Buying and Laddering CDs and Treasuries

With the Fed raising interest rates, the interest paid on CDs and Treasuries has risen also, to respectable levels.  One year ago, I was only able to  get 0.1% on a 1 year CD.  Now 1 year CDs are in the 1.25-1.4% range.   2 year CDs are paying 2.20%.  Much better than the savings/sweep accounts are paying only 0.01%.

Yeah, I know, inflation is coming.   However, these funds are intended to be available when needed.   Thus, doing a CD/Treasuring ladder is an acceptable alternative to get higher interest rates while waiting.  Currently, I am only laddering out to 3 years since the yield curve is flattening after 2 years.

Hopefully, inflation will get under control.  But if CD/Treasury rates go up to 5% or higher, I will definitely add more funds to fixed income.

For more on Strategies and Plans, check back  Mondays  for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

House Votes to Increase RMD Age

On Tuesday, the House passed Secure Bill 2.0 which includes raising the RMD, requirement minimum distribution,  age from 72, in steps,  up to 75.   The RMD effectively causes retirees to take taxable distributions, whether they need the money or not.  It effectively causes retirees to pay higher taxes while reducing the amount of saving in tax deferred retirement accounts.

From the Barron's article:

"Key provisions of the House bill passed Tuesday include: 

● Raising the age at which seniors must take required minimum distributions, or RMDs, from their retirement savings accounts to 73 from 72, effective next Jan. 1. The bill will raise the age to 74 starting in 2030 and to 75 starting in 2033."

This provision would benefit many retirees and help them keep funds needed for retirement rather than pay taxes on funds they don't yet need.

For more on Reaping the Rewards, check back Fridays s for a new segment.

This is not financial, tax nor retirement advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Ugly First Quarter 2022 Investment Returns

NGL, our investment returns for January through March 2022 were horrible.  We have given back all, yes all, of our gains from 2021 in only three months.    It would have been worse, except the market has rallied since mid March 2022.

For now, I remain cautious.  We're keeping our core positions, selling off peripheral investments, and buying a few value stocks. 

For more on Reaping the Rewards, check back Fridays for a new segment.

This is not financial, retirement nor investment advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Using Excel to Do Our Taxes

I don't use tax preparation software to do my taxes.    I use Excel and create worksheets for each form I need, and then link the worksheets together as needed.

Here're the reasons I do that:

• I am cheap.  I don't want to pay $30-60 each year for tax prep software.
• I get a better understanding of how financial events affect my taxes, since I read each instruction to create a worksheet for a form.  Essentially, I am doing the tax return by hand, and using Excel to do the math calculations, which eliminates a major cause of errors.
• Using Excel allows me to easily run scenarios to determine how our tax liability is affected.  For example, I can plug in different numbers for Roth conversions to determine the best conversion amount, from a tax perspective.   Also, I can update the input information very quickly to get a real time estimate as the year comes to a close.

Of course, as many people point out, there are some downsides to using Excel to do my taxes:

• I may misinterpret the calculations on a form and enter an incorrect on Excel. I don't think this has happened yet.
• I need to update Excel each year if there are changes.  For many years, the same format was used.  However, recently, the IRS seems to be routinely changing the 1040 format and a few other forms on an annual basis.  This has been tedious chore in some years, causing me to delay doing our taxes.
• I may copy the number incorrectly to the actual tax form.  This has happened a couple times, but I was able to correct via a phone call.
• I may forget a new form.  This has happened once and I submitted form later.

For me, the pros outweigh the risks at this time.  I do expect that I will be less interested/capable as I get older, and may have to transfer the responsibility to a paid professional sometime in the future. 

However, for now, I will continue to do our tax returns by hand using Excel.

For more on Ideas You Can Use, check back Tuesdays for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Stock Market Entertainment Tomorrow

After closing at %94.20 yesterday, Gamestop (GME) was 28.94% to $123.14 during the day, and up 20.06% to $143.20 after hours.  I'm getting up early tomorrow and checking the premarket activity. If GME move up substantially, I expect tomorrow to be a wild market, for GME and other meme stocks from Wall Street Bets. 

For more on Ideas You Can Use, check back Tuesdays for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Oil, Precious Metals, and Fertilizer, OH MY!

I've been bagholding numerous oil, oil service, precious metals and potash (feritlizer) since 2013-2015.   I bought as these stocks were declining from their all time highs.  However, they kept falling further.   In all cases, I was carrying these stocks at a loss.    

I sold some oil stocks in December 2021 to harvest tax losses, fully expecting to buy them back in 30 days at the same price or lower.  That didn't happen.  With the expected Russian invasion of Ukraine, most of the oil and oil service stocks began going up in January.  In some case, such as OXY, as much as 100%.

Now the oil, oil service, precious metals, and potash stocks are mitigating the declines in my other stocks.  Many of the stocks have been going up 15%, 50% or even 100%.    I feel vindicated for holding on, but I'm not optimistic the gains will be sustainable.   Thus, I am slowly scaling out of these positions as the price rises, a few shares at a time, since the trades are commission free.    

Hopefully, I will get out of most positions before they peak and start falling.

For more on New Beginnings, check back Sunday for a new segment.

This is not financial nor investment  advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Forgiving Student Loan Debt, Why Not All Debt?

Progressives continue to advocate forgiveness of up to $50,000 of student loan debt.   Apparently, excessive student loan debt is preventing borrowers from buying goods and helping the economy.  (Paraphrasing reason from Lizzie Warren, Senator from Massachusetts.)   

Let's assume that is true.    Then why not forgive all debt: mortgage, credit card, payday loans and car loans.   Without the burden of loan payments, these borrowers could then spend payments on other goods and further stimulate the economy.

As they say in Wall Street Bets:  Can't go tits up.   

On the other hand, does the economy really need more stimulation?   CPI was at 7% for December, the highest since June 1982.    Using Lizzie's reasoning, maybe we need to NOT forgive any student loans to keep from further stimulating the economy.

Key learning:   

• Except for a mortgage, don't borrow what one can't pay back.   Maybe not even for a mortgage.  
• Today's college education tuition is way over priced, cause primarily by availability of student loans.  Maybe true of cars also.

Final thought.  If I were in charge, I would allow new student loans to be eliminated by bankruptcy.   Institutions would then be more judicious about requirements to qualify for a student loan.

For more on The Practice of Personal Finance, check back Wednesdays for a new segment.

This is not financial, student loan, nor policy advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC

Future Inflation

The year is 2024.

A loaf of bread cost $20.    Gas is $12/gallon.   Interest rates are 7%.

President Biden is running for re-election, saying "Inflation is transitory."    Jay Powell is the Fed Chair and says, "Inflation is transitory."

My nephew and niece are expecting their 15th stimulus check and will vote for Joe Biden, as they did in 2020.  

They tell me, "Inflation is transitory."

For more on Crossing Generations , check back Thursdays for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC

Bought the September Dip

I started scaling funds into stocks in mid August 2021.    Primarily into the top growth stocks, such as MSFT, GOOGL, AAPL, and NVDA.   I did not buy AMZN, FB, TSLA and NFLX.  As the market fell further, I added to the growth stock positions and started to buy some of the beaten down stocks such as BB, NOK, EVGO, LAZR, CHPT, TLRY, SNDL, BABA, PLTR, WISH, SKLZ, CLOV, T and VLDR.  In addition, I bought a growth ETF, SCHG, and the S&P 500 ETF, VOO. 

The growth stocks and ETFs have already bounced back, with MSFT almost at its previous high.  The beaten down stocks, well, they are still beaten down.   A few, BB, CLOV and NOK, are showing positive gains,   But most still haven't bottomed.

Overall, our total, by brokerage, are near or at all time highs, due mainly to the gains in oil and oil related stocks.   If the beaten down stocks show a similar resurgence, our accounts will have nice gains in the next few months.

However, I don't expect the beaten stocks to spike suddenly.   It may take a while for them to clearly bottom and begin an upward trend.  Fortunately, I don't have much invested in them and have the time to wait.

At this point, I plan to wait for another drop before making any substantial stock purchases.   I still think there are enough downside risks that will lead to another decline and buying opportunity.

Disclosure:  In our personal non managed accounts, we own shares of MSFT, GOOGL, AAPL, NVDA, NVLX, BB, NOK, EVGO, LAZR, CHPT, TLRY, SNDL, BABA, PLTR, WISH, SKLZ, CLOV, T and VLDR.   We also own SCHF and VOO ETFs.

For more on Reflections and Musings, check back Saturdays for a new segment.

This is not financial nor investment  advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC

Legislative Turmoil Is Priced In

If Dems fail to pass Infrastructure bill,  Build Back Better bill, and increase the debt ceiling on the first vote, there is good chance market crashes and U.S. starts going into recession.

Economy and market are fragile right now.   Just needs a catalyst to start the decline.

But, then again, Dems need a crash and recession to pass infrastructure bill, Build Back Better bill and increase debt ceiling.

So already priced in by efficient markets.

For more on New Beginnings, check back Sundays for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC