Friday, May 22, 2009

Short Takes: Buy and Hold, Credit Card Rules, and Inflation for Retirees

1. Vanguard’s John Ameriks explains why “buy and hold” is not dead. Every time the market drops, commentators cry out that buy and hold doesn’t work. Unfortunately, trying to time the market doesn’t work either.

2. New credit card rules are on the way in the US. My Dollar Plan outlined the expected changes. The most interesting new rule to me is the one requiring cardholders under 21 to have a co-signer unless they can prove that they can make payments on their own. This is an attack on the practice of extending credit to young people with the expectation that they will get themselves into debt trouble and get bailed out by their parents.

3. Canadian Financial DIY reports on a study showing that inflation is higher for retired people than it is for the general population due to rising health care costs.

4. If you own any emerging market funds in taxable accounts, you may be getting a distribution. Canadian Capitalist reports that South Korea and Israel may be dropped as emerging markets and take on developed country status.

5. The Big Cajun Man reports that while inflation overall hasn’t begun rising significantly, the price of food has been rising.

6. Preet observes that when markets are volatile and flat, leveraged ETFs tend to perform poorly making them attractive to short. Of course, the trick is to anticipate whether markets will remain flat and volatile.

7. Frugal Trader designs an income portfolio for a 60-year-old with $1 million in retirement savings. Unfortunately, I know a lot more retirees with less than $100,000 saved than those with $1 million or more.

8. Mark Wolfinger plugs his book on trading options. Mark is serious about managing risk, which is very important for anyone considering trading options.

4 comments:

  1. Thanks for the mention have a great weekend and don't hit any Snowmen!

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  2. Thanks for the link Michael. I find it incredulous that even otherwise sharp commentators implying that stocks may not make money over the next 15 because the last 15 were a wash. If anything, past history has shown markets to be mean reverting. They don't go in one direction forever.

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