aaaaand we're failing once again to break above the 200 day. Boring, this is. Igy might be in place once again to make money on his shorts.
4-5% in short term bonds and 8% in short term junk sure sounds good right now.
But we are starting to get some quite negative pieces about the economy. Hard to imagine but we seem to be going from 4% growth to 1% growth, 4Q to 1Q. Weird.
added to position in short term junk bond etf (SJNK). I think I got in in-time as regards to ex-dividend date, but having a hard time finding exactly when it is this month.
You probably know this, but keeping an eye on corporate spreads is a good idea with junk bonds. It's tricky though - low spreads suggest safety but that means junk bonds are expensive and crowded. Which is not usually the best time to buy.
Spreads are pretty tight right now, so the bargain nature of junk has faded a bit. But on the other hand, if there really were a recession around the corner, spreads would likely be widening. So maybe they are fairly safe at this point. Which is why they do so much better than stocks on a worry day like today.
What do you boys think of MYGAs? For example, 5 year paying 5.5% (B++ rated insurance company).
What is the rest of the contract term?
You can withdraw the interest every year. Taxes not due until end of the term. If redeem early, fairly steep surrender charges (go down each year). Don’t see much else in there … anything I should be on the lookout for before purchasing? Thanks.
You can withdraw the interest every year. Taxes not due until end of the term. If redeem early, fairly steep surrender charges (go down each year). Don’t see much else in there … anything I should be on the lookout for before purchasing? Thanks.
Two possible problems.
1. Reliability of the company of course;
2. Inflation. If it continues and increases, a long term contract paying 5.5% loses value
You can withdraw the interest every year. Taxes not due until end of the term. If redeem early, fairly steep surrender charges (go down each year). Don’t see much else in there … anything I should be on the lookout for before purchasing? Thanks.
Interest guaranteed for 5 years, after that term what? Annuity contracts function where principal withdrawal is tax free, but growth is taxed as ordinary income. Growth is taxed first. Does not appear to be a particularly good deal to me.
You can withdraw the interest every year. Taxes not due until end of the term. If redeem early, fairly steep surrender charges (go down each year). Don’t see much else in there … anything I should be on the lookout for before purchasing? Thanks.
Interest guaranteed for 5 years, after that term what? Annuity contracts function where principal withdrawal is tax free, but growth is taxed as ordinary income. Growth is taxed first. Does not appear to be a particularly good deal to me.
aaaaand we're failing once again to break above the 200 day. Boring, this is. Igy might be in place once again to make money on his shorts.
4-5% in short term bonds and 8% in short term junk sure sounds good right now.
But we are starting to get some quite negative pieces about the economy. Hard to imagine but we seem to be going from 4% growth to 1% growth, 4Q to 1Q. Weird.
Weird that stop gap measures put in place by Biden and the Democrats to prop up the economy for the midterms wouldn’t provide meaningful economic growth? Not weird. Smoke in mirrors. Americans lost a ton of wealth the past year and have blown through their pandemic savings. Bidenflation is a killer.
You can withdraw the interest every year. Taxes not due until end of the term. If redeem early, fairly steep surrender charges (go down each year). Don’t see much else in there … anything I should be on the lookout for before purchasing? Thanks.
Interest guaranteed for 5 years, after that term what? Annuity contracts function where principal withdrawal is tax free, but growth is taxed as ordinary income. Growth is taxed first. Does not appear to be a particularly good deal to me.
After the 5 years can take it all out. Seems basically like a CD but offered by insurance companies instead of banks?
Interest guaranteed for 5 years, after that term what? Annuity contracts function where principal withdrawal is tax free, but growth is taxed as ordinary income. Growth is taxed first. Does not appear to be a particularly good deal to me.
Only income is taxed anyway
Yes, but some annuity contracts are variable rather than fixed. Those contracts have sub accounts that function as growth investment where as the principal grows that portion of the withdrawal is taxed as income. There are additional restriction prior to age 59 1/2 and contract specifications. Better read all the fine print.
aaaaand we're failing once again to break above the 200 day. Boring, this is. Igy might be in place once again to make money on his shorts.
4-5% in short term bonds and 8% in short term junk sure sounds good right now.
But we are starting to get some quite negative pieces about the economy. Hard to imagine but we seem to be going from 4% growth to 1% growth, 4Q to 1Q. Weird.
Weird that stop gap measures put in place by Biden and the Democrats to prop up the economy for the midterms wouldn’t provide meaningful economic growth? Not weird. Smoke in mirrors. Americans lost a ton of wealth the past year and have blown through their pandemic savings. Bidenflation is a killer.
wrongo.
the US economy probably grew between 3-4% in the 4Q. After growing 3.2% in the 3Q.
Which is very, very, very strong growth historically speaking. No idea why you think that kind of massive growth is not 'meaningful.'
Weird that stop gap measures put in place by Biden and the Democrats to prop up the economy for the midterms wouldn’t provide meaningful economic growth? Not weird. Smoke in mirrors. Americans lost a ton of wealth the past year and have blown through their pandemic savings. Bidenflation is a killer.
wrongo.
the US economy probably grew between 3-4% in the 4Q. After growing 3.2% in the 3Q.
Which is very, very, very strong growth historically speaking. No idea why you think that kind of massive growth is not 'meaningful.'
That growth is manufactured, fake. Continuing to spend wildly is foolish. Manchin was speaking in Davos about forming a bipartisan commission to avoid debt default.
No lessons learned thus far. Most expecting past regime continues. In hindsight likely “financialization” of economy and markets seriously undermined productivity and created moral hazards. Change in behavior and a reset requires great pain.
That growth is manufactured, fake. Continuing to spend wildly is foolish. Manchin was speaking in Davos about forming a bipartisan commission to avoid debt default.
Manchin saved the Democrats in the past election. Bipartisan compromise is the only hope for the current congress. It’s a shame the firebrands on both sides can’t comprehend this.
That growth is manufactured, fake. Continuing to spend wildly is foolish. Manchin was speaking in Davos about forming a bipartisan commission to avoid debt default.
Manchin saved the Democrats in the past election. Bipartisan compromise is the only hope for the current congress. It’s a shame the firebrands on both sides can’t comprehend this.
If we had real leadership this country wouldn’t be as screwed up as it is. Victimization rewarded and encouraged. Handouts for the unproductive, and lazy. Belief systems turned to the irrational. Society distracted, fat and stupid. So, we get the leadership we deserve.
Are we done here? The Fed has the perfect setup to stop raising rates. Inflation has come back to normal and there are signs of weakness in the economy. Except for jobs - that is as strong as ever, but jobs data are lagging.
Fed should stop now and sit back. But most likely they'll do two more hikes of 25 bps each, just so they can say they killed inflation good and ded.
WSJ:
After a period of steep inflation, Americans have seen monthly price growth ease, but when will things get back to normal?
The inflation benchmark, measuring price growth over a year, hit a 40-year high in June after months of sustained price increases. Since then, monthly gains have slowed. While December 2022 prices were up 6.5% from a year earlier, a Wall Street Journal analysis of Labor Department data indicates that annual growth has eased to levels that existed before the pandemic. Inflation observed during the past six months would extend to prices rising 1.9% over the course of a year, close to the average annual rate of 1.7% between 2010 and 2020.
For those who think the Fed is an all-powerful mover of economies. (it's not)
Sure, there's a lag. But we've yet to see just about anything happening (other than housing and financial markets) during the fastest rise in Fed rates in almost a half century and stunning levels of monetary tightening. The economy has plowed ahead regardless.
Conor Sen @conorsen Since the Fed pivoted to 75bps rate hikes in June the unemployment rate has fallen from 3.6% to 3.5% and the 4-week average of initial jobless claims has fallen.
