[melpetezrinski]

Originally Posted by CoachKandSportsguy

buying an interest bearing bond at a discount means that, there is a taxable gain on the basis and an interest income on the interest. they are taxed at different rates. generally you don't recognize the gain until maturity. A zero coupon bond by definition the discount is the the interest, which may get taxed annually as interest. . i am fuzzy on that while drinking my coffee prior to going to home office to work.

However, that is considered efficient investing whereby you are always maximizing wealth and minimizing future taxes. . . this is not a tax avoidance scheme as in not accepting high income/selling for capital gain as one has to pay more taxes, which is regressive thinking.

As far as inflation goes right now, goods inflation is declining, energy and food is declining, but home owner equivalent rent, ie rent increases is the bulk of the increase, along with services labor. So, how does this impact the economy?

First, rising service incomes and falling goods prices is a tailwind for the working consumer, which is why Jan retail sales post christmas was so strong. Good for the economy in general. . . Now, the gov't brain trust changed the inflation comparative basis for CY23 and so the increases might not last as long and then inflation falls like a rock. that is the best news for buying low coupon rate high discounted basis bonds for huge relative capital gains. . .

As far as stawks go, consumer goods sector will go well, industrial/mfg will recover, etc. and large financed purchases will not, such as cars, homes, banks for loan income, and slowing discretionary sector. So the market is in a large sideways range, where there will be more chop and derivatives influences between like 3600 and 4200, not exactly but conceptually, depending upon the earnings and the near term economic signals.

So for many, and same for me, its best to just sit and wait and collect 5% interest and dividend income, until the market presents an undervalued dismal outlook p/e ratio. . . if the market long term return is 8%, maybe 10%, then 5% when there is slow/no growth in the market really good. . prior to putting more money into the market. Those in the market, just stay put, as a crash is highly unlikely unless there is a nuclear accident in asia / taiwan . .

future former finance manager with more to say about overhead transmission lines

5% interest risk free is too good to pass up. I just locked in a MYGA @ 5.4% for 5 years in a retirement account. It's my first foray into annuities, so I didn't commit much.