John T. Reed’s news blog

Reading two heavy duty investment books at the same time has caused me to spot a huge flaw in the so-called financial advisor industry. .The true basic fact is investors want their assets to grow as measured by after-tax, after-inflation future numbers.That, in turn, requires prescience, a crystal ball, clairvoyance..Absent cause-effect, no one is clairvoyant. .I have described expertise as knowing how to cause an effect. For example, expert cooks know that water boils at 212ºF at sea level. That is, if you raise the temperature to that level, the water will boil..The only financial expertise is knowledge of pertinent laws...

Financial “experts” recommend periodic rebalancing. Mostly they speak of the percentage of bonds versus stocks..I can help you with that. The percentage of bonds should be zero because they are disasters in inflation..Lately, the financial “experts” say the bonds you own must be TIPS and/or ibonds inside a tax-deferred pension account like an IRA..I wrote a fairly thorough article about TIPS at https://johntreed.com/blogs/john-t-reed-s-news-blog/why-treasury-inflation-protected-securities-do-not-adequately-protect-you-from-inflation?_pos=8&_sid=e4dcfe9cf&_ss=r.I also wrote about limitations of tax-deferred pension accounts at https://johntreed.com/blogs/john-t-reed-s-news-blog/problems-with-iras-and-401ks-you-probably-never-heard-about.Rebalancing can also refer to restoring an initial mix of other assets..The basic idea of rebalancing is that there is an ideal mix of different assets that you...

A financial investment problem I never see discussed is redundant tax shelter. Also, when you need to move fast, having assets in an IRA or other tax deferred pension account will greatly hamper your efforts to escape that “burning theater.”.Generally, the IRA, 401(k) and so forth tax deferred pension trustees refuse to handle real property like a duplex you own. But many investors gleefully report they found a trustee who WILL manage your duplex or other building in an IRA account..For one thing, these trustees are typically laughably lacking in financial strength, long-term trustworthy reputation, and proven record. .But, why...

This is my article on TIPS Treasury Inflation-Protected Securities. They are U.S. treasury bonds of 5, 10, or 30 years..They suck in many ways. Do not buy them. If we get hyperinflation, the government will renege on the promise to make you whole in terms of purchasing power. The original “TIPS” were gold certificates. That is, they were US government bonds that had a clause saying you could demand to be repaid in gold coins. Americans then had gold coins in their pocket and could get them at any bank in return for paper currency or US government bonds that...

 Copyright John T. Reed 2022 My first job when I got out of the Army was selling brand new condos in 1972. Condos had been known in Europe for centuries, but were new in America then. . I worked seven days a week, sold 18, and never got paid a penny. The appraiser said I sold them for more than they were worth and the lender refused to make any mortgages. They turned it into a rental apartment building. . To learn about condos, I attended a condo HOA meeting in that Camden County, NJ area. What a horror show!...