Personal Finance News

The Dow Jones Industrial Average had a heck of a good run over the past decade, even as membership in this bastion of just 30 blue-chip stocks changed dramatically.

On a price basis alone, the large-cap average has gained more than 160% since the last day of trading in 2009. Include dividends - all Dow stocks are dividend payers - and the industrial average has delivered a total return in excess of 230%. Indeed, the Dow has generated a 10-year annualized total return of 10.5%.

It's not unusual for the folks at S&P Dow Jones Indices, which operates the index, to make changes to the Dow. As a price-weighted average, it's necessary that the Dow stocks with the highest prices not get too far away from those with the lowest prices, lest those low-priced stocks become immaterial to the Dow's performance.

The keepers of the index also make changes to ensure the Dow comprises a diverse portfolio of stocks that reflect both the U.S. equity market and the U.S. economy.

To that last point, the average went into overdrive to better reflect the dynamic forces shaping the market and the economy. Seven Dow stocks were removed from the average over the past 10 years. In almost every case, the Dow's editors ditched a more sluggish, older-economy company in favor of a name that's riding secular changes in the global economy.

Here are the seven Dow stocks kicked to the curb over the past decade.

Read more: https://www.kiplinger.com/slideshow/investing/T052-S001-7-dow-stocks-that-didn-t-survive-the-decade/index.html

Retirees relocate for lots of different reasons, from the weather to proximity to grandchildren. Moving from a pricey part of the country to one with low housing prices could also lower your expenses and make your retirement savings last longer. But as you consider the cost of living in potential retirement destinations, don't overlook the impact of state taxes on your bottom line.

Where does your state fit in? We've ranked all 50 states, plus the District of Columbia, based on how they tax retirees.

Read more: https://www.kiplinger.com/slideshow/retirement/T054-S001-taxes-in-retirement-how-all-50-states-tax-retirees/index.html

Read more: https://www.kiplinger.com/article/college/T042-C032-S014-yes-you-can-buy-a-home-and-pay-off-student-loans.html

Read more: https://www.kiplinger.com/article/business/T012-C032-S014-why-do-incompetent-people-become-business-leaders.html

The long travel to retirement is about to end. You're ready to begin new journeys, hit the open road, ditch the bricks and sticks -- RV speak for a traditional house -- and travel the blue highways in a recreational vehicle.

And why not? You've earned it, with a comfortable cushion of retirement income and a yearning to see the country, camp, maybe glamp, and visit the scattered and grown kids and grandchildren in between sightseeing stops. You know you'll have fellow travelers. Approximately 10 million U.S. households own RVs, according to the RV Industry Association, and roughly 1 million Americans are living full-time in them.

But is an RV in retirement really right for you? We checked in with retirees who spend much of their time in recreational vehicles for their guidance on the pros of RV living in retirement. Here's what they had to say about the upsides of life on the road in an RV.

Read more: https://www.kiplinger.com/slideshow/retirement/T037-S001-8-reasons-to-retire-in-an-rv-motorhome-fifth-wheel/index.html

You may be wondering about your odds of an IRS audit. Most people can breathe easy. The vast majority of individual returns escape the IRS audit machine. In 2018, the Internal Revenue Service audited only 0.59% of all individual tax returns, and 81% of these exams were conducted by mail, meaning most taxpayers never met with an IRS agent in person. So the odds are generally pretty low that your return will be picked for review.

That said, your chances of being audited or otherwise hearing from the IRS escalate depending on various factors. Math errors may draw IRS inquiry, but they'll rarely lead to a full-blown exam. Check out these 10 red flags that could increase the chances that the IRS will give the return of a retired taxpayer special, and probably unwelcome, attention.

Read more: https://www.kiplinger.com/slideshow/retirement/T056-S011-10-irs-audit-red-flags-for-retirees/index.html

Investors in even the best bond funds that Wall Street has to offer might be in for a difficult 2020.

Much of the bond market, in my view, is in a bubble - just as tech stocks were in 1999. And bubbles always end badly.

Consider that in November 2019, $12.5 trillion was invested globally in bonds that have negative yields. That's down from a peak of $17 trillion in August, but that's still an absurd amount of money invested globally in bonds that have negative yields. That means investors are paying interest to a borrower to lend the borrower money -- which is just as crazy as it sounds. Carl Weinberg, chief economist at High Frequency Economics, notes that a bond with a negative yield is worth less than "a bag of dirt in your basement."

What's more, at various points recently, long-term bonds have been paying lower yields to investors than short-term bonds - a phenomenon known as a negative yield curve, which is typically predictive of a recession sometime down the road.

The lesson is to keep bond maturities short. With bond yields so low, they almost have to rise unless we're entering a period of serious deflation, which seems a remote possibility. And when bond yields rise, total returns on shorter-duration funds will sparkle compared to likely losses on long-term bond funds.

Here are my seven best bond funds to buy for 2020, from least to most risky. Bonds are primarily intended to add stability and a bit of income to your portfolio - not to take big risks in search of huge profits. For bonds, 2020 likely will be a year to be concerned not so much with return on capital but with return of capital.

Read more: https://www.kiplinger.com/slideshow/investing/T041-S001-7-best-bond-funds-for-retirement-savers-in-2020/index.html