Why corporate bonds are a bad bet
With U.S. interest rates at record lows, corporate America’s best-known names are issuing trillions in new bonds, some with maturities as long as 100 years, said Bernard Condon in the Associated Press. But you’re better off resisting, because they’re no bargain. Many of them offer “interest so puny that investors are already losing money to inflation.” Johnson & Johnson, for instance, just sold $4.4 billion in bonds paying as little as 0.7 percent—a quarter-point below the inflation rate. Rail company Norfolk Southern has even “convinced investors to lend it $400 million for 100 years.” Those bonds’ 6 percent annual yield is well above today’s inflation rate, but we’ve seen annual inflation of as much as 18 percent in the past 100 years. And “of course, the bigger question might be whether the railroad company will even be around in 2111.”
An excuse to snoop on the neighbors
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Nobody likes a busybody, but “there are good reasons, beyond sheer curiosity, to take a peek” when your neighbor holds an open house for prospective homebuyers, said Amy Hoak in The Wall Street Journal. Even if you don’t plan to sell your home soon, “it’s smart to know how your place stacks up” against the competition. If you notice that five of your neighbors have recently fixed their roofs, for example, you might decide to make your own roof a top home-improvement priority. Conversely, if most of your neighbors are content with Formica, expensive granite countertops might not be a great investment. Open houses also offer an opportunity to see real estate agents in their natural element, giving you a chance to decide whether you can work with them.
How long should you retain tax info?
Conventional wisdom says to hold on to tax documents for three years after filing a return, said Liz Weston in the Los Angeles Times. But the conventional wisdom isn’t always so wise. Many assisted-living facilities, for example, want to see five years’ worth of financial statements from prospective residents. Medicaid also looks back five years into would-be recipients’ financial pasts to ensure that people aren’t “artificially impoverishing themselves by transferring money or assets” before they apply for coverage. And the IRS can demand up to six years of records from taxpayers suspected of underreporting income. If you’ve already shredded your documents, most banks, brokers, and credit card companies will provide copies—for a fee.
