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  • The Best Passive Retirement Strategy In The World [View article]
    At the risk of being an "intelligent fool" (cool quote Jerbear), if one were going to go this route, I would advocate a bond *fund* ladder to get more diversity (rather than buying individual bonds to make a ladder). I.e., use something like the Guggenheim BulletShares funds (BSCE through BSCM), or perhaps even the AMT-Free Muni Term funds (MUAE through MUAH).

    Of course, this substitution comes with default risk that Mr. Springer points out is not present with CDs. But, in my opinion, the higher yields more than compensate for the marginal increase in risk.
    Jun 26, 2014. 04:49 PM | 1 Like Like |Link to Comment
  • Will Detroit Save The Municipal Bond CEF Sector? [View article]
    Do you mean "tax free" rather than "interest free"? If so, then you're suggesting these buy-writes would be good for a taxable account perhaps (I say perhaps because NFJ, for example, also throws off dividends so it might not be a good fit)? I hadn't thought about that before. Thanks for the tip.
    Nov 13, 2013. 02:57 PM | Likes Like |Link to Comment
  • The 'Great Rotation' May Be Very Different Than Many Think [View article]
    If I follow you correctly, your prediction is that bond yields will rise due to the removal of demand from the Federal Reserve which will drive demand for bonds. But this new demand should drive rates straight back down, right? I.e., this sounds like a self-limiting scenario.

    Isn't it more likely that the removal of the demand coming from the Federal Reserve will cause rates to rise to attract buyers to new issues? This will in turn case current bonds values to drop to raise the effective interest rate to the prevailing norm. This drop in value would be especially felt by individuals who mainly keep funds that do not hold to maturity and are constantly buying bonds to match the maturity level advertised. People would sell due to the dropping value and there would be a self-reinforcing effect until the rates reached equilibrium.

    So, the first part of the "great rotation" is probably right "bond holders will dump their bonds." Perhaps it is only the second portion that is incorrect: "and buy stocks."
    May 31, 2013. 05:45 PM | Likes Like |Link to Comment
  • Sell In May: Not Today [View article]
    Two is not "more than 2." Fill in your own quip regarding incompetency: __________.
    May 2, 2013. 03:41 PM | Likes Like |Link to Comment
  • The Price Of Admission For Buy-And-Hold Investing [View article]
    The reverse is just as hard too. Can you have the patience to keep your newly earned income in cash, getting little interest, and watching your savings get eaten by inflation as the markets slowly rise when there aren’t any good valuations available?

    You mentioned bonds aren’t an option (“we’re in the middle of a massive bond bubble”). Any thoughts on parking your money in the Guggenheim Bulletshares which hold to many bonds maturity while waiting for another big decline? The high yielding funds are paying from 3.5% (2012 maturity) to 5.8% (2015 maturity) while the higher rated funds are only paying 0.99% to 2.37% for the same maturities. I suppose the chance of default risk is the biggest downside, but may be mitigated by the number of holdings.
    Jan 19, 2012. 01:42 PM | Likes Like |Link to Comment
  • Don't Leave Your Hard-Earned Retirement Money Languishing In A Savings Account [View article]
    I was interested in reading your article, because I am one of those people who have all money outside of retirement accounts in cash. It is about two years worth of living expenses. I admit that it does make me sick to see the 0.85% interest dribble in every month, but I have friends who have been unemployed for over a year (lawyers, like me). I am single, and I just cannot put anything in the market when I might need that money to live on. In short, my worry over retirement is overshadowed by my worry of foreclosure and moving in with my parents in middle age. A secondary consideration is that I would not be surprised to see a 30-50% correction in this secular bear market with looming triggers everywhere (Europe, U.S. Deficit, etc.). So patiently I wait. If there is another drop like March 2009, my powder will be dry. In the meantime, new cash flow from my job is going to pay down my mortgage, which is at least a 4.375% return guaranteed (more like 3% after considering the mortgage deduction).
    Jan 6, 2012. 06:02 PM | Likes Like |Link to Comment
  • Buying Ford For The Dividend? Consider This Instead [View article]
    FWIW, according to some commentators at Yahoo: "This issue has been callable since 2008 at 25/share . . . At the current price, you're risking an immediate 5% loss if they decide to call, which they can at any time." Might have mentioned this in the article.
    Dec 12, 2011. 01:12 PM | 1 Like Like |Link to Comment
  • The Life Cycle of the Dividend Investor [View article]
    An idea for you to consider: If you are looking to make an entry into these stocks if they dropped 5–20%, you can sell cash-covered puts at your price targets and generate income while you wait.
    Jun 9, 2011. 07:14 PM | Likes Like |Link to Comment