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Author: RetiredFool6 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Covering a loan + Foolish Four Date: 12/17/1997 10:01 PM
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1) I have a 4 yr. 2.9% loan on my new car.
a) I _could_ just put the cash into T-bills at 5%+
b) I could put it into Vanguard Index (which I already own)
c) I could put it into the Foolish Four at the start of the year.
[where did I get the cash -- by not stopping the
payroll deduction when my last car was paid off]

2) Is the Foolish Four investment a good idea IF I might need the money at the end of the four years?
a) With the change in the tax law re. Long Term Capital gains, do you still roll over every 12 mo. or do you not roll over until the 18 mo. is up?

3) I am retired (see signature) but so far am still in a positive cash flow situation, if this makes any difference in investment strategies.

RetiredFool6
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Author: rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 941 of 121585
Subject: Re: Covering a loan + Foolish Four Date: 12/18/1997 10:56 AM
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I posted a 4-parter about drawdown in retirement.  See if you can't find it.  Pixy posted a 20-parter.
It all depends on if you need this money to live on, or if you can leave it in investments and let it grow.

FWIW, below is info on all rolling 5-year returns, for the period 1961 to 1997.  None of the Unemotional Value strategies had any 5-year period that lost money.
Regards,
Ray
            DJIA S&P_50   BTD5    MF4    UV2   UV4+ UV5/6+    UG5 
Deposits   $ 100  $ 100  $ 100  $ 100  $ 100  $ 100  $ 100  $ 100
Highest    $ 266  $ 247  $ 377  $ 437  $ 510  $ 423  $ 397  $ 848
Median     $ 154  $ 172  $ 225  $ 252  $ 275  $ 255  $ 242  $ 624
Avg        $ 159  $ 163  $ 223  $ 243  $ 280  $ 254  $ 245  $ 647
Lowest     $  91  $  88  $  99  $  87  $ 132  $ 120  $ 114  $ 473
CAGR-High  21.6%  19.8%  30.4%  34.3%  38.5%  33.5%  31.8%  53.3%
CAGR-Med    9.0%  11.5%  17.6%  20.3%  22.5%  20.6%  19.3%  44.2%
CAGR-Avg    9.8%  10.3%  17.4%  19.4%  22.8%  20.5%  19.6%  45.3%
CAGR-Low   -1.8%  -2.4%  -0.1%  -2.7%   5.8%   3.7%   2.7%  36.5%
Num gained    29     30     31     31     32     32     32      6  
Num lost       3      2      1      1      0      0      0      0
Std Dev     6.5%   5.7%   7.8%  10.1%   8.5%   7.6%   7.9%   6.1%
Expctd Hi  22.9%  21.7%  33.0%  39.5%  39.9%  35.7%  35.5%  57.5%
Expctd Lo  -3.3%  -1.1%   1.8%  -0.7%   5.7%   5.2%   3.8%  33.1%


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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 943 of 121585
Subject: Re: Covering a loan + Foolish Four Date: 12/18/1997 6:57 PM
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<<1) I have a 4 yr. 2.9% loan on my new car.
a) I _could_ just put the cash into T-bills at 5%+
b) I could put it into Vanguard Index (which I already own)
c) I could put it into the Foolish Four at the start of the year.
[where did I get the cash -- by not stopping the
payroll deduction when my last car was paid off]>>

I'm not sure if this is a question or comment. I'll assume it must be a comment, 'cause I don't have any good answers if it is a question.

<< 2) Is the Foolish Four investment a good idea IF I might need the money at the end of the four
years?>>

A good investment absolutely, or compared to something else? Obviously, with a short time horizon, any equity might be a problem...especially one that is simply executed on a fixed schedule. But would it be better than just putting your money in the bank...I would think so, but my crystal ball is a little on the hazy side today. Really, only YOU are in the position to know your financial situation and make that determination.

<< a) With the change in the tax law re. Long Term Capital gains, do you still roll over every 12 mo. or
do you not roll over until the 18 mo. is up?>>

Check the Fools School area, especially the Beat the Dow and Foolish 4 areas. I believe that the official Fool position is to hold for more than 18 months, but you would have to check out the BTD pros in order to more fully understand the rational (other than an 8% tax rate savings).

<< 3) I am retired (see signature) but so far am still in a positive cash flow situation, if this makes any
difference in investment strategies.>>

But, we deal primarily with tax strategies here. I'm not nearly smart enough to really provide any investment advice, especially when I have no knowledge of your other assets, liabilities, goals, etc. So I'm not sure that I can be of much help.

TMF Taxes
Roy

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