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Can't say I disagree with anyone posting. Your trigger point has to be your ability to sleep . . . or not. Not a big issue as this would be an incremental rebalancing. You would want to lighten up discretely and prudently and hopefully with a plan. That said, if you're blowing chunks with fear, take 10% of everything equity to cash. See how you feel thereafter and if that's enough or not.
As for the state of geopolitical affairs . . . I AM blowing chunks. Our gov't is completely disfunctional and so corrupted by campaign contributions that you could argue that it was malfeasance 'de facto' and grounds for impeachment. Er, let's see . . . give me $53B per year in subsidies and I figure I can spend $3B on politicians to keep the $53B. Duh, sign me up.
Oh, and BTFW. Supply side economics w/o addressing demand side won't create jobs. It might help equities, but I won't create jobs. CapEx taxes gone, most corporate taxes gone, money essentially free and with QE I & II - easy . . . I still will not build another plant if my existing P&E are at 75% capacity. The folks at the lower end of the food chain are the ones who buy wigits and they are the ones w/o jobs. Marginal propensity to consumer and whatnot.
Oh, and BTDFW, how about we start to asset taxes based upon gov't services received - sort of a kinghellbastard system of tolls and fees. How much defense am I receiving as compared to say . . . CocaCola? Boeing? GE? McDonalds? WalMart? How much of the judicial system? How much fire and police protection?
rono, you are on much the same wavelength that I am. We had a client in yesterday because he was nervous about the debt ceiling issue, runaway spending, funding issues for Social Security, etc., etc. "Should I make any changes?" Our response is that a LOT has happened in the last three years and that 1) the potential reaction to NOT reaching a debt-ceiling agreement will likely be short-lived for stocks, 2) eventually they WILL reach an agreement, 3) interest rates have no where to go but up over the next 5 years (although even an increment increase by the Fed is unlikely through 2012 and perhaps even 2013), 4) all things considered stocks look a whole lot more attractive than bonds, and 5) my client has a better grasp of the whole economic picture than the talking heads on TV. In the end, he took a chunk of idle cash and moved it to a global dividend fund. It puts his allocation a little out of whack, but he is much more comfortable doing this than leaving dollars in cash at 0.01% (losing value after taxes and inflation) or moving new dollars into bonds right now. So TIBIX appears to be an ok option.
This is a very conservative client politically, and even he see the need to raise the SS retirement age, do some kind of means testing, and ask everyone and every corporation to pay SOME kind of federal tax.
Bob C, I paid 10.4 percent in OASDI taxes for decades. The problem is that most people make much less than the $106,800 income limit and pay the tax on every dollar earned. The $106,800 number hasn't changed in 3 years. I think the tax should be paid on every dollar of earned income without a limit. Tax breaks for the wealthy at the expense of our seniors is unAmerican, it's very republican.
I have been employed by the govt as a defense contractor for 35 years. The govt has plenty of money, they just spend too damn much. An across the board (incl DoD) cut is needed. The SS "reform" they talk about in vague terms amounts to effectively denying SS benefits to those, like all of us on MFO, who have taken responsiblity to invest & save to provide a certain standard of living in retirement. Our funds will be routed to those who have done nothing to prepare, haven't scrimped and sacrificed. Most of the entitlement programs are riddled with fraud and abuse. That's where entitlement cuts need to be made. I advocate "No representation without taxation". You don't pay taxes, you don't vote. Simple as that. If you aren't contributing to the revenue, you should not have a say in how its spent. I guess I might have wandered a little off-topic, but I agree that everyone should pay some sort of tax. Just don't increase the taxes on those who have been paying all along. Corporate tax breaks are another topic all together. I suspect that many tax breaks encourage overseas investment at the expense of U.S. production.
Hilarious. My thread on Asness and his dirty politics gets shut down, censored and labeled "off topic" and this one advocating cuts to Social Security and Medicare is still here. As I was asked so many times about a verifiable fund manager, "how is this related to mutual funds?"
Comments
Can't say I disagree with anyone posting. Your trigger point has to be your ability to sleep . . . or not. Not a big issue as this would be an incremental rebalancing. You would want to lighten up discretely and prudently and hopefully with a plan. That said, if you're blowing chunks with fear, take 10% of everything equity to cash. See how you feel thereafter and if that's enough or not.
As for the state of geopolitical affairs . . . I AM blowing chunks. Our gov't is completely disfunctional and so corrupted by campaign contributions that you could argue that it was malfeasance 'de facto' and grounds for impeachment. Er, let's see . . . give me $53B per year in subsidies and I figure I can spend $3B on politicians to keep the $53B. Duh, sign me up.
Oh, and BTFW. Supply side economics w/o addressing demand side won't create jobs. It might help equities, but I won't create jobs. CapEx taxes gone, most corporate taxes gone, money essentially free and with QE I & II - easy . . . I still will not build another plant if my existing P&E are at 75% capacity. The folks at the lower end of the food chain are the ones who buy wigits and they are the ones w/o jobs. Marginal propensity to consumer and whatnot.
Oh, and BTDFW, how about we start to asset taxes based upon gov't services received - sort of a kinghellbastard system of tolls and fees. How much defense am I receiving as compared to say . . . CocaCola? Boeing? GE? McDonalds? WalMart? How much of the judicial system? How much fire and police protection?
and so it goes,
peace,
rono
This is a very conservative client politically, and even he see the need to raise the SS retirement age, do some kind of means testing, and ask everyone and every corporation to pay SOME kind of federal tax.