What's up Gang?
Sorry I got tied up yesterday and was not able to post.
Market is screaming! Across all sectors as well, including oil and metals. S&P about to take out 2011 highs and everything. I know many are saying we need a cool down period but why? The market is just going to go higher here. Being a bear it's tough to play but I stay in the metals and energy plays in these runs. The triple bears are getting slaughtered and making me think maybe I should start to scale in here. Maybe some TVIX or TZA? As far as treasury yields, they seem to keep going lower. TBT is looking good to start scaling into but could still go a bit lower. The 10 yr has solid support at the 3% area. I'm still just as scared as most everyone else on the board and others I know about the future but for now the markets rock onward. Gold- I think only a matter of time before 1600. Oil should be above 100 in the next few weeks. S&P is overbought but I think we hang on to these gains a few more days into next week. I will look to scale in the bears though starting tomorrow in anticipation of a much over due cooling off next week some time. This debt ceiling issue such a circus as always. If the Repubs can get some cuts to some of the big social programs then the market could really like it and scream over 1400 on the S&P easily, maybe even get up to 1450. Obama has his back to the wall and knows he has to give up some as he has to put his election face on. Is it seriously almost 2012 already. I can't believe it. Anyway, should be a good show and I think the market has been pricing this in as well so we might not see such a big push than I previously thought.
I hope everyone is doing well and having a great summer. My business is finally coming together as I got my new management system up and running and have already re-created everything from day 1. Technology is sweet and this system is helping save me tons of time which I share with the family daily. It's great to be alive in this great country and I am so blessed to have the quality of life I always wanted. Money is only a means to an end and not a means to happiness that's for sure. I relish everyday to be able to work from my basement and spend so much more time with the family. Life is good. I just hope I can keep my market win streak alive. lol
I look forward many good discussions as always and I look forward to hearing how everyone's summer is going. Finally nice in Nor Cal. I urge all debriefers, 1st timers, passerbys, and lurkers to weigh in. This community we have is great and I want to do everything to keep it going.
The 15% limit only applies to individual accounts and is subject to change with new legislation. IRA withdrawals get added to your gross income which could be taxed at a much higher rate than 15%. Cashing out of all retirement accounts at once could really hurt you tax wise, but selling your home likely wouldn't. A person should always factor in the tax benefits of putting money into an IRA each year. The question is, do I need the money now or later?
I'm not an expert on this and I'm going from memory alot here. However, I don't think that it is a one-time sell situation. I think that it is a lifetime situation where a house seller gets an exclusion of 250K if single or 500K if married and filng jointly...and you can claim the exclusion every 2 years if you live in the house blah blah blah.
Also, all market gains and dividends are capped at 15% with is certainly center to the discussion.
"As such, I can make a pretty good math arguement that all of us should take out a new mortgage just to pull the equity out of our houses."
It depends on what you do with the money. If you invest it and make a higher return, then that's fine. However, you'll have to pay taxes on that income unless it's in a ROTH. You might not have to pay taxes on the profit you make on your house. When talking about $200,000-300,000 over 30 years, that's a lot of savings, especially since that one time profit would put a person into a very high tax bracket.
Don't forget too that unless you owe a lot you won't be deducting any of the interest you pay because the standard deduction will be larger than if you itemize, meaning you will get no tax benefit from having a mortgage. When I sold my last house I wasn't even filing a schedule A anymore because my deductions were less than the standard deduction, and my interest rate on that mortgage was 6.5%. This year even with all the state and local taxes I pay, I saved a whopping $750.00 by itemizing instead of taking the standard deduction. In 2015 that will drop to $0 because the standard deduction will be larger than my itemized deduction.
I understand your general sentiments about paying down debt but I have just a little different spin on your IRA angle. Real estate is not a liquid asset so that is one of my arguements for absolutely not putting cash in a home. Everybody wants to build home equity. It is the main financial reason for owning a house. However, building equity has nothing to do with the amount of cash that you have sunk in it. As such, I can make a pretty good math arguement that all of us should take out a new mortgage just to pull the equity out of our houses.
Thanks for the Hump Day Debrief. Its going to be tough to try to play the TZA type funds at this time due to the debt-limit circus. There could be a nice celebration rally (maybe short lived) after the amount of cuts are agreed upon. The only saving grace for Treasuries is with the EU scenario playing they are almost the only game in town. I was thinking the same that oil could peek above $100, but looks like it may retest $90 before doing it. Gathered some SCO to play the retest. Good day for it today. Glad to hear that your business setup is nearing completion. That's a good write-off using the basement as your center of operations. This summer will be one of austerity for me. Working on the house and putting most of paycheck into paying bills. If only congress could do that.
It's austerity for the foreseeable future here too. All our money is going towards paying basic living expenses, paying down debt (I plan to be completely debt free in 9 years and all my debt is mortgages at this point), and retirement/education savings. All the other stuff (cars, electronics, vacations, etc.) somebody else can buy because we won't be.
Amen, well said Don. You saw the 10 yr bounce off 3.01% today. Good support there. Today was mild profit taking but bulls still in drivers seat. Interesting to see as many are holding to see how earnings shape up starting next week. So dangerous to see the action like this. Seems to be setting up for a big fall eventually, maybe not before 1400 S&P though. I'll be doing the same this summer with regards to working on the house.
Like you, I'm watching for an opportunity to enter on the short side. At the end of May, when the S&P hit 1345 and then started a steady slide, I missed the move and promised myself I'd catch the next one. Now we're there again, and a little higher. I'd like to dabble in some TZA too, but worry about a sudden rush up to 1400 on "good news," which could merely be more can-kicking down Denial Highway.
My move today was to get flatter going into tomorrow's jobs number. I took profits in my UCO and am second-guessing myself, thinking I should have sold other holdings, too. I just wonder: everyone thinks tomorrow's jobs number is going to be great news, so what if it isn't? Or what if it is and that's already priced in? So I will wait until after 8:30 a.m. to consider my next move.
Good night to all.
I think you will be happy you sold UCO. The "great" jobs # spiked oil down through the trendline. Of course, I'm sure it will be viewed as a buying opportunity by all the people that missed out on the bargain oil prices they could have gotten Wednesday afternoon...
I don't know why austerity in the US will cause the markets to scream higher. This is pretty much a replay of the 1930's, and I seem to recall that not going well. Don't get me wrong, I hope they cut it all, but it isn't going to be great for the market when the huge number of people who currently get a check from the government and spend every dime of it aren't anymore.