True Contrarian Investments LLC
Steven Jon Kaplan began TrueContrarian.com in August 1996 as a weekly blog and later expanded this to a daily newsletter with intraday updates in February 2006. He has been trading his own account, and those of family and close friends, since 1981, and handles separately managed accounts for qualified clients. As a registered investment advisor, Steve charges a 20 % performance fee on net profits and no management fees. He has been quoted in Barron's, Market Watch, Dow Jones Newswires, Seeking Alpha, Kitco, and elsewhere and has appeared on Market Watch cable TV with Stacey Delo.
Steven's goal is to identify those assets which are farthest away from the best estimates of their realistic fair-value levels. This is done through designing algorithms which examine the most reliable signals in the financial markets. These include insider buying relative to selling; investor inflows and outflows; media and advisors' sentiment; and intraday behavior especially near multi-decade tops and bottoms. He studies historical interrelationships to mathematically identify which divergences from typical behavior are pointing the way toward essential trend changes.
Steve enjoys running with the New York Road Runners Club, composing and performing on piano and voice, writing stories, and traveling to unique places. He enjoys hearing from anyone about a wide range of topics, so please let him know what you think about the web site or whatever is on your mind. You can find his music on ReverbNation.
BES, Electrical Engineering and Computer Science, The Johns Hopkins University
Assets Under Management:
20% of net profits; zero management fees.
True Contrarian Investments LLC
Steven Jon Kaplan explains why investors repeatedly fool themselves.
Steven Jon Kaplan: April 2010 conference
There is nothing similar about these two except the superficial similarity in their names.
There are retirement accounts which employers can set up for their employees. These include 401(k), 403(b), 457, and Simple IRA plans. The employer makes a contribution and matches the employee's salary reduction up to a certain percentage. Employees are allowed to contribute additional non-matched funds deducted from their salaries, some of it before-tax (causing a lower tax bill that year) and some of it after-tax (not affecting that year's taxes). Thus, a Simple IRA is just like a 401(k) but with simplified rules for employers who are small and don't have the resources to set up a 401(k) plan.
There are retirement accounts which individuals can establish for themselves independent of their employers. These include Roth IRAs, traditional IRAs, and similar plans. Roth IRAs usually grow best over time since they have no taxable withdrawal problems and no required minimum distributions.
There are also self-employed plans like SEP-IRA, Keogh, and solo 401(k) for those who own their own businesses and want to have the equivalent of a 401(k).
You didn't say how many children your have or whether you have any grandchildren. If you want, you can give up to 15 thousand dollars per person per calendar year without filling out any paperwork or paying any gift taxes. You can do that immediately without having to wait until you die.
If you prefer to wait then if you are still working you should put the maximum $6500 into a Roth account each year and $6500 for your spouse. If you give your children, grandchildren, friends, or others Roth accounts then they can grow them tax-free throughout their lifetimes. They would only have to make a small annual withdrawal based upon their life expectancy according to the IRS table. The younger the recipient, the longer they have to grow it tax-free. Be sure to list a specific beneficiary or a set of beneficiaries for each of your accounts.
If you have any non-Roth retirement accounts then you should be gradually shifting them into Roth retirement accounts. Otherwise your heirs will have to pay taxes on all money withdrawn from your traditional IRA or 401(k) or 403(b) accounts which makes them much less valuable. You can convert whichever amount each year that will not put you into too high a tax bracket.
A defined benefit plan is much better for an employee, since you know exactly how much money you will get in a pension. With a defined contribution the employee has to decide how to invest the money which requires difficult decisions, and you have no idea how much it will be worth one or five or ten years in the future.
From an employer's point of view, the defined contribution plan is much better since it removes the fiduciary investment responsibility of the employer. That is why, since the law was changed in 1981 to permit defined contribution plans, most employers have switched to it. It removes the employer's responsibility and switches it to the employee.
Paying a performance fee is definitely illegal by SEC rule 205-3 which specifies that this is permitted only for qualified clients with a total net worth of at least two million dollars not counting a primary residence, or if the advisor has at least one million dollars of money invested by the client. Such an agreement must be made in advance, and should never be done immediately prior to a trade.
For a sophisticated investor, paying zero management fees and 20% performance fees can be a superior method of compensation so an advisor only gets paid when is client comes out ahead. However, only the wealthiest clients qualify for this kind of fee structure.
If we look back at the history of bear markets in the United States, then they were usually preceded by lengthy, strong bull markets. Those bull markets encouraged most investors to pile into the stock market and into high-yield corporate bonds, with the highest concentrations close to the tops. We can see that recently with all-time record inflows into U.S. equity funds--especially passive equity funds including ETFs--in 2017. Thus, as each bear market begins, people have huge percentages of their money in the stock market.
The bear market always proceeds in a manner which discourages investors from selling anywhere near the top. The biggest losses and the gloomiest media coverage occurs only at the end, encouraging investors to sell in disappointment just before each bear-market bottom. The biggest monthly outflow in U.S. history occurred in February 2009, just before one of the strongest and longest bull markets in history.
In this way the fewest people benefit from both bull and bear markets.
A more intelligent approach is to have assets like U.S. Treasuries during a bear market for U.S. equities. Some short positions in the most popular funds are more aggressive and also will usually be profitable. In the first year of a bear market for U.S. equities, commodity producers and emerging markets often outperform as they have already been doing since January 20, 2016 and which will likely continue through some point in 2018.