Thursday, November 03, 2005

Is Bernstein right (on that one)?

On Raddr's forums (, I've read the following, from Bernstein, relating to early retirement (age 45 or before):

Further, with a time horizon that long, one has to face up to the reality that "merely" keeping up with inflation will seriously disadvantage him or her regarding wage earners, whose earnings will be increasing along with productivity increases.

I don't want to blindly believe that my plan to retire at 37 is feasible, for this reason, I let much place to doubt, questioning and criticism. I must say that I never seen things that way: yes, I planned to keep-up with inflation, but I didn't consider that other people will get "richer" with time. That is, my plan will allow me to have the same standard of living as today, but I could be unable to afford new technologies, products or reach higher living standards. How exactly is inflation calculated? For instance, if we compare the cost of living in 1950 with that of today. If one's income has been increasing along with inflation, does that mean he couldn't afford computers, a cell phone and internet access, since these were inexisting in 1950 and thus, not accounted through years as being part of inflation?

Anyone has anything to say about that?

Wednesday, November 02, 2005

My Technical Analysis Signals Track Records

Value of 10,000$ invested in IVV (S&P 500 ETF).

Signals track record

Date Signal S&P500 MySignals HoldStrategy Diff
26/09/2005: Sell 1216.05 9980$ 10000$ -20$ (-0.02%)
2/11/2005: Buy 1202.76 9960$ 9890.71$ +69.29$ (+0.69%)

Note: MySignals = value of portfolio if 10,000$ invested according to my sell and buy signals. 20$ is taken into account for commissions. HoldStrategy refers to holding initial $10,000 invested at the time of inception, September 26th 2005.

A canadian trick for mortgage deduction

Seems like mortgage deduction is at risk in the US. In Canada, interests paid on mortgage are not tax-deductible. But many use an old, legitimate trick.

Mortage interests are not tax-deductible, but loans used for investment purposes are on gains made by these investments. The trick is to use your investments to pay your mortgage and get a loan of the same amount to reinvest it. Now, your loans are tax deductible. Even if the interest are higher on a personal loan than that of a mortgage, since income tax rates are high in Canada, you generally save (unless your credit score is so low that your personal loan would be too high).

Buy signal

Now we have a buy signal.