So, is urple the new boss of which things make sense and which don't? Because ... well, just checking.
Although I do quite like his ManMinBalVal method.
111: huzzah! I hope the officializification is not too delayed.
111: hey, that's great news! Can you tell us where you'll be living? One assumes Alaska, of course, but perhaps you've decided to deviate from the norm.
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I share an informal exhibition space with six other artists. Because some of the allotted spaces are larger and more prominent than the others, we rotate our work monthly, before First Fridays. One of the six is traveling until spring. She just emailed the rest of us suggesting that to save us all the trouble of moving her work every month, we should move her work just this once, into [one of the two best spaces], and leave it there until May. This is the same woman who wanted me to leave my laptop in the gallery for a month to play back her crappy videos on, because she was too stupid to figure out how to make a dvd and too cheap to get someone else to do it. I know 90% of the artists in the world think their work is the only work that matters, but not many actually expect others to share their views on the matter. I am unreasonably irritated by the so-reasonable tone of her "offer".
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Congrats, FA, that's awesome.
Draw penises on her art. If it already has penises, draw swastikas. If already has both, give up. She's won art.
132: If that's what it takes to win art, I'm going to put it on my own stuff.
I know 90% of the artists in the world think their work is the only work that matters, but not many actually expect others to share their views on the matter
Shared spaces are a fucking hassle sometimes.
She just emailed the rest of us suggesting that to save us all the trouble of moving her work every month, we should move her work just this once, into [one of the two best spaces], and leave it there until May.
Oh, how nice. I suggest you all just leave it in the lesser space where it is now until May.
That's a reasonable comprise. You need a "I'll destroy America" counter if you want to win.
First Halford-baiting of 2013: it appears that the hot new business model is to acquire a set of dubious patents covering ubiquitous technology--emailing a scanned document, in this case--and then send out thousands of threatening letters to companies small enough that they're unlikely to have any patent-litigation experience. For bonus points, create a dozen shell companies with randomly generated names to make it harder for your targets to publicize what's going on or coordinate their defense!
139: look, if that technology isn't patented, nobody will ever send important pdfs via e-mail again.
Isn't that more directly LizSpigot-baiting?
141: But Halford's more fun.
Oh, I can't resist, let's have some more:
The same address and contact phone number is on every variation of the six-letter entities. The address is just a mailbox in a UPS store in Newark, Delaware. As for the phone number on the letters, 855-744-2360--I called it. The conversation was not enlightening. "Thank you for calling the legal department," said a youngish-sounding man. "This is Kevin, how can I help you?" I was calling about a letter I was holding from AllLed, I explained. Kevin asked for my letter's "file number," which was the one thing I couldn't give him--it would have revealed the source from whom I had received the letter. I told Kevin I was a writer who had been given the letter by someone else. All I wanted to do was contact AllLed, LLC directly--so how could I do that? "We don't have any information on the entities that send the letter," he said. It was just an answering service. "We don't have their contact information." "Well, who are you the 'legal department' for?" I asked. "Hmmm," said Kevin. "Legal department." "I don't get it--is 'Legal Department' a real company?" I persisted. "Hmmm," said Kevin again. "We're just Legal Department." "Well, you work for someone, right? What company do you work for?" "This is Legal Department. That's all we can say."
The Nigerian 419-ification of the economy marches onwards, with a little inspiration from the RIAA and Kafka.
... although I suppose it's actually a lot closer to those Russian hackers who encrypt folks' private or business data and demand a ransom to decrypt it than it is to the traditional 419 scam. My bad.
There should be a tax on assholes, that would balance the budget right up.
That would be as regressive as a poll tax.
I'm a little annoyed that I forgot that car loans are lower interest than my wife's student loans when getting my car loan.
Also, it's annoying trying to work out whether I should be putting more money into retirement or saving for a downpayment or paying off student loans.
You could tax assholes by size, so the biggest assholes have to pay the most. The tax on Donald Trump alone would be enough to fund Planned Parenthood.
At the orientation for new faculty last year, our last task was to fill out forms allocating our retirement contributions between TIAA-CREF and Fidelity. None of us had a clue what we should do, and I think most people split them 50-50. (I went for a 25-75 split, for no good reason I can think of). It was almost as if the idea that we were going to make actual money--enough to save!--was too surreal to contemplate.
This thread inspired me to look back at the paperwork for my retirement funds for the first time since I signed up when I was hired. My memory was correct that I went with the default date-targeted fund. I also signed into the website to track it for the first time; it looks like the largest equity holdings in the fund are Apple, Exxon Mobil, Microsoft, GE, and AT&T. Works for me, I guess.
14
Is there a way to short the US credit rating? (Without just shorting treasury bonds, which isn't really the same thing.)
Yes buy Credit Default Swap (CDS) contracts protecting federal debt. These seem to come in 1, 5 and 10 year versions. The markets appear to be small and illiquid which means not a good idea for an amateur. See here and here .
Ideally, you can buy your Credit Default Swaps from a company that will be bailed out by the government when it can't pay off its Credit Default Swaps covering the credit rating of that very government's debt.
Although what do I know, I keep all my money in synthetic sub-prime mortgage backed securities. What could go wrong?
31
Buying individual stocks is reasonable if you enjoy stock picking and have enough funds to buy 10-20 or so to get adequate diversification. But it is more work. I recently had some money to put in the market and bought some individual stocks but ended up putting a lot in the Vanguard S&P 500 ETF because I had run out of individual stocks I felt like buying and didn't really want to do a bunch of research to find more.
122, 128, 129, 131: Thanks! I have some hope that it will be settled enough this week for me to relax a bit and start working on actually moving. I'll be moving somewhat north, and way east, not to a big city but within a reasonable distance of one or more. Assuming everything goes as planned, of course.
I have some money with one advisor and another with another and a teeny amount in a Roth IRA and a chunk in Sentinel which is supposedly ethical. Most of it is parked in a money market because I am trying to buy a house because although this one is just lovely it is a one bedroom and I really want a home office, so much I cry sometimes just thinking about it. The market is cookynutty and we are putting in our tenth offer soon.
105
Can I just say how much I resent feeling that I'm forced to invest in securities? Since I've had any money to invest for retirement, what I've invested (in the 401K options my jobs have given me) has done about as well as stuffing the mattress with bills would have. My emergency fund is in a ridiculously low interest savings account because I hate all this shit.
This can be a dangerous way of thinking. Just because you want attractive alternatives doesn't mean they exist. Lots of people (and entities) have gotten in trouble reaching for yield instead of making appropriate adjustments to their expected rate of return.
Just because you want attractive alternatives doesn't mean they exist.
Ah, flashbacks to dating in college.
After college, you stopped wanting somebody attractive?
74
Most people just invest in S&P 500 index funds, which is a perfectly reasonable option, but I buy mid-cap and small-cap indices instead. Given the sheer amount of money people pour into S&P 500 indices, I worry about those things getting overvalued. Mid-cap buyers can also profit when their stocks get added to the S&P 500 and all the index funds have to buy it at the same time.
I do this with ETFs (exchange-traded funds), which are index funds that can be bought and sold like individual stocks. If you're looking for ticker symbols, most of my money is in VO, VB, and VOE. I also have a little VWO for international exposure.
This is reasonable but there are some advantages to Vanguard's S&P 500 ETF (VOO). It has a lower expense ratio (.05%) and lower portfolio turnover rate (4.3%) and I would expect it is a bit more liquid. (The expense ratios for VO, VB, VOE and VWO are .10%, .16%, .10% and .20% respectively and the porfolio turnover rates are 22.5%, 17.5%, 40.8% and 7.6%).
Asking ordinary people to be their own investment manager is crazy in so many ways. It does offer good predation opportunities for the financial sector though.
Something like the Guaranteed Retirement Accounts proposal by Teresa Ghillarducci -- a pooled, professionally managed investment fund with a government-guaranteed minimum return -- would be far more sensible. Senator Harkin has a similar proposal to create a pooled public retirement account but it's unclear if it goes all the way to guaranteed returns. The devil is in the details of course.
159. Presumably the point is that once she was no longer in college, she was able to find people who were more attractive.
162: To understand this you have to remember where LB went to college.
Indeed. That point had not escaped me.
161
Asking ordinary people to be their own investment manager is crazy in so many ways. It does offer good predation opportunities for the financial sector though.
Public employee pension funds haven't exactly demonstrated strong immunity to predation from the financial sector. It would be interesting (although possibly depressing) to try and figure out which group gets exploited worse. I am pretty confident (perhaps wrongly) that I am better off in this regard managing my own money.
165: the usual claim made about public pension funds is that they promise excessive returns/are underfunded, which is actually different than financial predation (the right-wing claim is actually inflated pension payouts, to which never mind). However I agree with you that many pension funds, particularly smaller ones, can get taken advantage of. The size and professional management of a public option is meant to guard against this, as is the attempt to lock in a low but guaranteed return rather than speculate to maximize returns.
Plenty of attractive people where LB went to college (the second time).
165 --- isn't that just a symptom of the generally (comparatively) high levels of malgovernance and corruption in state/local government/unions in the US? I think that in countries with stronger norms public pension funds are pretty much safe as houses.
pretty much safe as houses.
As investment vehicles?
161. What about asking ordinary people to make their own spiritual or reproductive decisions?
Mind you Equitable Life/the Tories/a pox on many houses.
170: There's a big difference between making your own medical decisions and performing your own colonoscopy. A lot of personal financial management feels like the latter.
(Explained marginal tax rates to Newt this morning. I figure he's now more sophisticated on the subject than a large percentage of Congress.)
172:1 belongs on a fortune cookie. Or maybe a Hallmark card.
(And in defense of the Nerd-American community, I remember the dating options at the first of my almae matres as more appealing than those at the second. But my tastes have always been specialized, and in most contexts counterproductive.)
74: People who claim that they can outsmart the market are usually scamming you.
I've found that they do seem to believe their own hype, frequently enough. I think I've mentioned before that I only ever saw one other real "strategy" besides buy-and-hold: There was a broker who had this scheme to make money off the spread in S&P index (usually the 100) options in the week or so before expiration. He had hundreds of thousands of dollars in T-bills as the collateral for fairly significantly risky spread and straddle positions, and I think he netted about $500-$2000 a month per account from his trading, plus whatever he got in interest from the T-bills. He also consumed something like 5% of the margin clerk resources for the firm, as his positions were hella complex, and in that week or so of trading, he'd often do 50+ trades per account. Of course, the only reasons this was profitable were (a) he was mostly trading his own and family accounts, and (b) there were still appreciable spreads on those options back then. Nowadays, I don't think you could really do that.
Tl;dr: Buy and hold.
A lot of personal financial management feels like the latter.
Disagree
|| A link for Trapnel. Well, the title is for XT, the post is sadly on topic. |>
Nice find. Super rich, Californian, likes lotteries, seems to support open content... Maybe I should write him and see if he wants to adopt me.
That's kind of 19th century, x. You should get him to subscribe to your newsletter, and then fund your think tank research institute.
If only I had a newsletter, I could get him to fund my research institute, if only I had an institute.
But jesus christ, I'd forgotten what sewers the comment sections of the right wing blogosphere are--especially once the discussion gets anywhere near affirmative action. I should have known to be worried when Google suggested that folks who search for Un/z also often search for Steve Sai/ler. (Though to be fair, it appears he's linked to the racists in Google's mind because he argues with them and engages them rather than because he agrees with them.)
Ron Unz is a weirdo who had an odd run for governor and spent most of his money attacking bilingual education (though IIRC he also opposed Prop 187, so he's not at all just an anti-Hispanic, anti-immigrant racist.)
I read his recent article in which he claims that Ivy League admissions officers systematically discriminate, for irrational reasons, against Asians and in favor of Jews. I have to say it seemed pretty convincing, though presumably the American Conservative published the article for good old fashioned anti-Semitic reasons.
I read his recent article in which he claims that Ivy League admissions officers systematically discriminate, for irrational reasons, against Asians and in favor of Jews.
I saw that as well, but didn't really want to engage with it without doing a lot more checking the stats than I had energy for. That is, I'll believe no problem that there's effectively anti-affirmative action for Asians: that Asian kids need higher test scores/grades than non-Asians to get into high-prestige schools. The in-favor-of-Jews bit, on the other hand, I'd want to look at all the numbers very carefully before accepting it as a basis for discussion.
Against Asians or against Asian-Americans?
Yeah, me too. I just thought the article itself was surprisingly non-crazy seeming and appeared surface-level convincing, not that anyone should accept it as true without a lot more analysis.
183 -- I believe Asian-Americans, but I guess I should retread the piece if we're going to be discussing it.
Reread; its tires are probably OK.
I see. At least in graduate admissions it seems like we almost have to discriminate against Asians, given the fraction of applicants who are in Asia, have perfect test scores, and have glowing recommendations from people we've never heard of.
183: I think both, but certainly including Asian Americans.
Seriously, I think both outcomes are plausible pernicious but not-necessarily conscious results of the subjective admissions process in high-prestige colleges, which nominally seeks students to create a 'well-rounded' class, but was (as you know Bob) originally devised to find a way to keep their classes primarily WASPy despite all the academically high-achieving Jewish applicants. If there's a strong subjective element of 'the kind of kid who will fit in well here' that's not consciously defined but forms a significant portion of admissions decisions, it wouldn't surprise me at all if at many colleges Asian-American kids didn't tend to impress the admissions departments as that 'kind of kid', and possibly that Jewish kids disproportionately did.
This is a real justice problem, although one limited to people who are doing just fine, globally (that is, anyone who arguably should have gotten into an Ivy is going to get a perfectly decent college education somewhere), so of limited broader social importance. But still a real problem.
187: In graduate admissions, that seems like a very different call -- you can have an opinion about what grades and tests mean coming out of all the universities worldwide individually in a way that you really can't looking at high schools. (I say, blithely knowing nothing about graduate admissions.)
It's a real problem to the extent that elite undergrad institutions function as a finishing school for our political and business ruling class. It's not that everyone should have an equal shot at joining that ruling class, it's that having one that's narrow and homogenous encourages groupthink &c; all the stuff Cosma and Farrell go on about. And further, the fact that it's done with such care has the particularly pernicious effect of encouraging a sense of desert in those who win the competition.
And further, the fact that it's done with such care has the particularly pernicious effect of encouraging a sense of desert in those who win the competition.
Yes: there's a sense in which it would be less pernicious for the Ivies and similar to abandon any pretense of being a meritocracy. The real situation seems to be much more that "we admit the kids that we find most personally appealing, which includes an aspect of academic merit but is mostly kind of whimsical", but the public impression is "we select the best of the best."
189: essear's talking about international graduate admissions, which is quite different (hence his question of asian or asian-american). For domestic admissions, indeed you have much more information than for undergraduate admissions.
Here's the article, in case anyone wants to take a whack at it.
This article, while not exactly work, was a useful way to spend part of the afternoon. Via Metafilter.
It's worth noting that when that article says there's discrimination in favor of Jewish applicants, it does not mean relative to other affluent white americans, it means relative to Asian-Americans. I don't think there's anything in the article saying or implying that Jews are overrepresented relative to white american gentiles drawn from the same educational and socioeconomic background.
Oops, my bad, ignore that last comment, I hadn't finished reading the whole article.
I don't think there's anything in the article saying or implying that Jews are overrepresented relative to white american gentiles drawn from the same educational and socioeconomic background.
I read the article and believed it was claiming that there was a Jew versus gentile advantage. If it's not -- if the stats it's relying on are 'white american' versus 'other ethnic groups', that's really a disgustingly antisemitic (I think the author's Jewish but I don't care) framing.
197 crossed with 196 -- I'd read the article a week or two ago, and didn't remember it in perfect detail.
In my defense the article does a bit of a bait-and-switch, because it first introduces Jews as an easier to identify by name proxy for traditional WASPs, and doesn't give any indication that these populations aren't interchangeable until halfway through the article.
"One obvious candidate would be the population of elite East Coast WASPs which once dominated the Ivy League... Fortunately, an alternate comparison population is readily available, namely that of American Jews, a group which is both reasonably well-defined and one which possesses excellent statistical information, gathered by various Jewish organizations and academic scholars."
it first introduces Jews as an easier to identify by name proxy for traditional WASPs
Wait, Jews are a proxy for WASPs?
If you're a monotheist, extreme traditionalism might push you that way.
Look at the article, it's totally how he justifies looking at Jews for the first half of the article. It's not the craziest suggestion either, both groups are relatively wealthy, well-educated, and concentrated in the northeast.
I know no one cares much about Canada, and some doubt it even exists, but there was a controversy not that long ago about an article in Mclean's that suggested that there were too many Asian-Canadians getting accepted to elite colleges because apparently they are too academic and not well-rounded enough. I believe the article started out with a headline of "Too Asian" and then changed it too "Too Asian?" after people criticized it. They may have switched up some of the content too, you know, to make it seem less racist.
Jewish people are just more traveled immigrants from Asia.
I read the article and believed it was claiming that there was a Jew versus gentile advantage. If it's not -- if the stats it's relying on are 'white american' versus 'other ethnic groups', that's really a disgustingly antisemitic (I think the author's Jewish but I don't care) framing.
no -- Unz has specific stats on Jewish enrollment in the Ivies, coming from Jewish organizations and also from the work of Jerome Karabell and others.
The conceptual issue I saw with the article is that in the part on academic achievement (NMS, Math Olympiad, etc.) Jews are apparently identified by ethnic surname, while assimiliation has meant that many Jews have last names that are not traditionally Jewish. Certainly surnames are going to be far more accurate for Asians. However, the size of the academic drop he documents and also the other sources seem to create a decent prima faciae case for a real decline, even if maybe not as large as he estimates.
I thought overall the article was important and valuable work. At least to me, it convincingly documented a significant Jewish advantage that aligned with some of my own experiences.
At least to me, it convincingly documented a significant Jewish advantage that aligned with some of my own experiences.
I was looking at it and wondering if (under the assumption that the stats are good, which I'm actually not willing to accept without a lot of checking that I'm not in a position to do) I'm Jewish from an admissions department's point of view. Not that a college would be confused about my ethnicity, but that a bias in favor of urban white children of professionals might have the effect of favoring Jewish kids, but would actually be applied regardless of Jewish/gentile status.
But mostly I wanted to ask, what experiences? Out of context, that sounds weird.
Non-roman character spam on an English language site is kind of brilliant, if its ability to evade the filters right now is any indication.
208 gets near a point that was annoying me, a failure to look at the high school level rather than the individual or ethnic/race level. Are heavily Asian schools getting few slots or are Asians losing out within schools? Do heavily Jewish schools have fewer NMF than they used to? What happened to the number of Stuy students accepted by Harvard as it changed from heavily Jewish to heavily Asian?
Badly written or more likely old filter.
Here's a key
Legacy admissions are another confounding factor. It's no secret that jews were substantially overrepresented in the ivy league since at least the 70s, Partly because those schools are geographically in the Jew belt, which means that children of Jews are overrepresented among alumni children for the past few years. At this point, a preference for alumni offspring discriminates against wasps.
166
165: the usual claim made about public pension funds is that they promise excessive returns/are underfunded, which is actually different than financial predation (the right-wing claim is actually inflated pension payouts, to which never mind). However I agree with you that many pension funds, particularly smaller ones, can get taken advantage of. ...
The inflated assumed returns enable predation by encouraging funds to adopt complicated investment strategies in an attempt to achieve the assumed returns. The more complicated an investment strategy the harder it is to assess and the easier it is for the more sophisticated parties to rip off the less sophisticated. And it is not just small funds who are victims, for one thing bigger pools of money attract the slicker, more plausible and dangerous predators.
For example someone talked Rod Blagojevich, the then Governor of Illinois, into a scheme in which the precarious finances of the state teacher pension fund would be shored up by borrowing money and investing the proceeds (basically buying on margin). No doubt this generated lots of fees but did less for the teachers when the investments under returned. See here .
The pension funds would invest the proceeds in stocks and bonds with a target investment return of 8.5 percent a year, but the interest on the bonds was only about 5 percent. This was marketed as a free lunch, but it wasn't one: Interest payments were fixed but Illinois taxpayers were on the hook to pay if the assets underperformed, which they did.
This is hardly an isolated case. Hedge funds as a class are a scam (charging high fees for average returns) and lots of public funds invest in them.
And there are lots of cases where the politicians running state funds allow politically connected investment firms to cream off excessive fees. As for example Alan Hevesi former New York State Comptroller.
...He later pled guilty to corruption charges surrounding a "pay to play" scheme regarding the New York State Pension Fund, and was sentenced to 1-4 years on April 15, 2011.[4]
To the OP, I've long invested in Do/mi/ni Funds and Sen/tin/el and have some CD's at 1st Tr/ade Un/ion in Boston. Used to own some Cal/vert, but sold out. I also have a 401(k) with limited choices. I own one stock with a reliable dividend (left to me by my grandfather, who worked on a factory floor his whole life and saved and invested well enough to leave his grandkids a little when he died at 99).
I don't really monitor anything; it's boring and hurts my head. I'm putting my faith in diversification and the long run. In the likely scenario that the Water Wars begin before I retire, it won't matter anyway.
209: I may be exaggerating it, but I have had many experiences where people senior to me in important positions were Jewish and shared my cultural style, ways of talking and communicating, certain assumptions, etc. This can be an advantage in a number of ways -- it won't hold back a true star or lift up a real mediocrity, but for the great majority of human beings who spend a lot of time performing in that B+ kind of range it can help.
"Where should people put their money in 2013?"
NCUA-insured credit unions. Safe deposit boxes. Mattresses.