Picking Winners and Losers – It’s Anyone’s Guess


When you lay out the returns of a variety of asset classes over time it’s hard to find any meaningful patterns. The chart below shows the returns on 10 different asset classes over time and it’s quickly evident that what was the star of last year rarely shines the brightest the following year.

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Buying Your First Home

buying-first-homeHome ownership is the cornerstone of the American Dream. But before you start looking, consider a number of things.

First, look at buying a home as a lifestyle investment and only secondly as a financial investment. Over time, buying a home can be a good way to build equity. But as recent history has shown, house prices can go down as well as up. Like many other investments, real estate prices can fluctuate considerably. If you aren’t ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you’ll need to determine how much you can spend and where you want to live. (more…)

Investing Long Term? Don’t Overlook the Inflation Factor!

inflation-dollarsA penny saved is a penny earned, right? Not necessarily. Thanks to inflation, over time that penny could be worth less than when it was first dropped into the piggy bank. That’s why if you’re investing — especially for major goals years away, such as retirement — you can’t afford to ignore the corrosive effect rising prices can have on the value of your assets.

Inflation Under the Microscope

Just what is inflation, this ravenous beast that eats away at the value of every dollar you earn? It is essentially the increase in the price of any good or service. The most commonly referenced measure of that increase is the Consumer Price Index (CPI), which is based on a monthly survey by the U.S. Bureau of Labor Statistics. The CPI compares current and past prices of a sample “market basket” of goods from a variety of categories including housing, food, transportation, and apparel. The CPI does have shortcomings, according to economists — it does not take taxes into account or consider that as the price of one product rises, consumers may react by purchasing a cheaper substitute (name brand vs. generic, for example). Nonetheless, it is widely considered a useful way to measure prices over time. (more…)

Getting Value in a Vacation Home

vacation-home-familyThere are two great reasons for buying a vacation home: You want one and you can afford to buy it. Buying a vacation home as an investment, however, should not be your primary motivation.

Some vacation properties can also be good investments. Others aren’t. As recent history has shown, real estate prices can go down as well as up, and there are no guarantees.

There are, however, some guidelines that can help you find a vacation home that will provide value along with pleasure. (more…)

What Are the Tax Issues Associated With a Gain or Loss on a Primary Residence?

house-taxesA homeowner may be able to claim a significant tax break on any gain from the sale of a primary residence. Here’s more on the break.

For U.S. federal income tax purposes, you may be able to exclude from income any gain up to $250,000 for a single taxpayer and $500,000 for a married couple filing a joint return. Generally, to exclude the gain, you must have owned and lived in the property as your main home for two of the five years prior to the date of the sale. If you lose money on a sale, the loss is not tax deductible. (more…)

Investing in Your Financial & Life Portfolios

money-eggIn their book Life Matters, authors Roger and Rebecca Merrill write:

Both what and how we spend dramatically impacts the quality of our lives, the quality of our relationships, and the legacy we leave to our children—not only in terms of dollars and cents, but also in terms of character, financial intelligence and the ability to interact in positive ways around money matters.

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