Bob Carlson

December 13, 2016

Bob’s Blog has Moved

Filed under: Uncategorized — Bob @ 5:04 pm

My blog has been incorporated with the Retirement Watch web site. You can find it now here. Or go to Rollover “About Bob Carlson” and click on “Bob’s Retirement Blog” in the scrolldown menu.

December 12, 2016

Used Car Deals

Filed under: Economy — Bob @ 5:20 pm

Last summer I wrote in Retirement Watch about the coming glut of used cars that will create attractive deals for buyers. This article goes in to a lot of detail about the forces causing the situation and the effects.

In 2017,  about one million more off-lease vehicles will be available in the U.S. compared with 2015. That additional volume will put downward pressure on used car prices.

If cars depreciate too quickly, consumers will be unwilling to pay high prices for new vehicles. High residual values also help to keep monthly lease payments low. In other words, if used car prices fall, the whole system comes unstuck: automakers’ earnings will likely fall and car finance companies (often a subsidiary of the manufacturer) may have to book writedowns on the value of their leased assets.

Information Overload

Filed under: Economy,Retirement - General — Bob @ 12:20 pm

Most people like having a lot of information available and don’t feel overwhelmed by it, according to this survey. In fact, they’re more comfortable with all the information than they were a few years ago. Of course, something isn’t true simply because survey respondents say it is. Studies of 401(k) plans consistently show that there’s a limit to the number of choices people can handle. Studies of retirement preparedness indicate that most people believe they are financially prepared for retirement while the state of their finances says otherwise. Then, there’s the whole controversy about fake news and how much of it people believe.

A new Pew Research Center survey finds that, for the most part, the large majority of Americans do not feel that information overload is a problem for them. Some 20% say they feel overloaded by information, a decline from the 27% figure from a decade ago, while 77% say they like having so much information at their fingertips. Two-thirds (67%) say that having more information at their disposals actually helps to simplify their lives.

The survey shows that most Americans are comfortable with their abilities to cope with information flows in their day-to-day lives. Moreover, those who own more devices are also the ones who feel more on top of the data and media flows in their lives. Those who are more likely to feel information overload have less technology and are poorer, less well-educated and older.

The Most Expensive ZIP Codes

Filed under: Housing — Bob @ 9:45 am

There’s been a shift in America’s luxury housing market, according to Appreciation in Silicon Valley is taking a break and is being superceded by areas of New York City and Florida. But the article asks whether this is a shift in tastes or will today’s priciest ZIP codes follow Silicon Valley down?

Demand for high-end homes is finally waning after six years on the boil. The signs of a slowdown are clearest in Silicon Valley, where just a year ago eight-figure list prices, bidding wars and one-week sales were commonplace. Surpassing the Valley this year are ZIPs in New York and California, but sellers in these high-priced havens would be wise to stay humble: Their hometowns could be next.

December 7, 2016

The Irrational Exuberance Update

Filed under: Economy — Bob @ 6:20 pm

It’s been 20 years since Alan Greenspan first commented on the irrational exuberance in the stock market. Stocks still are highly valued, but some things have changed. This article discusses what’s changed and what hasn’t, and says bonds probably are in more of a bubble now than stocks.

“The philosophical thinking behind Greenspan was that the central bank was there to pick up the pieces” rather than prejudge on bubbles, said Chris Green, a veteran of two central banks who now heads economics and strategy at First NZ Capital Group Ltd. in Auckland. “We’ve moved away from that. It’s a more holistic approach that central banks have adopted with the benefit of hindsight and looking at the problems that emerged” from the Greenspan era, he said.

Improving Your Credit Score

Filed under: Cash Management — Bob @ 1:30 pm

I rarely link to articles about credit scores and improving your credit rating, because most of my readers don’t have to worry about that. But in case you do, or you want to pass good information on to someone who does (such as a child or grandchild) take a look at this post. It gives a comprehensive look at what matter without getting into details about how credit scores are computed. It also gives reasonable, practical tips.

Make strategic payments

Are you making your minimum payments on time? Your payment history (where delinquent payments show up) contributes the most to your credit score. Late payments generally stay on your credit report for seven years.

South Carolina’s Pension Problems

Filed under: Economy — Bob @ 9:30 am

The problems South Carolina has with its pension plan are unique. This article takes a comprehensive look at how the problems developed since 1999. I wouldn’t assume everything in the article is accurate or complete, but it gives a good overview of some key mistakes the state made, and these often are the same mistakes made by individual investors.

By pouring money into stocks after prices had already soared, the pension funds arrived just in time for the bursting of the internet stock bubble and a deep, two-year tumble in market prices.

“We missed a significant portion of the dot-com bubble,” said the current S.C. Retirement System Investment Commission CEO, Michael Hitchcock. “The timing of what happened, it was not good by any stretch of the imagination.”

It was the first in a series of ill-timed pension investing decisions, some allowed by additional voter-approved changes to the state constitution, that resulted in the funds repeatedly buying stocks at high prices near peaks in the market.

Regular folks saving for retirement are typically advised not to try to time the stock market as it rises and falls, to avoid chasing investments that were last year’s winners, and to avoid paying high fees. The pension managers did the opposite, repeatedly, with state lawmakers’ encouragement.

December 6, 2016

Two Economists View Christmas

Filed under: Cash Management,Happiness & Money — Bob @ 6:27 pm

The two economists behind Marginal Revolution blog prepared a free video that’s a little over five minutes long about the economics of gift giving. They say a lot of giving is inefficient, and offer some suggestions for improving gift giving.

What Your Car Company Can Do

Filed under: Economy — Bob @ 12:14 pm

Recent model automobiles have a lot of technology and communications equipment in them. That allows auto manufacturers to do convenient things, such as unlocking your key after you locked the key in them or lost the key (or the fob you have instead of a key). But they can do more. Here’s an article about how BMW helped the police track a stolen car and then lock the thief in it until the police arrived to arrest him.

But technology triumphed. When the owner, who’d just gotten married a day earlier, discovered the theft, the police contacted BMW corporate, who tracked the car to Seattle’s Ravenna neighborhood. The car was parked, still running, with the snoozing suspect fast asleep behind the wheel.

Some Counterintuitive Thoughts

Filed under: Retirement - General — Bob @ 9:30 am

Dan Ariely is a professor at Duke and a leader in behavioral economics and similar studies. In this interview he gives a few of the insights developed from research and how he’s applied them with different organizations.

I think that the first thing to recognize is how difficult it is to be motivated about things that will happen in the long term. It’s almost inhumane. And this includes all kinds of things that we need to motivate ourselves to do. There are very few projects that we’ll finish in a month. Everything that we do for our health is about the long-term. But the long-term is just not that motivating because we just do effort, effort, effort, effort—and nothing good comes from it. So what can we do? We can hope, which is what physicians often do—they tell patients, “Oh, you just need to take this medication because otherwise you’ll die from something.” And we can hope that that will be sufficient. The problem is, it’s just not.

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