Monday, March 23, 2009

529 Plans Suck

From the first time I heard about College Savings 529 plans, they seemed awful.  I heard these hucksters on the radio peddling them and they just sounded like a way for them to grab fees. Now people that invested in them are f-ed.

Let's just say...any plan that doesn't let you put close to 100% in cash within a year of having to use it is criminal. Yet: "Last April, Oregon doubled the stock exposure in its "1-3 Years to College" portfolio to 40%. In 2004, an in-college student in Rhode Island's aggressive age-based portfolio would have had 40% stocks, 31% bonds and 29% cash. By 2008, the equivalent was 40% stocks (including real estate), 55% bonds and a measly 5% cash."

In these plans, the flexibility to do the right thing was taken away by bureaucrats.  My plan is simple- give the kids their own money.

Why don't all government savings accounts include some kind of commodities choices?

Wednesday, March 18, 2009

Private Mortgage Insurance

What the heck is private mortgage insurance for? Shouldn't that insulate banks from foreclosure losses? Every loan under with less than 20% should have been paying that... Did that many people really get piggy back loans to avoid it?

Sunday, March 08, 2009

Quick portfolio update

I think the market has dropped to the point that I can start looking for dividends again.

I don't know what's going on with TNP, but I might be getting a greater than 10% dividend off of that stock. They are trading well below book value, and I don't know why. I guess no one is going to be shipping oil? Come on, there is some inelasticity of demand there.

Looking at the financials, there is probably no reason to go there. They should move the trading desk of these stocks down to Atlantic City. That said, I jumped into TD Bank. They're Canadian, but they are running a tight operation and took over Commerce Bank, which was a really good acquisition. I am hoping for a steady value and a 7% dividend.

As far as the macroeconomy goes, we are completely screwed. I wish we could let housing prices drop faster without a total disaster.