Tuesday, March 31, 2020

Looking for Cash Opportunities


Cash is king for now.

There will be lots of attractive opportunities for those with cash:  stocks, real estate, purchases.  I'll be actively looking for good deals.

For more on Ideas You Can Use, check back  Tuesdays for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC

Monday, March 30, 2020

Be Prepared for the Worst

That was my hard lesson learned from the 08/09 Great Recession.  The stock market was doing great, hitting new highs in October 2007, the month of my early retirement. My company stock had also hit a new high. 

Rather than paying off our mortgage, I stayed mainly invested in equities, assuming the stock market would continue to deliver gains greater than the interest on our mortgage.   It was the "smart" financial decision.

Needless to say, I wasn't prepared for the stock market crash of 08/09.    Our retirement funds were reduced by about 60%.   Fortunately, we had enough cash and CDs to tide us through for a couple years.  That plus some part time work for a few years, and some deferred compensation payments enable us to recover completely by 2017.

However, I never forgot the anxiety and financial challenges of the 08/09 Great Recession.   I was much more prepared for the recent bear market decline, by keeping more funds in cash and cash equivalents, foregoing some of  the gains in the stock market.  If the market should decline further, it will still be painful, but I anticipate the financial challenges to be much less daunting than the ones we had in 08/09.

For more on Strategies and Plans, check back Mondays for a new segment.

This is not financial nor invesment advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC

Sunday, January 19, 2020

Preparing for a Significant Market Decline

"The market doesn't ring a bell at the top."  ~ trader adage
"If it's too good to be true, it probably is." ~ old adage 

Depending on which yield inversion (March 2019 or August 2019) chosen, the market is now 5-10 months past the inversion.  The market can rise as much as 30% and take as long as 24  months before peaking based on history.

While I'm enjoying (and benefiting from) this rally, I don't believe that it is sustainable.  There are too many indicators (eg. total market value/GDP, government deficit, Fed balance sheet, personal debt, corporate debt, etc) that are flashing "too high."   So I am being prudent and taking some profits off the table.

I've sold some of the total market indices (SPTM, VTI all sold, VOO  all sold, SCHB) and have taking profits on most of my peripheral holding (ie. shares of core holding purchased on dips).   Now I am starting to sell some core holdings.   Recently, I sold some Visa (V), Tesla (TSLA), Shopify (SHOP) and Apple (AAPL).    I have some sell orders for Microsoft (MSFT), Nextera (NEE) and Google (GOOG).    Due to all trades being commission free, I am scaling out 1-2 shares at a time, to benefit from the inevitable higher prices in the next few months.

I am waiting for some of my "value" purchases to recover to at least break even, and then start selling some shares.  Examples include Exxon (XOM), Occidental (OXY), Kinder Morgan (KMI) and Helmerich and Payne (HP).

Actually, I'm hoping, and would enjoy, the rally continuing for 6-12 more months.   Despite my skepticism, I have no complaints about the effect on my investments.   However, if the rally does continue for 6-12 more months, I am sure the market will truly be in "the danger zone."

For more on New Beginnings, check back Sundays for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC

Monday, January 06, 2020

Four Contrarian Investment Strategies

With the market near all time highs, it's hard to find good value stocks to buy.  My personal bias is to sell into this rally.

However, there are four sectors that I am only slowly selling or continuing to hold:

  1. Oil and Gas.  Tremendously beat up sector.  Some stocks in this sector are paying 5-7% dividends: OXY, WMB, KMI, BP, XOM  Others are at or near all time lows: CHK, MCF, NE.   I am not purchasing any more shares, but holding or slowly selling what I own as the mid-east crisis boosts oil prices.
  2. Gold and Gold Miners.   Gold has just reached a 6 year high.  With the geo-political issues, gold and gold miners could keep rising.   
  3. Biotech.   It has been a long winter for most developmental biotechs.  Fear over Medicare for All, Health Care reform, and price controls have kept these stocks down.
  4. Bitcoin related stocks.  I bought at the end of 2018 and have lost over 80%.  Some of these stocks have started to bounce back, as much as 100% of their lows.  I own OTIVF, MGTI, MARA, HBVTF, and NXTD
If any of these sectors should advance significantly, our investment portfolio would experience a nice windfall.
Disclosure:  We own shares of OXY, WMB, KMI, XOM, CHK, MCF, NE, OTIVF, MGTI, MARA, HBVTF, and NXTD,

For more on  Strategies and Plans , check back Mondays for a new segment.

This is not financial or investment  advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC

Friday, January 03, 2020

My Advice to New Retirees

Although I took early retirement 12 years ago, many of my contemporaries have just started retiring in the past year.

Here's my advice, three financial and one social,  to them based on my experience:

  • Take advantage of tax benefits in retirement.   After I retired, I became eligible for several tax deductions and tax credits which were phased out due to income thresholds while I was working.    I became a part time tax preparer and learned about my own tax situation while on the job. I didn't make much money, but I sure learned how to save a lot on my own taxes.   For most people, it is probably worth consulting with a good tax preparer/accountant if they currently don't use one.
  • Have 3-5 years of investment income needs in cash. For those without pensions or SS payments, the number is equal to 3-5 years of expected living expenses.   For those with pensions or SS payments, the nominal number is lower since pension and SS covers part of living expenses.   I retired in 2007 at the peak of the stock market.  I was fully invested.  Then came the 08/09 crash.  Whoops, it was a challenge to get by for the next few years until the market somewhat recovered.
  • Pay off all debt.   Having no debt eliminates a debt payment from living expenses. In 2008, I made the mistake of keeping funds in the stock market market instead of cashing out and paying off our mortgage.  When the market crashed, I had less money to pay of the mortgage.   The irony is I asked to refinance since I had always been timely in my payments.  The bank, which I won't name, refused since I didn't have regular income. So I told them to send me the payoff amount and let me close out the mortgage.
  • Learn to say "no."  It's amazing the number of people that want retirees to do their volunteer projects, since retirees have "lots of time, from not working" in their eyes.   Fortunately, I didn't have to say "no" very much since I gave the impression I wasn't going to say "yes" if they asked.   I did recant my "no" from one request, but it was for a paying job, and they met my salary request.
My final observation, but not advice, is that retirees soon wonder how they had time to work, given how busy they are with activities and interests in retirement.


For more on Reaping the Reward, check back Fridays for a new segment.

Despite the title of the post, this is not financial, investment or retirement advice. Please consult a professional advisor.

Copyright © 2019 Achievement Catalyst, LLC

Wednesday, January 01, 2020

Yield Curve Inversion Economics

"It's tough to make predictions, especially about the future" ~ Yogi Berra

Stock market peaks typically follow a yield curve inversion after 18-24 months.  Depending on which  yield curve, we are now 4-9 months past the inversion.  I expect a market peak to happen in the next 18 months, but I don't know exactly when.   So I am being cautious, taking some profits, and moving to more cash.

2019 was a great year of stock investments.   My plan is to protect some of those gains against a significant pullback in 2020.

For more on The Practice of Personal Finance, check back Wednesdays  for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC

Sunday, December 29, 2019

Scaling Out and Protecting Profits

"Danger, danger, Will Robinson!" ~ Robot from Lost in Space

As 2019 wraps up, I've made a conscious decision to sell some of our core stock holdings to lock in profits and increase our available cash.

Here are my reasons:

  • Fundamentals (earnings, P/E etc) don't support current stock valuations.   Stocks appear to be overbought. 
  • Several indicators show the market is overvalued.   The Buffett metric is at 145% for stock market valuation/GDP.   The metric peaked in 2008 at about 118% and in 2000 at 161%.
  • Debt (personal, corporate and margin) is at an all time high, fueled by low interest rates.
  • Expectations are high that the market advance will continue into 2020.
At this point, I am not exiting the market immediately nor am I exiting the market completely.   With stock trading commission going to $0, I plan to take about 10-20% of the profitable position out of the market.  Some positions I will take to zero. Others, I will remain 20-80% invested.  For the managed accounts, I will keep the amount invested at or near minimum requirements.

For clarification, I am not predicting an imminent decline.  Nor am I shorting the market.  However, I think the downside risk is much higher than the upside potential.   So I am willing to forgo some gains to sleep better at night...


For more on  New Beginnings, check back Sundays for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2019 Achievement Catalyst, LLC

Sunday, December 22, 2019

Investment Strategy - Near Term

The stock market seems overvalued.

Here's are short term strategy:

  • Keep 3-5 years expenses in cash and cash equivalents.
  • Keep intermediate funds (5-10 years) invested.
  • Keep long term fund in cash, ready to invest in a pull back or bear market.
At this time, the downside risk seems higher than the upside potential.  So we have reallocated accordingly.   If the market falls, we are protected.  If the market continues upward, our intermeidiate funds will participate.


For more on  New Beginnings, check back Sundays for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2019 Achievement Catalyst, LLC

Saturday, November 02, 2019

A Lucky Day

We were lucky today.

We went to our local ski resort to get our annual passes and have our skis tuned up.   While there, we participated in a free raffle and a free spin the wheel for prizes.   For the wheel spin, my daughter won a gift card and I won some ski related stickers.   After we got home, I get a call telling us that we had won second prize in the raffle.   I excitedly told the caller, "We never win!"

So much unexpected fun.

For more on  Reflections and Musings, check back Saturdays for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2019 Achievement Catalyst, LLC

Monday, September 16, 2019

Energy Investments

Today, our energy investments are seeing 5-20% gains depending on the stock.   I plan to take some profits but allow most to the positions rise 20-40% before more selling.  Overall, we are still down on most of our oil and gas stock investments.   So this advance will hopefully get us back to about even.

At this point, I expect the pop in oil prices to be short lived.  But who knows, it could last longer or go further.

For more on Strategies and Plans, check back Mondays for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2019 Achievement Catalyst, LLC