So, not too many comments on my concept of "Political Efficiency".
I have been thinking about that for a while. I observed that many people look down on market timing, for the various well-known reasons. And those are all valid, I will admit. Yet, so many also have strong political inclinations, whether they openly post about them or not. So, I asked myself that if people could not be sure about the market movement, and they knew that it was futile to predict the market future, how could they be so sure of the effects of their favorite candidate? It seems to me that nearly all politicians sounded a lot better on the campaign trail than their actual performance when they actually got the seat. To be fair, they might not have been able to do what they wanted because of various reasons, but the net practical effect was the same: it might not matter that much.
So, I posted earlier about my discouragement with voting, and might just let the public deliver its "Political Efficiency", so that I benefit without doing any work, the same as investing by indexing.
Now, you might have sensed some sarcasm in my post.
Yes, the sarcasm is there. I do not believe that either the market or politic arena is truly "efficient". But I do know that it is tough to beat or to predict either. However, for me myself, guessing the market direction is a lot more fun than thinking and arguing about politics. So, I have spent much more time trying to time the market than to follow politics, the later mainly as it might influence the market.
On voting, I was told all my life that a citizen should be grateful to have that right, and should exercise that right. So, borrowing from the portfolio rebalancing principle, I can vote in a similar manner. I shall vote against all incumbents, regardless of their political party. That maintains the balance in the political system. It keeps a political bubble from getting out of hand, just like the recent housing bubble, or the tech stock irrational exuberance of 2000.
How can one have a portfolio with all stocks? Or all bonds, or cash? Similarly, what will this country look like with all Republicans, or all Dems? I would not want to live in such country!!! There must be a balance of them, and I have to do what I can to restore the balance, the same way as rebalancing my portfolio.
Will I be able to maintain the above principle, or will I in the election booth be having second thoughts and willing to give my favorite candidate a little more benefit of the doubt than his opponent? Oh it is going to be hard...
Can't we all agree to just call it "investing" and move on with our lives?
No. The problem is that we call our action "investing" and the other person's "gambling".
I'm still in the market, about 80% stocks. Probably 15 to 20 years until I draw my retirement. But, I have several vested pensions, with COLAs, to anchor me. Unless the masses rise up and take the pensions away.
I am more than 70% equities too, and it has been hurting me like crazy. Kept telling myself I will [-]sell[/-] rebalance when it gets to 80%, but the darn thing never got there.
I'm so poor I can hardly scrape together the money for a nice dinner date, but still this would not help me.
The 15% income bracket is $34,000 and that includes the cap gain itself. So, it is easy to go over that limit like you said.
But what expensive dinner did you have in mind? Have you tried the "Herb Farm"? I have not, and it is tough to do so with the market as it is.
