American Consequences - January 2019

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I have stayed the course hoping to ride the wave of prosperity in the end. – Jim M. Steven Longenecker comment: Sounds like you’ve each got the right asset mix for your personal situation. We’re glad you’re all sleeping well at night. I was concerned [in October] and I put 8% trailing stops on most of my holdings. Glad that I did. I do not mind being in cash right now. I figure I get to pick up some great stocks at a discount once the smoke clears. – Tom S. Steven Longenecker comment: No word on whether the smoke has truly cleared, but we hope you were watching for a few “stocks on sale” right before Christmas, Tom. I’m in retirement. [In preparation for a bear market], I shifted funds into a CD ladder sufficient for cash flow. Everything else stayed put. – D.S. Steven Longenecker comment: Makes sense to me, D.S. And it sure helps now that CDs are finally paying something worth buying at upward of 2.5%-3%. I’m hoping the market continues to drop through 12/31/18. The snap shot of your IRA portfolio determines how much you must withdraw for your 2019 required minimum distribution (RMD) if you are 70+. I had to take too much in 2018 (my 2nd year into RMD-land) and I want my investments to last me into very old age. Being forced to

take large amounts early worries me that my investments will dwindle down when I am older and need more money for health care and the cost of living increases. – Joan O. Chris Gaarde comment: For readers not as versed in IRA lingo, the “required minimum distribution” is a mandatory withdrawal from your IRA set by the IRS under certain circumstances. So the more money in your account, the more you’re required to take out at the end of the year. We wrote to Joan to inquire how her year had turned out and she responded that she got exactly what she was hoping for... an end-of-year dip (lowering the value of her IRA and in turn, her RMD amount) followed by a post-2018 market upswing. I think you foolish roosters crowed a little early about the stock market performing well. The last time I looked things were in the toilet and about to get much worse. IMPEACH TRUMP NOW! – Robert K. Steven Longenecker comment: You sure about that Robert? We don’t know the future... but you wrote us right as the market bottomed. Since then, the S&P 500 Index is up nearly 10%. And of course, the market is still up about 20% from when President Donald Trump was elected in November 2016. Please don’t let your politics – whether on the right or the left – get in the way of investing. It rarely works.

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