Trump Tweets, Black Swan Events and Your Money

How much does your financial future depend on a 140-character Trump tweet, stroke of a pen on an Executive Order, or an off-hand comment to a reporter?

A lot, as these recent news headlines reveal:

  • “Trump Sinks Pharma Stocks on Medicare Price Negotiation”
  • “Dollar Dumps Most in 30 Years as Trump Raises Doubt Over Strong Dollar”
  • “When Trump Tweets, Wall Street Trades – Instantly”
  • “Trump, Not the Fed, Is What Moves Markets Now”
  • “Toyota Stock Drops Immediately After Trump Tweet”
  • “Trump’s Executive Orders Send S&P 500 to an All-Time High”
  • “Dow Jones Industrial Average Sells Off After Trump’s Executive Order on Immigration”

As you can see, when President Trump tweets or speaks, the markets react – in some cases violently.

Whatever your opinion of Trump is, there is one thing we can all agree on:

We are in uncharted waters. We have never had a president like Trump. We’ve never had an administration like Trump’s. There is no historical precedent for this.

What none of us knows is what to expect in terms of unintended consequences. What will be the potential impact on bond markets and interest rates? What is the risk of trade wars, currency wars, and U.S. relations with Russia, China, the Middle East, or North Korea?

Was Trump’s Election a “Black Swan Event”?

A “black swan event” is an event in human history that was unprecedented and unexpected when it occurred. By that definition, Trump’s election was a black swan event.

The idea of a black swan event was introduced by former Wall Street trader, Nassim Nicholas Taleb, as the 2008 financial crisis unfolded. The dot-com bubble of 2000 is another black swan event with similarities to the 2008 financial crisis.

So here’s a quick quiz for you: How much did the markets lose in the aftermath of those two crashes?

If you don’t remember, you’re not alone. As the behavioral finance experts have observed, we human investors typically forget about our losses and mentally exaggerate our successes.

Going back just 17 years, many people saw their investment accounts plunge by 50% or more when the dot-com bubble burst. And many investors had moved their money into NASDAQ technology stocks, which plunged 78% over 19 months.

In the most recent market crash, the S&P 500 lost 57% over an 18-month period.

There are many who would argue that the current bull market has outpaced the economic fundamentals. Today, stock market valuations are approaching levels last seen just before the last two market crashes. (They are now over 29 times the S&P 500, compared with an historical mean of 16.7 times, according to the Shiller cyclically adjusted price-to-earnings ratio.)

To add to the concern, in the last 100 years, there has never been a two-term presidency end that wasn’t followed by a recession within 12 months.

It pains me when I hear people say, “Oh, but my investments are up a lot since the last crash, and they’ve gone up even more in the last year.”

Those who forget history are condemned to repeat it.

Didn’t we all feel like we were sitting real pretty right before the crash of 2008 (and the crash of 2000)? Then we discovered – yet again – that what goes up fast usually comes down fast, too.

The stock and real estate markets did just that – with a resounding thud, and took the retirement security of millions of Americans with them.

The Critical Difference Between “Paper” Wealth and Real Wealth

If you think you can relax and coast until retirement because of the sky-high numbers on your retirement account statements, then you have forgotten the lessons of the last two crashes (and the crashes that came before them).

Your investment account statements, 401(k) and IRA statements, real estate appraisals and business valuations are nothing more than pretty numbers on paper. And those numbers repeatedly sucker many of us into believing we have real wealth and financial security when we do not.

Key Point: You don’t actually lock in any profit until you sell an investment and lock in (hopefully) any gains. Until then, you have only a paper profit, which can vanish in the next market crash.

Real wealth, on the other hand, doesn’t disappear when the markets crash. And, as we just discussed, your investment accounts, retirement plan balances, real estate appraisals and business valuations all represent paper wealth.

So, what asset represents REAL wealth, that doesn’t disappear when the markets crash?

A Bank On Yourself-Type Supercharged Dividend-Paying Whole Life Policy Is Real Wealth!

Your principal AND growth are locked in – even when the markets are tumbling. This is an off-Wall-Street strategy. Dividend-paying whole life has increased in value every single year for more than 160 years. Even during the Great Depression and Great Recession.

Your annual statements represent real wealth, which you can access how and when you want – without having to beg for it or ask permission to use it.

Dividend-paying whole life insurance is the best way to build a solid financial foundation that can help you weather whatever challenges life throws at you.

And the supercharged variation that’s used for the Bank On Yourself concept builds cash value significantly faster and lets you take an income stream in retirement with no taxes due on it, under current tax law.

Bank On Yourself Lets You Sleep at Night – Even When the Markets Are Crashing

It’s easy to find out how adding the Bank On Yourself method can help you reach your financial goals and dreams – without taking any unnecessary risks. Just request a FREE Analysis.

You’ll also get a referral to one of only 200 advisors in the U.S. and Canada who have met the rigorous training and requirements to be a Bank On Yourself Authorized Advisor.

So why not request your free, no-obligation Analysis NOW, while it’s fresh on your mind?

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Five Pieces of Free Financial Advice on Saving and Investing You Should Avoid

We all love free advice. Why pay for advice if someone is willing to give it to you for free?

Some advice will cost you little or nothing if it’s wrong. “You should wear these shoes with that suit.” “Try the catch-of-the-day. You’ll love it!” “I think you should turn left here.”

Other bad advice can be much more costly—both now and for the rest of your life.

This article focuses on free financial advice. We’ll tell you why five bits of so-called “wisdom” you’ve heard over and over again are wrong.

We’ll give you some tips on choosing sources of free financial advice you can trust, while avoiding all the dumb financial advice that’s out there.

Why Free Financial Advice Is Often Dumb Financial Advice

[Read more…]

4 Mistakes to Avoid to Make This Your Best Year Yet

It’s a brand new year, and I’m very excited! Are you?

Are you reviewing last year’s goals and accomplishments? Taking note of who you’ve become in the process of pursuing your dreams? Setting your sights on even more growth and achievement in 2017?

When you look at the key areas of your life – your finances, relationships, health, career and personal/spiritual growth – can you see how far you’ve come in the past twelve months?

Or when you think back to January 2016, do you realize that you’re almost exactly where you were twelve months ago?

Bummer.

Or as Yogi Berra said,

It’s like déjà vu all over again.”

If your life is beginning to feel like the movie Groundhog Day, you might be shooting yourself in the foot with one of the following four missteps:

Mistake #1: Repeating What Didn’t Work Last Year

[Read more…]

7 Reasons the Economy is Worse than it Seems

Do you believe the economy has improved significantly since the Great Recession?

Or do you feel like we’re staring down the barrel of a cannon whose fuse has already been lit?

The stock markets should be down considerably by plenty of measures, but many investors appear to have been hypnotized to believe that nothing can go wrong.

I believe things are worse than they may seem on the surface, and extreme caution is warranted, for the 7 reasons I spell out here.

I’ll also give you some tips on how to protect yourself and have a “Plan B” in place in case the you-know-what does hit the fan.

Here Are 7 Reasons the Economy is Worse than It Seems…

1. Addiction to Stimulus and Low or Negative Interest Rates

[Read more…]

President Reagan’s Secret 702(j) Retirement Plan – What it Is and How it Works

The Palm Beach Letter is at it again! And that’s why we’ve been getting questions about “President Reagan’s Secret 702(j) Retirement Plan,” and how it compares to Bank On Yourself.

The 702(j) account has gone by other names, including the 770 Account, President’s Secret Account, Invisible Account and Income for Life.

First let me reveal exactly what the 702(j) Retirement Plan is, and then I’ll tell you what they got right… and what they got wrong.

The 702(j) Retirement Plan is yet another name that the Palm Beach Group gave to the Bank On Yourself method, which relies on a super-charged variation of an asset that’s never had a losing year in it’s 160+ year history. [Read more…]

6 Costly Retirement Plan Traps and How to Avoid Them

If you’re like most people I talk to, you’re making several critical mistakes with your retirement accounts.

These mistakes could cost you literally hundreds of thousands of dollars over your lifetime.

But what’s worse is how these retirement plan traps can cost you your family’s well-being, and mean the difference between having to struggle to get by during what should be your golden years … and being able to enjoy life’s luxuries.

With all the economic uncertainties and worldwide turmoil that have been churning the markets, it is vitally important that you know how to avoid these costly retirement plan pitfalls today.

That’s why I’m urging you to join me and our Director of Education, Lee McIntyre, for this special online event. You’ll discover which retirement plan mistakes you are making and how to avoid them.

Space on this online event is limited, and there is no cost to attend.

Here’s What You’ll Discover During This Online Event…

[Read more…]

Get all your questions about Bank On Yourself answered – Live Webinar

You’ve been reading about Bank On Yourself. You may have thought about trying the program. But you might have questions like…

  • “I don’t totally get how the concept works.”
  • “How can I be sure this is really legitimate?”
  • “Could this really work for me in my situation? How can I find out, without actually meeting with an Advisor or feeling obligated?”

That’s why I’d like to invite you to join me and three of the most experienced Bank On Yourself Authorized Advisors in the country (learn why only 200 Advisors have met the rigorous requirements) for a no-holds-barred online event where you can get all your questions answered anonymously.

Space on this online event is limited, so reserve your spot here now. [Read more…]

5 Financial Myths that Are Destroying Your Wealth

The problem isn’t so much what people don’t know, the problem is what people think they know that just ain’t so.”
— Will Rogers

Remember when you were absolutely certain about something that turned out to be false? Like Santa Claus or the Tooth Fairy. Or how about the witch that hides under your bed waiting to attack so you have to flip the light switch then spring into your bed before she gets you? (Okay, maybe that one’s just me.)

In honor of National Financial Literacy Month, let me just debunk a few “things you know that just ain’t so”:

1. You’ll come out ahead by deferring your taxes, and that’s one of the prime benefits of retirement plans such as 401(k)s and IRAs

[Read more…]

Why a Little Financial Information is Dangerous

Just cuz you’re following a well-marked trail doesn’t mean that whoever made it knew where they were goin’.”
— Texas Bix Bender

I respect people who are self-educated, and I respect people who continue to educate themselves about various topics, even after they’ve finished their degrees. As legendary basketball coach John Wooden used to say, “It’s what you learn after you know it all that really matters.”

That said, a little financial self-education can go a long way – toward completely destroying your financial future!

Why? Because when you cobble together your financial education with bits and pieces of advice you see on the internet, read in articles or hear on TV, you’re not really building a strong foundation of financial literacy. It’s like that old story of the 12 blind monks and the elephant. Each monk felt a different part of the elephant and used just that part to figure out what the whole animal looked like!

So one blind monk tells you to pay off all your credit debt ASAP, while another tells you that you need to build up a rainy day fund. One insists that you max out your 401(k), while another says to secure your future by paying off your mortgage. And the blind monk standing at the elephant’s tail thinks the economy stinks – so you need to get yourself a stash of precious metals!

When it comes to personal finances, you really need to see the whole elephant

[Read more…]

The Checklist: What You Need to Know Before You Commit to a Financial Product or Plan

People are quick to dispense advice on any subject, regardless of their qualifications. Most people don’t even distinguish between ‘opinion’ and ‘knowledge’. That’s why you must.”
— Dan Kennedy

Your Uncle Vinnie corners you at the Sunday barbeque: “You got to get on board! It’s like buying into Microsoft in the ’80’s.” Your dentist tells you to open wide and “You gotta check out this once in a lifetime opportunity. It’s the mother lode!” Your golf buddy swears she’s found the “ultimate tax shelter.” Your advisor calls with an exciting new financial product “that will get you 15% plus annual returns with little or no risk!”

Whatcha gonna do?

Hey, I’ve spent 25 years investigating over 450 financial products and vehicles. The research was intense and required sleuthing skills that probably qualify me for CSI. I can tell you that, though these products were sparkly and seductive on paper, 99.9% of them didn’t stand up to scrutiny!

I’m guessing you don’t have the time or inclination to put in that kind of effort. But to protect your family’s financial future, you need to get answers to at least a few basic questions before you (and your money) jump in: [Read more…]