A Market Crash is a Golden Opportunity for our Children

Markets have always recovered to new highs after every crash.  Sometimes it just takes a while.

A crash is very risky for me since I am retired.   However, for our children, a crash would be a great investment opportunity.  After all, they have a 50+ years to wait for the recovery.

So if there is a stock market crash, our plan is to make significant investments in our children's accounts.   That way they can reap the benefits of the inevitable recovery.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Waiting for Bears to Capitulate

It's hard to predict market tops. However, I look for simple indicators that a market top is near. One of them is lack of bears, because they've all thrown towel.  

Right now there are still lots of bears.   In fact, the number of bears is still growing.    So no worries.

For right now.

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

Look at the Economy, not Politics

From 2009 to 2016, I was under invested because I believed the administrations policies would be a significant drag on the economy.   (Actually, the policies were a drag but in a good way to keep the economy from overheating.)   So I partially missed out on a great bull market advance.

Now the people with the opposite political beliefs are making the same mistake.   I know people who believe that Trump will soon bring down the market.   So they have deinvested from the market.  They are making the same mistake I did in 2009, investing based on political beliefs.

Instead, the economy is doing well, and Trump keeps it from overheating.  So I'll plan on the market continuing its slow advance, since no bubbles, with the exception of bitcoin, are happening.  And there isn't enough market cap in bitcoin to bring down the economy if there is a bitcoin crash.

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

Tax Loss Selling

Although it's still a ways from the end of 2017, I am already considering how we will create tax losses against our gains, while maintaining positions that I want to keep.

As background, the IRS has a 30 day wash sale rule that prevents investors from selling losses and immediately repurchasing the same stock.    An investor needs to wait over 30 days when buying back the same stock.  

One way to circumvent this rule is to buy a different stock, but similar in business.  An example would be to sell GE at a loss, and buy United Technologies as a replacement.    This would avoid the 30 day wash rule.

My approach is acquire or sell the subject stock, and then sell or buy the same stock 31 days (or more) later.  Of course the risk is that the stock will rise during that time.  So I tend to acquire first and then sell late.

Stocks I am considering for tax loss selling:  Tidewater, Seadrill, Contango Oil and Gas, and Under Armour.

Disclosure: At time of posting, we own shares of GE, United Technologies, Tidewater, Seadrill, Contango Oil and Gas, and Under Armour.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Anticipating a Flash Crash

With all the anxiety and concern about current  market valuations, I think there is a small possibility for a flash crash to occur, due to algorithm trades being activated by some event.   So I am putting in some good til canceled orders at 40-70% below the current price, just in case a flash crash happens.

I wouldn't mind owning more Amazon, Priceline or Netflix at 50% or lower than current prices.

Disclosure:   At the time of this post, we own shares of Amazon, Priceline and Netflix.

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

Waiting and Planning on the Sidelines

The stock market is looking very weak to me, i.e. ready for a pullback.

I've sold most of my non core positions that are profitable.  However, I am still waiting before buying back my sold trading positions.

So I am making short list of the actions I plan to take for a small pull back or a big correction.  ( I don't expect a bear market at this time.)

At this time, I plan to be patient.   Although, the market may rebound quickly, I am waiting for a further drop before making any significant purchases.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Why Isn't the Stock Market Crashing?

"It's the economy, stupid." ~ James Carville

With all the negative events of the past week, why hasn't the stock market fallen further?   Charlottesville, Barcelona, Finland and the Trump administration turmoil were all negative events.  These types of events would have caused significant market declines in the past.  Why not now?

Here's my reasons for the resilience of the stock market:

• The economy is continues to improve.  Corporate earnings are good.   Unemployment is low.   Inflation is low.  
• The economy is not overheating.  Companies are still cutting costs and not over investing in growth.  There doesn't appear to be any business frothiness.   In fact, the economic recovery continues to one of the slowest ever.
• No significant bubbles.  The only bubble I see is bitcoin.  Other than the bitcoin markets, there isn't any exuberance.   In fact, there is significant caution in most markets.
• No recession in sight.  Typically, bear markets coincide with recessions.   At this point, there aren't even small concerns about a recession.

Of course, economic conditions can change quickly, but right now the economy looks very positive to me.

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

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

Copyright © 2017 Achievement Catalyst, LLC

De-Risking But Staying Invested

I am clueless as to why the stock market keep advancing.  There is domestic turmoil, there are geo-political issues, stock market breadth is getting very narrow, and there is political gridlock even  though one party is controlling.  The only positive is that the economy, both global and US, continues to improve.

We are only one or two major negative events away from a significant market decline.

Until then, the market will continue to grind up higher.

I'm not a fan of completely exiting the market and going to cash.  However, I am willing to reduce risk by selling some stocks and taking some profits.  I may even sell some stocks at a loss, if I expect them to all further.

So I plan to sell my peripheral holdings, taking profits in my trading positions, and take profits to maintain accounts at minimum levels.  If the market declines, the pain won't be as great.   If the market advances, I will partially participate.

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

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

Copyright © 2017 Achievement Catalyst, LLC

What's Hot and What's Not

The stock market has become very discriminating.   Even though indices are near all time highs, many stocks are not.  In fact, there are many near 52 week lows.    So here is my perspective on what's hot and what's not.

Hot

• FAANNG -  Facebook, Apple, Amazon, Netflix, Nvdia and Google (now Alphabet).   Nvidia, Facebook and Apple are really hot.  Amazon, Neflix and Google have cooled a little but can easily recover.
• Priceline and Tesla - Both have pulled back from their highs, but I would still consider hot.
• Alibaba - At all time highs with earnings coming up this week.

Not

• Retail, especially apparel-  This sector is getting crushed, with many stocks at or near 52 week lows.   More downside risk that upside potential at this time.
• Oil - Many stock are hitting new 52 week lows.
• Materials - Weak and getting weaker.

Being a contrarian isn't working now.  Stocks in the Not category can't find a bottom and  keep going down.   Buying momentum is working.  Even if stocks in the Hot category correct, they quickly  rebound to new highs. 

So for me right now it's either go hot or stay in cash.

Disclosure:  We own the following stocks:  Facebook, Apple, Amazon, Netflix, Google (Alphabet), Priceline and Tesla.  Unfortunately, we own a bunch of oil, retail and materials stocks too.

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

To Buy or Not to Buy

After yesterday's drop in the market, it's tempting to consider purchasing some beaten down stocks.   Several stocks have fallen to 52 week lows and some have even fallen to all time lows.  On the other hand, several stocks have hit new 52 week highs and then fallen 10-20%.   Earnings season hasn't been kind to these stocks.

In my younger days, I've typically purchased the stocks near their 52 week low.  However, that strategy doesn't seem very promising at this time, since stocks near their lows seem to keep going lower.  Lately, I've focused on buying stocks that have been advancing and near their highs.   This worked well when I started in early May.  But recently, these stocks have fallen from their highs and some are below my purchase price: oil stocks, retail stocks, and biotech stocks.

Now that I'm retired, I don't have as much time to recover losses.  So I am a bit more cautious.   Articles like Cracks in the bull market: Amazon and 199 other S&P companies now in correction make me think it may be too soon to start buying.

So here's what I will be doing.   First, I am not buying the beaten down stocks near their 52 week lows, yet.  I am going to wait until the pain is so great that there is no hope, and then I may buy some.   Second, I will buy small positions in a few previously "winning" stocks, for example, Nvidia.  Third, I will continue to look for opportunities to take profits or otherwise de-risk our investments.

I still don't think the bull market is over, but I am hedging against the possibility that I am wrong.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Only Six More Years

Until our daughter goes to college.

It felt like forever until she got into kindergarten.   Now it seems it will be the blink of an eye before she goes to college.  Where did all the time go?

We'll definitely miss our oldest when she goes to college.  

Fortunately, we started saving for college the year we adopted her.    The savings should be able to cover costs for most colleges.   Should she be accepted to a more expensive school, we'll work to cover the additional costs so she can graduate without any student loan debt.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Good News is Bad News

This earnings season has been interesting.  It seems that several companies with excellent earnings reports have had their stock price beaten down significantly.   I don't get it.   Revenue and earnings beats are resulting in the stock going down.   The reason given is that the forward guidance disappointed.

Tomorrow that is going to happen one of our holdings, The Priceline Group.   It is already down $137 in after hours trading.   This phenomenon has also happened to a few other companies I am trading.   My expectation is that the drop is short term and the stock prices will recover since these are outstanding companies.

We'll see...

Disclosure:  We own shares of Priceline.


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

When It Rains...

It pours.

I typically do most minor home repairs, but lately, stuff is breaking faster than my pace of fixing things.

I still have a few not urgent plumbing repairs on my list.   Then this week, I determined my refrigerator gasket is deteriorating and found an underground rainwater drainage pipe has a break  Then today,  my son breaks the door handle on my spouses car.

My first two discoveries were already taking up significant time as I was figuring out how do to the repairs.   My biggest concern was the refrigerator, since a poor repair would have us lose a lot of food.   So I was carefully working out the details.

Now my son has added more complexity to my tasks.   It seems that replacing a door handle requires major, in my opinion, disassembly of the car door.    Again, a little risky if I don't do it correctly, since my truck is able to transport our entire family.

So I'll be very busy in the next week, figuring out if I can manage the work to minimize risk or if I should just have the professionals do it.

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

This is not financial or home/car maintenance advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

No Regrets for Retiring Early

"Lot less money, but a lot more time." ~ me on early retirement.

It's been almost 10 years since I took early retirement at 49.   Looking back, it was extremely challenging due to the Great Recession, and I gave up a significant amount of earnings.  So the question is, "Would I do it all over again?"    The answer is, "YES!"

Here are the reasons:

• I might not be alive today.  Five years after retiring, doctors found significant blockages in my arteries.  I suspect I may have had a heart attack due to stress if I had continued working.
• I received retiree health insurance from my company.  So I didn't need to find private insurance or use Obamacare.
• I could focus on what was best for me and my family, instead of what was best for the company and its employees.  This is much more rewarding for me.
• I had time to see my children grow up.  My daughter was three when I retired.  My son was adopted 6 years after retiring.   I didn't miss a moment, which all seemed to go by too fast.

Of course, we would be better off financially, if I hadn't retired.  But overall, I think it was a good trade off.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Bull vs. Bear Tug of War

With the stock market at all time highs, it is now a classic battle between the Bulls and Bears.  Some days the Bulls win, other days the Bears win.  It's back and forth, back and forth since neither wins with sustaining conviction.

Inevitably, the Bears will win and bring an end to the Bull market. However, for now, I think the Bulls have the (slight) advantage.   So I'm still staying in my core investments, although I will use rallies to sell some peripheral holdings and take profits.

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

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

Copyright © 2017 Achievement Catalyst, LLC