Longboat Retirement Solutions LLC

Trump’s Stock Market Bubble December 10, 2017

The US stock market is continuing it’s rise beyond any rational level.  The Trump administration can probably claim some credit, but should it?  Is this a big old bubble, ready to pop any day?  Probably.  Will Trump take the credit for the crash?  Probably not.  Wether you are on the Red Team or Blue Team, you need to recognize a bubble when you see it – no matter which team is currently taking credit or blaming the other colored team.  It’s all the same.

The best way to cover your ass is to put someone in charge of your investments that has your best interest in mind – YOU.

Your stockbroker or investment manager or financial planner has their best interests in mind, not yours.  Make no mistake.

A Solo 401k enables you to invest in what you want, when you want it.  There are no fees, no waiting for permission, and no middle man.  Buy when you want, and sell when you want.

Stop paying for someone else to make decisions for you.

 

Diversified Portfolio February 28, 2017

Over and over I hear the mantra “Diversified Portfolio” – but what does that mean?

Diversification means different things to different people.

Most however, think that it means they own stocks in several industries that counteract each other. In other words, they own two stocks – if one goes down, the other goes up. No two stocks are going to perfectly counteract the other, but a person can come close with lots of research.

Other people (including myself) contend that investment diversification must also include investment class diversification and international diversification. In other words, you should own things other than stocks, things like metals, currencies, bonds, real estate, and even international investments.

The argument could be made that a world wide downturn would hurt all of these things. Well….sure, maybe, but maybe not. Generally “safe harbor” investments and “contrarian” investments like gold, and certain currencies (Norway, Switzerland) tend to go up during world wide downturns.

Now, being a guy that does not give investment advice, I’m not going to advocate any particular investment, or even investment class, or even investment style….but do your research, and diversify…..and I mean really diversify, not just own a bunch of U.S. stocks.

 

What Does a Trump Presidency Mean to Your Retirement Savings? February 22, 2017

How will the Donald Trump Presidency affect your retirement?

If you believe the big media outlets, he is going to steal your wallet and your retirement account.

I doubt that this is the case. But, how would I know?

While we are certainly overdue for a market correction in the U.S., the timing of a correction is of course the million dollar question.

I’ve said this before, but I’ll say it again; I am not in the business of predicting the stock market. I am in the business of helping people diversify their retirement savings through the set up of self directed retirement accounts.

In other words, it should not matter what the U.S. stock market does. My clients have the flexibility to move in and out of the market when ever they choose. Or, if they choose to have zero dollars in the stock market, they can do that too. If they choose to pull out of the market and hold cash, they can. If they choose to hold metals, or real estate, they can.

The point I am trying to make is that true diversification requires more than owning several stocks from different industries in the U.S. stock market. True diversification necessitates ownership of a variety of investment classes, as well as investment location diversification. When you have your retirement savings invested in stocks, bonds, real estate, foreign markets, and metals, you can call yourself diversified.

The best way to diversify your retirement savings is through a Solo 401k – accept no substitute.

Give Longboat a call or send us an email. We are not slick salesman; we are real people.

406-551-4775

 

Why Asset Allocation Doesn’t Matter In The Long Run June 27, 2015

 

Part Three: Self Directed Retirement Questions May 19, 2015

This is the third installment in the Self Directed Retirement Questions, Answered.

These are questions I’ve been asked, my answers to those questions, and some commentary.

Question:  What is the difference between a Self Directed IRA and a Solo 401k?

Answer:  A Self Directed IRA requires a Custodian.  Custodians are generally banks and investment houses.  These Custodians charge fees to baby sit your money and tell you where you can and cannot invest your savings.  An SDIRA is far better than a standard IRA, but it can still have high management fees, hoops to jump through, and limitations in what you can invest in.

A Solo 401k, which is designed for the self employed, enables you to invest in anything that the IRS allows.  You become the Custodian; therefore you don’t have any filters on your investments (within the framework of the IRS’s allowed investments).  You basically don’t have to ask permission to use your own savings as you see fit.  Since it is a 401k, you can also borrow up to 50% of the value, up to $50,000.  And again, you don’t have to ask permission or fill out piles of paperwork to take out a loan.  You draw up the terms, put the terms in your safe, write a check from your 401k to you, and then just make the monthly payments to your 401k.  Because you are making payments to your 401k, the interest is essentially free – you are paying yourself!  A Solo 401k also enables you to contribute as the employee and the employer; in other words you can contribute over $50,000 a year to your retirement account – or over $100,000 if your spouse is a partner in the business.  This is a BIG deal.

My thoughts on the two different approaches boils down to this:

If you can, go with the Solo 401k.

 

Obama’s MyRA Savings Plan: Wolf In Sheep’s Clothing? February 19, 2014

Filed under: Corporate Malfeasance,Economics,Investing Globally — larsfforsberg @ 1:35 pm
Tags: , , , , , , ,

BY:  John E. Girouard

FORBES

If you were wondering how the federal government is going to unload those trillions of dollars in long-term Treasury bonds it’s been buying for the past five or so years—quantitative easing is the technical term—President Obama dropped an anvil hint in his State of the Union address last week. You’re going to buy them, with the retirement savings you’ll be putting in the President’s new MyRA program.

If ever there was a misnamed initiative this one ranks near the top. It’s a mash-up of My and IRA. It implies a greater level of possession than the familiar Individual Retirement Account, which came into being forty years ago during another retirement crisis—the 1970s, when a deep, stubborn recession drove corporate defined-benefit pension plans into the ditch.

This time, a deep, stubborn recession triggered by the Wall Street institutions that also sell IRAs drove a lot of individual retirement plans into the ditch. The fix was the Federal Reserve’s buying up a staggering amount of Treasury bonds to keep interest rates low and hopefully encourage investment and economic recovery.

Those bonds that our government now owns are yielding low rates at a time when most experts are predicting that rates will be rising again. When rates rise, the value of a bond falls. So U.S. Treasury bonds have become so unpopular not even China wants them. In November, a People’s Bank of China official gave a speech in which he said, “it’s no longer in China’s favor” to keep buying U.S. debt the way it has over the past decade or so. There are better deals elsewhere.

That means the federal government is stuck with a lot of unpopular bonds and one sure-fire way to get rid of them is to sell them to the American public as a retirement savings vehicle. It’s a wolf in sheep’s clothing.

The pitch for the new MyRAs is that it’s an automatic savings vehicle, a little like the old-fashioned Savings bonds that our parents and grandparents bought for the kids and grandkids. On the surface, it sounds like a good idea—encourage people who don’t have the money or discipline to buy an IRA or Roth to put a little away each week for the next two or three decades.

MyRA contributions will be invested solely in U.S. debt, guaranteed against loss, and will pay the going Treasury bond rate. But there’s a catch or two. There’s no tax deduction for buying MyRAs, so you’ll be buying them with dollars that have already been taxed. The interest you’ll earn, such as it is, will be tax free, but Uncle Sam gets his cut up front and the use of your money for decades to come. And he unloads some of that mountain of bonds.

You, on the other hand, give up control of your money to the government and that money can never participate in a robust stock market or any other asset class, like your home, a business entity, or an insurance policy.

As a financial advisor for more than three decades, I know that automatic saving is the single most important tool in building a retirement fund. But the MyRA idea is just another example of how government controls so much of what we can and can’t do with our retirement savings by dialing up or down the tax rules.

There isn’t enough money in our economy for MyRAs to bail the government out of its bond glut. So we should be alert to what may be coming down the pike. The tax laws already require IRA funds to be invested in stocks and bonds to qualify for the tax deduction. It wouldn’t surprise me at all if at some point in the near future there was a proposal in Washington to require a percentage of all IRA funds to be invested in debt of the U.S. government.

In a capitalistic system, that would mean even more of the nation’s wealth would be locked up and unavailable to start and grow companies, buy homes, and make other investments that ultimately are the engine of individual prosperity.