Bob Brinker Update for 4/2/06
In our Bob Brinker Discussion Forum we discuss Bob Brinker's market timing model and "Marketimer Newsletter". Bob uses this model to "predict" the stock market in the months ahead. Make sure you read my article Market Timing Quotes to see what famous investors have said about trying to time the market.
Bob Likes Series I Bonds
On recent shows, Bob has recommended I Bonds for purchase. I Bonds are currently paying 6.73% on new money as I explained in my article called I Bonds.
Kirk's Comment: Beware that with low inflation, the variable rate would be zero if based on the past 4 CPI readings. I Bonds will pay a much lower rate for the next six months unless they raise the base rate considerably. See my iBond Core Rate Calculation for details.
Bob Likes TIPS
On the Sunday, April 2nd edition of "Moneytalk," Bob Brinker said TIPs (Treasury Inflation Protected Securities) look attractive now.
Kirk's Comment: If you want to get these via a mutual funds, then VIPSX over at Vanguard is an easy, low cost way to add them to your IRAs.
- Vanguard® Inflation-Protected Securities Fund seeks long-term returns that exceed inflation by investing in high-quality inflation-indexed bonds with an average maturity of 7 to 20 years. These securities, issued by the U.S. Treasury and government agencies as well as domestic corporations, automatically adjust their principal and interest payments over time in response to changes in inflation.
Bloomberg.com says TIPS now have base rates between 2.19 and 2.32%. This means if you buy now you get a base rate that is over double the base rate of I Bonds.
Bob Brinker Fan Club
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Bob Likes CDs from Pentagon Federal Credit Union
Bob Says the Pentagon Federal Credit Union's 5 year CD rate is in excess of 5.5%. He recommended their website www.penfed.org for more information. Bob said you can join Pentagon Federal Credit Union for only $20
Kirk's Comment: Here are Pentagon Federal Credit Union's current rates:
- 3-Yr CD is paying 5.50%
- 5-Yr CD is paying 5.67%
I find it quite bullish for equities that Bob's callers are so interested in fixed rate securities like Series I bonds and CDs.
Bob Interviewed Donna Le Valley, editor of JK Lasser's Your Income Tax 2006
Here are some of the items that they discussed:
- It is much easier to get an extension. You still have to pay your taxes by April 17th, but you can file to delay the paperwork by six months. Kirk's Comment: You are still expected to pay your taxes on time so make an estimate and send it in by April 17th. If you under pay, then when you file late, you will pay a small penalty for the amount you under paid.
- Tax free Gifting has changed from $11,000 a year to $12,000 a year.
- Traditional and ROTH IRAs have increased and the "catch up provision" for those over 50 has doubled!
- SEP contributions are higher
Bob said he was "very impressed with the changes that have allowed people to put money away, tax deferred, for the future."
Bob's Favorite Books
On both shows this weekend, Bob recommended and spoke about these books several times. All of the authors (or editor) have been guests on his show once or more to promote their books.
- Common Sense on Mutual Funds by John Bogle
- Wall Street Words by David L. Scott
- The End of Detroit by Micheline Maynard (She was Saturday's Guest)
- Hedgehogging By Barton Biggs
- JK Lasser's Your Income Tax 2006 (The editor was Sunday's Guest)
Bob seems to be recycling his guests. Hopefully my readers will write or call Bob and suggest he have me on to discuss "core and explore" and "asset allocation with dynamic rebalancing" as an alternative to the market timing he recommends. I'm not holding my breath, but it would make for an interesting show I am sure!
Discuss Bob Brinker and this article
Discuss: What do you think? Ask questions about this article and discuss Bob Brinker In our Bob Brinker Discussion Forum. Make sure you click "Next 10" to read newer posts. Bookmark this URL to quickly find new posts at the end of the forum.
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DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice.
Past Bob Brinker Updates:
- Update for March 14, 2006
- March 2003: If you missed the BUY signal, what should you do now?
- Bob Brinker Fan Club
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