For investors: better returns, no management fees, and better tax sheltering

For those interested in my investing services (managing your private IRA account etc), this is an edit of a private email I just sent someone on that topic: /////

Hi, as for getting “better returns” (than what you have been getting lately with your 401K, IRA, and robo-trading from Betterment), “better returns” is my primary specialty. Plus, perhaps I can make some useful comments on some of the other issues you raised. First, I will make a couple quick points on those other topics.

Regarding management fees, I have not built my “authorized trader” service around typical “management fees.” Instead, I simply use a profit-sharing model. In other words, there would never be any “out-of-pocket” cost to you at all (in the sense that your only expenses are already covered by the prior profits generated).

As for taxes, I generally recommend that people consider maximizing their use of tax shelters such as IRAs and tax-exempt trusts (such as “charitable remainder trusts”). CRTs are similar to Roth IRAs in terms of sheltering the ongoing investment profits from taxes, but without the typical restrictions of Roth IRAs (especially when it comes to receiving money from out of an account prior to age 59 & 1/2 – or whatever they change it to as time goes on).

Another nice thing about CRTs is that the implications for your personal tax returns would be extremely simple (since they are not subject to “early withdrawal penalties” and related documentation). Further, CRTs also offer a potential tax deduction when you create them. If that is not appealing for tax year 2018, then of course we are only 2 weeks from 2019….

Next, for any funds you can control, my current strategy would be to set me up to trade anything that can be traded (such as the IRA) and to shift anything else to cash / “near cash equivalents” (money market or very short-term treasury bonds). With 401Ks, people often have very limited alternatives within that structure, so you can just either “park” those assets in to cash for now or “roll over” the 401K, probably in to a “traditional IRA.” As for robo-trading through Betterment, I am not a fan….

As for your current positions, they are rather different from mine (with a minor exception in regard to metals). As I have noted on facebook in a few places, I have been taking some positions in SLV and USLV lately (and in fact I currently hold a few shares of GLD). Other than metals, I have been primarily “shorting” a few of the major indices of the US stock market plus taking a series of short-term “long positions” in US bonds (though I currently do not hold any). Some examples are in this link: http://allycm.com/order%20history%20for%20account%20opened%20November%209%202018.php

Ultimately, regarding “better returns” in particular, I’m not sure what you comments of mine that you have seen or not. I posted yesterday on Facebook that an account I opened on 10/4 had exceeded a 32% percent gain as of late Friday. The week prior, it was up “only” 23.6%, and the sudden large profit was mainly based on taking advantage of a notable “set-up” that I had posted about on Thursday while markets were open. (As you probably know, I consider Friday’s market activity to be only the latest wave of much larger developments).

As another example, on 12/8 (a week ago), I posted that another of mine just passed a 50% gain in just under 1 month (since the account was opened on 12/9). The link above is for that account.

The methods used in each of those accounts are a bit too aggressive for most IRA investors (though generally legally-compatible with IRA accounts). So, the main “take-away” point is that in the last month or two, overall I “nailed” the drops in stock prices plus the more recent rallies in bonds and metals.

For now, I will also make just a very brief reference to my published forecasts going back to 2003. I gave lots of warning about the crisis of 2006-2009, detailing in advance what would happen regarding global fuel prices, stock markets, and lending markets (which in turn produced huge changes in real estate prices). I also published forecasts of the stock market rebound that started in early 2009- just days before the “bottom” in US stocks.

So, I have been trading for a long time (since 2002) and I have learned a lot in that time- even though my long-term forecasting has been quite solid from the start. I also am very clear what my presumptions are regarding any particular forecast or strategy, which is very useful in case the presumptions later get violated.

The most notable example to me is that when I forecast the rebound in global stock prices in early 2009, I did not anticipate that crude oil production in the US would triple within just a few years. In fact, I expected it to continue to drop. The huge increase in US crude oil production violated one of my key presumptions and resulted in that rebound lasting MUCH longer than what I had referenced in early 2009 prior to it starting. Further, that huge increase in oil production was not just a massive benefit to the US economy and stock market, but also internationally.

However, all developments are temporary. So, just as stock markets in Europe has not yet recovered to the point of their highs in 2000 (or Japan’s in late 1989), I expect similar developments in the US. I expect the highs of 2018 in US stocks to hold for not just years but decades.

To me, current conditions presents the most lucrative opportunity in my lifetime- apparently far more profit potential than the 2007 “crash.” Unless there is a MAJOR shift in the global energy market (as in the widespread use of a technology that renders fossil fuels obsolete), I expect the tide of retiring baby boomers to… sell. Stock prices (and many prominent financial institutions) are poised to be “crushed.”

Incidentally, my own long-term targets include relocating outside of the continental US (or at least having plenty of financial independence to do so in the event that I desire it). I would not surprise me if you had similar interests.

Let me know your thoughts and interests.

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