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Posted by Guest October 26, 2017
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When is the Right Time to Invest in AAPL?


Apple is the biggest publicly traded company that is not a bank, with a market value of $752 billion. Newcomers will surely want to invest in this tech giant that shows no sign of stopping, despite pivot after pivot. Before deciding when to invest it is important to identify some patterns that can give you a bigger picture of trends in AAPL.
 

The trend is upward. Over the last 10 years APPL has seen a 600% increase, according to InvestorPlaces. This “shows a steady upward march with a couple deep valleys when zoomed out to 10 years of history.” What causes these valleys or dips at all in a company that has showed near constant growth?
 

First there is the common industry misconception that APPL stock always falls right before an iPhone announcement. This has been proven untrue. Calculations of available stock data have shown of the 12 iPhone announcements, seven resulted in AAPL stock going down the day of and up the day after. Five announcements saw the inverse, AAPL stock going up the day of and down the day after.

 
iPhone

Credit: Fortune/Bloomberg/Kensho

 

The largest dips occurred in 2012 and 2015. The hit in fall 2012 was the largest of the iPhone era and it took Apple until well into 2014 to get back on track. This dip occurred following the iPhone 5 announcement and pre-orders, when there was a supply shortage on the new device components. At the time, Techcrunch reported that the iPhone 5 sold out twenty times faster than the 4 and 4S models, and due to Apple selling them at a loss in order to achieve parity with competitors, AAPL took quite the hit.
 

The 2015 dip was not nearly as severe, and the recovery was swifter, but it did appear in late-summer, around the same time as the dip in 2012. A great deal of this loss was due to Apple losing ground in China. Tech research firm Canalys reported Apple slipped behind Chinese tech companies Xiaomi and Huawei in the third quarter of 2015. Complications with the Apple Watch release, on top of the worst market performance since 2008, were likely the major causes of this downward trend. Check out the chart below for a more detailed overview.

 
iPhone Chart

Credit: InvestorPlace

 

These drops, be they major plunges or just blips, are all irrelevant amid Apple’s ever-rising stock. If you plan on making a long-term decision, it is all but assured that you will make money. The question is how much. So given these trends, is now a good time to invest in Apple and where is the stock likely to go?
 

When Apple launches a new product there is more chance you will see a dip in stock value due to either production issues or selling products at cost. CNN is betting that even with the stock price at historic highs, incredulously, now may be the time to buy. It may be safe to wait until after the iPhone X launch (and give time to evaluate how profitable the iPhone 8 will be due to the X), but given the high price point and early pre-order indications it seems like there will be no replication of 2012 and 2015’s issues. Any major drop off will surely cue a great bounce-back that will skyrocket AAPL values to new highs.

 






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Posted by Mark Pokorny October 25, 2017
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6 Investment Opportunities You Should Jump On Right Now

6 Investment Opportunities You Should Jump On Right Now

6 Investment Opportunities You Should Jump On Right Now

The journey to financial freedom requires hard work, persistence, patience and sacrifice. One of the best ways to boost your income is to choose investment options that promise high returns. However, since such investments come with a certain degree of risk, you may not know where to start. If you are to identify great investment opportunities where others do not, you will have to be diligent. This means striking just the right balance between risk and reward.

 

 · Real estate

 

Real estate remains one of the best and safest investment options. Since most entrepreneurs view this as a long term investment, you should consider jumping on it right now. While you will require a considerable amount of money to buy property, the investment is generally associated with positive cash flow.

 

 · Gold

 

When it comes to commodities, gold provides great and attractive investment opportunities. Today, global unrest, high interest rates and debt crises have resulted in uncertainties in the stock market. With the volatile gold prices in the global market, the best time to take advantage of this investment opportunity is now.

 

 · Home security

 

With home automation ushering our society into the future, home security companies like ADT are becoming powerhouses on today’s market, with promising projections for further growth. If you like reliable dividend raises, international prospects, and promising mergers, home security might be the investment for you.

 

 · Private investments

 

There are many advantages of putting your money in investments you own, understand and can control. This is because you will be in a better position to make decisions and guide business operations. Some of the private investments you can consider include crowdfunding and hedge funds.

 

 · Bonds

 

As an entrepreneur, you understand that your business is constantly exposed to financial uncertainty and volatility. This is why you will consider less volatile options when thinking of investments. Bonds make for a low-risk investment option that guarantees returns after a specified period of time. Such investments will also work to balance out with some of your more risky ventures.

 

 · Startups

 

Once you have recorded success with one venture, you may consider starting up another business. Compared to the stock market, the success of your new startup will be determined by the time and effort you invest in the business. Reinvesting your money in startups will also be a great way to diversify your investments.

 

 · Personal health

 

If you’re not in good health, you will not be able to run a successful business or be able to properly explore the investment options available to you. Invest in your health today by making strategic changes to your routine with balanced meals, exercise, rest, and opportunities to recreate. While this is not your typical investment opportunity, maintaining your body’s health makes it possible for you to think better, run your business more efficiently, and realize attractive returns.
 






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Posted by Mark Pokorny October 24, 2017
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Athletes and Financial Stability; 5 Trends That Have Changed Contract Negotiations

Athletes and Financial Stability; 5 Trends That Have Changed Contract Negotiations

Athletes are among those that many would consider to be superstars in American culture. They are literally revered by their fans in a lot of ways. While this is the case these days, it was not always this way. Athletes did not used to have the level of representation by agents and the like that they enjoy today. Now that they are so well taken care of, it is worth taking a look at what has changed so dramatically for this very privileged group of individuals.

 

 · 1) Entertainment And Athletics Merging

 

The worlds of athletics and entertainment have become one in the same in many ways. The athletes themselves play into this in some ways, but in other ways we just want them to be entertainers as well as athletes. We have grown increasingly interested in even the mundane details of their lives. Therefore, the consolidation of agencies should come as no surprise. Fewer agencies exist, but they have become all the more powerful.

 

 · 2) Greater Public Awareness Of Athletes Who Got Ripped Off

 

There may not be a lot of sympathy from the public for athletes who aren’t doing well financially. This is sympathy may come despite the fact the athlete has made a good deal of money. However, there is room for nuance even with this. People do not want to see their heroes have their money stripped away from them by fraudsters. Agents help prevent against this, and thus, have become more valuable than ever to the athletes.

 

 · 3) Agents Help Their Clients Find Good Money Managers

 

Hand-in-hand with trend number 2, a lot of agents these days find themselves working for their clients to find proper money managers. Mismanaged finances lead to foreclosures with many athletes. They may not have been taught proper financial management skills. These skills have only been ingrained in them as they earn enormous paychecks. The result can be terribly mismanaged finances. Thus, the need for good agents to find suitable money managers has been highlighted in recent years.

 

 · 4) More Emphasize On Veteran Players

 

Some of the professional sports leagues have made changes to help bolster the value of veteran contracts more than those of rookies. It was once the case that the rookie was valued above all else, but those days are gone. The rookies now need to prove themselves in the league to earn the fattest paychecks around.

 

 · 5) Athletes Share More Of Their Life With Agents

 

Agents need to get to know the entire backstory of their clients these days to get them the best deals. Athletes are expected to be more open with their agents in order to provide them with the greatest ability to get them the kind of contract they truly need.

 






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Does Seasonality Affect Stocks?


When analysts examine stocks, traditional forms of due diligence dominate: fundamental analysis, technical chart analysis, macroeconomic analysis, and even sentiment analysis.

If you are an investment management firm looking to get an edge on your competition, it makes sense to conduct discounted cash flow analysis and extensive research. After all, you have extensive resources at your disposal – top notch analysts – to crunch the numbers on lots of companies.

As a retail trader, you probably don’t have the time to build out the complex spreadsheets needed to hone in on precise company valuations, so coming up with your own unique twist of chart indicators may be the best bet. After all, you can easily spot resistance and support levels, spot triggers that signal buy and sell signals with free stock rating software.

Some analysts will even rely on sentiment analysis to figure out when stocks are overvalued or undervalued according to extremes in sentiment. For example, when the volatility index skyrockets, history shows it is often correlated with a temporary market low.

Billionaire investors, such as Ray Dalio and Jim Rogers, are well known to examine macroeconomic factors to make big decisions on which way markets will move over the coming months and years.

But what if you have used some combination of fundamental, technical, sentiment, and macroeconomic analysis without success? Is there any other analysis you should be considering?

Seasonality analysis is an increasingly popular form of market analysis because it isn’t a subset of the other forms of analysis. The way seasonality analysis works is that at certain times of the year some stocks have a tendency to rise or fall with fairly predictable patterns.

A company that serves tax clientele may rally in anticipation of higher revenues around tax season and fall when the seasonal spike has ended. A company building swimming pools may rise in anticipation of spring and summer demand from customers but winter will generally be a slow season and share prices often reflect these seasonal swings.

To figure out the seasonality of stocks by yourself is quite the challenge. You would need to analyze each stock at each time of the year and how it moves historically over the coming weeks and months, and constantly update your spreadsheets for thousands of stocks each day. Obviously, it quickly becomes impossible!

But there are ways to spot and screen seasonality with relative ease. For example, a company like Masonite International [DOOR] has a history of falling on average approximately 6.0% over the weeks from the middle of October to the middle of November in six of the prior seven years.

 
DOOR
 

Obviously, there is no guarantee that any company repeats its seasonal chart pattern behavior on any given year. But some stocks, like AMD, have a history of falling with high predictability by large amounts at a certain time of year. Still others rise more often than not at the same time of year. So, if you are looking to move the odds in your favor, when you see a stock has a history of moving nine years out of ten or nineteen years out of twenty in one direction, it is certainly worth paying attention to the seasonality trend.

After all, would you really want to buy a stock that has a history of falling by a large percentage amount over the next month or two? The reason seasonality is so valuable is that if you were to view a technical chart, the share price of a stock may be in an uptrend, but a big risk may be on the horizon. Where other forms of analysis are valuable in their own ways, seasonality is valuable at knowing when the risk of a big drop or a big rise in share price may historically have taken place, and may translate to future share prices too.
 

Avatar Jack Davis is a writer at Financhill, a website dedicated to providing free stock ratings and seasonality analysis.

 






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Posted by Martin October 12, 2017
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Is it time to be cautious?


If you follow my blog and read my outlooks for the market, you know that since December 2016 I have been bullish and pretty much criticized long term investors selling their positions in their portfolios based on valuations.
 

Here is a pictue from Hedgeye I posted to support my bullish view:

 
S&P 500 Composite
 

And as you will see below, the economy accelerated even more since then.

Any time the stock market dipped I wrote “buy the dip” although many disagreed with me.
 

It wasn’t a time to be a bear. And if you were a bear and sold your positions, you missed a great rally in the recent market history (not overly unique, but extraordinary for sure). I watch time to time some investors on their blogs and on Stocktwits and followed their actions. I time-stamped their sells to se how would they do later on. On average, they missed about 10% of additional growth if they kept holding the positions they deemed too overvalued (note, many of them were selling in 2016).
 

My response to their criticism was that I would be the first one changing my mind should the data supporting my view change.
 

What data?
 

The US macro economic data propping the stock market up.
 

Look at it this way: recently we had many bearish views and opinions out there – North Korean nuclear tests, two hurricanes, and many pundits comparing today’s market to 1987, 2000, and 2008.
 

Every time a bearish event hit the market, it dipped and continued higher.
 

My theory was that it was the US economy accelerating and low inflation propping the market. Many, who were comparing the market to 2000 or 2008 forgot to include inflation. They said that the S&P 500 had pre-2000 or pre-2008 valuation of P/E 20 or 30 or whatever their number was. But what they didn’t include was that in 2000 or 2008 the inflation was at 14% and today below 2%.
 

A P/E 20 at 14% is not the same as P/E 20 at 1.5%. Fudge the number any way you want but you will not be able to go around this fact unless you decide to blatantly ignore it. And many did.
 

Did anything change?
 

I am beginning to see a change in the growth acceleration. We are still growing, but it seems to be slowing down. Let’s review the numbers:
 

S&P 500 Composite
 

There is no time to panic as we are not yet in deceleration but Q1 2018 may be a tough one for corporate earnings and growth. If this cycle continues, we may see the market to follow and investors taking their profits out of the table on a large scale. That may push this market significantly lower.
 

I am still bullish but not as bullish as I was before. It is time to be cautious now.

What should you do?

This all depends on your strategy and time horizon.

If you are a long term investor building your retirement portfolio with 20 or more years before retirement like me, do nothing. As stocks become cheaper, reinvest dividends and buy cheaper. If you buy stocks which do not pay dividends, maybe slow down in purchasing your stocks and save cash for purchases as the stock market corrects. I still wouldn’t sell a single stock if it meets your original criteria. A sell off cycle in the market is normal. It won’t last forever and on the 20 year long scale such sell off will be an insignificant blip.

Also, this slow down may reverse and we may see another up cycle. Then all I said above will be irrelevant.

As an option trader this will not change my strategy too much. I trade strangles and those are neutral trades which allow me to skew the trade in any direction. Should the market really enter a bear market correction, I just simply add more calls to my trades to offset puts losses while reversing puts at the same time. However, it is definitely a time to start preserving cash unless the data start showing growth again.
 

What is your expectation for the rest of the year and beginning of 2018? What will be your strategy in case the market goes into correction? Please, share your thoughts in the comments.






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Which Options Brokers Are Best?


If you are new to trading, the best broker to choose might seem at first glance to be the one that offers lowest commissions costs. After all, any active trader worth his or her salt wants to keep transactional costs to a minimum. And any experienced trader knows that paying hefty commissions can eat up a large chunk of trading profits at the end of the year. You hardly notice them on any given trade but sum them up and it’s a different story altogether.

 
The problem with choosing an options broker based on commissions costs alone is you could easily overlook brokers who offer a wide variety of tools, research, chart studies, and virtual trading platforms.

 
An options trading platform that has historically won high marks among experienced options traders is thinkorswim, which features one of the most comprehensive offerings – you can even use an embedded programming language to customize charts to your own preferences beyond what is available most everywhere else. The platform has the added benefit of supporting forex, futures, and even bond trading for traders looking beyond stock and options trading.

 
In recent years a broker that has stepped up to the plate to rival TD Ameritrade’s thinkorswim platform is tastyworks. Many of the team members who built thinkorswim went on to join tastyworks, so it’s no surprise to see it caters to serious options traders too. Plus, the tastyworks trading platform has the added benefit of charging no commissions on closing trades. While this may not affect credit spreads heavily, which often expire worthless, any call or put options purchased can be closed out at no cost – other than applicable exchange fees.

 
In any options broker or trading platform you consider, you will want fast and accurate order execution. Plus, you will want to know that you can call up a customer support expert who is knowledgeable in trading, so you don’t end up teaching them the ropes.

 
A broker who has consistently excelled in this area is Schwab, who purchased OptionsXpress – a serious rival to thinkorswim for many years, though not as advanced when it comes to charting and back-testing simulators.

 
Schwab has fully integrated OptionsXpress and admirably it kept commissions costs low, and made some of its own best features available to OptionsXpress customers, including extensive research, which is especially valuable to covered call traders, who may wish to study the longer term prospects of a company while selling calls regularly against shareholdings.

 
For experienced options traders, it’s best to evaluate ahead of time the extent of strategies available. These days most options trading platforms are sufficiently well-versed in the nuances of options trading to support just about any strategy, no matter how exotic. But it doesn’t hurt to double check that beyond collar trades, covered calls, and married puts, other strategies are supported too, including ratio backspreads, iron condors, straddles and strangles.

As an options trader, you can vary the number of contracts you trade, the type of contract you buy or sell – call or put – and the timeline to expiration in so many ways that you can create all sorts of complex strategies, and sometimes it’s hard to visualize them without the use of a risk graph.

 
So, if you fall into the category of experienced or creative trader looking to fine tune a strategy or get adventurous with a new one, then look to an options broker who specializes in helping you to visualize risk graphs easily, make changes and modify graphs quickly, and accelerate your learning curve with a virtual trading platform too – so you don’t risk a penny while testing new strategies.

 
The bottom line as an options trader is you should evaluate your broker on factors beyond cost. Where a stock investor may prioritize research over cost, an options trader should consider the value of risk graphs, tools, back-testing simulators, and virtual trading platforms, as well as how knowledgeable customer support staff are and the range of options strategies supported.
 

Of course, if trading actively seems like an uphill struggle, there is a new option available to long-term oriented investors who wish to be hands-off and invest passively. Robo-advisors, such as Betterment, have taken off in recent years and offer investors a lower cost way to gain exposure to markets than was historically possible via traditional human advisors, and an automated approach that doesn’t require you to make investing decisions. Keep in mind however that while you probably won’t underperform the market, equally you probably won’t outperform it.
 

Avatar George Windsor is an author at Investormint, a financial website dedicated to helping consumers make smarter financial decisions.

 






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Posted by Mark Pokorny October 10, 2017
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Is a College Education Worth the Required Investment?

Is a College Education Worth the Required Investment?

With the constantly rising costs of tuition each and every year, students are graduating from college with large amounts of debt to go with their diplomas. There are many critics that claim that graduating with this debt is not worth the educational achievements, stating that attending college delays starting a career. This prohibits students from making and saving money earlier, and instead they begin their professional careers financially in the hole.

In actuality, despite potentially incurring initial amounts of debt that can be reduced or negated with proper financial aid, attending a university and obtaining a degree is a quality investment that has many short and long-term benefits.

 

 · More Opportunities in the Workforce

 

More and more jobs seem to require a college education in order to be eligible to apply for them. Since 2010, more than 11.5 million jobs have been created, and nearly 75% of those jobs were filled with individuals holding a bachelor’s degree or higher.

Job openings that require only a high school education are not growing rapidly enough to keep up with the number of people that wish to fill these positions. As technology continues to develop and become a larger focal point of daily life, earning an advanced education is going to become more and more important, and it is going to become increasingly harder for those with only a high school education to find work.

 

 · Maximize Your Earning Potential

 

The more education an individual obtains, the higher their earning potential. In the United States, 88% of Americans have graduated high school or passed the GED, 33% have earned at least a bachelor’s degree, and 12% have attained a professional or a master’s degree.

The difference in earning potential varies significantly between these groups. With only a high school education, the average annual salary is just over $35,000. However, after obtaining a bachelor’s degree, this earning potential nearly doubles, as the annual salary for four-year degree holders is around $60,000. Adding a master’s degree increases that number an additional $10,000, while obtaining a professional degree nearly triples that of a high school graduate, providing an average income of $90,000 each year.

While earning a professional degree is not a requirement for everyone, obtaining at least a bachelor’s degree is necessary for many skilled positions and comes with a salary nearly twice as large as it would be otherwise. This extra income will not only allow graduates to pay back their student loans in a reasonable amount of time, but will allow them to save and invest a much larger amount of money each year after their loans are paid off.

 

 · A Leg Up in Social Networking

 

A college education provides much more than a piece of paper; it also provides students with a many social opportunities throughout their education with teachers, other students, and a university’s career resource center. Through these opportunities, students are able to acquire many networking connections that will be of value to them in the future.

Networking connections are one of the best ways to get a desired position in the workforce, and these connections can be obtained in clubs, teams, and classes. Universities also often have a career center, which can be a great resource for workshops, as well as for finding internship and work opportunities.

 

 · Getting a Degree Made Easy

 

Some people may want to attend a university to earn a degree, but may not be able to make the time commitment due to certain circumstances in their lives. With the increasing presence of technology, earning an education has never been more accessible, and online degree programs provide a great alternative to physically attending courses on-campus.

Many online degree programs carry a positive reputation, often offer a more affordable college experience, and students can earn a degree without needing to commute to attend classes. Online courses can be completed around other commitments on a student’s daily schedule, as all class materials are handled electronically.

Earning a college education is a great investment for any individual, and receiving a degree offers many benefits, especially regarding opportunities in the workforce. Higher education offers a more stable and better paying position, establishes valuable connections for students, and is more accessible than ever before due to the availability of online degree programs.

 






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Posted by Mark Pokorny October 09, 2017
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Investing 101: Simple Tips to Start Investing Your Money

Investing 101: Simple Tips to Start Investing Your Money

The world of investing can seem pretty complicated to an outsider. If you’re curious about investing, don’t be daunted by the myriad of terms. The basics are actually pretty easy to learn, and you can pick up more as you go. Capital markets are accessible to individual investors too, so you can invest almost anywhere. Here are 4 tips to help you learn the basics of investing.

 

 · 1. Decide How Much You Want to Invest

 

How much can you afford to invest? Many people have a set dollar amount or percentage of their income they can commit to investing each month. This doesn’t have to be anything exorbitant. If you can only afford five dollars every paycheck, that’s okay. It’s better if you can invest $50 or $100 every month, but even just $5 is better than nothing. You don’t want to put too much strain on your budget for other expenses, so choose what you can afford. So long as you can keep to that amount, every paycheck or month, the total amount you’ve invested will grow over time.

 

 · 2. Get Advice or Self-Direct

 

When investing, you can either pay to receive professional investment advice, or you can self-direct your accounts. The route you choose will depend on how willing you are to do the research needed in order to make smart investment decisions. Some apps help walk you through investing, and while you’ll probably want to research what exactly you’re investing in, a self-directed account, in this case, would be the way to go. If you’d rather let someone else take charge of it, you’d want to find a financial advisor. Advisors do, however, charge fees that can cut into your returns.

 

 · 3. Set Up a Platform

 

Before you start investing, you’ll need to choose an investment platform, which is a service that facilitates investment activities. There are many of these online. You can usually get up and going with these services pretty quickly after providing some personal information and funding your account. Full-service investment platforms offer sophisticated suites of investment research and other tools. More bare-bones platforms provide a way to buy and sell investments but not much else. Different platforms aren’t necessarily better than others; it just depends on your needs.

 

 · 4. Determine Account Type

 

You’ll need to consider the time frame for which you are investing. If you don’t plan on withdrawing your investments until retirement, an individual retirement account (IRA) may be beneficial. In an IRA, you invest using pre-tax money, and you’re not taxed on the gains until you withdraw them. The catch is that you have to wait until age 59 ½ to withdraw without a penalty. If you plan on withdrawing from the account before retirement, you’ll want a non-IRA, or “non-qualified” account. Earnings aren’t tax-deferred in these accounts, but there’s no penalty for taking withdrawals before a certain age.

 

Investing doesn’t have to be complicated. Anyone can learn to invest. Follow the above five tips and you’ll be on your way to investing your money properly.

 

Sources
Internal Revenue Service
CNN Money
Weisblatt Law Firm
The Balance






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Posted by Martin October 03, 2017
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September 2017 results


Another month is over and time to review my accounts, trading and investing results for September 2017.

September was volatile month mainly to my trading yet I was able to end higher than in August in all accounts.

Again, this month, I was not focusing on income but rather on bringing my accounts to the rules (trading account especially) which I have neglected before and now I am over invested/traded. This can be dangerous when the market turns down. If that happens, I might not be able to manage my trades properly so I must unload some positions to make room for violent turns. So far, I want to do it slowly without liquidating my positions and taking a loss.

 

 · ROTH IRA account:

 

September 2017 account value: $23,255.24   ▲ (up by $512.43;  2.25%)
September 2017 dividend income: $89.45   (down from previous $91.23)
September 2017 options income: $74.40   ▲ (up from previous $59.44)
XIRR: 9.59%   ▲  

 


 


 
Monthly dividend Income:

 


 
My dividend holdings:

Options Income
(Click to enlarge)
 

 

 · TD account:

 

My trading account ended higher for the month, however, I am still focusing on bringing the account back to my trading rules. Thus this month it was not about income (which was very low this month) but growth. And the account grew nicely. I hope, as I will be able to unwind some of my positions, the account will grow more.
 

September 2017 account value: $23,323.87   ▲ (up by $1,906.66;  8.90%)
September 2017 options income: $90.05   ▲ (up from previous -$1,308.67)
XIRR: -27.27%    

 

Month-to-moth trading results

Trading results
 

(The red dots on the chart indicate income estimate, blue bars actual earnings.)
 

 

 

We are presenting you our month-to-month business performance review:

 

 · Lending Club

 

Lending Club investing proceeded well in September, except one note. The first note got into a Grace period with an overdue payment. It was a “B1” note where the irresponsible borrower asked for 6,000 dollars loan for debt consolidation. He or she failed to pay their very first payment. Funny thing is that the borrower was a loan officer (probably in a bank) and it looks like he or she was determined to skim the lenders.

When reviewing the loan listing, I noticed a few things:

The employment length was less than 1 year (so this was my first note as at the very beginning I ignored employment length in selecting notes. Now I have a minimum 2 years and it seems like I will be extending this to a longer period of 3 or 4 years.

The second thing I noticed was Revolving Line Utilization at 79.80% and that is very high in my opinion. I do not have this metric included in my selection process, so I will be adding it to eliminate overextended borrowers which are more likely to fail paying their debt.

What baffles me though is a high credit score of this borrower. He has a score at 714. With such behavior and line of credit it is a mystery to me that he has such a high credit score.
 

September 2017 account value: $414.14   ▲ (up by $100.97   32.24%)
September 2017 interest income: $2.28   ▲ (up from previous $0.00)
XIRR: 3.69%  

 

 

 · IRA Account

 

As I wrote in my previous post I recently changed jobs and got a new one. This move had many positives. I have a better, satisfying job now, and it also released my 401k funds which I decided to transfer into a self-directed IRA account.

My old 401k account ended with $87,646.23 dollars which I will be rolling in October to my new IRA account (an estimate is around October 5, 2017).

Once rolled, I will apply the exact same strategy as I use in my ROTH IRA account.

I will be selling jade lizard trades which will consist of cash secured puts and call spreads against dividend stocks with approx. 30 days to expiration in an attempt to collect monthly premiums.

In a dividend month, I will let the put option assign to the stock so I will attempt to sell in the money puts or near the money puts to make sure I get assigned. If not possible (for example there will be a risk of being assigned too deep in the money) I will do a buy-write strategy to buy the stock out right and sell a covered call. My friend Bob from our trading group mastered this strategy so I will follow his lead to make sure I do the buy-write correctly.

After I buy the stock, I will collect dividends and sell covered calls (if jade lizard will still be on, then I will sell the long call and keep a short call as a covered call).

The goal will be to sell the stock using covered call. Once I will be out of the stock again, I will start selling new jade lizards to repeat the process.

I also decided to include this account into my reporting here from now on.

 

 · Conclusion

 

My market and economy outlook is still bullish and I think no investor or trader should be selling their positions based on the valuation. If inflation is included into the equation then this market is still very cheap and may run higher.

Since May 2017 I keep saying that the US economy is improving and accelerating that we saw increasing year-over-year sales, earnings (the second best since 2011), in June 2017 I showed you the numbers on consumer confidence. increased capital expenditure, corporate profits, all up. And this trend continues as recently financial media reported revised GDP above 3%, something I have been saying since June 2017 that our economy is increasing from lack luster 1.4% (and back then to 2.5%, now to 3%).

As long as we see this improvement there is no need to be selling your stocks on valuation. Instead, buy every dip you can.

 
What do you expect from the stock market in October? What is your strategy for the rest of the month?
 






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Posted by Mark Pokorny October 02, 2017
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How to Protect Your Assets without Breaking the Bank


Avoiding debt is the primary and most efficient technique for protecting your family assets. To achieve this, you have to design a comprehensive asset protection plan for your family. This involves purchasing insurance and actively managing your family finances to avoid exposure and help you pay off debts. While there are many options to managing your assets, these are the foundations to a comprehensive protection plan for your resources.

 

 · The Limitations of Homeowners Insurance

 

Insurance may provide some degree of security for your family. However, it does not shield your assets from exogenous threats. Insurance policies are usually limited to a specific range of disasters. For instance, insurance cannot protect you from the harsh economic downturns which occur in unprecedented circumstances or improve your ability to pay your off creditors. However, an insurance policy covers your losses resulting from unfortunate events like accidents. In such a situation, your insurance agency is justified only to cover these losses while not addressing other unrelated variables like your electricity bills.

 

 · Emergency Savings

 

Unlike insurance, your own cash can be accessed at your discretion. The challenge of emergency savings is that they are about the single least sexy thing you can do with your money. Having massive stockpiles of cash just sitting there, not making any money, drives investment gurus nuts! And there is a legitimate caution there – don’t park your entire investment portfolio in your mattress and expose it to the ravages of dust mites and inflation. But it is wise to keep a small amount (between 3-6 months of household expenses) in liquid cash in a money market account, so you can weather an unexpected financial storm. That way, you won’t be tempted to pull money out of your investments every time your radiator leaks. That’s how you end up selling at the bottom of the market.

 

 · Avoid Endangering Assets

 

Speaking of not pulling money out of investments, the last thing you want to do is endanger your assets in the event of an emergency. Avoid HELOCs and Title Loans at all costs, and never pull money out of a retirement account – unless maybe it was necessary to avoid a bankruptcy or a foreclosure. We talk about this in our post NEVER Cash Out Retirement!. According to Want A Fresh Start, it’s very common to feel overwhelmed and stressed when being harassed by unrelenting debt collectors. Don’t let these snakes pressure you into making a bad decision! Money withdrawn from a retirement account will be treated as income by the IRS and taxed at your income rate, plus hit with an early withdrawal penalty. I really don’t like 35 percent or more of my money going to the IRS.

 

 · Quit Borrowing Money

 

As a young family determined to protect its assets while offsetting some debts, stop digging yourself into a financial hole. Do not mortgage your family assets for short-term financial gains. Avoid credit and insist on paying with cash for both household expenses and income generating assets.

 

 · Pay Off Debt

 

An ideal approach when you are in a lot of debt is to focus your assets on the loans with the lowest balance. Many financial advisors will tell you to prioritize debts with the highest interest rate first, and if you calculated simple math, this would be the correct approach. This is fallacious, however, because this isn’t a math problem – it’s a behavior problem. Harvard Business Review says, “Our research suggests that people are more motivated to get out of debt not only by concentrating on one account but also by beginning with the smallest.” The power of quick wins is a powerful tool for behavior modification.

 

 · Invest Responsibly

 

With debts paid and investments protected with adequate savings and insurance, you are prepared to make your money work for you! Try to invest upwards towards 15% of your monthly income – but make sure you are managing cash wisely so you don’t end up in a pinch. If available at your income level, try to max out ROTH IRA’s and 401K’s, as these 4 little letters (R-O-T-H) could represent literally hundreds of thousands of dollars in tax savings, depending on how long between now and retirement and how aggressively you invest.

 

Investing can be an extremely intimidating prospect for the uninitiated. There are so many different kinds of investments with diverse strategies, gain potentials, risk and volatility measurements, and fee structures. Don’t let paralysis of the analysis stop you from taking advantage of the blessings of compound interest. Contact me today and I’ll help you walk through a comprehensive strategy to get the most of your investments.

 






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