Friday, June 9, 2017

Is your portfolio wrecked by investment biases?

I wrecked my portfolio; did you?
My retirement nest eggs could have contained over a $1 million. Invested at 8% in a balanced fund, I could have spent $80,000 a year on average. But I fell victim to 10 investment biases that wrecked my portfolio.  After learning about my mistakes, I was able to recover and still grew it to $900,000. I had never heard of Warren Buffett when I began investing in the early 80s. Warren Buffett had not yet provided his secret to investing.
            I had no idea that for investing, the key to success is cost.
            I did not know you can avoid taxes on retirement income.
            I did not know my money could grow faster just by leaving it alone.
My first contact with 'investing' was deciding which options for my 401k account. The HR person said “you won't lose money with this one.” They steered me to the “stable value” and money market options. That was my first big mistake.           
I learned to avoid my biases and invest well: https://www.amazon.com/investment-biases-that-fried-nest/dp/1547188952

Trump uses flattery to trick us about investing
 “The Fiduciary Rule as written may not align with President Trump’s deregulatory goals,” Acosta, Trump’s labor secretary, wrote in an Op-Ed. “This administration presumes that Americans can be trusted to decide for themselves what is best for them.” Flattering, but not true. We don’t have enough education and experience to decide how best to invest. The industry has preyed on us for over 100 years. “The image of the investment professional who always prospers—whether the client sinks or swims—has got to change,” said Paul Smith, head of fee-only advisors. “Everyone knows we overcharge for what we do. It’s obvious.” It is the brokers that have the yachts not the customers. We go to advisors for help and we lose. “The broker leads [us] to believe [we]re not paying any fees at all.” The return of the average customer is 3.79% while owning a low-cost stock index fund earns 11%. Further, by paying 2% per year to our advisor, we give up 63% of our total possible nest egg. One regulation doesn’t automatically make advisors more ethical. However, without at least the Fiduciary Rule, the phrase “trust your broker” will continue to be just a joke punch line. Schwab has it right, there is no advisor accountability. The industry hides the costs. GOP House lifts protections against financial meltdowns.

Did Russia change our voting computers’ tabulations?
Leaked documents say they targeted our voting machine software. The head of the Senate Intelligence Committee told USA TODAY, "I don't believe they got into changing actual voting outcomes," Virginia Sen. Mark Warner said in an interview. "But the extent of the attacks is much broader than has been reported so far." The Feds don’t know!
It sounds like our government never checked the local computers to determine if the software changed a few votes here and there to give the election to Trump. Putin did not want Hill to win. He admitted his “patriots” hacked our elections. But no one bothered to check our computers. It only would take a few votes in 3 states to reverse the outcome. The Brennan Center report estimated 43 states used voting machines that are more than 10 years old. Many of these devices contain outdated software without updates. Harri Hursti, a Finnish computer programmer, famously exposed this vulnerability by remotely changing counts. Some analysts think that malware, planted in the machine software can change outcomes. “You can tap that as many times, for as many votes as you want to give the person.” Any votes coded for “Clinton” could be cut in half automatically.


Will a single payer health care plan in CA NV work?
CA Dems say this is the only way for the majority to receive affordable health care. Many voters think that health is a right not a privilege of the tax credit class. TrumpCare gives our tax money to the wealthy and puts the burden for care on the states. Ryan does not want to give CA the money for a single-payer system. CA has the 6th largest economy in the world ahead of France. The top 10 countries have single payer systems. Even US medical providers agree Medicare works. Only the DC lobbyists disagree. These highly compensated folks have run our health care for too long. CA might show the way. NV may try Medicaid for all who need it. Medicare works better than what we have now. Just ask any 65 year old.
Trump’s kid thinks Dad’s critics are not human. https://www.amazon.com/Enough-Retirement-Income-Incarnate-living/dp/1500165107


What we don’t know will kill our future
Survey participants who worked with an advisor had lower overall levels of financial literacy. Because we don’t even know what an advisor charges, we lose $ billions yearly. Indeed, three in four respondents failed to pass The American College of Financial Services’ 38-question quiz regarding strategies to make savings last through a retirement. Before taking the quiz, 61 percent of the participants felt like they had high levels of knowledge about retirement income, but just one-third of those who said they were highly knowledgeable were able to pass the quiz, according to the College. This is called illusory superiority, a cognitive bias whereby a person overestimates their abilities. So many of us think we or our advisor can beat the market. So we think we know how to manage retirement income. 30 percent knew that actively managed mutual funds tend to have higher fees than ETFs. Just one-in-three correctly responded that bond values tend to fall as interest rates rise, and only one-in-four displayed an understanding of bond ratings and asset classes. We also struggled with low levels of knowledge regarding annuities, according to the College. Expensive annuities are sold, not bought.  


What did you learn from the Great Recession of 2008-9?
Many young people, watching from the sidelines, have turned into conservative investors, according to a Legg Mason survey. 82 percent of millennials say the investment decisions they are making now were influenced by the recession. People with other experience react differently: only 13 percent of baby boomers and 14 percent of those over age 65 say the recession held sway over their investing. This is called anchoring: a cognitive bias that describes our tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. If millennials had learned about compounding in high school math, they would know that investors earn 10-12% on stocks over TIME. A low-cost stock index has gained over 9% per year since 2007 and 11% since 1995 and 13% since 1975. At that rate, any young person who invests $250 a month could have $1 million by retirement because they have TIME.

This is what a critic is saying about 1 new car
“Perhaps the worst-handling new car on sale,” one said. The critic said that drivers will hate how much road noise emanates within the cabin. Check all ten new cars that you should NOT buy even if you love the way they look. Even the $80,000 Maserati Ghibli is rated a Gjip.
Best for getting there and back: Consumer Reports BEST for the 200,000 mile life.

Trump tax cuts will do harm and will be reversed like KS
GOPs in KS have awakened from the myth that more breaks for rich grows economy. GOP voted to rescind the tax cuts of 2012 after KS almost went bankrupt. Rich people of KS did not build new business, did not create more jobs and did not increase revenue from growth. The tax cuts of Brownback just left bad schools, more fees, less jobs. KS has no deficit spending like the feds so GOP can’t waste money. How many times will GOP fool the public with “growth thru tax cuts?” People forget the GOP savior Reagan had to raise taxes 11 times after cutting them in the 80s. Yes, he did not call them tax hikes but a duck is a duck. KS proved that when you cut taxes for the rich you increase deficits because rich people don’t spend money for things that create jobs. They buy art and other assets that are not taxed until they are sold—perhaps a generation later. When you have money, you can use all the legal means to avoid taxes. For instance, Warren Buffett, with $60 billions, pays only 17% total tax: http://www.youtube.com/watch?v=Cu5B-2LoC4s; Mitt Romney only 14%; John Kerry only 13% and Apple just 9.8%. Buffett found that his staff pays 32.9%—DOUBLE! Trump protects his own class with tax cuts.

Trump thinks he is vindicated.
He was/is the boss of campaign officials being managed by Putin.  “Despite so many false statements and lies, total and complete vindication...and WOW, Comey is a leaker!”
Comey kept notes of every meeting because the president lies. “Please release the tapes!”
U.S. bars are offering $5 Russian vodka drinks, “impeachmint” cocktails to draw crowds on Thursday to watch fired FBI Director James Comey's televised testimony to Congress.


*****************
TrumpWorld
Goal: Trump brand around the world


“Covfefe” means “I quit”
We can’t stop watching his “apprenticeship for president” show EVERY DAY!
Two Americas

Trump is still just a mafia contractor from Queens—Fred taught him to be The Don.
Like mob boss, he asks Comey to let Flynn probe go, then asks for loyalty, then fires him, then threatens him. https://twitter.com/realDonaldTrump/status/863007411132649473
Putin is not just another mob boss The Don is used to dealing with in NYC.

Chris Wray to FBI so he can get Trump off like Wray did for Christie’s Bridgegate. Wray kept secret Chrisie’s messages to staff who were convicted of giving order to close.

Russia tried to interfere with U.S. voting software before the 2016 presidential election.
Putin’s ‘patriots’ only had to have the software change a few votes for electoral college.
Putin happy Trump dumped working the rest of the world on climate—another wedge

Trump near giving spooks their mansions back and ending sanctions for invasions.
Trump retreat from world: America was happy “between our two oceans,” he said, until realizing “what a crummy world if we all retreat inside our own borders.” Gen Mattis
“When America gives her word, we have to live up to it and work with our allies.”

TrumpWorld – using presidency to make money the old fashioned way:
Koch Industries big winner with Paris pullout—Election dollars really do make change.
Ivanka’s shoe manufacturer investigated for abusing her workers.
Trump hotel paid $270,000 Saudi lobbyists to stop letting Americans sue for terrorism.
Don’s greed: shifted kids-cancer charity money into his business and interests.
Don to sell Washington waterway so customers can pay more and budget looks better.
Privatizing airports, water, roads could create another Flint or IN toll road hikes.


*************
Regulators are the only protection against corporations since we can’t sue anymore

VW recalls 24,000 Audi A7, A8 for emissions cheating after govt testing
Harley-Davidson recalls 57,000 Hogs for oil line break onto rear tire.
Fay Servicing caught failing to provide protections against foreclosures. No due process.

We need regulation—GOP wrong—companies/cities wouldn’t fix bad products on own
GM killed 124 because ignition switch pin not replaced after knew it killed first in 2006.


Police want gun control.
When everyone has guns; your chance of being killed goes up. Police don’t know who to shoot. They assume everyone has one and shoot first. You and thief have guns. CO schools now allow teachers/administrators to carry guns in the classroom. Kid lesson! Since 2015, police have killed 86 people with realistic looking FAKE guns--suicide?

TN teen accidentally killed his girlfriend with gun he’d just received as a graduation gift from girlfriend’s father?  

SCAMS:
DealDash lures you to gambling site an investigation by TINA.org has found.  

Ignoramus Award:
“I am not a woman, so I don’t have bad days,” Vladimir Putin

Don, look at Tangier, VA where climate change and rising sea levels threaten jobs of the inhabitants of the flooded island. Every coal job costs us 4 energy jobs.



How our government wastes our money:
This is how Fascism creeps into our lives—little by little—excused by “protecting us”

Where have all the jobs gone?
“Since the fourth quarter of last year until most recently, we’ve added almost 50,000 jobs in the coal sector.” Fact: Most were in ‘non-coal’ mining operations. Trump’s EPA Puitt
370,000 people work for solar companies – growing at fast pace; now at risk?
Verizon cuts about 2,000 jobs from Yahoo.



Job interview will ask for your salary requirements. Answer: I will research the range.
Which job board sites are best for your job search?

Cancel Robo calls with Mr NoMoRobo: https://www.nomorobo.com/ 

Miracle:
Heroic Kids Save Dad’s Life After Shed Falls—he’s unconscious; they called 911.

Fox News tries to get the real news for a change.

IAN
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