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
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.
Certainly you can invest your student loan money, or any money you have. The only obligation on any loan is to repay it in a timely manner. What you do with it in the meantime is your own business.
There is no tax due under normal circumstances as long as the money is 100% replaced within 60 days. The fact that it crosses over two years is irrelevant; all that matters is the 60-day time limit. When you do your taxes in March or April, you can indicate that the rollover was completed so no taxes will be do on your federal or state return.
You are correct that only one rollover is allowed per 12 months. Moving money from a 401(k) into an IRA doesn't count as a rollover, only money moved from an IRA into a non-retirement account. Be sure that after the rollover is completed, you wait at least 12 months from the first rollover before considering doing another one.
Simply put, an annuity is something to be avoided. If you want to shelter your income from taxes, you have a simple solution: put the maximum 25% of your salary into a 401(k), 403(b), or 457 plan with your employer (or up to 54 thousand annually into a SEP-IRA if you are self-employed), then another 5500 into a Roth IRA (6500 if over age 50), another 5500 or 6500 for your spouse in a Roth IRA, and then 8750 combined into an HSA which is tax-deductible and free of taxes upon withdrawal once you reach age 65. That is about 80 thousand dollars annually which you can contribute out of your income each year.
What if you have millions you want to shelter from taxes? In that case, do what Warren Buffett does and buy something--anything at all, like a stock, bond, or a fund. Don't sell it for ten years, or 20, or more--Buffett still has some shares he bought a half century ago which he hasn't paid taxes on since he hasn't sold, and will never pay tax on if he doesn't sell it. When you die, the purchase price steps up to the closing value on your date of death, so you never have to pay taxes. If you do decide to sell after five years or so, or at least after one year and one day, then you pay only 15% in capital gains (or 18.8% or 23.8% if you are in a very high tax bracket).
With an annuity, you will still have to pay taxes when you withdraw the money, probably with huge surrender penalties and with a tax rate of 28% or 33% instead of 15% because it is all counted as earned income. Then you still have the 10% penalty if under age 59-1/2 and all kinds of other fees and penalties. So there is zero advantage. The only reason annuities exist is since unscrupulous financial advisors get upfront kickbacks from the annuity companies for which they get clients.
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.