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The ISDA post is one of the top paid industry advocacy jobs. Robert Pickel, who is stepping down as the group's chief, made about $1.8 million in 2012, according to public records.
According to Reuters, O'Malia received $155,500 a year at the CFTC.
Dennis Kelleher, president and CEO of Better Markets, a group advocating stricter government regulation in financial markets, was quoted by Bloomberg:
"O'Malia's spin through the revolving door is a record setter for influence peddling. This is why Americans are so disgusted with so many high government officials and believe that Washington is in cahoots with Wall Street."
Federal ethics rules will bar O'Malia for two years from trying to influence, communicate or appear before the CFTC seeking official action. But, as CEO, O'Malia will have a great deal of direct influence and control over much of what ISDA does in interacting with the CFTC.
While on the CFTC O'Malia criticized his agency's efforts to regulate the global swaps trading that totals $700 trillion annually. This included public speeches. He also tried to slow implementation of Dodd-Frank regulations, arguing that all changes should be subjected to cost-benefit analysis.
There are 10 articles discussed today 'behind the wall'.
The final discussion is a short article on (1) the effects of portfolio rebalancing and (2) the benefits of small amounts invested early in life if the investments are held until late in life.
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And one other note: This result is only valid in tax deferred or tax exempt accounts. Taxes paid on gains realized during the rebalancing transactions would be taxed; as a first approximation using a long terms capital gains rate of 20% the advantage is reduced to 5.5% and in a state with a 5% personal income tax rate on capital gains the advantage for rebalancing would be reduced to 5.2%.
So is rebalancing worth it? Extrapolating these results over a lifetime, for $1,000 invested at age 20 the value in a tax deferred on untaxed account with rebalancing at age 70 would be $2,566,215 . Without rebalancing, $2,036,288. The rebalancing would produce approximately 26.5% more in the account at age 70.
If this were a traditional IRA $2,565,215 would be taxable as ordinary income if all was distributed at age 70. Of course if only RMD (required minimum distributions) were taken ($94,657.38 the first year) the account balance would continue to grow for many years and the taxable income would eventually total much more than the account balance at age 70.
But if this were a Roth IRA and was held until age 80 the rebalancing would produce an account balance of $12,335,356, which is 32%% more than buy-and-hold ($9,345,599). And distributions from the Roth would be entirely tax-free!
The average annual returns for the fourteen year period in this example have been much higher than the longer term averages. Instead of the 16.46% average annual return here, long-term returns (over the past 40, 50 and 60 years) have been in the 10%-12% range for buy-and-hold for a diversified portfolio like the one here. The return on $1,000 invested in a Roth compounding at 12% per annum for 60 years would total $897,597 and for 10%, $304,482. These numbers are much more realistic targets for the 20-year old investor to consider.
So, what advice would you give a 20-year old who wants to be a multimillionaire in his dotage? Here is one scenario to lay out for him/her. Invest $1,000 in a diversified portfolio and held in a Roth IRA every year from age 20 through age 29. If the average annual return is 10% the investor will have $2,057,999 at age 80. If the return averages 12% the total will be $5,680,218.
But if the returns average 8% the $1,000 a year will only produce $733,799 at age 80. To get over $1 million, the annual investment would have to be at least $1,362.
And if the annual returns averaged only 6% a year the $1,000 a year for ten years (age 20-29) produces $257,360 at age 80. To get a million at least $3,885 would be required each year.
Caveat: The modeling has been done with an assumed uniform average annual gain. The distribution of returns will affect the final total. Many irregular patterns of returns over time will change the final results negatively. For example, late in life losses can be especially damaging to the final total.
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