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Joseph Slife

Joseph Slife

Writer/researcher

Joseph Slife has been a news writer for the Associated Press, a college instructor, and a radio host.

From 1990 to 2003, he was a writer/researcher for Larry Burkett at Christian Financial Concepts and Crown Financial Ministries, and he served as the executive producer for CFC/Crown Radio from 2000-2005.

He first joined SMI's writing team in 2008, before going on to serve nearly six years as senior producer/co-host for WORLD Radio. He returned to Sound Mind Investing in 2017.

Joseph and his wife Joye have three grown sons.

Most Recent Articles

Money Roundup: The Price of Admission, Tax Breaks for Retirees, and More

Happy Friday! Here's our weekly Roundup of articles on investing, personal finance, and stewardship.

Your comments are welcome below!

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Now Available: Personal Portfolio Tracker & Fund Performance Rankings With Data Through 7-31-22

We've updated SMI's online Personal Portfolio Tracker with performance data through July 31, 2022, and we've posted the August update of our Fund Performance Rankings (FPR).

If you're new to the Tracker and FPR, read the following overview.

• The Tracker: SMI's fund-performance database tracks the monthly returns of thousands of traditional mutual funds and ETFs. The Tracker can filter that large amount of data and produce a concise report covering only the funds available via your employer-sponsored retirement plan, thus making it easier to apply our Fund Upgrading strategy to a 401(k), 403(b), or similar plan.

Important: There are differences between the fund categories used in the Tracker and those used in the SMI newsletter.

The newsletter's Upgrading formula for domestic funds typically guides users toward either growth or value funds as appropriate, rather than maintaining both growth and value allocations within each category at all times. Accordingly, the newsletter uses only two domestic categories: Large Company and Small Company. 

Tracker portfolios, however, classify holdings according to four domestic stock-fund categories: Large/Growth and Large/Value plus Small/Growth and Small/Value. This helps members who use alternatives to our "official" fund recommendations gauge (using the Tracker's percentile-ranking column) how each fund they own is performing relative to its same-category peers. Because Upgrading calls for selling a fund when it drops below the 25th percentile, having a clear view of a fund's relative performance is important to maintaining that selling discipline.

Also, unlike the newsletter, Tracker portfolios show a separate Foreign category. In the newsletter, Foreign is a subset of the "Situational" category.

The Tracker displays any fund that doesn't fit within the five categories mentioned above (Large/Growth, Large/Value, Small/Growth, Small/Value, and Foreign) in a category labeled "Other Funds."

To view our Tracker tutorial videos, go to the Tracker page and click the Video Tutorials tab.

• Fund Performance Rankings (FPR): The FPR report is a 38-page downloadable PDF file featuring performance data and SMI's momentum rankings for more than 1,600 no-load traditional funds and ETFs.

We choose which funds to list in the FPR based on asset size, brand familiarity, and brokerage availability.

The Fund Performance Rankings report displays domestic stock funds (both traditional funds and ETFs) across four common categories: Large/Growth, Large/Value, Small/Growth, Small/Value. Like the Tracker, the FPR also uses the Foreign category. Other FPR categories include Bond funds, Target-Date funds, and Sector funds. 

Check page 2 to learn how to use the FPR report. Page 3 includes a listing of 70+ risk categories that will help you compare "apples to apples." (Each category shown on page 3 is hyperlinked, enabling you to jump to specific sections within the rankings quickly.) Page 4 of the FPR has explanations of the various data-column headings.

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Using I-Bonds to Save for College

With inflation running hot, inflation-linked U.S. government "Series I" bonds are the best deal going in the fixed-income universe. So it's not surprising that I-Bonds have become attractive for education-related savings.

The current yield is attractive (9.62% annualized), and I-Bonds also fall under the Education Savings Bond Program. That means Uncle Sam waives federal income tax on interest if the proceeds are used for qualified higher-education expenses. (I-Bond interest is already exempt from state and taxes.)

More from the U.S. Treasury Department (PDF):

The Education Savings Bond Program permits qualified taxpayers to exclude from their gross income all or a portion of the interest earned on the redemption of eligible Series EE and Series I bonds issued after 1989. You must be at least 24 years old before the bond's issue date.

To qualify for this exclusion, the taxpayer, the taxpayer's spouse, or the taxpayer's dependent at certain post-secondary educational institutions must incur tuition and other educational expenses.

In this case, qualifying educational expenses include tuition and fees but do not include textbooks, sports programs, and room/board.

Also, note the bond's owner must be at least age 24 at the time of purchase. If a parent or grandparent buys an I-Bond and puts it in the name of a child under 24, the tax waiver won't apply.

More strings attached

The Education Savings Bond Program has other regulations. Here is a summary via Investopedia:

• Eligible education expenses must be incurred during the same tax year as the bond's redemption.

• Any nontaxable education payments, education aid, or tax-free scholarships must be subtracted from eligible expenses.

• If the total proceeds from the bonds equal less than the amount of eligible expenses, all of the interest accrued on the bond remains tax-free. But if the bond proceeds exceed the eligible expense amount, the amount of tax-exempt interest is subject to a prorated reduction....

• All payments made with bond proceeds must be reported to the IRS along with detailed receipts. It is also necessary to maintain itemized records of all redeemed bonds. Filers must use forms the IRS specifically designed for this purpose.

As you may have guessed, there is also an income-related restriction. If the bond owner's modified adjusted gross income is above a certain amount, the tax exclusion starts to phase out. For tax year 2021, that phase-out threshold began at $124,800 for joint filers. The exclusion disappeared entirely at $154,800. (The income thresholds go up yearly based on the inflation rate.)

Further, married owners are required to file a joint return to qualify for the tax exemption.

To claim the interest waiver for education-related expenses, you must fill out IRS Form 8815 (PDF) when filing your taxes.

This TreasuryDirect page has more on the education-related federal tax exclusion for I-Bonds.

The I-Bond-to-529-Plan rollover

Suppose you're holding I-Bonds for education-related expenses and realize your income likely will exceed the phase-out threshold by the time you're ready to redeem them. Or maybe future conditions change and your I-Bonds become less attractive than other options. You have an out, as described by Forbes:

You can redeem your I Bonds tax-free while you still qualify [for the tax exclusion] and roll the entire proceeds into a 529 state college savings plan, which is considered a "qualifying educational expense." When money is withdrawn from the 529, the earnings are all tax-free, so long as they're used for college expenses.

Important: The rollover must occur within 60 days of the time you redeem the I-Bond.

General I-Bond rules

  • The maximum one owner can invest in an I-Bond is $10,000 per year. Therefore, a husband and wife can invest an annual maximum of $20,000. (Each spouse would need to set up an account at TreasuryDirect.gov.)
     
  • You can invest an additional $5,000 per year in I-Bonds if using a tax refund.
     
  • If you have a trust account, the trust could purchase up to $10,000 annually (the trust is considered a separate owner).
     
  • An I-Bond must be held at least one year before redemption. If you hold an I-Bond for less than five years, you'll forfeit three months of interest.
     
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Money Roundup: A Giant Distraction, Finding Missing Money, and More

We're rolling out the Roundup a day early this week. Tomorrow, Mark will post the monthly strategy updates for DAA and Sector Rotation.

Comments? Let us hear from you below.

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Your Best Interest: Finding Better Rates for Your Savings

The Parable of the Talents in Matthew 25 contains an interesting detail. After commending two servants for their stewardship, the master turns to a third servant, one who did nothing with the money entrusted to him. The exasperated master notes that if the “slothful servant” had taken the simple step of depositing the money in a bank, he could have at least earned interest.

Aside from the parable’s stewardship lessons, we can glean this from the story: Earning interest on a bank deposit is a practice that goes back thousands of years. Much has changed in the banking business over 20-plus centuries, but this hasn’t: Bankers still pay a fee (i.e., interest) for using a depositor’s money. (Banks profit by lending the money at higher rates than paid to depositors.)

As the parable suggests, putting money in a bank is a play-it-safe approach to earning at least a small return on it. Unfortunately, sometimes the return is very small. During most of the years since the 2008-2009 financial crisis, banks have paid minuscule rates on savings deposits, following the lead of Federal Reserve policy that held short-term rates at artificial lows. Rates paid on savings finally began moving up five years ago, only to decline in 2019 and then plummet again to near zero when the pandemic struck (and the Fed returned to a policy of super-low rates).

With the Fed now pushing short-term rates up again, rates paid to savers are moving up too — if only a little. So far, most banks are taking baby steps toward paying high rates. According to the government’s Federal Deposit Insurance Corporation (FDIC), the national average interest rate for savings accounts in mid-July was still a tiny 0.10%.

Don’t settle for average

Want to earn higher-than-average interest on your savings? You can, but that likely will require you to move your savings to an online bank. Online banks have lower costs than traditional “brick-and-mortar” banks, so they can pay better rates to savers. And you don’t have to worry about safety. Like conventional banks, America’s online banks are insured by the FDIC — up to $250,000 per depositor. (The FDIC’s standard insurance amount is “$250,000 per depositor, per insured bank, for each account ownership category.”)

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SMI on the Radio: Navigating a Storm-Tossed Investing Sea

When the investing waters get choppy, you're more likely to remain safe if you stay in the "boat." That's a metaphor for avoiding rash decisions and sticking with a well-considered investment strategy.

This morning, on the American Family Radio edition of MoneyWise, SMI's executive editor Mark Biller talked with host Rob West about why it's crucial not to jump ship. 

The audio is posted below. Scroll down for a transcript.

MoneyWise airs weekday mornings on American Family Radio. A different version airs weekday afternoons on Moody Radio.

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Roundup: Why Central Bankers Are Antsy, Investing in Your Long-Term Health, and More

It's a scorcher in many places. (We're hitting the mid-to-upper 90s today in Kentucky!) So find a shady spot (or an air-conditioned one), enjoy a cool beverage, and relax for a while with this week's Roundup.

Comments? "Join the Discussion" below.

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Mark’s Mid-Year Video Update

Once a month, Mark Biller provides a half-hour video update for SMI Private Client investors. Mark is the Senior Portfolio Manager for Private Client, as well as serving as the Executive Editor for the SMI newsletter.

Private Client and the SMI newsletter are separate but affiliated businesses. The SMI newsletter and website are primarily for do-it-yourself investors — i.e., people who manage their own investments based on the advice and data we provide. Private Client, in contrast, offers professional portfolio management for people who'd rather not manage things themselves.

Though separate, the two businesses employ similar strategies and, of course, they follow the same market trends.

Since that is the case, we thought you might like to see Mark's latest video — a mid-year update released last week to Private Client investors. You'll find a link below.

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Money Roundup: The Worst First-Half Ever, The Danger of Wealth, and More

Here's our latest summertime Roundup of recent articles about investing, personal finance, and stewardship.

We hope you find them to be informative and helpful.

Comments? "Join the Discussion" below!

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Now Available: Personal Portfolio Tracker & Fund Performance Rankings With Data Through 6-30-22

We've updated SMI's online Personal Portfolio Tracker with performance data through June 30, 2022, and we've posted the July update of our Fund Performance Rankings (FPR).

If you're new to the Tracker and FPR, read the following overview.

• The Tracker: SMI's fund-performance database tracks the monthly returns of thousands of traditional mutual funds and ETFs. The Tracker can filter that large amount of data and produce a concise report covering only the funds available via your employer-sponsored retirement plan, thus making it easier to apply our Fund Upgrading strategy to a 401(k), 403(b), or similar plan.

Important: There are differences between the fund categories used in the Tracker and those used in the SMI newsletter.

The newsletter's Upgrading formula for domestic funds typically guides users toward either growth or value funds as appropriate, rather than maintaining both growth and value allocations within each category at all times. Accordingly, the newsletter uses only two domestic categories: Large Company and Small Company. 

Tracker portfolios, however, classify holdings according to four domestic stock-fund categories: Large/Growth and Large/Value plus Small/Growth and Small/Value. This helps members who use alternatives to our "official" fund recommendations gauge (using the Tracker's percentile-ranking column) how each fund they own is performing relative to its same-category peers. Because Upgrading calls for selling a fund when it drops below the 25th percentile, having a clear view of a fund's relative performance is important to maintaining that selling discipline.

Also, unlike the newsletter, Tracker portfolios show a separate Foreign category. In the newsletter, Foreign is a subset of the "Situational" category.

The Tracker displays any fund that doesn't fit within the five categories mentioned above (Large/Growth, Large/Value, Small/Growth, Small/Value, and Foreign) in a category labeled "Other Funds."

To view our Tracker tutorial videos, go to the Tracker page and click the Video Tutorials tab.

• Fund Performance Rankings (FPR): The FPR report is a 38-page downloadable PDF file featuring performance data and SMI's momentum rankings for more than 1,600 no-load traditional funds and ETFs.

We choose which funds to list in the FPR based on asset size, brand familiarity, and brokerage availability.

The Fund Performance Rankings report displays domestic stock funds (both traditional funds and ETFs) across four common categories: Large/Growth, Large/Value, Small/Growth, Small/Value. Like the Tracker, the FPR also uses the Foreign category. Other FPR categories include Bond funds, Target-Date funds, and Sector funds. 

Check page 2 to learn how to use the FPR report. Page 3 includes a listing of 70+ risk categories that will help you compare "apples to apples." (Each category shown on page 3 is hyperlinked, enabling you to jump to specific sections within the rankings quickly.) Page 4 of the FPR has explanations of the various data-column headings.

Continue Reading