The only good financial decision when you can afford to pay cash is to do so. What part of this is hard? He needs a new car. He can afford to buy it without financing. He should. Do what leo doc says, and you can't go wrong.

There's also the question of which car to get, how to maximize trade-in value on the old car vs maximizing the value of the old car, timing with regards to smog/registration fees, timing with regards to getting the best deal from the dealership... All of these other things have been in the air for discussion.

I didn't know that anyone was advising financing. Did I miss something?

Again, I don't doubt your ability to gauge the CarMax appraisal model vs. a new car dealer model, even if I might not yet be ready to recommend you for a GM position at an 8 store group. Each dealer, new or used, has to make their money somehow.

CarMax HAS to acquire inventory. So perhaps their model is to step up for sellers, fail to safely service the vehicle for the buyer, and play some games in finance, making them def not the place to buy a pre owned car. More likely, they are willing to forego a lot of the negotiation and give you about what a new car dealer will eventually give you, but w less hassle. I think the answer lies in your own words - "Initially offered".

If someone has a car w an ACV of $8k, CarMax may give them $7,650 right off the bat, make a few hundo on the trade, and ensure the higher likelihood that they will acquire more inventory, by giving the seller close to the number they had in mind without forcing them to haggle (which some customers enjoy and most despise).

John Elway Ford may offer someone $6,300 and hope they will take it, but will incrementally raise the trade allowance the closer they think they are to selling a car. They may ultimately give you $8,300 for the same trade CarMax will give you $7,650 for (if you haggle correctly while still making it make sense for the dealer), bc they know that along w acquiring inventory for future sale, they will sell a car in the present. J.E. Ford can afford to not step up on your initial trade offer, bc they don't need the inventory as badly as CarMax, esp if it's not for the right price, and they know they can always negotiate. Or better yet, just wait for CarMax to do the work for them and honor the $7,650 for a car that's worth $8k. It's all one big cycle.

These are basic business fundamentals. A $10k car is a $10k car. Dealerships, whether CarMax or J.E. Ford, have to make the profit somewhere. To give to the customer in one respect, they must take away from that customer (or the next) in another.

I can understand that within my wall of text you may have missed the multiple direct and indirect references to one former place of employment in the car biz for me, Acura, but the number $15k has nothing to do w the type of cars we sold. It was just a random even number. I didn't want to go with $6,742.43 bc it seemed unnecessarily complicated. Nothing more or less than that. I've appraised as many $6k-$8k trade-ins as I have $15k cars - prob even more (excluding online auction appraisals), as people have less incentive to trade in a car worth $15k than one worth $6-$8k, as the $15k car is more likely to be in decent mechanical condition.

I'm all car-talked out for the time being. It's not you, it's me. But hopefully you've learned as much as I have. Thanks

I have nothing to add to this thread other than to compliment Macau and to make a mild comment on Dog's post. -- I've owned 4 different Toyota Corolla's! Really good cars. Managed to total two because I'm a bad driver. Ran another one into the ground and sold the other. When I sold the other, the blue book was about $15K and CarMax offered me around $10K. Ended up selling that to a private buyer shortly thereafter for around $14K. I had a note on that car and felt as though CarMax lowed balled it because of that fact.

I live in a big city now and have a lease on a fancy car (it is a volkswagon) and will give it up and go carless in late July.

I'm currently watching Judge Judy and really love this show. Wise woman.

good thread!

@AaronW or anyone else,

This is purely Finance/Investment diversification question but have you hedged your index funds to make it more global as in include certain European index funds or Asian Index funds? I personally did about month or 2 months ago per recommendation by Jared Dillian per Mauldin Econimics, Everythings a Bubble article or The10thMan, or from following Jared on twitter per https://www.mauldineconomics.com/jared-dillian#connect

Not advertising but I'm a fan of free info and Jared Dillian definitely provides that much better than most sources in my biased opinion.

I personally diversified as a hedge and as a result my portfolio is doing alright despite these idiotic drama queen politicians that's been moving markets purely from opening their mouth or making drastic decisions but I personally love volatility since that equates to more opportunities. That's another story/case involving trading which I'm not asking about.

Purely have you diversified your investments after the North Korea meeting was canceled by Trump and job reports didn't look great today.

The world economy is pretty interconnected. It's going to be rare that the US tanks while the rest of the world flourishes and vice versa. An S&P index may even have outperformed an international fund since the Great Recession.

It doesn't buy you a lot of diversity (think of it like EV and SD - EV increases linearly with n but SD as sqrt(n)) but it's fairly easy to do. Just go to Vanguard or Schwab and search for international funds or emerging market funds. Pick the one with the lowest fees.

If Trump starts a nuclear war, ain't no place in the world safe from the fallout, literally or metaphorically.

Sorry but we can agree to disagree on this.

You can literally look at historicals from Intetnational funds, specifically large cap growth European funds or Asian Funds and they have performed rather well in lieu of say Large Cap US Index Funds in which the benchmark is S&P500 as an example over the last 2 months.

This should be easy to compare contrast on whichever brokerage firm you use whether it be Fidelity, Vanguard, Schwab, Interactive Brokers, E-Trade, TD Ameritrade.

Based on my portfolio, I haven't completely gotten out of US Index funds but reduced my exposure which in turn definitely still has me crushing S&P 500 as a result based on Personal Capital app and on my brokerage account when I compare and contrast diversified fund scenario or mainly US Index Funds scenarip.

If Trump starts nuclear war, more volatility and more opportunities to trade. Especially if you can trade short and/or trade options and/or commodities as an example.

I haven't done anything... yet.

I guess, more precisely, I've been thinking about it but I haven't engaged in any real research on the matter. There are a lot of question marks, not just with North Korea, but also trade war chatter with China and so forth.

The thing that started to make me think about it was the passing of the tax act. From what I understand, nobody actually believes it will pay for itself, and the gigantic deficit that the US is creating when things are good is going to make things worse when the pendulum inevitably swings back. When will that happen? I don't know, but I'm not optimistic about the end of the individual tax relief that will sunset in 10 years. It could be get pretty miserable at that time, and I don't expect the US economy to be happy.

The present tense euphoria from the windfall of the corporate tax cuts probably doesn't last more than a few years.

It's really hard to say "Look at how well this fund is performing" when you're only talking about two months.

100% agree.

I work in the Finance industry and is my job to follow the markets so I will just exit the international exposure when it prompts it.

Plan on keeping it for at least a year though since tail risk can go both ways and while one market crashes, another may have exact opposite outcome / benefit although correlation isn't necessary causation but history often repeats itself.

Unfortunately not able to trade while I'm at work but if everything goes nuts in market, I'll just recreate the automated FX model via VBA I learned from my mentor. Although political risk is going to require like 1-5% of discretionary considering my mentor had 100%+ returns last year but her base is to be purely systematic FX trader with 2:1 margin to start. Increase with experience and certaint economic events such as Brexit and Drama Queen Draghi comments.

A big part of it is over already.

The money that was spent on stock buyback has already given as much benefit as it'll ever give. Money spent on long term R&D will return some percentage over the next few years.

Yeah, well, if you're looking at 2 months as a scoreboard, then yes we'll have to agree to disagree.

I'm talking about what will happen over the next 7 years, specifically, whether any difference between a Trump-led US stock market and a generic President-led US stock market is big enough to alter whatever percentage allocation you'd otherwise make to ex-US stocks.

Whether we live in a this universe or an alternate one where Clinton is president, chances are the economy will continue to do pretty well for a bit. We will/would then hit a recession, and everyone - US, EU, CN, emerging - will suffer. The main risks are not Trump-related, they're just generic. There are specific opportunities, like China more actively investing in securing rare metals or whatever. But again, that'd independent of Trump - the lifetime election of Xi probably factors into that.

Shorting things that Trump tantrums about is probably a good short term gain. But in the long term it really is like a little kid throwing a tantrum, he threatens a trade war but in the end he'll back down after minor changes have been made.

I personally had an oversized US allocation from the few weeks after the election to early January this year, solely for the gigantic corporate tax cut that I knew was must pass. I sold that off and returned my percentages to baseline.

I was just using the 2 month sample as an actual example in my situation.

Never said long term I will allocate internation as long term investment. I'm personally rebalancing as a hedge against political risk and geoploitical risk Trump and the new Fed can potentially create.

Also, 9 year bull market is eventually going to go through another correction or in worst case turn into a recession based on how Cyclical cycles generally work.

Past isn't indicative of the future but history often repeats itself.

I agree, but stock values will probably continue moving upward for at least a bit longer. I'm in no hurry to make changes.

Edit: I've also got a 30ish year horizon for when I'm going to be using this money, so even if I take a hit in the next few years, I've still got time on my side. I would be invested very differently if I were retiring in the next decade.

Do you think Asia and Europe are safe from Trump-related geopolitical risks?

No separate fund for life dreams? Vacation home in Tahoe? Savings for an Antarctic cruise to see the solar eclipse in 2021? Down payment for opening your own erotic bakery? Bankroll for a WSOP Main Event buyin?

In my view, this is the end goal of money:

I have enough to live a comfortable lifestyle on my base salary. I can pay for the things I need to pay for, I have a little extra for other expenses (things like entertainment and travel), and I also have enough to divert some to support others. My money has attained all the goals I've set for it (and I'll have even more when my mortgage is paid off in a few more years).

The accumulation of more wealth just isn't important. I'm more interested in investing in myself (for example, maximizing the personal satisfaction I get out of the work that I do) and investing time into the people around me.

That's very noble, but I'll offer this alternative: you should greedily hoover up every dollar you can.

If you're a selfish bastard and want more hookers and more blow, this is ldo. And in part because it's ldo for the selfish bastards, good people tend to frown on it.

But the reality is that if you do good with your money, then you should be as happy to acquire it. Let's say you're at the poker table, you can decline a pot you've won. "No, thanks, I've won enough," you can say. Nobody will disagree, everyone will think you're a good guy, and they will takr that money and go buy hookers and blow with it. You can tell your boss not to give you a raise, she'll just commend you and take a bigger bonus for herself. As a matter of fact, if you want the money to be distrubuted to the most deserving / most needy / whatever criteria you want, the best person to do that is you.

Sure, it's rare. Of all the tech bro douchebag CEOs in the SF Bay Area, there are vanishingly few I would not snicker at if they were led away in handcuffs. Most people are seduced by wealth and end up just hookering and blowing. But they do exist (Benioff is an example), and they do some amazing things with their wealth (basically saving Children's Hospital of Oakland) that 99.99999% of the population can't. Bill Gates is another, basically creating incentives for people to go after malaria instead of the next generation of herpes medicine for frat boys.

Given how well you've been able to characterize me and your concept of what good advice is, I don't see any reason why I should give any credence to the advice you give.

I expressed no sadness or disappointment with the acquisition of money. I have merely chosen not to invest even more time into that aspect of my life.

I have no doubt that I could find a way to earn an extra 20-30% of my income doing various sorts of things. I just choose not to because the time investment that would be required for me to do so would take away from time I could be investing in other things. There are things that some people can do with their money that I can't. And that's fine. The most valuable resource I have in this life isn't my money. So I will use what I have, rather than chasing something I don't.

You probably disagree with this and that's fine. It's your life. It's your money. It's your car. It's your whatever. You are free to do what you want.

Was sadly hoping in case of the next recession. The asset class that thrives during the recession are so powerful at least based on what I learned from my Managed Futures class where the professor was a former Portfolio Manager / CTA at a bulge bracket investment bank.

You got me though callipygian Literally rebalanced my portfolio today to be 100% out of International Funds today.

Back to mainly US Large Cap Growth and Midcap Growth funds in my portfolio now.

Got a semi-sweet potential job offer today which should enable me to give me more freedom to trade at work and/or make automated FX trading models or Commodity Option models

Life goal still to this day is to learn Trading at a much more advanced High-Frequency level though which hopefully this new job opportunity will get me closer to if I can get it

I think you should reevaluate. A balanced portfolio should have some baseline amount of international funds.

What I meant was that you shouldn't increase that allocation solely because of Trump. And you shouldn't decrease it either.

Not sure whether my reply was deleted or just never went through so I'll repost briefly and if it gets deleted again maybe a mod can PM me?

Most people who invest have layered investments, some for retirement, some for before retirement. Not everyone has the same amount of time to retirement either. Not everyone puts their money away for 30 years, and you're just shrugging off anyone who is - appropriately - investing with a 3-10 year horizon.

Sure, theory has it that you get some uncorrelated changes from US to international and that's great for diversification. Has that ever played out? Like US market tanks and foreign funds carry the day? If the US and foreign funds are highly correlated, then you're paying costs for investing in them, paying foreign managers, currency exchange, etc. I'm doing some version of the Random Walk diversification, but the foreign funds just under-perform. Up markets or down, they're not ever better. I'm not sure there is a point in the last 50 years where that isn't the case.

Mid 90s to late 00s I'm pretty sure international funds - at least emerging market funds - did.

The foreign fees are included in the rake for the bigger funds, at least the Vanguard and Schwab funds that I have now.

The ETFs or smaller funds do create a tax headache, though. For several years I had to upgrade to Turbotax Platinum or whatever it's called because of foreign tax credits and also one ETF I bought was a partnership so I had to fill out Schedule K-1. Big mistake, Indy, big mistake.

In part, we sought external financial advice to avoid that poo poo.

The worst part was that all in all it was insignificant to our overall tax burden. I'd be spending hours deciding things like whether I wanted to take a credit or a deduction for $15 in foreign taxes paid, and one year when I thought I had lost a 1k poker chip I was like double dammit I would have more money if I just blow these questions off and go look for my chip. But gubment and all.