From ghoulies and ghosties and long-legged beasties, things that go bump in the night, and the Internal Revenue Service rulebook, Oh Lord deliver us.
I must never write about taxes again. There were dozens of reader e-messages after I listed some of the forward macro risks of US tax law changes, mostly trying to get me to replace their accountants. As I do not do my own taxes, I cannot give anyone advice on this horrible annual trick or threat experience, far worse than Hallowe'en. Here are some points extracted form the mail:
You cannot use capital losses to offset the fees to convert your IRA to a Roth. The tax is based on your statuatory rate and has nothing to do with capital gains.
Do not listen to stockbrokers who will aim to convert your IRA. Check with your accountant. If you don't have an accountant, hire one. If you are proposing to boost your income by 6-figure amounts this year you really can afford an accountant.
The main advantage to Roth-ing this year is that you can spread the tax over two years rather than paying at once. But if tax rates go up, it works against you. You also can pay the tax all at once.
However, Roth-ing is not forever. You can undo the conversion if you pay tax next April and ask for an extension to a year from now. Un-Roth if your IRA stocks have gone down, or if your statuatory tax rate has gone up.
Don't forget state and local income tax.
Note that I was wrong to suggest that investment losses should be stored against possible higher future rates. Losses can be carried forward so you can take them now (unless the law is changed of course.)
Swiss-American reader JS writes:
Stupidly, I sat on my reading glasses on train from Bale to Geneve. They cost $1 at a 99 cent store and identical pair here cost 39 SFR, $44. To paraphrase T.S. Elliot, "I measure out my life by coffee spoons..." A coffee here costs 4.40 SFR at Starbucks, vs $1.50 in California, identical quality. The Swiss shrug it off, their unemployment remains the lowest. Their new world's longest tunnel, just bored through, 58 kms cost $16 bn after 7 years work, was paid for by every taxpayer SFR 1500. hence no debt. Meanwile N.J. Governor cancelled Hudson tunnel project costing $8 bn and badly needed.
Others shun us due to the hollow Tea Party types by which a minority US electorate reaveals a dumbed down America in decline. O vey o vey. I am tempted to open a school for CEOs in US titled : ?Acquire Export Expertise or Perish.?
The tea-party creates political risk as does no-taxation-never-ever, for example in tunnelling under the Hudson.
After I told Paul Renaud, our former Thai reporter, about the horrors of trying to open a Hong Kong stock trading account with Boom.com (recommended by another reporter, Fei Chen) because they required about 7 pounds of paperwork to comply with US regulations for offshore accounts, he replied, discounting my attempt for some reason.
You are wrong, HK Broker, Boom.com does accept US clients & handle multiple Asian markets including Thailand. [My] members report good service/execution there, while the commissions are a bit higher then dealing directly in Thailand. You are doing your members a disservice by biasing only ADR's. Realize my dear, most/best growth companies here don't have it.
Paul, a US registered rep, carries some baggage about this country and my supposed ?imperalism? because I write about ADRs rather than obscure small stocks tradable only on foreign markets. Being myself a rather sophisticated investor, and not that poor, if I cannot manage to open a Hong Kong or Bangkok account on-line without a full frontal regulatory lobotomy, I figure none of you can. We write about a non-ADR I recommend and own today, but there are distinct reporting problems, as noted. He will not longer write for us.
Mark Hulbert wrote up Global Investing's annualized performance data this month. Here's how we are doing, raw and risk adjusted:
Raw returns | Newsletter |
1-year | 16.32% |
3-years | 2.19% |
5-years | 9.83% |
10-years | 10.31% |
Risk adjusted returns | Newsletter |
1-year | 95.64% |
3-years | 125.47% |
5-years | 124.68% |
10-years | 120.46% |
More for paid subscribers from France, Greece, Kazakhstan, Germany, Singapore, Israel, Brazil, Colombia, and Australia. It is mostly about political risk.
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