Monday, September 22. 2008
Is the Safe Withdrawal Rate too safe? Or too aggressive!?
As readers of my newsletter know, in May I published research that challenges the safe withdrawal rate as potentially being TOO safe in some environments, where market valuation is not at unfavorable extremes. However, in some feedback I've received from readers, another important point is being made - in some cases, the safe withdrawal rate may also still be too aggressive!
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Friday, September 5. 2008
Using average cost accounting for Exchange-Traded Funds?
The average cost accounting method was first created to allow a taxpayer to simply report the gain on partial sales based on the average cost of all shares purchased (instead of the default FIFO treatment, or by using specific share identification), but was reserved exclusively for mutual funds and not for individual equity securities. However, it appears now that the rules may be a little broader than anyone realized - because technically, an exchange-traded fund (ETF) may also be eligible, notwithstanding the fact that it trades more like a stock than a mutual fund.
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