8. July 2009 by Dan Walkow, CFA, CMT.

For US taxpayers “times are a changin” as the Obama Adminstration readies changes to the tax code.

The buzz about tax efficient investing grows as we steam toward imminent changes to the tax code under the Obama administration. Certainly there’s a lot of conjecture and disagreement about what the exact effects will be, but there’s a consensus that taxes will increase, and that the burden of those increases will rest primarily on the affluent. According to Forbes magazine families making less than $100,000 will see their tax bills shrink, while those earning more than $200,000 will see theirs grow by 2011.

Forbes magazine points out “At higher income levels.taxes will get complicated quickly.” One of the most significant changes will happen as the former administration’s tax provisions sunset in 2010. Individuals earning $200,000 or more will see their tax rates rise from 35% to a stunning 39.6%.

Investors might want to prepare for these changes now. Read more at Forbess here.

Posted in Taxation | No Comments »

8. July 2009 by Dan Walkow, CFA, CMT.

Why do so many stock market analysts and economists get it so wrong?

According to the Pragmatic Capitalist ” At the beginning of 2008 the average analyst was calling for $90 in total S&P 500 earnings.  The final figure came in at $49.51.  They missed by nearly 50%!   As I’ve mentioned repeatedly here at TPC, the entire analyst community on Wall Street is flawed.  Most analysts are selling a service or pushing a specific firm’s long-term investment beliefs.  This was well displayed in the 90’s and despite regulatory changes, continues today.”

The value of technical analysis is that the charts don’t lie. What you see is what is. Yes you can read a chart wrong and that is your problem but on balance and over time technical analysis provides ” another view” and a check against runaway wall street fodder.

Posted in Investment Industry | 1 Comment »

8. July 2009 by Dan Walkow, CFA, CMT.

One of the great ironies in the hedge fund industry is the propensity for many investors to favor relative returns over absolute returns.  This is particularly true among retail investors who, by and large, would prefer to lose money along with everyone else than to make less than everyone else.  What else could explain the complacency with which investors accept -40% market returns while crying foul at the hedge funds that “under perform” in a bull market.

Investors are supposed to be “rational” when it comes to accessing risk and making investment choices. At least that is what they teach finance students when they study the CAPITAL ASSET PRICING MODEL. Nothing could be further from the truth!

Posted in Investor Psychology | No Comments »