william the wie
Gold Member
- Nov 18, 2009
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Normally most long term accounts with $500K or more are balanced portfolios with at least two of the following asset classes:
Real estate
Stocks
bonds
cash/CDs
being the most common. The recent correction was an example of classic stocks & bonds portfolios being rebalanced. Then there are the problems that sometimes the balances get really involved. Other assets include: direct investment as with franchises and commodities such as gold and energy.
As portfolios get larger and the more asset classes get added to the balance the more difficult rebalancing gets. So far the tax bill has not really kicked in. Here are some of the problems that the tax bill creates in rebalancing:
The mortgage deduction cap acts to prevent housing bubbles.
Rising wages make retirement accounts easier to fund. Since muni bonds should never be put in a tax reducing retirement account and the vast majority of "taxpayers" are no longer subject to federal tax and are also moving to states that have low/no state income tax this will get interesting.
Gold is likely to go up as a result of bitcoin going down. That will trigger rebalancing as well. Likewise energy is likely to go very low because of breakthroughs in fracking and other forms of energy. That too will trigger rebalancing. The big question is whether 24 K on the Dow is the resistance level it is thought to be?
Wage push inflation
Real estate
Stocks
bonds
cash/CDs
being the most common. The recent correction was an example of classic stocks & bonds portfolios being rebalanced. Then there are the problems that sometimes the balances get really involved. Other assets include: direct investment as with franchises and commodities such as gold and energy.
As portfolios get larger and the more asset classes get added to the balance the more difficult rebalancing gets. So far the tax bill has not really kicked in. Here are some of the problems that the tax bill creates in rebalancing:
The mortgage deduction cap acts to prevent housing bubbles.
Rising wages make retirement accounts easier to fund. Since muni bonds should never be put in a tax reducing retirement account and the vast majority of "taxpayers" are no longer subject to federal tax and are also moving to states that have low/no state income tax this will get interesting.
Gold is likely to go up as a result of bitcoin going down. That will trigger rebalancing as well. Likewise energy is likely to go very low because of breakthroughs in fracking and other forms of energy. That too will trigger rebalancing. The big question is whether 24 K on the Dow is the resistance level it is thought to be?
Wage push inflation
