No change in allocation, but I've shortened the duration of our bond exposure. Long rates are incredibly low, and vulnerable to gyrations up or down. I have no idea what the Federal Reserve will do in our current environment. So, new bond money goes into either a 1-5 year duration bond ETF, a TIPS fund (inflation hedge), or Series I bonds.
I read Jonathan as describing three fundamental levers in our brains: ambition, optimism, and realism. We can drive ourselves. We can hope for ourselves. But there's a real benefit in evaluating where we stand from time to time. Pull the levers to speed up or slow down as appropriate. I have a good sense of where Jonathan is from his recent candid articles; that helps me think about my own situation. Thanks.
I recently spoke about taxes to a group of low income people through a court program. They uniformly had no idea why money was withheld from their paychecks (income tax, Social Security, Medicare, etc.) or what they could get back from the IRS by filing a return. It's unbelievable that our tax system is so confusing to ordinary citizens about something as basic as how much they actual earn - and keep - from a day's work.
#3 - I like earmarking. I have several Schwab accounts that hold funds for my property taxes, estimated income tax for my business, a "swag" account for my wife's part time job that we use for travel, etc. Helps keep the finances straight and to avoid missing a big bill. #5 - HD readers will recognize Christine Benz from Morningstar as the impetus for "buckets" in your portfolio. Sensible and helpful way to order your finances. And perhaps one can use earmarked accounts for the buckets. . .
Super interview. I appreciated reading about Jonathan's role in modernizing the WSJ. I find their columns - on investing, personal tech, (some of the) travel, cars, etc. - to be accessible to ordinary consumers and really helpful. The news reporting remains solid and the opinion / editorial pages are notably conservative as always. But the addition of sections and columns directed to individuals can often be insightful. Just like Jonathan's work here at HD.
I agree with Adam's sensible advice about tax loss harvesting. I have an account with Wealthfront (a robo-advisor) that offers harvesting for ETF portfolios or direct indexed stocks. I see the benefits of harvesting in my 1099 at the end of every year. One note. If folks work in a position in which they have to disclose investment holdings for ethical reasons, direct indexing can be a nightmare. Holding every stock in an index presents conflict of interest issues that can disqualify someone from a job or assignment. Most ethics rules exempt holdings in ETFs or mutual funds that are managed independently.
There's no reason to do tax loss harvesting in a Roth or traditional IRA. It's a strategy to minimize / avoid capital gains taxes. But transactions in both types of tax-advantaged accounts are immune to cap gains on trades. And withdrawals are either tax-free (Roth) or taxed at your ordinary income tax rate (trad). The tax basis of the holdings in the accounts are irrelevant. Tax loss harvesting is only for taxable, ordinary brokerage accounts
Not sure that I agree with the final takeaway. If the point of the article is that indexing has affected pricing in the markets, diversifying within those same markets can’t be a solution. Rather, it’s an extension of the same problem. But I’m reasonably in favor of Adam’s other implied point. If indexing has created inefficiencies / inaccuracies in pricing, the smart money will figure that out and correct it. Translation - some sharp operators will keep the markets honest and pricing will follow.
Hard to disagree with Jonathan on the key point of "don't make big moves." But the tone of the new administration on immigration sounds long term. If folks are to be deported or, more tellingly, deterred from coming to the U.S., that means (a) fewer workers and (b) fewer customers for goods and services. A big show of force in the first few weeks of the new term (see today's reports about a post-inauguration crackdown in Chicago) may have an economic impact for a longer period of time.
I’ve enjoyed Michael’s writings at HD over the years. Like others, I’m not prepared / able to launch a fully nomadic life. However, at age 58 and launching a new entrepreneurial venture that can be partially remote, I’m definitely interested in three- or four-week itinerant stints. These insights about scouting out fitness locations and cooking setups (all airbnbs are not created equal) resonate with me. Perhaps I’ll bump into Michael in Santiago, Lima, or Antigua Guatemala; all are on US time zones for easier video calls…
Comments
No change in allocation, but I've shortened the duration of our bond exposure. Long rates are incredibly low, and vulnerable to gyrations up or down. I have no idea what the Federal Reserve will do in our current environment. So, new bond money goes into either a 1-5 year duration bond ETF, a TIPS fund (inflation hedge), or Series I bonds.
Post: Ch-Ch-Changes?
Link to comment from May 10, 2025
I read Jonathan as describing three fundamental levers in our brains: ambition, optimism, and realism. We can drive ourselves. We can hope for ourselves. But there's a real benefit in evaluating where we stand from time to time. Pull the levers to speed up or slow down as appropriate. I have a good sense of where Jonathan is from his recent candid articles; that helps me think about my own situation. Thanks.
Post: Don’t Push It
Link to comment from April 12, 2025
I recently spoke about taxes to a group of low income people through a court program. They uniformly had no idea why money was withheld from their paychecks (income tax, Social Security, Medicare, etc.) or what they could get back from the IRS by filing a return. It's unbelievable that our tax system is so confusing to ordinary citizens about something as basic as how much they actual earn - and keep - from a day's work.
Post: Should all Americans pay federal income tax? By Ben Rodriguez
Link to comment from March 22, 2025
#3 - I like earmarking. I have several Schwab accounts that hold funds for my property taxes, estimated income tax for my business, a "swag" account for my wife's part time job that we use for travel, etc. Helps keep the finances straight and to avoid missing a big bill. #5 - HD readers will recognize Christine Benz from Morningstar as the impetus for "buckets" in your portfolio. Sensible and helpful way to order your finances. And perhaps one can use earmarked accounts for the buckets. . .
Post: Picture This
Link to comment from March 15, 2025
Super interview. I appreciated reading about Jonathan's role in modernizing the WSJ. I find their columns - on investing, personal tech, (some of the) travel, cars, etc. - to be accessible to ordinary consumers and really helpful. The news reporting remains solid and the opinion / editorial pages are notably conservative as always. But the addition of sections and columns directed to individuals can often be insightful. Just like Jonathan's work here at HD.
Post: Asking the Editor
Link to comment from March 8, 2025
I agree with Adam's sensible advice about tax loss harvesting. I have an account with Wealthfront (a robo-advisor) that offers harvesting for ETF portfolios or direct indexed stocks. I see the benefits of harvesting in my 1099 at the end of every year. One note. If folks work in a position in which they have to disclose investment holdings for ethical reasons, direct indexing can be a nightmare. Holding every stock in an index presents conflict of interest issues that can disqualify someone from a job or assignment. Most ethics rules exempt holdings in ETFs or mutual funds that are managed independently.
Post: One Stock at a Time
Link to comment from February 22, 2025
There's no reason to do tax loss harvesting in a Roth or traditional IRA. It's a strategy to minimize / avoid capital gains taxes. But transactions in both types of tax-advantaged accounts are immune to cap gains on trades. And withdrawals are either tax-free (Roth) or taxed at your ordinary income tax rate (trad). The tax basis of the holdings in the accounts are irrelevant. Tax loss harvesting is only for taxable, ordinary brokerage accounts
Post: One Stock at a Time
Link to comment from February 22, 2025
Not sure that I agree with the final takeaway. If the point of the article is that indexing has affected pricing in the markets, diversifying within those same markets can’t be a solution. Rather, it’s an extension of the same problem. But I’m reasonably in favor of Adam’s other implied point. If indexing has created inefficiencies / inaccuracies in pricing, the smart money will figure that out and correct it. Translation - some sharp operators will keep the markets honest and pricing will follow.
Post: Blame Game
Link to comment from February 10, 2025
Hard to disagree with Jonathan on the key point of "don't make big moves." But the tone of the new administration on immigration sounds long term. If folks are to be deported or, more tellingly, deterred from coming to the U.S., that means (a) fewer workers and (b) fewer customers for goods and services. A big show of force in the first few weeks of the new term (see today's reports about a post-inauguration crackdown in Chicago) may have an economic impact for a longer period of time.
Post: Limits of Power by Jonathan Clements
Link to comment from January 18, 2025
I’ve enjoyed Michael’s writings at HD over the years. Like others, I’m not prepared / able to launch a fully nomadic life. However, at age 58 and launching a new entrepreneurial venture that can be partially remote, I’m definitely interested in three- or four-week itinerant stints. These insights about scouting out fitness locations and cooking setups (all airbnbs are not created equal) resonate with me. Perhaps I’ll bump into Michael in Santiago, Lima, or Antigua Guatemala; all are on US time zones for easier video calls…
Post: Retirement on the Road
Link to comment from January 2, 2025