Showing posts from March, 2016

Dave Ramsey just makes stuff up about gold

Radio gold-basher Dave Ramsey on his 3/24/16 show (hour 2, 30 mins in):
When you look at the track record, say, over 50 years, if you put money in gold 50 years ago, or you put money in a growth stock mutual fund 50 years ago, or you bought a house 50 years ago with the exact same amount of money, so we took $100,000 and we put it in there, and you visit 50 years later, you know, you would find that gold has about a 2% rate of return over that 50 years... It's done horribly! The truth?  Not even close.  Gold was $35 in 1966, and is $1216 now.  That's a 7.35% annual return compounded over 50 years.  And it's 8.2% annually over the 45 years since Nixon took the dollar off the gold standard in 1971.  That's not quite as high as stock returns, but it's a hell of a diversifier due to its low correlation with stocks, and certainly deserves at least a few percentage points in any asset allocation.

Pro Tip: use mutual funds for dollar-cost averaging, then flip into ETFs to cut taxes and expenses

Exchange-traded funds (ETFs) are the greatest thing since sliced bread. They allow individual investors to build diversified portfolios at near-zero cost. You can get all the asset classes you need using only a handful of ETFs.

Here's a 4-ETF portfolio you could start with, choosing various weights depending on your risk tolerance.

VTI - Total US stock market
BND - Total US bond market
VEA - Foreign stocks
VWO - Emerging market stocks

Your total cost on that portfolio would be less than 0.1% per year.

If you want to get fancy, you could throw in a few other asset classes like REITs (VNQ and VNQI), munis (MUB, CMF, NYF), and high-yield bonds (HYG). There are even ETFs for the precious metals (SGOL, SIVR, PPLT, PALL...), though most goldbugs prefer, with good reason, to hold physical metal.

So what's the downside to ETFs for individual investors?  It's that you generally can't set up automatic dollar-cost averaging as you can with mutual funds.  I like to dollar-cost …

Father of the Year


Vote for the crook!

It's important to preserve the status quo!

Marketing, government style

San Diego Union-Tribune:
NCTD considers fare hike amid flagging ridership


... means getting to choose which rich, old, arrogant white person is going to waste your money and boss you around.

Super Tuesday

All is proceeding as Idiocracy has foretold: