How Volatility Can Help

"Buy low and sell high." ~ Wall Street Adage

Volatility can be painful as the market seems to gyrate up and down.  However, I have found that volatility can be helpful, both buying and selling.

First, when the market takes a short term downward move, I can use the opportunity to purchase core positions on my buy list.  Also, I can purchase additional shares of stocks we already own.  This will average down our cost basis.

Second, when the market takes a short term upward move, I can sell some of the additional shares of core positions purchased when the market turned down.   Doing so will lock in some profit and reduce our effective cost basis.

Of course, there are trading costs associated with this approach and the costs can be a high percentage of the profit for small trades.  However, I currently have some free trades with one broker, which allows us to ignore the trading cost impact in the short term.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Time for Patience

"This too shall pass." ~ old adage

Yesterday's market volatility in response to the immigration ban reminded me of the need to stay calm and to remember my thesis for each investment.   Long term, the market responds to economic and earnings factors with the long term direction being upward.

Short term event driven movements in stock prices are general just noise, and may be opportunities to buy lower or sell higher.   Otherwise, the best action may be no action and waiting for the event to pass.

Patience is sometimes the best action.

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

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

Copyright © 2017 Achievement Catalyst, LLC

New Financial Metrics for Retirement

While working on my annual liquid net worth summary, I realized that the metrics I used prior to retirement may not be as relevant during retirement.  So I am looking at new metric options to quantify if I am meeting our retirement financial goals. Here are some metric options I am considering:

• Recurring income vs. annual expenses.   We've had pretty staple expenses over the past five years.   As I build our portfolio of dividend paying stocks, CDs, rental properties/REITs, annuities and capital gains, I will compare the income from these investments as a percentage of annual expenses. The target is greater than or equal to 100%.
• Longevity of annual expenses or 4% withdrawals.  There are calculators that show the expected years retirement savings will last at a specific withdrawal rate (with cost of living adjustments), and a specific invest return.  I will use a conservative return equal to the U.S. 10 year bond. The target is greater than or equal to 35 years.
• 4% withdrawal rate vs. annual expenses.  I will calculate the 4% withdrawal rate at the beginning of the year and compare it to our annual expenses.  The target is greater than or equal to 100%.

I will use one or more of these metrics to quantify our financial results starting this year.

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

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

Copyright © 2017 Achievement Catalyst, LLC

2016 Wealth Builder Ratios

A little delayed, but here is our year end 2016 Wealth Builder Ratios update. During  2016, the Dow, Nasdaq and S&P500 indices were up 13.4%, 7.5% and 9.5% respectively. My company stock was up 5.9%.  Our investment portfolio increased in value by 1.1%.

Overall, the investment return was poor versus the indices, primarily due to a high proportion on cash and the lower performance of my company stock.

For more details on the relevance of these ratios, please see this How Much Is Needed To Be Wealthy - The NUMBER.

Although I will continue to track these and previous wealth building metrics, this will be my last report on this blog.  I realized that after 9 years of retirement that wealth building should no longer be the strategy.    I will come up with a new measure, which I will track and report on a yearly basis,

Ratio and Target	2015	2016	Comments
Retirement Income to Salary Target=0.8 2007= n/a 2008= n/a 2009= n/a 2010= n/a 2011= n/a 2012=  n/a 2013=0.84 2014=0.88	0.79	0.79	This is the metric that I'm using which is based on a 4% withdrawal rate of the liquid assets in our retirement and savings accounts. The target I'm using is a 0.8 ratio, which would be 80% of our pre-retirement pre-tax income.   With the low return in our portfolio, we had no increase in in the ratio. As I write this post, I'm thinking I should revise this metric to better reflect the retirement income versus our spending/expenses.  Perhaps, I will show this as a net withdrawal percentage in future summaries.
Debt to Salary Target=0 2007=1.51 2008=1.46 2009=0 2010=0 2011=0 2012=0 2013=0 2014=0	0	0	We said bye-bye to our mortgage on May 20, 2009. Eliminating a mortgage payment reduced our monthly expenses by 24%.

My financial goals for 2016 were:

1.  Maintain a Retirement Income to Salary ratio >  0.8.  (below target at 0.79)

2. Maintain Debt to Salary Ratio at 0. (met target of 0)

(For reference, Salary refers to gross salary just prior to early retirement in October, 2007.)

 #1 was directly correlated with how well our stock, bond, and CD investments returns. Due to a high cash position and the lower return of my company stock, our portfolio had a return worse than the indices.

2016 was a another humbling investment year.   I continue to reduce my company stock holdings and look for opportunities to increase equity investments.  In addition, I am migrating towards building a portfolio of higher dividend paying stocks

 At this point, I am slightly optimistic about the economy and the stock market.

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

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

Copyright © 2017 Achievement Catalyst, LLC

The New Pain Trade

Markets have a tendency to deliver the maximum amount punishment to the most investors possible.  ~ Wall Street Adage

The current pain trade is buying into the current Trump rally, which very few people believe is sustainable.   After all, the bull market is long in the tooth, there is significant uncertainty associated with the current administration, and valuation measures, such as P/E, are at or near all time highs.  So money continues to stay on the sidelines,

However, if the market keeps grinding up, there will be reluctant movement back into the market, after 5%, 10%, 15% or more gains.  It's tough to be in cash as the market moves upward.  Eventually, the return of funds to equities may lead to euphoria, which will correlate with a market top, inflicting more pain on the most recent buyers.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Breakout or Breakdown?

Is this rally for real or is it a head fake?

After busting through milestone record highs mid week, the indices seemed to peter out by the end of the week, which begs the question of whether the rally can continue or has the market made a short term top.

So what's next?  My feelings are one of ambivalence, much like the market.   I expected more follow through with the Dow closing above 20,000 and the S&P 500 crossing 2300 (barely) for the first time.  However, there was no conviction or excitement, just a feeling of "meh," it happened.

For now, I think we're still at an inflection point.  Either direction is likely and movement will be influenced by the events, tweets, and actions of the day.    I still remain cautiously optimistic but ready to take advantage of opportunity whichever direction  the market takes.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Cities for a Comfortable Retirement

The 15 cities where you can live really well on a $60,000 posted at CNBC shares 15 locations that may be good places to consider for retirement from an income point of view.  Many of the cities are in the midwest; none are in the west coast or east coast.

There are some options that I consider pretty good, and there are a couple that I would not want to move to in retirement.  However, I would rather stay in our current location than move to a new city primarily for financial reasons.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Free College Education

I just found out I am eligible to audit classes for free at any public college in my state when I turn 60.  I checked with the local university and confirmed it was true.

Although I'm not 60 yet, I checked the courses at the college campus closest to me.    In the undergraduate course offerings, there were several topics I was interested in taking.   I have not yet checked the graduate courses but I expect that I can audit courses at the business school also.

Once I turn 60, I'll probably audit at least one course a semester, to take advantage of my free college opportunity.

For more on Reaping the Rewards, check back every Friday Saturday Sunday for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Lost the Battle of Batteries

Before we had kids, I was very frugal with batteries.   I only used batteries as necessary and often used rechargeable batteries to keep costs down.  My sister-in-law warned me that would change with our first child.   But I was still able to maintain some semblance of battery frugality.

However, with our second child, I've lost all control.   Everything needs batteries nowadays.  We probably go through a hundred different batteries a year...for toys, flashlights, games and various appliances. So I've given up.

I now just buy batteries in bulk from Costco when they are on sale about three times a year.

For more on  Crossing Generations, check back Thursdays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Another Department Store May Bite the Dust

Several large department stores from my childhood no longer exist:   Woolworth, Kresge, and Montgomery Ward.    It appears that Sears may soon join them.

In my younger days , Sears was my go to place for tools for great quality at a good price.  I bought my first sets of tools there, sticking with the Craftsman brand, which my dad also owned. I still use the Craftsman socket sets, screw drivers and pliers that I purchased over 30 years ago. They were great tools back when I just graduated from college.

However, I haven't been to Sears for over a decade to buy tools since there are a couple of home improvement stores that are much closer to me and their prices and quality of tools seem as good or better.

With my generation moving away from Sears and the new generations shopping at new online places like Amazon, Sears may soon join the list of former great department stores.

For more on Crossing Generations, check back every Thursday for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Avoiding Exuberance

Dow crosses 20,000 for the first time - January 25, 2017.

It's easy to get caught up in the excitement when an index crosses a number milestone. It feels good to see stocks rise.  The market sentiment is positive.  Signs of a market advance abound.

For me, it's a good time to step back and wait.   That way I don't chase the stocks I'm trying to buy and then watch them fall back.

That's what I'm doing now.   I'm going to wait for the excitement to die down or for my potential stock buys to fall back to my target buy points.    With the market volatility, that may be as soon as tomorrow.

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

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

Copyright © 2017 Achievement Catalyst, LLC

My Reasons to Stay Invested

Five reasons to stay invested despite heightened uncertainty by Jefferey Kleintop gives five logical quantitative based reasons to remain in the current market.   The reasons makes sense to me but are lacking in conviction.

So here are my (five) qualitative reasons for staying invested in this market:

Economic optimism is back.  Business leaders believe the future is bright.  They are hiring and investing in their businesses. Government created headwinds are expected to be reduced.

No irrational exuberance yet.  Although the stock market is near all time highs, this is the most unloved bull market I have ever experienced.   Unlike previous bull markets, no one talks about stocks at social gatherings.  Very few of my acquaintances are even interested in stocks.  

Still lots of money on the sidelines.  There is still a lot of cash waiting for the "inevitable" market crash.   I know of people who sold out of equities just before and right after the election.  This money may return on dips and keep the bull market alive.

Negative expectations are top of mind.  Lots of people expect a recession or market crash to happen in the near future.  Very few people expect the bull market to be sustainable much longer. (Except maybe George Costanza:-)  

Individual exceptionalism is valued again.  Well, maybe not valued yet, but at least it is no longer vilified.  It is now OK again to be a business owner, investor or capitalist to make money.  I expect more people to use the opportunities available, work hard and succeed.

Finally, I believe the stocks we own are of good companies that would rebound from any economic decline.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Vacationing All Year While at Home

The vacation norm is to travel somewhere and then pack in 16 hours of activities per day to relax.  We've done this with trips to Disney World, Florida, Washington D.C. and other areas.    Sometimes this leaves me more tired than relaxed.

Another option may be to take advantage of vacation activities while staying at home. Where we live, there are numerous activities and venues that allow us to try such an option. While we are not a vacation destination city. here are some of the activities and venues in our area:

Amusement park.   We have a very nice amusement park in our area, which includes typical rides and a large water park.  The cost of an annual pass is less than the cost of two adult admissions.   Since the park is only 15 minutes away, we can go for a couple hours and still have the rest of the day.

Ski Resort.  , We have a small ski resort nearby.   It's not the Rockies, but good enough for a beginner skier like me.   The cost for an annual pass with rental is about the cost of two days of skiing at a ski resort like Vail.   The ski resort is close enough that we can go for 2-3 hours and still have the rest of our day.  We expect to go over 15 times this winter.

Restaurants.  We have several top rated restaurants in the area.   Before going on my vegan/no added oil diet, we tried many of them.   Nowadays, since most are known for their steaks, we have not visited the recent additions.  But this may be a good option for the rest of the family.

Zoo.  We have a highly ranked zoo in our area.  The cost of a family annual pass is about the cost of two visits.  Normally, we go to see the animals but with a pass we can go more often and see the shows.

Seasonal events.  We have several regionally recognized events in our area.  My spouse and I attended these prior to having kids.  Nowadays, I just consider these traffic nuisances, but maybe we should consider going again as the kids get older.

We also have professional sports teams, live theater, and various museums close by to us.   I would not normally consider these venues as vacation material.   Of course, we can still take advantage of these venues for entertainment.

The two biggest benefits are doing vacation activities while at home are time and cost.   We don't have 1-2 days of travel time and avoid $1000-2000 in travel costs, which we can reinvest into having more fun at home.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Ways I Choose Our Stocks

Finding good stocks to buy can be challenging.  There are so many approaches, so much noise and so much data.   It's tough to sort through everything and narrow the list to a few good picks.

I used to evaluate the recommendation of investment services and letters and try to cherry pick a few stocks.   My success rate was very low.  In fact, more often than not the stocks would go down, some all the way to zero.  Then I tried buying stocks that were once high flyers and were beaten down.  My results were mixed.   Although some stocks were winners and some stocks continued to be losers.

During my retirement years, I've been experimenting with how to better choose stocks.   Here is my latest methods for doing so, which I feel are promising.

Borrow ideas from professional managers.    I have managed accounts that are run by proven equity fund managers in three strategies: growth, value and dividend growth.   I like to evaluate their stock portfolio and selectively buy additional shares in some companies.  Since they are putting money into their picks, I can easily evaluate the performance of their choices.

Focus on good dividend growth stocks with long histories of paying dividends.  Some of the ideas I get from our managed accounts.  Other ideas I get from articles that I read about Dividend Aristocrats, REITs, and high dividend payers.

Focus on stocks in beaten down cyclical sectors that should recover.   Energy is one such sector, since I believe oil and gas will be a major source of energy in my lifetime.  I started buying energy stocks too soon in late 2014, but have recently benefit from the recent recovery.  Biotechs and retail stocks are other sectors I am considering.

Finally, I am testing each of my picks by committing to a small position which I can track to determine if the new strategy is working.  So far the results are favorable, but inconclusive since the last eight years have been a bull market.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Disruption May Be the New Norm

"Change is the only constant in life." ~ Hereclitus, Greek philosopher.

Change is happening so fast now that it is disrupting the current status.  Examples are Amazon vs. bricks and mortal retail, Netflix vs. cable, and Trump vs. the politocracy.   We've already seen the results for Amazon and Netflix.  It's still way too early to evaluate the results for Trump.

The challenge with disruption is that initially it does not appear to be a big idea.  I think back to the beginnings for Amazon and Netflix.  Neither appeared to be big ideas.   And of course, very few people expected Trump to win.

However, I believe disruption will be more likely and more frequent than in the past decade.  Of course, the difficulty will be finding disruptions before they are recognized as such.  In my opinion, health care is has a high potential of being a disrupted business, given my brief interactions in the area and the intensive focus on the businesses.

We shall see.

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

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

Copyright © 2017 Achievement Catalyst, LLC

A Sense of Urgency

"The most successful people have the same twenty-four hours in a day that you do."~ Jay Samit

I've usually been a late bloomer.   I got married in my late thirties, started having kids in my mid forties, and will be an empty nester in my early seventies.  I didn't get my first major promotion until twenty years with my company.

My main divergence has been early retirement (late forties) and playing football (first freshman varsity letterman in my high school).    Other than these two, I've generally not been to rushed to achieve anything.  In reality, early retirement and football happened because I was in the right place at the right time versus any specific contribution on my part.

However, I am now feeling a much greater sense of urgency.    I am less than a decade away from full retirement Social Security benefits. Four years ago, I had stents inserted for blockages in my heart,  My daughter is only six years away from college.    There just isn't much time left for me.

First on my agenda is ensuring the financial security of my family. In the past nine years, I have established sufficient finances for a good middle class lifestyle for the next forty years.  However, I think there is probability for greater financial success.   I think the next few years may be the most opportunity financial growth, with a potential economic boom.  Perhaps, we may start a business that our children can take over when they are adults.

Second on my agenda is to enjoy what we have earned and saved.   We are taking advantage of the entertainment and festivities in our area, with memberships to our local ski resort, zoo and amusement park.   Each family membership is much less than the cost of a vacation an lasts several months to year.   We will also attend more arts venues which are kid friendly.  In addition, we will take at least one major vacation a year in a significant location.

Third on my agenda is legacy, how we will be remembered.  This area is still a bit fuzzy and work in progress.  However, I don't want to end up being a legend in my own mind.   I would want to be remembered well by my children and close friends.

The next decade or two may be all the time left to achieve these, which is the reason for my sense of urgency.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Are Retail Stocks a Bargain or Not?

"Everyone likes buying a bargain, but catching a falling knife is no fun at all." ~ The Wall Street Journal, 1/21/16

With the poor results reported by Macy's, Kohl's, Sears, and Target department stores, the retail stocks have taken a significant hit over the past couple weeks.  Many are near their 52 week lows and some have made new 52 week lows.  And some are paying annual percentage dividends in the mid to high single digits.

Very tempting, yet still risky since prices could continue to fall further.

My current thinking is to avoid department store retail, which I believe has the biggest downside risks.  So I am not buying Macy's, Kohl's, Sears or Target stock at this time.   Unfortunately, we already own J.C. Penney's, which is unlikely to rebound either.

To me, the biggest opportunity are off-price retailers, such as T.J. Maxx an Ross Stores.  These stores buy overstocks from department stores and sell the items at reduced prices.    However, neither has declined much, with Ross Stores still near its 52 week high.

The next best opportunity is specialty retail.   Several stocks in this sector are paying 5-8% dividends, meaning the downside risk is somewhat mitigated.  And I get paid to wait, for the eventual (hopefully) recovery.  Companies that I include in this category are Guess?, The Buckle, Abercrombie and Fitch,and Staples.

So for now, retail is a selective bargain, which I need to sort through before making a purchase.

Disclosure:  We own shares in J.C. Penney's, T.J. Maxx, Guess?, The Buckle, Staples and Abercrombie and Fitch.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Inauguration May Be a Buying Opportunity

There seems to be "sell the inauguration" recommendation among some traders.  If so, I may use the opportunity to put some of our kids' funds into stocks or index ETFs. After all,our kids have a 6 to 14 year horizon before initially needing the money for college.  That will be sufficient time for good stocks or indices to recover, if there is an inauguration correction.

I will wait until after the inauguration speech before making any buys in our kids' accounts.

For more on Crossing Generations, check back Thursdays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Investing in Companies Based on Leadership

There are great examples of  the leadership of a single person making a significant difference in a company.  Some great examples are Bill Gates, Steve Jobs and Jeff Bezos.  Investing in their companies at the beginning or even at the midpoint would have resulted in significant profits.

Who might be the current great business leaders?  Here are my votes:

Reed Hastings, Netflix -  This CEO has shown tremendous resilience and innovation with a company that started out as a DVD rental site.   Original content, streaming content... what's next?  Netflix is at or near a 52 week high.

Kevin Plank, Under Armour -  This CEO has built a tremendous company based on a simple concept of innovative athletic wear.   It was a shining star for many years.  Lately, Under Armour has fallen out of favor with it's stock near 52 week lows.  However, I still have confidence.

Sheryl Sandberg, Facebook - The former Google exec and COO of Facebook, IMHO, has been the driving force behind Facebook's success.   Facebook is at or near a 52 week high.

To me, these are outstanding corporate executives that make it a good decision to invest in their companies.

Disclosure:  We own shares of Netflix, Under Armour, and Facebook.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Prepare for the Worst, Hope for the Best

"I am prepared for the worst, but hope for the best." ~ Benjamin Disraeli

With the upcoming inauguration of Donald Trump, this may be a good time to be cautious and be prepared for the the worst, e.g. economic recession, stock market selloff, or a global trade war, which has been forecast by several pundits.  Who knows what may happen.   This may be a good time to have higher than normal cash/cash equivalents as a buffer, to purchase protective puts (downside insurance), or take some profits in select stocks should the worst economic scenarios happen.

On the other hand, the Trump administration may perform well above (low) expectations, which lead to economic expansion and continuation of the bull stock market.   In that case, it would be good to own stocks and other assets such as real estate.    So it may also be a good time to hold onto core position should a positive economic scenario occur.

In either case, it may be best to wait a few more weeks for the market to show some conviction in a direction.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Gold and Real Estate

I'm increasing my exposure to gold and real estate investments over the next few months.

My rationale is that gold and real estate will benefit from most economic scenarios.   If the economy does significantly better, higher inflation will return and increase the value of assets such as gold and real estate.  In addition, rents will also increase.   If the economy does poorly, the Fed will implement more quantitative easing (QE4) and inflate asset values again.

My plan right now is to buy gold miners and REIT stocks, primarily increasing positions in companies we already own.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Waiting for Buy Points

At this time, I am cautiously optimistic and making small purchases to add to or initiate new positions.

My late father-in-law used to calculate a reasonable buy price for a stock, put in a good-til-cancelled limit order, wait until the order was filled.   Although he sometimes missed out on stocks that ran higher, his system was a good one since he consistently outperformed the S&P index on an annual basis.

Lately, I've applied that approach to many of the stocks I am considering for purchase. However, I am not as rigorous at calculating a buy point based on fundamental factors. I base my target price on a combination of  technical factors and qualitative business assessments.

Using this methodology, I've been able to acquire some stocks at or near 52 week lows, despite the indices being at or near all time highs.

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

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

Copyright © 2017 Achievement Catalyst, LLC

A Real Estate Investment That May Be Too Easy

Becoming a landlord is just a click away posted at CNBC sounds too good to be true and leads me to think that a real estate bubble may be coming again soon for residential real estate.   When it's too easy to buy real estate and everyone is making money, it may be time to sell.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Hedging Interest Rate Increase with REITs

With the Fed indication of three interest rate hikes for 2017, the bond market and bond surrogate stocks (utilities, telecom, REIT) initially took a big hit.    However, as time passed, each of these asset classes began to recover.    Interest rates on bonds have declined from the peak and interest sensitive stocks have risen from their short term bottoms.

I'm thinking the market no longer believes the hawkish talk will become reality.   Perhaps, it is the Fed just jawboning to keep the market animal spirits from becoming too exuberant and creating a bubble.

In the past (e.g. 2014), it has been profitable to bet against aggressive interest rate hikes.  Perhaps it may be beneficial to do so again.   Last time, it paid off when I purchased some long (5-10 year CDs).  This time, I am considering buying REIT stocks, because I think REITs will benefit whatever interest rate do, whether they go up, stay flat, or go down.

If the Fed stays with the three interest rate hikes, the economy is much stronger - a win real estate and REITs.  If the Fed made an interest rate head fake - higher interest/dividend paying assets such as REITs will rise.

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

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

Copyright © 2017 Achievement Catalyst, LLC

What to Be When Grown Up

When I was a child, it was pretty easy to decide a path to a job in adulthood.

For me, it was going to college and then graduate school for a specific profession, in my case, medical doctor. This was the self-employed profession option. Or work for a large corporation from which I could retire.  This was the employee option.

I eventually chose the employee option, after majoring in Chemical Engineering in college.

Nowadays, I think it much harder for kids to choose a future career .

The landscape of jobs in the future is a fast evolving one.   Who knows if the job will even exist in 10-15 years from now when my kids graduate from college.  And who knows what new jobs will be created that don't exist today. My daughter has no idea what she wants to be when she grows up.

Maybe the new path is to own your future by creating you own job/business.

For more on Crossing Generations, check back Thursdays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Biotech Buying Opportunity?

"Buy low and sell high." ~ Wall Street adage

President elect Trump's comments about drug prices being too high at today's press conference has caused biotech and pharma stock prices to drop significantly.    Some stocks are at or near their 52 week low.

Although risky, I think that some it may be worth buying some biotechs that are significantly beat down.   It may be worth selecting about 10 different biotech stocks into which to put new or additional funds.    And then selling out when the inevitable near term rebound occurs.

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


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

Copyright © 2017 Achievement Catalyst, LLC

Waiting for FOMO Indicator

There is still a lot of cash on the sidelines.    I know of people who went to all cash prior to the election.  They felt the market would react negatively to whomever was elected   I  know people who went to all cash right after the election, fearing the ramifications of who actually got elected.   Some of these people are probably still in all cash.

They are patiently waiting for the crash they are expecting.  They believe there will be a better time in the future to reinvest.   Maybe they are right.

And maybe the market will just keep grinding up while they continue to predict a near term significant decline.   At some point, the FOMO (Fear Of Missing Out) factor will cause them to reinvest some funds.   Eventually, they will capitulate and put their maximum back into stocks.   Exuberance will return and then the market will crash.

I don't think we are anywhere near FOMO or exuberance.  So no worries yet.   If the market should grind up 20-30%, I expect people with mostly cash will start getting back into the market.  Then I will be looking for a top and correction.   But I think that is still a ways off.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Ways I Buy Stocks Cheaper

With the market reaching all time highs, good stock buys are getting more difficult to find.  Here are some ways that I use to buy stocks I want at lower prices:

• Sell out of the money naked or cash secured puts.  Selling a put is an obligation to buy 100 shares of a stock at the strike price. If I like a stock now, selling a put gives me the possibility to buy the stock at a lower price.  If the stock doesn't fall, I profit from the the put premium
• Wait for a pullback in the stock.  Stocks fluctuate.  I like to wait for a decline instead of chasing a stock. 
• Wait for a pullback in the market.   Markets fluctuate.   I try to discipline myself to make some buys when the market declines.

Of course, the risk is that the stock (or the market) doesn't fall to my buy price and I don't get the stock.  But that is a risk I am willing to take.

For a guaranteed lower price, some people can also buy their own company stock at a discount to the current market price.   Unfortunately, I never had this option, or I would have used it.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Ways to Benefit from the Strong Dollar

The  stronger dollar may be bad for U.S. based multinational companies, but it is a boon for U.S. residents.   Here are some ways one can benefit from a stronger dollar:

• Travel outside of the U.S.  With a stronger dollar, one can buy more foreign currency, which results in lower food and lodging costs.   One doesn't even travel far.  Going to Canada and Mexico is now cheaper.
• Buy foreign currency ETFs.  The dollar strength will eventually subside, leading to stronger foreign currencies.   One can profit by buying and owning foreign currencies now,
• Buy foreign stock ETFs.  Several foreign country stock markets are hitting new 52 week highs in local currency, but not in dollar denominated terms.  Once the dollar weakens, these ETFs will get an additional boost in value.

Of course, imports will also get cheaper, which may help when buying a foreign made car.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Selling into the Possible Biotech Rally

Biotech stocks, which have beaten down over the past couple years, seem to make a selective comeback.   Over the past few weeks, I've had a few biotech stocks pop 15-25% in one day.  In absolute terms, the gains are small, since many have low single digit prices.

Over the years, I have dollar cost averaged down on several positions.  As the biotech resurgence is taking place, I will use the opportunity to sell the lower priced shares at a profit, while holding the high cost shares for longer term gains.

That way I will reduce my cost basis for positions I keep, mitigating the downside pain if the biotechs should fall again.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Buying Out of Favor Stocks

Even with the indices reaching new highs, there are good stocks at or near 52 week lows.   One sector that seems particular beat down is retail, with dismal numbers from Macy's and Kohl's last week.  Over the last couple weeks, I've been taking small positions in specialty retail stocks, specifically Staples, The Buckle, and Abercrombie & Fitch.  Not only are they near or at 52 week lows, they are paying 6-7% dividends  I'm betting that they don't cut their dividend and will recover in 2017.

Disclosure:   We own shares of Staples, The Buckle, and Abercrombie & Fitch.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Skied Moguls Successfully

"Life's too short to drink cheap wine." ~ my college roommate

Our local ski resort has relied on making snow the entire winter, often running the snow making blowers for 24-48 hours.  This results in the creation of moguls since the snow builds up in a limited area.  Over time, the moguls are groomed flat, but initially, the slopes are pretty bumpy.

Although I've progressed well in the past two years, skiing the moguls was a new challenge for me.  My daughter, who has the same years of experience as me, did better than I did, only falling a couple times.   I fell about half the runs and then finally figured it out in the last run.   I needed to start slower at the top, and ski more down hill, instead of across the slope.  That way, I have more control.

My last run was the best run

Unfortunately, the temperatures will be going into the 60s this week.  So I may not be able to test my abilities until next weekend or later, when temperatures drop low enough for more snow making.

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

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

Copyright © 2017 Achievement Catalyst, LLC

The New Regime

This chart shows major changes may be coming.



I'm looking forward to see if this is change for the better...or not.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Change I Can Hope For

I read this quote in a recent investment analysis:

"…it is increasingly obvious that we are about to experience a profound, president-led ideological shift that will have a big impact on both the US and the world.  This will not just be a shift in government policy, but also a shift in how government policy is pursued.  Trump is a deal maker who negotiates hard, and doesn’t mind getting banged around or banging others around.  Similarly, the people he chose are bold and hell-bent on playing hardball to make big changes happen in economics and in foreign policy (as well as other areas such as education, environmental policies, etc.)."

"...new administration hates weak, unproductive, socialist people and policies, and it admires strong, can-do, profit makers.  It wants to, and probably will, shift the environment from one that makes profit makers villains with limited power to one that makes them heroes with significant power."

From "Reflections of the Trump Presidency, One Month After the Election" by Ray Dalio, founder of Bridgewater Associates hedge fund.

Disruptive innovation has finally reached the public sector.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Searching for Pirate (and Other) Treasures

For Christmas, I received a metal detector, which I wanted to get when I was kid.  While I don't think I'll find much using it, I thought it might be fun to do with the kids occasionally.

Here are some of the searches that I plan to do:

• Legend has it that a pirate buried gold at a park near the river many years ago.  I've applied for and received a permit to use a metal detector in the park.   In addition, this park is the site of several festivals and music performances, which may yield other finds.
• Fourth of July festivals.  I'm guessing people are always dropping loose change at such events.  While we won't get rich, it will be fun to find a few coins.
• Cross country meets.  Several parks host cross country races from multiple schools.   
• Yards of older houses.  Apparently, old coins from previous residents are normally found. We used to live in a house from 1919, but now we live in one from 1988.

Earlier this week, we did a dry run at a picnic area in the park.   We learned that buried finds and hard to locate and are usually worthless (e.g. pull tab).   So I think we will focus on surface items, that may have been recently dropped.

For more on Crossing Generation, check back Thursdays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Not Chasing This Market

With the begining of the year rally, several stocks are running away from my buy point.Though I'm tempted to just buy the stocks, I'm resisting and going to wait to buy them at my desired price.  It's too easy to get caught up in the enthusiasm and have buyer remorse when the stock price reverses.

So I continue to be patient and wait.   And I will wait.

In the meantime if the market keeps going up, I will use the opportunity to sell and take some profit in current holdings.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Credit Card Used Fraudulently

On New Year's Day, I happened to check my e-mail and found a fraud alert notice from my credit card company.  Although the e-mail looked legitimate, I decided to first check my card account online.  Sure enough, there were a dozen fraudulent charges the previous 2 days amounting to $17,000.  So I called the number on the back of my card to report the issue.

After answering numerous identity questions, I provided the fraudulent charges to the representative.   He agreed that the charges were fraudulent and told me the charges would  be removed in 2-3 business days.   In addition, my card was cancelled and a new card was to be issued.

I checked the next day and 2/3 of the charges had been removed.  One day later all the fraudulent charges had been removed

First, it was fortunate that I checked my e-mail and read the fraud alert notice.  Second, it was good that I addressed the issue so quickly.  I'm guessing it would have taken more effort and time to correct the charges if I had identified them when I received my statement.

At this time, I'm going to check my online account a bit more frequently.   In addition, I will check with the credit card provider on more strict fraud checking criteria.   The fraudulent charges were not normal for the account, and most of them should have been denied,

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

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

Copyright © 2017 Achievement Catalyst, LLC

Using Regression to the Mean to Profit in the Short Term

This market as been particularly frustrating since it is showing no conviction in a particular direction.   We are truly at an inflection point.   However, I still think there is opportunity since I believe in the phenomenon of regression to the mean.

Here are two opportunities I am considering:

• Buying foreign currency ETFs.   The dollar is at or near multi-year highs versus the Euro and the Yen.  This isn't sustainable in the long term.  Over time, the dollar get cheaper versus foreign currencies.
• Buying stocks in out of favor sectors.    Retail, utilities, consumer staples, biotechs and REITs are out of favor sectors at this time.   Several retail stocks are at or near 52 week lows.   Many REITs are closer to the 52 week low than the 52 week high, and pay 4-7% dividends.  If the economy improves, these stocks will do better also.

For both cases, I have selected some ETFs and stocks into which I will slowly trickle funds.  That way if I'm early, I will still be able to buy some at lower price.  If my timing is right, I will have a small position, but it will be profitable.

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

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

Copyright © 2017 Achievement Catalyst, LLC

These Will be Interesting Times

We are at an inflection point.   One point of view is that we have moved into an unrecoverable death spiral.   The other point of view is that we have restored elements that enable opportunity for exceptional results.  To me, which scenario better reflects reality will be unequivocally clear by the end of 2017.

It will be interesting watching the events unfold over the next few months.  My hope is that 2017 will create opportunity for exceptional results, but I will also prepare for 2017 moving into an unrecoverable death spiral.

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


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

Copyright © 2017 Achievement Catalyst, LLC