Month: June 2024

My vegetable garden consists of raised companion beds, hydroponics, Hugelkultur, decomposed wood chips, traditional dirt, and a Cotieres, six distinct gardening techniques originating in several different countries, each with advantages and disadvantages. Since the climate varies yearly, and with each plant species possessing needs and vulnerabilities, likes and dislikes, the variation challenges my stunted creativity and vastly improves the probability of overall success every year. An equal number of account types can be utilized as you strive to build the wealth required to fund an expensive retirement, each with advantages and disadvantages, and considerable thoughtfulness should be applied to your endeavor! Consider the taxable brokerage account, its versatility and benefits, and the important role it can fill in your overall investing strategy:

• The account can be owned individually or jointly, and beneficiaries may be named. It can also be owned by a revocable or irrevocable trust. In all these cases probate is avoided, and the account complements the carefully crafted estate plan.

• When not owned by an irrevocable trust the account is liquid, unlike retirement accounts for investors under age 59 ½. A portion of emergency savings may be held within it, and generally at a higher interest rate than banks will pay.

• The account offers securities of many types in virtually every asset class. Investment options greatly exceed most retirement plans.

• Unlike retirement specific accounts, no formal agreement is entered into with the U.S. government, a fiscally reckless institution which can (and has) change(d) the rules in the middle of the game to its own advantage.

• For those receiving Required Minimum Distributions but not in need of income, shares of securities may be journaled from an IRA to the non-retirement brokerage account with an “In Kind” transfer. This allows ownership and compounding of dividends to continue.  

• Various tax advantages, though distinct from retirement plans, are presented. A strategy may be employed to create income or deferral and can be adjusted year to year. Tax-loss harvesting can be utilized annually to offset gains and losses, and against investments held inside the account or elsewhere, and losses not applied in the year realized can be saved for future years. This versatility can wonderfully complement an investor’s overall tax plan.

The Hugelkultur garden produces abundantly in a drought, even during a water ban. The Cotieres provides live, organic vegetables in the middle of a snowy winter. Once planted, the hydroponics garden can be neglected until the harvest. It should be noted that the non-retirement brokerage account should be used as a complement to formal retirement plan accounts, not as a replacement of them. As you construct a well-rounded funding strategy for your retirement, thoughtfully protecting yourself from the many developments that can derail you, the versatile non-retirement brokerage account is sure to fill a valuable role.

Think about it, Shaun.

“The prudent sees danger and hides himself, but the simple go on and suffer for it.”   ~Proverbs 27:12

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

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I’ll never forget a story my uncle told me many years ago about how he ventured into a large field on his dairy farm alone. When a good distance from the fence line he looked up the hill, and in near disbelief saw an angry bull staring at him 100 yards away signaling a charge. Seconds later, knowing he couldn’t win a race to the fence, and with the bull hurling towards him, he had the courage and understanding to run at the bull, which in its own disbelief turned around and sprinted over the hill! That decision gave my uncle the opportunity he was looking for and likely saved his life. It’s critical for investors to realize the stock market is primarily a psychologically driven entity, and that its cyclical peaks and valleys are more accurately measured by investor sentiment than other factors. Famed, late investor, Sir John Templeton, wisely perceived that “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” It’s notable Templeton defined the stages of the market cycle with exclusively psychological terms. What are some reliable measures of market sentiment, where does sentiment stand in the present bull market, and what disciplines can apply this knowledge to your benefit?

Measures of general market sentiment include, but are not limited to:

• The general attitude towards stocks of the people in your own sphere of influence. When normal conversations universally begin turning to the stock market, a cyclical top or bottom likely approaches.

• Widely read newspapers and magazines routinely make highly uncharacteristic predictions about the stock market right before major cyclical turns. Look for claims like, “Will stocks ever go down again?”, or “The stock market is roadkill.” 

• Market-wide cash flows will reveal where uneducated money is being directed, while the COT (Commitment of Traders) Report shows where educated money flows.

This week Stansberry Research revealed that after two years of soaring stock prices, not only are the investing masses not “all in” on stocks, they are buying bonds at ten times the rate of stocks and building cash Money Market positions towards an all-time high.¹

Helpful disciplines may include:

• Understand the biggest risk today lies in not owning the types of assets that tend to appreciate in a highly inflationary culture, assets like real estate, high quality stocks, and other hard assets. A Money Fund paying 5% may be the best rate in decades, but it still devours wealth at 2% annually when real inflation is 7%!

• Consider positioning your long-term investments at the high end of your personal risk tolerance level when the major stock indexes are above their respective 200 Daily Moving Averages, and at the low end when they reside below it. 

• Maintain ample cash savings so long-term investments can stay invested and serve their important purpose of building wealth, wealth that in a high inflation society you will likely need in the future.

Knowledge of a 2,000-pound angry beast packed with muscle, coupled with the emotional fortitude to act on that knowledge equipped my uncle to make the right decision at just the right time. God bless your investing efforts as you strive to navigate a market as formidable.

Shaun

“Give a portion to seven and to eight, for you know not what disaster may happen on earth” ~Ecclesiastes 11:2

1 Stansberry Research, Review of Market Extremes by Brett Eversole, June 12, 2024

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Following established trails up a forested mountain does not resemble devising one’s own advance of the contours of a snow or ice-covered alp. One requires a modern map; the other requires deep study and an intimate knowledge of the topography to be traversed. I recall using three software programs to carefully plan our first climb of Mt. Whitney’s Mountaineer’s Route in 2010, which in a white-out would have led us to an impasse right under a massive unstable cornice! Good visibility exposed the error from a mile away, but seldom does ineptitude prove inconsequential in such a hostile environment. The achievement of your personal and financial goals in today’s world is equally complex, which reveals the impetus of a formidable challenge laden with deadly pitfalls. Consider the framework of a successful plan, customizable to particular family dynamics:

• Identify and prioritize primary financial goals, such as a comfortable retirement, funding a child’s education, buying a second home, or creating a succession plan for your business. Be as specific as possible in defining each objective.

• Map each goal separately with a conservative time frame in mind. It’s far easier, and far less disruptive to other priorities, to push an outlay back than to pull it forward.

• Fund each objective with a separate investment account, as varying time frames will result in distinct risk levels, return objectives, and funding requirements.

• Use every tax advantage available to you in the pursuit of each goal, realizing the best tax plan results in the lowest lifetime tax, not necessarily the lowest present year tax.

• Use every financial principle at your disposal in the appropriation of your hard-earned, God-given capital. Become well acquainted with timeless financial principles, like diversification, dollar-cost-averaging, dividend compounding, position sizing, maintaining an exit plan, and rebalancing risk.

• Keep investment expenses at a minimum, which directly reduce investment returns and the probability of achieving your goals.     

• Annually monitor progress towards each endeavor and adjust risk/allocation, return objective and funding commensurately.

Like mountaineering, financial planning consists essentially of identifying specific priorities, appropriating resources towards those ends while applying every principal advantage, and then adjusting the approach as progress is consistently monitored. God bless your planning efforts!

Shaun

“A wise man thinks ahead” ~Proverbs 13:16

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty” ~Proverbs 21:5

“For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” ~Luke 14:28

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. Investors should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not insure a profit and does not protect against loss in declining markets. 

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.