Weekly Market Review
Michael Acho
Guardian of the Wealth of the Most Productive People on Earth | Creating, Protecting and Distributing Wealth for Clients
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Good afternoon,
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Here we go again. But in a good way…
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Next week we welcome the 6th iteration of the PGA golf tournament, the Rocket Mortgage Classic, to my home course, the Detroit Golf Club.
I will once again be volunteering as a Walking Scorer. Here is what that entails,
I’ll be there every day, so if you plan on attending and want to meet up, let me know. I do have some tickets available as well if you would like any. Complimentary of course. I will be in the office at various times throughout the week, but my responses may be delayed.
As I’ve done every other year, you can expect my full report following the tournament.
Here we go again, could be either good or bad depending on your viewpoint.
Markets continue to make new highs, how long might that continue? It will continue right up until it doesn’t. Before that happens, maybe it’s time to consider some portfolio insurance.
You have life insurance, homeowners insurance, health insurance, car insurance and probably some others, how about portfolio insurance?
Insurance, generally speaking, is math. It considers the probability of an adverse outcome and the resulting cost of that outcome.
If something is low probability and low cost, you don’t need insurance. A flat tire for example.
If something is high probability and high cost, avoid the activity. Getting too close to wild animals for example.
If something is low probability and high cost, insure it. Your house burning down for example.
Depending upon your personal circumstances, a prolonged or meaningful pullback in the markets could be a very high cost event. Do you have the time and/or inclination to weather a downturn and subsequent potentially lengthy recovery? If you’re a seasoned investor, perhaps in or near retirement, or using your portfolio to generate income, a big setback could be catastrophic.
Warren Buffet once said “The first rule of investment is don’t lose money. And the second rule is don’t forget the first rule.”
There are strategies available which can protect your portfolio, just like insurance protects your other assets, in case of an adverse outcome. They will vary depending upon your situation so call me for more details.
“Dig your well before you’re thirsty.” – Hindu proverb.
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Here we go again with some not necessarily interesting, though important, retirement plan information.
Paraphrasing Shakespeare, to Roth or not to Roth, that is the question.
A client sent me a query last week about his retirement plan contributions. He has both a traditional plan as well as a Roth plan. To which is it better to make future contributions? He asked. Great question.
Setting aside for now the qualifications necessary for each type of plan, income limitations, etc. let’s just briefly discuss how they work. This is not specific investment advice.
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Traditional v. Roth depends on how you like your taxes, now or later.
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Traditional IRA/401k contributions are before tax, so anything you contribute lowers your taxable income in the year of the contribution, resulting in a lower tax liability. Then the contribution grows tax deferred until you withdraw the money down the road at which time you’ll be taxed on those withdrawals. The theory is that you’re in a higher tax bracket now than you will be in once you retire and start withdrawing money. That could mean that a tax deduction today is more valuable than a tax liability later.
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Roth works the other way. Your current contributions are after tax, so you don’t get a deduction in the year of the contribution. Then these contributions grow tax free and are not taxed upon withdrawal in the future, assuming you meet certain other criteria. Roths also have more lenient distribution rules for beneficiaries.
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So really, the question is would you rather have a presumably valuable tax deduction today, or would you rather not worry about paying taxes later? #mathwins.
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Here we go again with a retirement ceremony.
Tom Brady’s jersey was retired by the New England Patriots last week. Arguably, or not arguably IMO, the greatest NFL quarterback of all time, here is a short takeaway from his speech.
“To be successful at anything, the truth is you don’t have to be special. You just have to be what most people aren’t: consistent, determined and willing to work for it.” – Tom Brady.
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Similarly, here is an oft quoted nugget from arguably, or not, the greatest inventor of all time.
“Opportunity is missed by most people because it is dressed in overalls and look like work.” – Thomas Edison.
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Why didn’t I think of this name for a restaurant? Next time I’m near there, I’m going to stop for lunch just because I like that name so much.
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This week’s comedy review is Jerry Seinfeld’s latest Netflix effort, “Unfrosted,” which is billed as the story of the origin of the Pop Tart. In summary, it’s not terrible if you want 93 minutes of mindless entertainment. It is not the actual story of the Pop Tart, of course, it is Seinfeld’s imaginary history. He’s told various Pop Tart jokes in his act for years, so it’s not a big leap for him to make a movie. It’s silly, it’s goofy, and there are numerous dumb premises and gags.? Several comedians make appearances, including Jim Gaffigan, Melissa McCarthy, Bill Burr, Amy Schumer, Sebastian Maniscalco and others. It’s cute if you’re looking for something unoffensive and silly. I’d compare the movie to a Pop Tart itself, it’s kind of tasty and a little bit filling, but the calories are empty with zero nutritional value. Enjoy it just for the sake of enjoying it.
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And finally, here is your friendly reminder that my half hour virtual office hour is back this Friday. Hop on at noon and ask me anything.
Michael Acho is inviting you to a scheduled Zoom meeting.
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Join Zoom Meeting
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This week’s chuckle is 3 minutes of Jerry Seinfeld, he thinks phone calls are done, just text him.
Safe for work.
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LF30 – “Patience, persistence and perspiration make an unbeatable combination for success.” – Napoleon Hill.
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Have a great week and stay healthy.
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This material is for informational and educational purposes only. Opinions and forward-looking statements expressed are subject to change without notice.? Links to external content are provided for your convenience and for informational purposes only. They do not constitute an endorsement or approval by Osaic FA, Inc. nor does the firm receive compensation or remuneration for your access to such content. Osaic FA, Inc. bears no responsibility for the accuracy, legality, or substance of the external content or for that of any links within such content. The opinions expressed are those of Michael Acho and not necessarily those of Osaic FA, Inc. CRN-6715348-061824
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Michael J. Acho, MBA, CFP? Private Wealth Advisor --------------------------------------------------- Osaic FA, Inc. 20505 West 12 Mile Road Southfield, MI? 48076 248-948-5100 direct 248-948-5101 fax 248-933-4339 cell
947-258-0289 texts [email protected]
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