Your Unbiased Advisor: Why smart investors do NOT sell high; buy low

Why smart investors do NOT sell high; buy low

Every time we have a severe correction like 2007-08 or 2020, investors have to re-learn the lesson of the sages: Don’t time the markets. Over the past 71 years, there have been 13 bear markets, lasting an average of 13 months, with declines averaging 25.8% before markets recovered. By contrast, the 14 bull markets since 1949 have been longer and have had disproportionate gains, lasting an average of 48 months and gaining an average of 129.0%. A $10,000 investment in the S&P 500 Index in 2004 would have grown to $36,418 by December 31, 2019, despite the 51% downturn of 2008–2009. Returns for other periods may have been less favorable and that other market segments may not have recovered from this downturn. As the Putnam chart shows, if you had timed the market and missed 30 or 40 best days, you would have lost money. Smart investors look at similar charts when they get the itch to sell. No one can predict the future!

Hold the Best: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

25% of us are using our future money for today’s needs

Many Americans are raiding their retirement accounts to pay for basic necessities, including groceries and rent. Over the last two months, the average withdrawal from retirement accounts was $6,757. Half of Americans who were recently furloughed or let go have saved less than $500 for retirement in the past year — and 70% have saved less than $1,000, according to SimplyWise. Of those who have an individual retirement account, 401(k) plan or retirement savings account, 1 in 5 now plan to tap those funds. It is difficult to find other ways to buy food and pay rent, especially since Congress let us take the money without penalty. But if a job loss or severe economic trouble goes on for month after month, we could be devastated. Like the Great Depression, we may be standing on food pantry lines sooner that we think.

We may demand a big change: https://www.amazon.com/Americas-Socialism-Rich-little-people-pay/dp/1535218584

Recover your retirement fund

The stock market has risen to the level of last August. If you did not sell, you may be able to meet your goals and timeline. No one can predict the future based on the past because we have never been through this kind of condition before. Plus, no advisor can predict the future anyway. Since nobody knows when the market will recover and refill your retirement fund, it is best to do nothing. Warren Buffett, expert unbiased advisor, says "The stock market is a device for transferring money from the impatient to the patient." We make mistakes when we are in a hurry. No advisor can tell you which investment to buy now to help you recoup your lost ground quickly. Quick gains are for gamblers who are willing to lose or who can’t control their emotions. We can concentrate on what we can control—cutting expenses, building emergency funds, looking for a new job—not on conditions we can’t control.

Wait and reassess in 2021: https://www.amazon.com/Warren-Buffetts-Investment-Strategy-Forget/dp/1484822900

Women need a Wealth Reserve

Women generate just 83% of the retirement income men do. That’s $47,244, 17% less than the median household income for men ($57,144). To make it worse, women live longer than men so they need more, not less. You and your family can solve this mismatch by creating a special tax-FREE account I call your “Wealth Reserve.” Before and after you retire, build funds in your tax-FREE account. Only earned income can be contributed to this account at first. However, if you don’t work but your spouse does work, you can still invest in this account. You can contribute up to $6,000; if you're age 50 or over, it is $7,000. You can withdraw your funds tax-free. In retirement, you can let your money grow tax-FREE while you take money from your pension and other accounts. You can add to this account even after the wage earners retire. You and your family can make sure you have enough even as you live longer. Plus there will be no income taxes due on your long-term accumulations. This could save you 22% in taxes.

Build a Wealth Reserve: https://www.amazon.com/Your-Hidden-Wealth-Reserve-Reduce/dp/1540435148

Is a reverse mortgage right for you?

Reverse mortgages allow you to spend down your home’s equity even while you continue to live in it, then pay the money back when you move out, often from the proceeds of a home sale. Last year more than 30,000 Americans borrowed against their homes in this way. During the last recession, some borrowers fell victim to high fees and questionable marketing tactics. Reverse mortgages are generally structured so the homeowner gets a monthly payment for as long as they live in the house. The loan comes due after the homeowner dies or moves out of the house. At this point, the loan will need to be repaid — which might mean selling the home in order to come up with the funds. The one you’re most likely to encounter is a federally-insured home equity conversion mortgage, or HECM. Most reverse mortgages have variable interest rates which may cause cash problems in the future. Go to a HUD-approved housing counseling agency and look for agencies specifically approved to provide reverse mortgage counseling. Although reverse mortgages may help you stay in your home longer, they aren’t cheap.

Plus all the maintenance, taxes and fees continue. As always with mortgages, it pays to shop around, getting quotes from at least three lenders, to make sure you get the best possible deal.

https://www.amazon.com/Your-Retirement-Income-Checklist-TrumpWorld/dp/1544703260

Where do retirees keep their money?

There are many advisors who tell clients to use bond interest for retirement income. After all, fixed bond coupons paying 6-8% were ‘safe’ and guaranteed a fixed income compared to stocks. Recently, low interest returns have dominated the economy so this may not be good advice any longer. With the advent of Target-Date Retirement funds, some retirees have discovered balanced funds that manage stocks and bonds over time automatically. Some retirees have relied on balanced funds like Vanguard Wellesley Income fund for many retirement years—providing 9% returns since 1970. Some retirees and pre-retirees are taking note of the current tax rates and lack of forced sales for RMDs to move more IRA money to Roth IRA accounts. Later if taxes go up to pay for this pandemic event, they can use tax-FREE money to reduce their total tax expenses.

https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957

How Congress people make money with their ‘crystal ball’

Yes, there is a law against insider-trading, even for the wealthy and the connected. But law enforcement doesn’t go after Congress people who have intelligence reports we don’t see. They get away with it. They have their own system so they make sure few get punished. Plus, Congress people are rich enough to have ‘third party’ people (trustee) to trade on their behalf with the information. Take Rep. Phil Roe. He purchased stock in Zoom, the teleconferencing company, and Moderna, a company developing a vaccine, while dumping shares of Royal Caribbean Cruises and Disney. As markets crashed around the globe in early March, the ‘representative’ sold nearly 100 stocks over a two-day period. A spokesman said Roe does not personally manage his investments. So it is just luck that Roe’s trustee makes trades on the basis of knowing what is coming? Roe makes $ millions and so does his trustee. We are not fooled.

Use your legal tax shelter: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Another way the wealthy takes our tax money

Trump and the GOP have provided another perk for the wealthy. Wealthy financial advisors keep our tax money (‘loan’ for employee salaries): big bonus. One firm, Lakeview Capital Partners, an Atlanta-based registered investment advisor with about $3.3 billion in assets under management, was the latest firm to disclose it received a Paycheck Protection Program loan from US. Do financial advisory firms which are already wealthy and receive about $33 million in annual fees ($3.3 Billion at 1% fee rate) really deserve $581,000 of our tax money? Lakeview is planning to keep the money under the ‘forgiveness’ regs. One critic: “these firms have to be in the position of dealing with bear markets,” he said. ”they know they don’t need the money. They know the loan was intended for small businesses like restaurants where they need to keep employees employed. It was not meant to be an indirect windfall for [advisors] RIAs.”

Robbing Us Blind: https://www.amazon.com/Robbing-US-Blind-fees

**********ACCOUNTABILITY**************

Like 1776, this period is a test of democracy—do we really want ‘low-IQ’ Mobster?

Mobster decides who gets food and who doesn’t (hint: politics)

Mobster: I decide which facts are real

Mobster: “Any difficulty and we will assume control but, when the looting starts, the shooting starts."

Mobster: “This Is So Unfair to Me”

No empathy

Mobster: give up your children or chance at life

Mobster: only good Dem is dead Dem

The plague was/is a sign

The Mob: virus is gone by Memorial Day (102,000 dead)