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.

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.

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!

We found an article on The Motley Fool today about how to not be an idiot with your IRA. How could that not catch your eye on Google News? No one wants to be an idiot.

Since the deadline for 2008 IRA contributions is coming quickly many people should be thinking about a last minute cash injection! We thought it was worth sharing some other ways to grow your IRA accounts. Here are a few of the Fool’s tips:

1. Don't overpay. Watch those management fees - especially in mutual funds. They can add up and over time cost you a small fortune.

2. Avoid overdosing on accounts. Pay attention to where your IRA money is and try to minimize the number of accounts that sit out there collecting fees.

3. Keep your hand out of the cookie jar. Avoid accessing your retirement funds early and getting hammered with early distribution penalties.

4. Don't “dis” dividends. Invest in companies that pay dividends. If you can live without them, reinvest the dividend money back into your account and watch your shares grow, over time of course.

I think a better choice for #5 might have been, “A fool’s advice could pay dividends”. I suppose they have only used the fool cliché only a few hundred times before.

What did they miss? How about DIVERSIFICATION! Guidant Financial Group provides and individual a chance to buy all sorts of investments inside their IRA. In addition to stocks, bonds and mutual funds, our clients can buy real estate, tax liens, private stock and mortgages and even small business. The opportunity is near limitless!

If you are not satisfied with how your retirement plan has performed – call us. Let us help you discover a new world of opportunity.

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 Industrial Average closed Tuesday at 6,763, the lowest level seen since 1997. There are only two other times have our country has seen the market sink below a 12-year low…1974 and 1932. MarketWatch.com reported that, “In 1932, the April 8 crossing of a 12-year-old low came three months before the market hit its bottom, while, 42 years later, the Dec. 6 breach marked the exact 1974 low.”

While no one really knows whether it’s the bottom or the beginning of the next waterfall – fear has truly taken over the market.