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Friday, January 31, 2025
Wednesday, January 29, 2025
$101,915
Average American Debt Level!
DYI:
If you find yourself in a Financial Hole
Stop Digging!
The current personal debt crisis in the United States is concerning. As of 2024, the average American carries approximately $101,915 in total personal debt, which includes liabilities such as credit cards, student loans, and auto loans. Recent data indicates that about 36% of Americans have increased their debt in the past few months, with 34% reporting that they carry over $10,000 in consumer debt. With rising costs and economic uncertainty, nearly half of adults have struggled to make timely bill payments, and a significant portion anticipates using credit cards for essential purchases, especially during the holiday season.
Credit card debt, in particular, has become a significant concern. The average American now carries around $6,271 in credit card debt, a figure that has been steadily rising as consumers increasingly rely on credit to manage everyday expenses. The Federal Reserve reported that total credit card debt reached $1.03 trillion, the highest level on record. This surge in credit card debt can be attributed to a combination of factors, including inflationary pressures and the rising cost of living, which push consumers to borrow more just to keep up with basic needs. Consequently, many find themselves trapped in a cycle of high-interest repayments, making it increasingly difficult to achieve financial stability.
The following are the common types of personal debts:
1. Mortgage Loans
- Yield Range: 2-7% annually
- Features:
- Mortgages tend to have the lowest interest rates among personal loans, especially with a fixed-rate, 30-year term.
- Interest may be tax-deductible. DYI: More than just a rule of thumb; a lifesaver making a house a blessing instead of a curse, 15 year mortgage, loan amount no more than 2x gross income**, and pay down as many points as the mortgage company will allow. **Soon to be millionaires always shoot for 1.5x times income and yes you will have to save up for the down payment to achieve this criterion.
2. Credit Card Debt
- Yield Range: 15-25% annually
- Features:
- Credit card debt has one of the highest interest rates, quickly accumulating if not paid off monthly. DYI: If you always find yourself running balances (hence being charged close to loan shark rates) switch to only using your debit card or go old school using cash!
3. Car Loans
- Yield Range: 4-10% annually
- Features:
- These loans usually come with fixed rates over a term of 3-7 years.
- Cars depreciate quickly, which makes financing them costly in the long run. DYI: Buy used cars in cash and save yourself huge dollars.
4. Student Loans
- Yield Range: 4-8% annually
- Features:
- These loans often come with favorable repayment terms, including deferment and income-based repayment options. DYI: Depending on the amount - if relatively small make a rapid payoff - if large then structure your repayment over a 5 to 10 year time frame. Many doctors take 15 years to retire the debt due to insane educational costs.
5. 401(k) Loans
- Yield Range: Prime rate + 1% to 2% (e.g., if the prime rate is 7.5%, the loan's interest rate will be 8.5% to 9.5%).
- Features:
- Repayments consist of principal and interest, typically made monthly or bi-weekly via payroll deductions.
- Interest repaid goes back into your 401(k), effectively "paying yourself."
- No credit checks or third-party lender involvement.
- Reduces the growth potential of your retirement savings during the loan period.
- Leaving your job could require repaying the balance as a lump sum, typically within 60 to 90 days. Failure to do so may result in taxes and penalties.
- Best used as a last resort to avoid jeopardizing long-term retirement goals. DYI: Borrowing money out of your 401k is a dead last resort - never your go to source of money this is for retirement when your working years have ended!
6. Other Personal Loans
- Yield Range: 6-15% annually
- Features:
- These loans tend to have higher interest rates than secured loans like mortgages but lower than credit card debt.
Smart rules of thumb to manage these various types of debts:
Pay Off High-Interest Loans First
- Example: It's a no-brainer to first manage your credit card debt that obviously has the highest interest rate! If you have a credit card debt with a 20% APR and a car loan with a 6% interest rate, prioritize paying off the credit card to save on interest costs.
Consider Loan Advantages
- Example: A 401(k) loan allows you to repay yourself with interest, which can be more advantageous than taking out a personal loan with higher interest rates. Similarly, some mortgages or student loans offer tax benefits worth retaining.
Refinance to Lower Interest Rates
- Example 1: Switch your credit card debt to another credit card debt that has lower interest rate or borrow from your 401(k) to pay off the highest interest rate credit card debt if necessary!
- Example 2: If you're repaying a 10% personal loan, consider consolidating it into a 6% home equity loan to lower your interest expenses.
Friday, January 24, 2025
Growth Stocks
VS
Value Stocks
Current underperformer: Value
DYI: Here is a method for those who have high tolerance for a portfolio 100% invested at all times. For those who are young enough with at least 2 decades and 3 is preferred; who are obviously in the accumulation stage of life.
Two Vanguard Funds:
1.) Growth Index Fund
2.) Value Index Fund
The accumulation of savings is the fund that is UNDERPERFORMING! When your underperforming fund becomes the new winner you now direct your savings into the old winner neither fund is ever sold. That’s it!
Tuesday, January 21, 2025
10 year estimated average annual return NEGATIVE 2%!
Only
after the speculative collapse
does the
truth emerge.
There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present. Only after the speculative collapse does the truth emerge.
-John Kenneth Galbraith, A Short History of Financial Euphoria, 1990
On Friday December 6th, the U.S. stock market pushed to the most extreme level of valuation in U.S. history, based on the measures that we find best-correlated with actual subsequent 10-12 year S&P 500 total returns, as well as the depth of subsequent losses over the completion of market cycles across a century of data. That’s not a forecast. Rather, it’s a statement about current, measurable, observable market conditions.
14th Amendment to the U.S. Constitution:
Civil Rights (1868)
AMENDMENT XIV
Sunday, January 19, 2025
Vanguard Mutual Funds Founder
The Late Jack Bogle’s 10 Investment
Principals
With DYI’s Commentary
1.) Reversion to the mean
Over time, the market will return to
its average, so it's not a good idea to pick funds based on yesterday's
winners.
DYI: Chasing the latest hot performing
fund is prescription for long term poor performance as what invariably occurs a
misstep will happen driving down the return back to the long term average of
the market in general (and possibly worse).
2.) Time is your friend
Start investing early, stick to a
plan, and don't pay attention to daily market news.
DYI: I actually advocate young people
to save as much money for retirement to the exclusion of purchasing their first
house. Why? Time is your friend when you are young and
your enemy when you have passed the 40 year old mark. Simply more time to compound and more you are
able to put in early will help tremendously before all the costs of household formation
comes into play.
3.) Buy right and hold tight
Once you've set your asset
allocation, don't change it based on market fluctuations.
DYI: John Bogle does mention in his book – Bogle on Mutual Funds 1994 – Chapter Twelve – The Allocation of Investment Assets beginning page 235 – changing your allocation between stocks to bond ratio. His determination for any change is based upon – drum roll please – VALUATIONS!
See DYI's Benjamin Graham Corner
https://dividendyieldinvestor.blogspot.com/p/ben-ii.html
4.) Realistic expectations
Returns in the coming decade are
likely to be lower than in the past.
DYI: Once again – as of 12-9-2024 –
the U.S. Stock Market is so severely “jacked up” returns going forward over the
next 10 years will be sub atomically low (less than the rate of inflation) or outright
losses depending on your allocation.
5.) Buy the haystack
Instead of buying individual stocks
or stock funds, invest in broad-based index or exchange-traded funds to reduce
risk.
DYI: I don’t see the need for any more
than three funds at the maximum nor is it required. If a very conservative investor or due to insanely
high valuation the Vanguard’s Wellesley Income Fund – (35% stocks – 65% bonds) –
will do just fine.
6.) Minimize fees
Invest in low-cost, low-turnover
funds to increase your return.
DYI: After looking at 401k plans till
I’m blue in the face I’ve come to the conclusion the best thing to do is only
the match after that set up with Vanguard an automatic method of
investing. Why? The vast majority of these corporate plans
have 2% expense ratio as compared to Vanguard’s S&P 500 index fund at 0.04%! That is a 98% decline in costs to run the
fund! Vanguard’s Wellesley Income Fund
(non-index)** expense ratio is 0.16%!
7.) Risk is unavoidable
There's no wealth without risk, so
you should save and invest for retirement to avoid depleting your savings with
inflation.
DYI: Inflation is the biggest tax that
you will pay even beyond death. Funeral
costs have soared right in line with inflation!
8.) Don't fight the last war
Avoid the temptation to sell when
markets fall and buy when they rise based on your emotions.
DYI: Individuals who are very risk
adverse then the Wellesley Income Fund is their only fund of choice no matter
what the current valuation level is. If
it is this fund as compared to doing nothing at all the choice is obvious.
9.) Skepticism towards active management
Bogle was skeptical of active
management strategies, which often promise high returns based on the manager's
skill.
DYI: Over broad periods of time
measured in decades your asset allocation – stocks, bonds, or gold/silver if
invested based upon correct use of valuation will out perform any hot manager
past or present (except for late Benjamin Graham or Warren Buffett).
10.) Simple, cost-efficient, and
diversified
Bogle advocated for an investment
approach that mirrors the market's returns over the long term.
**After studying Vanguard’s
actively managed funds they are closet indexers who make buy and sell decisions
only on the margins attempting to add value to the overall portfolio. Even with that their portfolio turnover is
SIGNIFICANTLY lower as compared to their peers.
In other words the portfolio changes when their core positions (closet
indexer) rise or decline significantly thus increasing or decreasing but never abandoning
the stock.
Tuesday, January 14, 2025
When the equilibrium between ruling elites and the majority tips too far in favor of elites, political instability is all but inevitable.
As income inequality surges and prosperity flows disproportionately into the hands of the elites, the common people suffer, and society-wide efforts to become an elite grow ever more frenzied. The wealth pump; it’s a world of the damned and the saved. And since the number of such positions remains relatively fixed, the overproduction of elites inevitably leads to frustrated elite aspirants, who harness popular resentment to turn against the established order. When this state has been reached, societies become locked in a death spiral it's very hard to exit.
Sunday, January 12, 2025
U.S. Government
Organized Crime?
FDA lawyer admits: 'HPV' & all other 'virus'-related authorizations are based on ZERO scientific evidence
No evidence that the virus even exists. Life in prison.
|
Friday, January 10, 2025
Momentum Players
Remain in
Charge!
DYI: Valuations is a weighing tool it is not
a timing tool. Obviously today
valuations are at insane levels however until this is recognized by enough
players stocks will continue their advance.
That advance is now only being powered higher, predominantly by the top 7 stocks called the magnificent 7!
Apple
Microsoft
Amazon
Alphabet (Google)
Meta Platforms (Facebook)
Nvidia
Tesla
The advancing stocks compared to declining stocks listed on the NYSE
remains advancing albeit a far lessor pace.
This is doing so by the outsized gains of the Mag 7!
The chart below is a timing tool for the S&P 500 clearly showing that the momentum players remain in charge, however when the tide turns and momentum moves south valuations will be in charge causing a large percentage drop before the value (valuations) players start moving in pick off the bargains!
Wednesday, January 8, 2025
War!
Natural
Resources
Somethings Just Never Change!
To the Last Ukrainian: United States Pressures Zelensky to Lower Conscription Age to 18
After lowering conscription from 27 to 25 in April 2024, the Biden Administration urges Ukraine to mobilize more men
|
As brutal videos of forced mobilization across Ukraine continue to spread online, Volodimir Zelensky and his Western masters are determined to continue fighting the unwinnable proxy war against Russia “to the last Ukrainian”: the United States has started to openly pressure Kyiv to, once again, lower the official conscription age.
The West wants to send 18-year-old Ukrainians to the front lines as Russian forces advance and Senator Lindsay Graham is getting antsy that trillions of dollars worth of Ukrainian natural resources, primarily located in the Donbas and central Ukraine, will be under Russia’s control.
Monday, January 6, 2025
The Desk of
Gemma O'Doherty's
Does Voting Actually Count?
Just substitute Ireland for USA
How much more evidence do you need before you accept that the State and all of its institutions are riddled with corruption and beyond redemption?
Take the HSE (CDC Irish version) hell circus which forces poison vaccines on the ignorant every day, is in bed with criminal (P)Harma and run by psychopathic bureaucrats (USA's Dr. Fauci) and doctors who diabolically danced their way through the Covid scam while mass murdering their patients.
What about the Courts where malevolent political wigs collude with crooked lawyers every day to steal children, homes, businesses and farms from innocent Irish families while writing off debt worth millions of euros from their golden circle? Debt that will be forced on the backs of your children and grandchildren, and is fueling inflation.
DYI: Our run away national debt machine here in the good old USA!
Back to Gemma:
What about the legislature which devotes its time to concocting illegal diktats to control the speech and thoughts of the Irish people while demanding to know what they do with their income and private properties, fleecing their wealth through taxation, bringing in hordes of illegal aliens and turning Ireland into a Third World dump?
How about the Gardai, described by whistleblower John Wilson as the biggest criminal gang in the country, who are importing drugs into Ireland to destroy the young - as per the Communist manifesto - framing innocent people and behaving like coked-up thugs in their fabricated ‘far right’ psyops used to manipulate the clueless public?
DYI: Police departments continue to this day with asset forfeiture instead of arresting the individual they actually (I'm not kidding) arrest their property. Zero due process and then they have to sue the police department (despite never committing a crime) to recover their property!
Between DHS/FEMA are running mass shooting drills especially at public schools then promoting through the mass media as real (fake shooting events) in order to achieve two ends that benefit the super rich.
1.) The masses believe this is promote gun control despite any gun restrictions are knock down by the courts repeatedly. The rich are actually promoting gun sales - a high profit margin business - as they fool gun owners or perspective gun owners to purchase additional firearms (and all things related) before draconian laws are past into law which never happens or is struck down by the courts repeatedly.
2.) Sales people are talking to school boards around the country selling all of their security products and services in order to protect children from another staged, FAKED, mass shooting!
This is big business as the U.S. has 13,452 regular school districts and 21,548 private schools plus 6,000 colleges and universities that all have multiple buildings. This is big business all promoted by a scam of one fake mass shooting after another to terrorize children and their parents!
Back to Gemma:
Then there’s the State-sponsored media whose sole purpose is to brainwash and gaslight those still naive enough to watch it. Just think of the damage it has done to this country.
DYI: Our main stream press is State-sponsored media as they are all in (those at the top) everything that is hoaxed or faked. Faked shootings, fake trials, fake illnesses such as COVID and the big hoaxed/faked 9-11!
Back to Gemma:
Knowing all of this, do you really still believe that the State is there to serve you and is capable of running clean elections? Do you really think that the monsters who have ruined Ireland are going to allow their minions to vote them out in exchange for real opposition? If you do, you’re deluded and in a trauma bond with Big Daddy Government, no different to a battered wife who remains with her violent husband.
DYI: Dominion voting machines are now so easily manipulated rigging elections is now common place as far as I'm concerned. All to keep you involved and believing in the system. A close race but never so close that voters demand a recount thus possibly showcasing vote rigging and even if they do the mainstream media will never report this evidence!
Back to Gemma:
If you’re confused about what to do tomorrow, here is the solution. Ignore the farce. Bin your voting card and walk away. If millions of us refused to vote, the State and its puppetician dictators would know that the sheep have finally woken up to their game and are no longer willing players. That would send shock waves through the system because it would prove that the people are no longer willing to be obedient servants and may assert themselves again into their rightful place as masters in charge of their own destiny. That is a terrifying prospect for the State.
In a tiny country like Ireland, we can manage perfectly fine without government. Wouldn’t you like to hold on to all of your wages? What exactly does the State do except lie, cheat and steal from you? Fraud vitiates all contracts. And the Irish State is a self-serving fraudulent entity that despises the Irish people. The social contract is broken. Let the State collapse as the Crown did in Ireland 100 years ago.
Anyone who is still telling you to vote in this rigged system is controlled opposition. The ballot boxes have long since been tallied with fictional votes to ensure the regime remains in place.
Refuse to participate in organized crime. Refuse to participate in elections. Stop feeding the enemy. When we walk away en masse, we are walking towards the end of our slavery. If there is one group of people who can do this, it is the Irish. Stop being bullied and controlled by sleazy conmen in dark suits and gowns. We are the 99%. They are on the run. Let’s keep them that way and drive them over the cliff before the rollout of their One World Government goes much further.
Thank You Gemma