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About DogFather

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  • Birthday 01/02/1959

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    History, Business, Big Ten sports
  1. Here is the problem with a so-called financial advisor or planner. There is really only about 3 things they can put your money into. Stocks,bonds & REITs (real estate investment trust), which trade on the major stock exchanges, but are different. The Total Stock Market Index, called the Wilshire is about 6500 different stocks. All traded in a market run by professional money managers. So, any advisor you hire, has to compete against other professional money managers. Who typically have an MBA from Harvard, Wharton, Columbia,Duke, Cornell or U of Chicago (opps, left out Stanford and Northwestern). But, the reality is these people all are very intelligent (on standardized tests anyway) and work in an extremely competitive environment. About 80% of the US stock market is controlled by institutions, who have hired a professional money managers. Much of the 20% left is owned by people who can't just sell, because they own a major hunk of the shares outstanding, and this would lead to a significant drop in share price. People Like Bill Gates, Larry Ellison, the Walton Family (owners of Wal-Mart) are examples. There are many people in this situation. So, there you have it. The US stock and the US bond market are run by professional investors. So, you can hire one to try and compete, or just buy index funds that invest in the whole US stock and/or bond market. There are also index funds for REITS and International investing. Invest for the long term and save the money you would have paid a so-called financial advisor or planner. When you add up the 1.5 to 4% you pay a financial advisor a year, over many years, it is a lot of money. Using index funds also eliminates the conflict of interest, every investor has with a financial advisor. Just another thing to mention, I was taught a concept called the efficient portfolio hypothesis. It was a very complex and supposedly sophisticated method to invest. Typically a portfolio would be 60% US stocks, 20% US bonds and the rest international. REITs were not in the model. Even though they are a good way to diversify. This concept has not worked very well. I don't think it is taught anymore. But, a 50 to 60% US stock, 20-25% US bonds, maybe 10% International (an Index fund like total world market) and 10% in a REIT index mutual fund is as good a guess for asset allocation as any. People can invest themselves. No load mutual fund companies (Vanguard, T Rowe Price & Fidelity) can help a great deal.
  2. The purpose of the financial markets, is to aggregate the large amounts of capital necessary for private enterprise. It is used to buy plant and equipment and finance operations. So, in this respect, it does crate wealth. Keep in mind municipal bonds are how roads, schools, hospitals get built. So, they are an important part, not only on the US Economy, but our society as well. Unfortunately, with all that money changing hands, people will try and cheat. It has always been that way. I don't see that changing. All one can do is diversify, as much as possible. The use of index mutual funds, not only helps with diversification, but also reduces opportunities, for fund managers to cheat. Indexes like the total stock market, the S&P 500, and the total bond market, are the most widely used. I do not believe a university course is necessary to understand investing. There are a lot of resources to help people do that. The reality is, that the financial markets are the only investment, besides owning a home and paying off personal debt that make sense. For most people anyway. Mutual funds can be bought from most any discount brokerage firm (in EFT form) or from major mutual fund company (Vanguard, T Rowe Price and Fidelity). In most cases you can open an account for no cost and buy no load funds, or pay a small commission to buy an ETF. For an example of long term return on the US Stock Market, take a look at the performance of the 1st index fund sold to the public: symbol VFINX. Long term it has returned over 10% per year. The fund was started in 1976. The long term return has stayed around 10% for a long time now. It is a reasonable return to expect from a mutual fund long term. Here is my source for the 10% figure: http://tinyurl.com/zzanbf6 (under "Since Inception 08-31-1976").
  3. It's called "WHAT YEAR POWERSTROKE IS BEST". The gist of it, is that the newer the model, the more complex and costly to buy and repair is the engine. Along with being more likely to a have engine failure and/or major fuel system problems. This of course is due to more emission controls. Beside being costly to buy and repair, the emissions use more total fuel. Because fuel is burned to clean up the exhaust. So, to me it is unclear this is helping the environment. Diesel trucks are now much more costly and fewer people can afford them. To me a couple full timing in a 5er, pulled by a diesel truck, would be energy efficient. Using less fossil fuel, because they tend to live in a small space to heat or cool and stay in moderate temperature places. Like FL in Winter and MI in summer. Because this lifestyle is now much more expensive, fewer people can participate. Also in Europe, many more people drive a diesel car, than in the US. The diesel is generally about 1/3 more efficient than a gas engine. The video points out that the 7.3L Power Stroke, was the best because it was simple and had no emissions equipment added on to it. I also have a feeling truckers will remove troublesome emissions equipment when they get a chance. So, I don't think these new regs, will do anything good for anybody. At one point I had planned to buy a diesel truck & 5er. I had hoped Toyota or Nissan would come out with one. Nissan did, but with all the untested equipment, I won't buy one. The cost will also be much higher than in the past as well.
  4. Perhaps you would like to share who makes 5ers that can be pulled by a 1500 Truck. I would like to consider that, as a possibility. The problem with small is that cabin fever sets in after about 2 to 3 weeks. This has been the case when RVing alone, with another person and with my dog. My dog didn't want to go back in the camper after a while either. In the past, I did have a small RV. Any 5er would be bigger than that I would think.
  5. As I look through Trailer Life's towing guide I notice no 1/2 ton big 3 truck comes w/4.1 or better rear axle. Toyota Tundra comes with a 4.3 rear axle, but still can't tow that much. You really need about 14K lbs or more, to pull a 5er all around the country. Kinda seems to me, the big 3 wants you to spend the extra money on a 3/4 truck, if you want to tow a 5er. Is there a reason Chevy can't put a 4.1 rear axle in a Silverado? I also wonder why Toyota's 5.7L V8 w/401 ft-lb torque, is only rated to tow about 11,000 lbs? Despite have a 4.3 rear axle. If I could tow a 5er with a Silverado, or similar truck. I could use that for everyday and still tow a 5er, that I would like to have. Anyone have any answers or suggestions for me?
  6. The reason financial advisors, including mutual fund managers, don't beat the index averages, is the fees they charge. The financial markets are run by so-called professional money managers (MBA types, from Harvard, Wharton & U of Chicago). They hold over 80% of exchange traded stocks, in mutual funds, pension funds and with other big institutional investors. The rest is mostly owned by very savvy people, who can compete in that environment. So you have very skilled and educated people all competing against one another! That is what makes the market efficient. You can avoid those fees by buying the Total Stock Market Index. Vanguard pioneered these funds for the individual investor, but you can buy them at Scottrade, T Rowe Price etc. In the form of an ETF (exchange traded fund), or a mutual fund. To me there are about 4-5 areas to invest in: US Stocks, Foreign Stocks, US Bonds and REITs. Some would add Precious metals (if you can buy at the right time, which is very hard to do). So, an asset allocation, like 50% US Stocks and 10 - 15 % in each of the rest. All in index funds, and all for the long term. The idea of listening to Bob Brinker is a good one. He has done a good job for his listeners in the past. For instance he suggested in 1999 (as did others) the market was getting pretty high. He then suggested investors get back in, in 2003. When I lived in CA, where Briker broadcasts from, I began to think he was a self fulling prophecy. He says the market is too high, so people see and the market goes down. Then he says buy and the market goes up. But, I don't think enough people listen to him for that to be the case. Anyway, he has given out a lot of good info over the yrs.
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