I don’t think it’s a close call. The Roth wins hands down. Look, we’ve already watched a generation save in traditional IRAs and 401ks and retire. The truth of the matter is that the majority of retirees are not going to be in a lower tax bracket during retirement.
If you have a 401k plan at work, contribute the amount that your employer matches. That’s a no-brainer. For savings beyond that, you’re going to be better off in a Roth.
If you have any doubts that the oil market is easily spooked, here’s what happened when a Web site erroneously reported a fire at an Oklahoma refinery.
The supply and demand numbers for silver in 2006. From Jason Hommel:
“World Net Silver demand in 2006, as a function of U.S. money in the banks, is [$739/$11,500,000], which is 0.006% of U.S. money,” said Jason Hommel of Silverstockreport.com. “If the wider public became aware of the silver fundamentals, net silver investment would be much higher, and so would silver prices. With a market this tight, and the world this unaware, the silver price will probably rise much higher than anyone can predict.”
A good article on debt. Here’s the takeaway:
There is a difference – a large and very important difference – between the two main types of debts: Self Liquidating Debt, and Consumptive Debt.
1) Self Liquidating Debt is borrowing money to create widgets that are sold to pay back the money that is used to produce them in the first place. That is what companies such as GE or Apple do every day.
2) Consumptive Debt, however, are debts that are taken to provide for purchasing a good that is consumed.
It is a truism that production is funded out of savings (future savings or present savings). Thus, one cannot go on forever consuming things without producing them. Thus, taking out consumption debt at a far greater rate than productive debt is a policy that has a limit and an end. And guess what: by FAR, the debts that have been incurred by consumers have been consumptive debts and not of the self liquidating variety.
I’m always telling people to get out of debt. When I do so, I’m talking about consumptive debt.
The distinguished Robert Shiller wrote an article in Forbes recently about how ordinary people can easily hedge their risk against higher prices on things they consume. For example, don’t complain about high gas prices. Do something about it — like buy some oil. It makes perfect sense.
However, as Roger Ehrenberg points out it doesn’t work in the real world. Why? Because when it comes to personal finance people will consistently do stupid things. Behavioral economists know this to be true. If I could ever figure out how to get people to behave rationally I could go along way toward saving the world. But it ain’t ever going to happen.
I’ve been following the new PowerShares gold ETF (DGL). And hardassetinvestor.com has an interesting article about the difference between DGL and the current gold ETF of choice — GLD. I think that the fact that DGL can hold a lot of cash earning interest may turn out to be important advantage. In fact, as of yesterday, DGL is up 8.01% for the year and GLD is only up 2.39%. Also, DGL has options and GLD does not. DGL is having trouble gaining much interest from gold investors, but — as the article says — it may be because the concept behind it is a little too esoteric for most investors who don’t want to worry about stuff like contango and “optimum yield.” I’m going to study the issue further and if I like what I see I may make the switch from GLD to DGL.
Mark Hulbert is right on target with this article. I can tell you from experience that most people would rather for you to be wrong telling them what they want to hear rather than be right telling them what they don’t want to hear. And don’t dare change your mind about an market opinion or strategy. That makes people uncomfortable. And people would rather be comfortable than make money. Good article.
The Top 5 Way to Become a Millionaire.
In fact, they’re the only ways unless you marry rich, are extraordinarily talented, are extraordinarily lucky, or perform some crazy stunt.
(HT: Hugh Hewitt)
According to Mark Hulbert:
2. His Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects newsletter exposure to gold, is down to 14.3%.
3. As recently as April 25 the index was at 57.1% even though gold was about $3 an ounce lower than it is now.
4. On February 16 the HGNSI was at 75% with gold at $665. Today gold is at $685. So even though gold is $20 an ounce higher than it was in February, bullish sentiment is dramatically lower. Highly unusual.
5. Since contrarians believe that when the bullish consensus goes lower — especially while prices are moving higher — it is quite a bullish sign.
