Posts Tagged ‘real estate ira’

Dr Copper Update And Your Self Directed IRA

Saturday, August 25th, 2012

As we have mentioned before copper prices reflects the future expectation of of consumer demand. Consumer demand comprises 2/3rd of the GDP. Copper is a major metal used in numerous consumer goods and related services.

The current price pattern for copper is showing a head and shoulders pattern. Without getting too technical, this basically is a critical juncture in which price support needs to be established or else, we are looking a a drop in demand. A drop in demand predicts more dire economic circumstances for our future. As you will see below, we are in a head and should pattern.

What does this mean for self directed IRAs

If the prices for copper fall through support levels, then demand is clearly going down. Decreased demand means lower GDP. Lower GDP means less hiring and stagnant or increased unemployment. Worse unemployment means more printing by the Fed.

At the end of the day this means that we are looking at inflation and security issues for our investments.

Actions for your self directed IRA

Our recommendations is to continue holding metals in your self directed IRA. We believe that we are not going to see an appreciable increases in demand in the next few quarters. Therefore metals accumulation is recommended.

Real estate should be considered for your self directed IRA portfolio.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

The ISM Report And Your Self Directed IRA

Wednesday, August 1st, 2012

The July 2012 ISM report just came out and the the number came in at 49.8 versus the June number of 49.7.

The ISM report is a general measure of manufacturing activity and specifically how much manufacturers are planning in procuring for the business. A number below 50 indicates negative or contractionary environments. The ISM numbers were below 50 for the last two months which is a very clear contractionary signal.

What does this mean for Self Directed IRAs?

The contraction of the ISM numbers supports a series of other economic values which shows that the economy is not only slowing, but may actually be entering or have entered into a recession.

Recession is the perfect cover for the Fed to engage in more stimulus via printing. These policies will lead to inflation, weak demand. This is the type of environment in which you need to be holding precious metals and other hard assets such as real estate in your self directed IRA.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

Q2 2012 GDP And Your Self Directed IRA

Monday, July 30th, 2012

The reported, headline, GDP numbers just came in at 1.5% in the second quarter. This is a major revision downward from 2% in the first quarter of 2012. This brings the overall annual growth rate in at 2.2% versus the previous 2.4% in Q1 2012.

Overall these numbers are not statistically significant. In fact, it could be argued that we’ve actually seen negative GDP given the governments margin of error. What is significant and important about these recent numbers is that the supposed recovery which occurred in Q3 2011 actually has now shifted to Q4 2011 — a full quarter later. The significance of this is that the figures being reported are not reliable, accurate and maybe even not credible. If this line of logic hold true, then the fact that we are seeing a continued degradation and and downward pattern in key economic indicators means that the economy is likely already in recession.

What does this mean for my self directed IRA

We will continue to maintain that a self directed IRA, invested in non-traditional assets such as real estate, private placements, precious metals, etc. is a critical part of everyone’s retirement portfolio. The overall economic picture is not improving as evidenced by the recent GDP numbers. We are still advocating that investors allocate portions of their self directed IRA portfolio to precious metals. We also encourage investors to look at other non-traditional investments in real estate, small businesses and other non-publicly traded assets.

The Storm is Coming – Check Your Self-Directed IRA

Friday, July 27th, 2012

We wanted to show you a couple of simple graphs to tell a simple, but it’s a┬áscary story. The first chart shows the federal debt since 1965. We would like to point out a simple inflection point of 1971. It was in 1971 that we moved off of the gold standard (thanks a lot, President Nixon). Removal of a gold standard removed all constraints on government spending. Notice how in a few years passed 1971 that the debt starts increasing.

Chart 1 – Federal Debt Of The US Government

Graph of Federal Government Debt: Total Public Debt

The next chart we want to draw your attention to is the value of the US Dollar. Notice the interesting reverse or negative correlation between chart 1 and chart 2. As you can see as the government continues to tax and spend, our purchasing power has continued to degrade. You should take special note of the significant decline that starts – guess when? 1971!!

Chart 2 – Value of the US Dollar

Us Dollar Value In Gold

What does this mean for self-directed IRAs?

The first lesson is that unrestrained government spending is hurting all Americans. We know that the government and the governments of the world are fully committed to printing their way out of any problem. In fact, we saw more clear signaling of that commitment this week from the ECB and our own Fed.

These charts paint a picture of failed central planning. Central planning is the current economic system that we now live under and have so for some time now. Central planning is not going away. Because of this, we know that there will be a point at which there is too much money in circulation, planning cannot restore the basic free market mechanisms that are needed to create a healthy economy. This will ultimately lead to that storm arriving in the form of some significant economic events internationally and here at home.

It’s our continued belief that you should be out of paper based assets as much as possible. You need to continue to look for and hold tangible, productive valued assets. Such assets are things like real estate, precious metals, your own business, patents, etc.

You need to be looking at your self-directed IRA and position it to hold these tangible assets.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self-directed IRA account.

Taxes, Spending, Politics And Your Self Directed IRA

Tuesday, July 24th, 2012

In prior postings we touched on what is referred to as the Fiscal Cliff. That so called cliff is a perfect storm of events coming together at years end.

What are these events:

1. Bush era tax cuts will be rolled back thereby increasing the effective tax rate on top earners from 36% to 39%

2. Estate tax exemptions will fall back from $5M to $1M

3. Obamacare will kick in thereby increasing the taxation or collection of taxes from US citizens

4. There are spending that will be coming in an effort to reduce the budget deficit

All of these events are coming to a head at years end. There are solutions to many of these problems, but we still have not seen any political will from anyone in Washington. You will also notice that you are not hearing anyone from the mainstream media talking about the problem or what efforts are being made in Washington.

What is likely to happen

Our prediction is that we won’t actually fall off a cliff per se. There will be last minute scrambling, proposals, bill passage that will address some of the issues and not others. There will be a lot of uncertainty and the markets will likely roil as a result. The overall confidence in government and the markets will go down, as if that were possible. In the end, the average person, consumer, business person, and investor will be hurt.

What to do with your self directed IRA

Firstly, we believe that precious metals will be a must have in your portfolio. We strongly advocate holding physical metal in your self directed IRA.

Secondly we encourage you to look for investment properties that can generate cash flow. Don’t worry about price appreciation. If the economy really tanks, at the end of the day people still need a place to live.

Third, look for other non-traditional investments that invest in real projects, real commodities provide real jobs. Get away from paper assets and anything directly controlled by the stock market or the government.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.