Category: Personal Investments

Be sure you’re using the right calculation when assessing portfolio performance

Many investors never evaluate their investment performance beyond simply noting gains and losses. Perhaps this is because they are not aware of how to conduct a proper evaluation. A couple basic calculations can help you better assess your portfolio returns and your financial advisor. A growth calculation is quite simple for the portfolio that never …

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IRS warns of Dirty Dozen tax schemes

The IRS has released its annual list of the top 12 tax related schemes, described in detail here.  In summary, the list includes the following warnings for taxpayers: Identity Theft Tax fraud related to identity theft is at the top of the list.  For instance, a fraudster may use a legitimate taxpayer’s identity to fraudulently …

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Permanent link to this article: https://betweenthenumbers.net/2013/03/irs-warns-of-dirty-dozen-tax-schemes/

How Much House Can You Afford?

The recent real estate bubble and foreclosure crisis that California faced has left first-time home buyers wondering how much home they can really afford.  With the relatively lower current prices and record low interest rates, the California Association of Realtors (C.A.R.) is suggesting it’s an opportune time to buy.  C.A.R. published the following chart that …

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Permanent link to this article: https://betweenthenumbers.net/2013/02/how-much-house-can-you-afford/

Fumbling the Interpretation: Statistical Models and the Super Bowl

Predictionmachine.com generated a statistical model for the 2013 Super Bowl that reports a 67% probability of the 49ers winning. The probability of this outcome is different than predicting that the 49ers in fact will win. Yet such simplistic, and incorrect, interpretations are common to  Monte Carlo style models (the type of model run by Predictionmachine.com). …

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Permanent link to this article: https://betweenthenumbers.net/2013/02/fumbling-the-interpretation-statistical-models-and-the-super-bowl/

Whether Simulating Super Bowls or Financial Portfolios, the Assumptions Matter

Statistical models are created by identifying influential random variables and then assigning characteristics to those variables. In the case of football, how many rushing yards the 49ers will gain is a random variable. So is the number of interceptions the Ravens will make. The formulation of a statistical model involves identifying the most important of …

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Permanent link to this article: https://betweenthenumbers.net/2013/01/whether-simulating-super-bowls-or-financial-portfolios-the-assumptions-matter/

67% Chance the 49ers Will Win, Pretty Good Chance the Prediction is No Good

Predictionmachine.com ran 50,000 iterations of its statistical model to give a 67% chance the San Francisco 49ers will win the Super Bowl. Such a large number (50,000 iterations) and “computer model” may create an impression of validity and sophistication about the prediction. This could be a false impression. The output from a statistical model is …

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Maintaining Wealth Eludes Most Professional Athletes

Sports Illustrated provides a surprising statistic: “By the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress; within five years of retirement, an estimated 60 percent of former NBA players are broke.” There are many contributing factors that quickly spring to mind …

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Permanent link to this article: https://betweenthenumbers.net/2012/12/maintaining-wealth-eludes-most-professional-athletes/

Investing in College: A Lesson in Evaluating Investment Returns

The common practice of investing in a university education to receive lifelong returns of larger salaries deserves additional scrutiny in the current environment of rising tuition, ballooning student-debt, and high unemployment among college grads. Smart Money attempted to provide guidance, but botched the return on investment calculation. The publication recently scored the country’s 50 most expensive universities …

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Permanent link to this article: https://betweenthenumbers.net/2012/10/investing-in-college-a-lesson-in-evaluating-investment-returns/

Investment fraud and financial exploitation of seniors is an epidemic

Results of a study entitled “Elder Investment Fraud and Financial Exploitation Survey” were released on June 13, 2012. 762 responses from primarily state securities regulators, adult protective services workers, social workers, medical professionals, and financial planners provided an unequivocal message that the elderly are being taken advantage of to an alarming degree. The results include: …

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Permanent link to this article: https://betweenthenumbers.net/2012/06/investment-fraud-and-financial-exploitation-of-seniors-is-an-epidemic/

Big Plaintiff Victory in Revenue Sharing 401(k) Trial

In Tussey vs. ABB. Inc. (Case No. 2:06-CV-04305-NKL, March 31, 2012), a United States District Court for the District of Western Missouri decided an important case regarding common fees and revenue sharing within 401(k) plans. The case imposed extensive liability on the plan sponsor, resulting in $36.9 million of damages, plus Plaintiff’s attorneys’ fees. We …

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Permanent link to this article: https://betweenthenumbers.net/2012/05/big-plaintiff-victory-in-revenue-sharing-401k-trial/