Here’s the Magic Formula Portfolio (hypothetical) through the month of April:
The portfolio was actually up over 13% last week but has fallen back to a little over 10.19% year-to-date, which still isn’t too shabby.
I’ll do the 3rd “Purchase” tomorrow. For more information on the portfolio and the strategy, see these posts:
A Look at Magic Formula Investing
Magic Formula – Portfolio Update
Magic Formula Investing Update – 2nd “Purchase”
DISCLAIMER: This is a hypothetical portfolio and is in no way a recommendation. Invest at your own risk.
According to this Washington Post article, women seem to be the main stumbling block in making compact fluorescent bulbs (CFLs) popular. Actually, I don’t really care for CFLs either. Part of it is the fact that I really didn’t know what I was buying when I bought them and the bulbs I bought are way too dim to use anywhere in my house. I spent something like $15 on the three pack (if I’m remembering correctly) and now the package is sitting in our pantry unused.
According to the article, CFLs are improving in quality and coming down in price, which is good. I’ll have to give them a try again. I like the idea of saving money on my electric bill and helping the environment at the same time. I have a feeling that we’re going to have to get used to CFLs because eventually traditional incandescent bulbs will be outlawed in the U. S. You watch, it’s just around the corner.
I just spent the last 5 minutes or so reviewing a new tool called ThriveQ that was put together by Thrivent Financial. Truth be told, I’m not really a fan of Thrivent Financial but this is an interesting retirement planning tool. I like the fact that they don’t ask for personal information like your address and phone number so that one of their “people” can call you to set up a consultation. This is purely an effort to build goodwill. Anyway, once you answer all the questions, the calculator gives you a number and then ranks you based on that number. Here’s a few screenshots I took while going through the exercise:
I thought this particular question was humorous:
I scored a 643:
They also give you some generic suggestions (none of which I will do):
You can take the Quiz yourself over at ThriveQ.com. I urge you to go take it and then report back with your results and we’ll compare notes.
Regular readers of this blog know that I balked at renewing my Wall Street Journal subscription this year because they raised their price from $215 per year to $249 per year. I let my subscription lapse but they kept sending me papers for about three weeks. They also kept sending me renewal notices but the renewal price stayed at $249 so I just kept throwing them away.
Well, Friday I got a “we want you back” letter from them with this offer:
2 years of the paper and the online version for $199 and a free book!
I took them up on this deal, which is better than any deal I’ve ever had! The best I deal ever received in the past was $175 for a year’s subscription and that was back in 1997. Anyway, sometimes it pays to wait for a better offer.
The post, Why Are Insurance Companies So Interested In Your Car’s Onboard Computer System?, from the Consumerist made me think about a great Question of the Day:
Should insurance companies be allowed to use information gathered from a car’s onboard computer (black box)?
This question may not have much meaning to you now, but I have a feeling that this is going to be a hot topic in the near future. A part of me thinks this would be okay. Another part of me thinks this is really creepy. I mean do I really want an insurance company to be able to check up on me? Would they be able to do this only in case of an accident or would they be able to do this any time they wanted to?
I’m wondering at what point technology will cross the line between being helpful and outright spying?
I was talking with my wife about how some people are predicting gasoline to go to $4 per gallon. She said, “Wow. That would cause us to make changes to our budget. Something would have to be cut.”
She’s right. My wife drives a lot of miles and according to my calculator, gas at $4 would cost us an additional $2,000 per year (based on the current price of $2.72). We would have to make adjustments to our budget in order for to afford the higher price. We would most likely have to cut our eating out budget or quit contributing to our 401(k) (I’M TEASING!).
Anyway, I thought it would be interesting to hear from you.
Would gas at $4 per gallon affect your budget? If so, how?
I saw this little article in the May 2007 issue of Money and had to share it with you because it is related to all my mortgage posts. Unfortunately, there’s no link available so I’ll have to tell you what it is about. On page 40B of the May issue of Money there is a column called “the mole,” which is written by an anonymous financial planner. In this particular column he says:
“Recently I was talking to a client of mine who has a second mortgage at 8%. As we went over his investment options, I suggested something he had never heard before: He should pay down his mortgage.
“Most financial planners would rather memorize actuarial tables than have you pay off a mortgage. They’ll say, ‘An 8% mortgage costs you only about 6% after your interest deduction. I can do better than that in the stock market.’ Well, yes, perhaps it’s true, but the stock market isn’t a sure thing. Paying off your mortgage is. A fairer comparison would be putting your money in risk-free Treasuries. Sure, paying off an 8% mortgage really means a return of around 6% after taxes, but Treasuries pay just 4.6% or so (around 3.5% after taxes).
He then goes on to say that the main reason planners don’t suggest paying off mortgages early is that it would mean that they (the planner) would make less money since they are typically paid a percentage of your invested assets. Assets used to pay down a mortgage would mean less assets for the planner to manage, which means less income for them.
If this were true, wouldn’t these same planners recommend that their clients NOT pay off their credit cards? I don’t know of any financial planner who would recommend that a client NOT pay off their credit cards. I realize that most clients aren’t going to have mortgage-size credit card debt. I think most planners would look at this as more an issue of what’s the best way to allocate your resources than they would worry about losing out on assets under managment. I mean, shouldn’t a planner’s responsibility be to help their clients grow their net worth? This means making decisions based on the known facts and weighing that against the possible outcomes. Sure, some people will be more comfortable paying off the mortgage quickly. Others may want to put it off as long as possible. I think it should be between the planner and the client to make that distinction.