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Explaining exchange-trade funds

Following last week's light touch on the subject, there's more to be explained about exchange-traded funds (ETFs). Since they are a relatively new financial product compared to stocks themselves or mutual funds, they present elements of a noble experiment. But that hasn't phased investors. The amount in ETFs has doubled since 2012 -- to $2.12 trillion.

Tips for managing after-tax money

Believe it or not, some people actually have money beyond what they have accumulated in their retirement accounts. Retirement account money is referred to as “pre-tax” or “tax-deferred” because no taxes are ever due until you spend it. All that money keeps compounding tax-free. Everything else is called “after-tax money.” The genesis of after-tax money for most people will be some combination of the sale of a home, business or an inheritance. Miraculously for some, however, their after-tax portion of the nest egg is attributable to disciplined savings and investment acumen.

The fight to protect investors' assets

The battle over who will be legally obligated to protect investors’ assets continues to rage in a knock-down, drag-out exercise that is now in its third year back in Washington. So what else is new? What the financial services industry is fighting is the requirement that all brokers working with retirement accounts including IRA’s become “deemed fiduciaries.” A “fiduciary,” by definition, is charged with making all recommendations in the sole interest of the beneficiary of the recommendations.

We need to invest more in the Peace Corps

We recently hosted a visit from identical twin sisters who came to San Francisco to celebrate the 50th reunion of fellow Peace Corps volunteers who had worked in Africa in the early days of this legendary organization. While volunteers total 6,800, the Peace Corp has almost 17,000 applicants for roughly 3,500 annual openings for two-year stints overseas. Why not take them all and spread that much more good will around the world? Budget restraints. The Peace Corps is allocated just $380 million which works out to about $50,000 per volunteer.

Do-it-yourself managed payout funds

With my home building projects, I used to gain a tremendous sense of visual accomplishment from completing 90 percent of the job. Paying a professional to do the last ten percent would have been an ideal option if I’d had the money, but alas and alack. Instead, I would just stop noticing after awhile that the door jambs didn’t have moldings, and I would only get around to finishing them about the time my parents or in-laws were coming to town.

Enduring the market's 'summer doldrums'

Like stepping on a pop top and blowing out a flip-flop, the stock market's so-called "summer doldrums" are an all-too-common nuisance factor for those who need instant gratification and who hate to be inconvenienced. The fact is, since 1926 the stock market's average gains from May to October have been half of what the remaining six months have generated. Downdrafts, when they have happened, tend to have occurred more often during the summer.

Moving towards a state-owned bank

I personally think the time has come to set wheels in motion to organize a state-owned bank here in California. North Dakota has operated its own bank since the early 1900’s and it has made money for taxpayers while strengthening the state’s own regional banks. The net effect has been to keep bank profits in North Dakota. The only losers have been the “too-big-to-fail” banks that would otherwise have enjoyed making the spread on money borrowed by, and throughout, the state.

Consider stocks that pay dividends

Over the past several years, I been sympathizing with folks who are feeling a little queasy about the stock market's ability to set new records for sustained increases in value. "When will the next shoe drop?" is the question in the minds of many investors -- including me. The antidote for anxiety is certainly not to bail out into cash. Anyone could have made the argument for adopting that course in January 2011 -- 22 months after the market bottom in March 2009.

Weighing home options in Maine

On vacation here in Maine once again, I can’t resist thumbing through local real estate listings to enjoy the thought of any number of these three bedroom homes on or near a lake with an in-ground pool and new stainless appliances on 2+ acres for $95,000. Across the country, the increase in housing prices since 2012 has been 27 percent. In the Bay Area, that statistic has been more like 65 percent with the median single family home price in San Francisco now at over $1.2 million.

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