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Sensible Perspectives

Bond Returns Early in the Trump Era (Part 1)

Posted by on December 21, 2016

There is now a tendency for higher interest rates. Total bond returns equal the coupon (interest payment) plus the price change impact of any interest rate change. Neither the interest rate alone nor the interest rate change alone determine the total return. Both have an impact. In the long run, higher rates are good for […]

Reverse Mortgages, Part 2: Increasing financial flexibility by leveraging the equity in your home

Posted by on December 20, 2016

In last month’s newsletter, I discussed reverse mortgages and attempted to clear up some common misconceptions about this product.  As I explained, reverse mortgages are loans offered by a commercial lender to an age 62+ homeowner using a portion of their home equity as collateral.  As long as the homeowner-borrower adequately maintains the home in […]

Is Passive Investing Bad for the Economy?

Posted by on November 29, 2016

In August, Inigo Fraser-Jenkins of Sanford Bernstein published “The Silent Road to Serfdom: Why Passive Investing Is Worse Than Marxism.” Since the note was for AllianceBernstein clients only, I can’t quote from it. I can’t even read it! The comments that follow are necessarily second hand, based on the responses[1] of several commentators who somehow […]

Reverse Mortgages: Increasing financial flexibility by leveraging the equity in your home

Posted by on November 28, 2016

If anyone had told me ten years ago that I would someday write favorably about reverse mortgages, I would have looked at them cross-eyed.  Very few financial products have been the source of so much bad press and consumer misunderstanding.  Variable annuities hold the top spot in this category.  As with variable annuities, some of […]

How Sensible Financial Raises Cash for You

Posted by on November 27, 2016

We strive to get cash to you when you need it. We understand that timely delivery of cash either for planned events or unexpected contingencies is important to you. Sensible Financial® has developed a process that balances your need to get cash quickly with your other interests, such as maintaining your target allocation, keeping trading […]

Investing and Investment Returns in the Event of a Hillary Clinton Election

Posted by on November 1, 2016

Historically, the stock market and the economy have performed better in Democratic administrations than with Republican presidents If enacted, specific Clinton policies could have both negative and positive implications for the economy, for corporate profits, and for short-term stock returns Long-run stock market performance depends a great deal on market fundamentals and relatively little on […]

Presidential elections, presidential terms and investment returns

Posted by on October 29, 2016

The US Presidential election is fast approaching. It is worth asking whether investment returns vary in predictable ways or are especially risky at such times. Perhaps we should be taking some action? One might imagine presidential elections to have both short-term and long-term effects on the stock market. The short-term effects would reflect the impact […]

Need a Short-term Loan? How About an Interest Free Loan from Yourself?

Posted by on October 28, 2016

You accidentally took a $100k distribution from your Individual Retirement Account (IRA) and you are under the age of 59 ½. Oh no!  You’ve just incurred a 10% tax penalty in addition to the regular income tax on the distribution, right?  Maybe not.  If you return that $100k to the IRA within 60 calendar days […]

What are I Bonds good for?

Posted by on October 27, 2016

In my previous post, I described what an I Bond is. Here I will offer a few examples of how I Bonds might make sense in an investment portfolio. Recall that I Bonds are a sort of inflation-protected savings account. They earn interest every year equal to inflation plus a (currently small) fixed rate. The […]

What President Donald Trump Might Mean for Investment Returns and Investing

Posted by on September 21, 2016

Trump’s unpredictability is likely to lead to greater market volatility. Historically, the stock market and the economy have performed better in Democratic administrations than under Republican presidents. If enacted, specific Trump policies could have both negative and positive implications for the economy, for corporate profits, and for short-term stock returns. Many, but not all, of […]