Revere Asset Management
President & CIO
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Daniel Stewart is President & CIO of Revere Asset Management and has been providing financial services and portfolio management for over twenty years. Revere Asset is a Fee Based RIA which Always Acts as a Fiduciary in the Best Interest of its Clients. Prior to joining Revere Asset Management, Dan advised on investment portfolios exceeding $200M. He is also well versed in comprehensive planning including corporate, individual, and estate planning.
Dan joined the NorAm Capital team in 2010 to create and manage their Private Wealth Management firm. This eventually led Dan to buy the business and rename it Revere Asset Management. He graduated from The University of Texas at San Antonio with concentrations in Finance and Accounting. Dan has passed the CPA Examination on the first attempt and subsequently earned his CFA® Charter (Chartered Financial Analyst).
Dan, a native of San Antonio, Texas, is married with 3 children. Dan played NCAA tennis on a full scholarship at Vanderbilt University. He played professional tennis on the United States and European circuit and was then the Head Tennis Professional at both the Retama Polo & Tennis Club and Thousand Oaks Indoor/Outdoor Racquet Club, in San Antonio, Texas.
Chartered Financial Analyst (CFA®), BBA in Accounting
Assets Under Management:
Fee Based Only - Fiduciary with No Conflicts of Interest
#Yes Primarily Term
No information presented constitutes a recommendation by Revere Asset Management, to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities by Revere Asset Management. Revere Asset Management does not offer or provide any opinion regarding the nature, potential, value, suitability or profitability of any particular investment or investment strategy, and you are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.
There are many ways to invest in gold from ETFs, like the SPDRs Gold Shares, ticker GLD, to gold futures contract, to physical gold itself. If you are considering it a long term hold and hedge against monetary policy, then I suggest physical gold and silver. This way, you do not have the ongoing carrying costs of a fund or futures, but do have to figure out secure storage. In fact, I recommend to my client that they hold 10% of their assets in physical gold just in case this grand Fed experiment blows up and we experience high inflation.
For midterm over a couple of years (or short term if you are active), then the paper gold ETFs work well. As stated above, you can own GLD or even the gold miners via the VanEck Gold Miners, ticker GDX, or the VanEck Junior Gold Miners, ticker GDXJ. The miners will be somewhat more volatile than GLD, but are based upon the business of gold and gold mining, whereas GLD is based more upon the spot price of gold. And there are other gold ETFs, even leveraged gold ETFs, but I wouldn't recommend those except for active traders.
To be successful in gold futures, you must have knowledge of how futures contracts work, which gets complicated. And GLD is well correlated to the spot price of gold. So based the way you worded your question, I would recommend physical gold or gold ETFs, or some combination thereof.
If you decide physical gold is one of your solutions, Dillon Gage (Google them) is one of the most reputable gold companies I know. I use them regularly for myself and clients. You can have your physical gold delivered to your doorstep and your are not responsible until you sign at delivery. I have done my due diligence and know the CEO of the company and the President of the Metals Division.
Storage can be an issue, but if your purchase is large enough, DG does have fully insured storage facilities both inside the country and in Canada. I believe the storage fee ranges from .45% to .65%, depending upon volume. This is "allocated" gold versus "unallocated" gold, which means they are your own specific coins or bars, not a promise of a certain amount of gold. And with 48 hours notice, you can go visit and inspect your gold at their vault with proper ID. Many big investment banks provide storage for "unallocated" gold which means they give you a paper certificate of the gold they owe you and in what form, but it is not your own specific coins/bars.
Even if you decide to store in a vault, you should always keep some on hand that is easily accessible. At least one person you trust should be aware of your hiding place so if you get hit by a bus, some new homeowner doesn't find an unexpected windfall. You do need to be clever how you store on site and I never discuss this via email or text, but small safes in a wall are not usually adequate because the thief can simply break the sheet rock, take the safe, and figure out how to open later. Behind pictures and in the bedroom closet is the first place they will look.
I tried to be as detailed as possible because there are many variables and many people don't think the whole process through. But I do think you are on the right track considering owning some portion of your portfolio in gold and it is not correlated well to stocks. Just don't go overboard. The only ex-rich people I know are the ones who went too top heavy in a particular asset class because they thought they had it all figured out.
Just as an interesting FYI, it has been in a downtrend as of late and just recently has been trying to break out to the upside. So, odds are it is a good entry point for physical gold and is even getting close to a buy point on the ETFs if it can break through resistance, which is it currently just under.
I think you have probably heard enough of my rants, but I do follow very closely. Best of luck, Dan Stewart CFA®
If you are simply buying and holding without any type of sell discipline to control drawdown risk, then moving a certain amount to cash might be prudent for you if it is scaring you too much. Some things are not all about money, but quality of life. So you could move all to cash or say, 50% with the remainder in the markets, or you could institute a strict sell discipline for all of your positions.
Be wary though because there are "indexed" annuity salesmen that will feed upon your fears promising you "most of the upside with none of the downside." While it is true you won't get any of the downside, you won't get "most" of the upside either, and will likely get around 3% to 3.5% over time. But you are locking in your money for years.
So with the 50-50 approach, you could ladder some CDs between 4mo to 18mo depending upon each months yield for emotional well-being. Normally the discount brokerage firms get their inventory Monday afternoon or Tuesday morning depending upon the brokerage house. If you wait later in the week, they will have already been picked over and you are better off waiting until early the following week. You will make around 1.6%+ if done properly but you won't lose. There are even FDIC insured CDs that guarantee the principal but the interest crediting is linked to an equity index like the S&P but with a cap. This is very similar to an indexed annuity but with no big surrender penalties, upfront hefty commissions, or salesmen. They are primarily for the fee based side of management but you need to shop & compare them. And you would spread these out over 2 year, 3 year, and 5 year. This way if the market goes up in the first two or even 3 years, but then goes down hard, you will make money on the first 2 and simply get you money back on the 5 year. Conversely, if the market has a major correction early but then recovers, you get your money back on the 2 year, possible make money on the 3 year, and make money on the 5 year. You could mix these various CDs with half of the money so that at the very least, you know that you will get your $400k plus some nominal interest. Then with the other half, you could have a fairly conservative equity portfolio.
The other option is to have your portfolio actively managed by someone who employs a sell discipline thus limiting drawdowns. They move a portion to cash, hedge, or a combination thereof during market duress. You will not make quite as much as the index on the way up but have downside protection. It is called risk-adjusted returns. I believe you control risk first, and make the returns second. Most of my clients are at or near retirement and cannot afford another 2008.
Lastly, the super-cycle of dropping interest rates from 1981 is over and rates are on the rise. This means the bull market for bonds is likely over with the exception of a few short term "flights to quality" during equity market selloffs. But the risk profile of longer term bonds is significantly higher than it was just a year or two ago. So I do not subscribe to having a pie chart based upon your age & station in life and just holding on & hoping for the best because the risk profile of the assets themselves change over time. So it is more about the risks in the assets than your "risk profile" which you intuitively understand based upon your question. And with these artificially low interest rates, there is truly no such thing as "safe money" until interest rates rise and normalize, which will be years. Again, this is due to the cost of living rising faster than the interest received. I personally cannot just sit in cash & let my purchasing power whittle away for a slow, consistent loss (buying power). I will, however, use cash as a defensive position during hard selloffs.
These are the things that you must think about and are strategy questions you must answer for your family. For me though, I believe it is about strategy, not products or which funds.
On a mechanical issue, you should almost certainly roll your 401ks into IRAs for a whole plethora of reasons - lower costs, virtually unlimited investment choices, more control especially on distributions, etc.... This would be true unless you have a complete wide open, full brokerage 401k and the employer pays all or most of the costs. Most employees don't realize that they share on a pro-rata basis most of the 401k plan costs. So if you have a bigger balance than most, you are paying slightly higher costs than most, and you are retired. Therefore I would open up an IRA at a discount brokerage firm and do a Custodian to Custodian Direct Rollover. Open up the account & get your account number, then go to your 401k provider/administrator for the paperwork to initiate the transfer directly to the new custodian. If you don't do this correctly & they send a check to you to do a 60 day rollover, they will automatically withhold 20%. Then you will have to come up with the extra 20% out of pocket for a "100% rollover." The withholding will be netted against your taxes and you will likely get a big refund (of your own money). So just be sure to do a direct IRA rollover which will give you more control, lower fees, and much greater choices.
Gave you a lot to think about. Best of luck, Dan Stewart CFA®
Having flexibility in retirement is an advantage and having all three wouldn't be too difficult. But without knowing your age or income levels I cannot give you sage advice. As a general rule though, the younger you are and the lower your tax bracket, the more advantageous a Roth is. This is because you have more time to compound & grow your assets to make up the out of pocket tax liablity of contributing to a Roth versus a before tax retirement account.
There are also income limits that may preclude you from contributing to a Roth. You definitely want to get the 6% match, and depending upon how good your 401k is - investment choices, whether you have a full brokerage options etc... - would also affect your decision. And you are doing the right thing by rolling your old 401k into an IRA for flexibility, lower fees, and virtually unlimited investment options. Each time you change jobs you should roll the 401k into this recepticle.
Your thinking is good though, and your decision is dependent upon your income, your current 401k set-up & options, age, income level, expected retirement date/age. So again, I need more information to give you solid advice other than the obvious of saving as much as you possibly can for retirement.
Sorry couldn't be more help, Dan Stewart CFA®
Sounds to me like you might need some professional help. Be sure to get someone who is fee based and acts as your Fiduciary, not someone who works on commissions etc... But to answer your question, if you are talking about a taxable account when you say "investment account," it really doesn't matter versus the home proceeds as they are both after tax money. So whether you take form one pool or the other, has no bearing on taxes unless you are talking about selling something in the investment account to pay the tax. Then is could have a bearing. I would not take an extra IRA distribution to pay the tax.
If you are really unsure and don't know, probably the easiest safest alternative would be just use some of the sale proceeds from the home if you are selling anyway. Again, if we are talking about material amounts you really need to speak with someone knowledgeable in taxes - estate, investment, & income all 3. If you want to reach out to me to pick my brain I can probably quickly answer your questions with just a little more detail. I just hate to give you bad advice as I am a little unclear of what you mean, especially by "investment accounts" and whether you have already "sold" or intending to sell the house anyway or would be doing so to pay the tax.
Hope this help and best of luck, Dan Stewart CFA®
You subtract your Original Costs Basis (what you paid for the stock) from the Sales Price to determine the gain or loss. Your holding period will determine how you treat the gain/loss and the applicable tax rate. If it is less than 1 year, it is considered a short term gain or loss, and if held for a year or more, it is a long term gain or loss. Short term gains are taxed at your ordinary income tax rate, and long term gains are taxed at your applicable capital gains tax rate not to exceed 20%.
But it is a little more complicated than that with regard to taxes as you need to consolidate all of your like-kind gains & losses. So at the end of the year in all of your taxable accounts, you will add all of your long term gains & losses together for a net long term gain or loss. You will then do the same for your short term gains & losses. If you have net gains in both categories, you will then simply pay the appropriate capital gains rate for the long and short term gains. If you have both losses, then you can offset $3,000 or ordinary income using the short term losses first, and then carry the remaining losses forward keeping their character (short or long term losses) to offset future gains.
However, if they are different, meaning you have a net long term gain & a net short term loss, then you net those together for a either a net long or short gain or loss. If gain, you pay the appropriate tax rate. If loss, offset $3,000 of ordinary income & carry the rest forward to offset future gains.
The easiest thing to remember is whatever is worse for the taxpayer is the rule. That is why the IRS wants you to use the short term losses against ordinary income first because they would have more "value" offsetting future gains than long term.
But if managed properly, you will pay a lot less in taxes than you might think even during years of solid gains. You should do tax loss harvesting around late November early December. This is because many others will begin to do their loss harvesting & the things that have declined during the year normally will come under even more pressure in mid to late December.
This may seem complicated, but once you get used to the process, it is easy. And it will help you minimize taxes. If you have any questions regarding my (confusing) explanation reach out to me.
Hope this helps and best of luck, Dan Stewart CFA®