Guidant Financial Group Blog

The meeting of European leaders in Brussels for the development of a bailout plan resulted in a large fluctuation in U.S. Stocks.

The Wall Street Journal reports that the plan "brokered a broad package of measures to retool their bailout fund, recapitalize the Continent's banks and reduce Greece's debt load."

Read the full article here.

Stocks rallied soon after the plan was introduced Thursday, but Friday, skepticism about the plan seized control as stocks fell.

CNNMoney reported Friday that "investors are taking a step back, in the sense that they're getting down to the details that were in the plan yesterday."

Read the full article here.

Check out the profile of Guidant Financial on the inc500 list

U.S. stocks rallied on Friday, a possible reflection in investors' hopes that the upcoming European Union summit will result in a plan for the European debt crisis.

The Wall Street Journal reports Michael Farr, president of portfolio-management firm Farr, Miller & Washington saying that, "Every whiff of promise that comes out of Europe leads to another 100 points to the upside . . . But everything that looks like gridlock knocks 100 points off."

Read the full article here.

Amid European debt crisis, U.S. stocks gained on Thursday. The gains are believed to be an optimistic response to the efforts of the European banking system over this past week.

The Wall Street Journal reported that the "U.S. stocks rallied, extending a string of recent gains, as in-line consumer sentiment figures and recent progress on the euro-zone debt crisis stoked investor optimism."

Today's early "gains come a day after global markets soared on the coordinated efforts of five major central banks to bolster the European banking system. The surprise move has calmed fears, at least for now, about the region's debt crisis." Read the full article here.

The European Central bank and the four other central banks were able to boost optimism through deciding "to pump dollars into Europe's financial system to increase liquidity in the eurozone," The Street explained. "The Dow has gained 4% in the last four sessions, although the index is still down 1.6% for the month." Read the full article here.

The Obama administration announced Thursday that unemployment rates could continue to hover around a disappointing 9%. President Obama is scheduled for a joint meeting of Congress next Thursday to outline economic growth proposals.

The Wall Street Journal quotes the proposals including "a mix of tax cuts to create jobs and provide economic security to the middle class, [and] innovative infrastructure ideas to put people back to work," as well as measures aimed at the long-term unemployed." Read the full article here.

To view the unemployment rates of your state, as reported by CNNMoney click here.

Reaction to this announcement added to already unsteady feelings in the stock market. Both the report and the reaction intensified concerns that the economy is headed for a steeper downturn.

Fed Chairman Ben Bernanke spoke this morning in a much anticipated meeting before global policy makers about the U.S. economy and the Fed's response. The Fed announced its decision to put stimulus into their upcoming discussions.

The Wall Street Journal quoted Bernanke saying, "Although important problems certainly exist, the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years." Read the full article here.

Bernanke also noted that, "The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability." Read The Street's full article here.

Many anticipated the speech to have an immediate effect on the stock market. But CNN Money reported that, "Immediately following the speech, stocks sold off broadly and sharply, only to recoup all those losses fairly quickly." Read the full article here.

Bernanke also announced that their discussions on stimulus will begin at the Fed's upcoming September meeting.

The Street reported today that the current real estate market could provide an opportune time to buy. In the article, Matt Brownell states that "historically low mortgage rates, an oversaturated housing market and a struggling economy are making it better to buy a home than rent in 74% of the country’s largest cities."

Read the full article here.

The data was collected by Trulia.com in its Summer 2011 Rent vs. Buy Index Report. Ken Shuman, Head of Communications at Trulia, was quoted in the report saying "while recent stock market volatility on top of the slow economic recovery makes homebuyers nervous, it has not destroyed the American dream of homeownership."

Read the full report here.

On May 6 the stock market suddenly and inexplicably plummeted nearly 1,000 points before just as mysteriously rebounding another 16 minutes later. Financial experts are still trying to figure out what happened. Some blame Greece’s economic crisis, while others suspect a trader mistakenly typed “billion” instead of “million” somewhere along the line.

Already the papers, blogs and media outlets are filling up with commentary on the market’s craziness and are offering opinions on what happened and how to avoid it in the future. Here’s a good one from The NY Times.

Everyone from financial titans to the proverbial man on the street are facing the reality that Wall Street is just another word for gambling – and far too often with the odds stacked against you.

Whether you want to refer to the May 6 plummet as a “Greek Tragedy” or a “Fat-Fingered Failure” (and throw in another couple of f-words, if you like!) it’s a terrifying thing . . . and only proves what those of us at Guidant already know: The only investment you can control is an investment in yourself.

This is why we’ve already helped thousands of clients invest IRA and 401(k) funds in a small business or franchise they own and control. Rather than watching helplessly as their retirement funds dwindle into nothing by the hand of mismanaged or unscrupulous corporations—or watching as moribund accounts gather dust rather than interest—these savvy investors are now experiencing business success while watching their nest eggs grow.

Maybe it’s time you turned away from Wall Street and looked instead in the mirror . . . and invested in the one person you can always trust to have your best interests in mind: YOU.

MarketWatch released an article on May 21, 2009 that suggested most investors should avoid self-directed IRAs. In “Why Most Investors Should Avoid Self-directed IRAs,“ Robert Powell details three main reasons:

• It is unclear who is regulating this industry;
• The IRS guidelines are complex; and
• There are very few “experts.”

While we appreciate his perspective, we do not feel it is as simple as to suggest this type of investing is only for the wealthy. We believe that individuals have the ability to make good wealth-building decisions when provided correct information.

The rules for investing in alternatives investments using retirement funds have been outlined within the Internal Revenue Code - IRC 4975. He is right – they are complex and subject to facts and circumstances. That is why you need to work with a company (not just an individual) that really understands how these rules apply to the assets you are interested in investing in. There is no space between us on this one.

But then he is also correct that there are very few experts in the field. Unfortunately, there are a lot of self-proclaimed self-directed IRA experts using social media and paid advertising to assert their position as a leader, but don’t be mislead. Do your due-diligence and involve your tax professional and investment advisor to find a firm you feel is most qualified to help you properly facilitate self-directed IRA transactions. Please consider that just because you saw them on Twitter, read a blog post about them or they have written a book does not make them an expert. Here are a couple of things to consider:

• How long have they been around?
• How many clients do they have? (If they have 2 – run!)
• How big is their company? (Size does not necessarily mean better…but it’s indication of their potential experience and strength)
• What value do they provide? (Do not shop purely based on price! If you accidentally run afoul of the rules for self-directed IRA investing, your entire IRA could be distributed. If you have a $100,000 self-directed IRA – you could be forced to take that as income, plus penalties, and pay 40-50% to the government. Saving a few hundred bucks to work with a discount provider is not a good strategy. )
• Are they registered with the Better Business Bureau and what does their history provide?
• Have they been honored, recognized or endorsed by other reputable organizations?

We have always asserted that self-directed IRAs allow people to invest in what they know and understand. It would be difficult to argue that the stock market was safer to invest in than real estate (if you know what you're doing)…especially after this year. Even spirited money man Jim Cramer recently said that real estate is a better investment than stocks today.

Self-directed IRAs allow you to decide that investments you feel are most prudent for your retirement plan. If you feel the stock market is better – buy stocks! If you like real estate…invest in that. The same goes for tax liens, private mortgages and gold. Self-directed IRAs let you invest in your core competencies and there are safe and effective ways to do it.

If you want to learn more about self-directed IRAs or real estate IRAs – contact us!

It is possible to put up to $10,000 (or $12,000 if you’re over 50) by making a double contribution – but you have to move fast. April 15th is only two weeks away!

Even though 2008 is long gone, you can still make your 2008 IRA contribution until April 15, 2009. Your 2009 contribution can be made any time between January 2, 2009 and April 15, 2010.* The maximum contribution you can make to Traditional or Roth IRAs (this goes for both 2008 and 2009) is $5,000 combined. If you are over the age of 50, you can contribute up to $6,000 in 2009.**

Why is this something to consider? You can never over prepare for retirement. Although there is no guarantee, contributing the maximum amount allowable is the first of many steps to ensure you have a comfortable retirement.

Can you answer yes to any of the following statements?

• I believe the stock market will rise over the next 12 months.
• I think the real estate market will rebound and I want to contribute to a real estate IRA to take advantage of today’s depressed prices.
• I can afford to make maximum contributions to my IRA.

If you can answer to any or all of these, you might want to consider making a double contribution.

* If you make a contribution between January and April you may need to specify which year you are intending to make the contribution.

** Please be aware that when you make IRA contributions between January 2 and April 15th, you may have to note which tax year you are contributing to.

Self-directed IRAs are one of the fastest-growing segments in the financial services industry; however, it is still difficult to find credible information regarding these types of accounts as many inexperienced providers, masked as advisors, are entering the industry.

• The biggest mistakes self-directed IRA investors make;
• How the credit crisis could affect self-directed;
• Ways to eliminate asset, transactional and holding fees by a custodian; and
• What opportunities are today’s self-directed investors capitalizing on.

The Seattle Times reported yesterday that President Obama thinks now may be a good time to buy stocks. He urged the nation to try to ignore the "day-to-day-gyrations" of the market and consider buying stocks.

The Dow Jones fell below its November 20 low today. In an article called “Dow Theory: Time to Sell?” it reported that the Dow Jones Industrial Average reached its lowest level since October 2002 and at the same time the DJ Transportation Average also hit its lowest level since 2003. There is no doubt that this will put major pressure on the markets – the futures are already pointing to a lower open in the morning.

We will try to avoid a shameless plug for opening a real estate IRA and getting away from the turbulence.... (We couldn’t help it)

Leading provider of self-directed IRA and small business financing services, Guidant Financial Group , has reportedly (official number coming soon!) seen a 23% increase in revenues in 2008 over 2007. That is really exciting!

Wait...Wasn’t 2008 a horrible year for American small businesses?

If your IRA or 401(k) is heavily invested in the stock market, 2008 is likely a year you’d like to forget. The market’s performance is particularly painful for those individuals who are taking Required Mandatory Distributions (RMD). IRA holders, who have reached the age 70.5, are required by RMDs to withdraw a percentage of funds from their accounts. Unfortunately, most individuals take this distribution in November or December. In most cases this is not of great concern—HOWEVER in 2007 the market was strong. In 2008, not so much. With most accounts losing money, some individuals are still taking withdrawals based on last year’s value.

THE GOOD NEWS: Congress has taken some positive action in reference to RMDs! The President signed the Worker, Retiree and Employer Recovery Act of 2008 on Dec. 23. Section 201 of the Act temporarily suspends Required Minimum Distributions (RMDs) from IRAs and qualified plans for 2009. RMDs will be required again in 2010 unless Congress renews the suspension. It enables retirees the opportunity to reduce their taxable income for 2009 should they determine that doing so is to their advantage and helps retirees and IRA owners avoid having to liquidate investments in a down market. Without the suspension, they could be forced to sell—most likely at a steep loss due to the stock market downturn—investments in their accounts in order to take the distribution, or face a 50 percent tax penalty on the amount that should have been distributed.