Treasury Inflation-Protected Securities (TIPS) and real estate investment trusts (REITs) are two of the best asset classes for long-term oriented investors.

They also work quite nicely in a retirement account, generating interest and dividends while we wait for bargains across other areas of the market.

Here are two chart studies, one on TIPS and one on the real estate sector:




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Today I did a complete top-down and bottom-up analysis of commodities.  You can view the full recording in the two YouTube videos shown below.

Key takeaways:

  • Long-term trend towards lower inflation and/or deflation remains in place
  • Rising USD may provide a short-term impetus for commodity decline
  • I expect base metals (e.g. copper) to be the weakest of all commodities going forward
  • Recent rallies in gold and oil seem driven by fear and geopolitical concerns; likely to be reversed.

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You can watch these sessions live and interact with me at




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In this episode, I introduce the US income tax provisions that apply to personal investors and traders.  I’ve got 10 years of experience compiling and filing my own tax returns on these activities, so I’ve got the real-world know-how to help you make sense of this complex topic.  Over the years, I’ve dealt hands-on with such topics as: wash sales, PTPs, K-1s, options exercise and assignment, qualified dividends, Section 1256 contracts, and more.  This is the first part of a multi-part series.

Important disclaimer: I recommend you consult a tax attorney or CPA for advice on your personal tax situation.  I am neither a tax attorney nor a CPA.  Furthermore, I can’t possibly know all the details of any listener’s unique financial and tax situation.  Therefore, I’m not in a position to provide personalized recommendations and this podcast is not to be construed as such.


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Section 1: Why Is This So Important?

  • You’re responsible for your tax return, even if you hire someone to do it
  • Brokers and tax preparers make mistakes; check their work
  • The benefits you get when you understand the tax consequences of your trades

Section 2: Basic Principles

  • Type of account
    • Taxable accounts: the main focus of this series
    • Tax-preferred retirement accounts
  • What is income?  Four types
  • Amount vs. timing

Section 3: How Will I Be Taxed on My Investment Activities?

  • Mutual funds
  • Most individual stocks and ETFs
  • Section 1256 contracts (e.g. futures)
  • Precious metals ETFs (e.g. SLV, GLD)
  • Publicly traded partnerships (PTPs)
  • Master limited partnerships (MLPs) and royalty trusts
  • REITs
  • Am I a professional trader?


IRS Topic 429: Traders in Securities

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Wise investors know that it’s a good thing to keep a portion of assets in cash-equivalents at all times, but do we really have to settle for paltry interest rates like 0.01%?  Absolutely not.  In this episode, I teach you how to put your cash to work without taking too much risk.  With interest rates at historically low levels worldwide, you’ve got to work a little harder than usual to get a decent return and stay ahead of inflation.

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(CC image by Michael Cote on Flickr)

Section 1: Why You Should Never Be 100% Invested in the Markets

  • Cash-equivalent assets serve many purposes:
    • Emergency funds
    • Saving for big purchases
    • Taking advantage of buying opportunities in the market
    • Protecting against bouts of deflation in financial assets, ala 2008-2010
    • Avoiding costly margin debt
    • Reducing risk level of the portfolio
  • Three “buckets” of cash:
    • Emergency Cash
    • Structural Cash
    • Tactical Cash
  • The best way to deploy that cash?  It’s different for each bucket.

Section 2: What’s the Right Amount of Cash to Hold?

  • It’s different for every individual
  • Factors to consider:
    • Personal balance sheet
    • Are you primarily a: short-term trader, intermediate-term trader, or long-term investor?
  • My baseline suggestions for the three “buckets” of cash

Section 3: Emergency Cash

  • Top Priorities: Safety and Liquidity
  • Interest?  Forget about it!

Section 4: Structural Cash

  • Stable value funds in an employer-sponsored retirement account like a 401(k), 403(b), or TSA
  • Build a laddered portfolio of certificates of deposit (CDs) or corporate bonds
  • There’s a right way and a wrong way to do this!

Section 5: Tactical Cash

  • Higher liquidity and yields, but you can lose a portion of your principal in a downturn
  • Short-term bond ETFs and mutual funds
  • Some of my favorite funds for tactical cash



Bankrate Safe and Sound Ratings

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Check out these videos I posted last week.  You can watch live at


Here’s a highlight clip from the live stream where I updated the big-picture view on some of the major financial markets:


I give analysis & insight into the precious metals and mining stocks:



I explain why the utility and telecom sectors are the best bets in today’s market:



Nice short-side setup in the XLB!  Here’s a quick analysis of the charts:


Web Directory

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Real estate packs a powerful punch for your portfolio.  By purchasing shares of a real estate investment trust (REIT), any investor can easily gain access to this vast and powerful asset class.  REITs are especially good for younger people or renters who lack any exposure to real estate.  In this episode I’ll teach you the basics of investing in REITs, what to watch out for, and how to get started.  I also go through a list of my favorite choices to help you find some that may be right for you.

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North Bay Village

(CC image by Ines Hegedus-Garcia on Flickr)

Section 1: Background & Basics

  • What is a REIT?  How is a REIT different from a stock?
  • Listing types
  • Types of investments held within REITs

Section 2: What Determines the Price?

  • Fundamentals
  • Other financial conditions
  • Societal trends & demographics
  • How to pick a good time to add to, or to reduce, your REIT holdings

Section 3: Why You Should Own REITs

  • Exposure to hard assets that produce good cash flows
  • Income
  • Diversification

Section 4: Areas to Examine When Selecting a REIT

  • Equity REITs vs. Mortgage REITs: Very different!
  • Debt: levels & maturities
  • Exposure to troubled entities
  • Concentrated portfolios
  • Geography
  • Management
  • Tax treatment (United States)

Section 5: How to Begin Today


Background on REITs

REIT industry financial snapshot

Jeffrey Gundlach betting big on mortgages


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Gold is the one and only investment that I strongly believe every investor needs in their portfolio at all times.  However, don’t go overboard and don’t fall for sales pitches that are meant to frighten you into buying gold.  In this episode I’ll teach you the basics of investing in gold, what it can and cannot do for you, and how to get started if you don’t yet have any gold in your portfolio.  I also discuss how to use fundamental and technical analysis on gold to find the best buying opportunities.

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(CC image by motoyen on Flickr)

Section 1: Background & Basics

  • History of gold as money
  • Who owns it, and in what form?

Section 2: What Determines the Price?

  • Fundamentals: global supply & demand
  • Financial conditions: Supply of money and credit, interest rates (real and nominal), inflation rate, health of the credit markets, and the rates at which these are changing
  • How I create my forecasts

Section 3: Why You Need Gold – The Rational Arguments

Section 4: Risks, Downsides, and Common Mistakes

  • Keeping too much of your money in gold, silver, or mining companies
  • Buying based on fear or panic
  • Buying from a less-than-reputable dealer
  • Buying at the top of the market
  • Security concerns
  • Tax treatment (United States)

Section 5: How to Begin Today

  • Take stock: How to determine if you are ready to purchase now, or if you should wait
  • Choose what form(s) of gold to buy – or, whether to start with silver because it’s more affordable
  • How to buy gold coins
  • How to buy gold bars in fractional/unallocated form (vaulted storage)
  • How to buy “paper gold” (e.g. ETFs)
  • How to buy shares of gold mining companies
  • Advanced strategies for earning cash flow from gold holdings


JM Bullion: The dealer I trust

BullionVault – secure vaulted storage and online trading of precious metals

Blade Digital Pocket Scale – for weighing coins

History of gold & silver as money

Infographics on the world gold supply and production totals

Above-ground gold reserves by country

Episode 7: Anyone Can Learn Technical Analysis to Boost Profits

Inflation, Deflation, and Your Portfolio


Historical gold price chart:


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The mainstream advice on using 401(k), 403(b), IRA, and Roth IRA accounts to build wealth is flat-out wrong if you want to retire early or achieve financial independence.  I talk through the reasons why you should limit your use of these types of accounts if you want to achieve better results than ordinary investors do.  I also explain the limited exceptions to my advice on retirement accounts.

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(CC image by GotCredit on Flickr)

Section 1: Background

  • Strengths and weakness of retirement accounts
  • Annual contribution limits

Section 2: The Uncomfortable Truth: They Own Your Money

  • Never forget: Taking control of your own money puts you on the path to financial freedom
  • Mandatory contribution schemes – it’ll happen sooner than you think
  • Politicians are always thinking of ways to put themselves between you and your money

Section 3: It’s Better to Pay off Debt First, Including Your House

  • Most investors don’t achieve a high enough return in retirement accounts to beat what they’re paying on debt
  • There are plenty of very good reasons to rent – Just be aware that if you’re renting, you’re paying your landlord’s debt, and the balance isn’t dropping
  • A prolonged period of low returns is coming – or something much worse

Section 4: Max Out Your Health Savings Account First

  • If you have a qualifying high deductible health plan (HDHP), you are eligible to contribute to a Health Savings Account (HSA)
  • Limits and conditions
  • If spent on qualifying expenses, the money will never be taxed.  That’s never, not ever!

Section 5: A Better Way

  • Contribute enough to your 401(k) to get the employer match, not a penny more
  • If not covered by a 401(k), 403(b), or 457 plan, contribute $5,500/year to an IRA instead
    • If you are covered, only contribute if you don’t already have an IRA or Roth IRA yet
    • There are limited circumstances that let you take penalty-free withdrawals
  • Be an active investor
  • Build a truly diversified portfolio
  • Develop a business, or invest in someone else’s quality business
  • Invest in real assets that produce cash flows

Section 6: Exceptions

  • You are certain you will be in a lower tax bracket for a period of time, starting soon
  • Your company has excellent fund options in its 401(k)
  • You are already doing all the things listed above, have a high income with extra money to spare, and understand all the downsides of traditional retirement plans
  • You plan to work until you drop
  • You hate investing, and will accept mediocre to poor returns just to not have to think about your money


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In this episode, I go through the most common goals that investors seek to achieve and teach you how to use the financial markets to achieve them.  Most investors will want to pursue several of these goals, with one being a higher priority than the others.  Traditional retirement, early retirement, income, capital preservation, and fun are very different goals that each require a unique approach to investing.

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(CC image by Al King on Flickr)


Section 1: Capital Appreciation for Traditional Retirement

Section 2: Capital Appreciation for Financial Independence or Early Retirement

  • Use retirement accounts, but you’re usually better off if you DO NOT max them out
  • Direct more capital towards alternative investments like: your own business, rental real estate, REITs
  • Use options to generate income, including more aggressive strategies
  • Be a more active investor – trade the intermediate-term cycles for extra profit potential

Section 3: Income

  • Appropriate for someone who already has reached, or is very close to, financial independence or retirement
  • Stock selection
  • Preferred stocks
  • Use options to generate income, but conservatively

Section 4: Capital Preservation

  • Laddered portfolio of bonds
  • Preferred stocks
  • Stock selection
  • Use options to limit downside and sell some upside

Section 5: Fun!

  • Futures, FOREX, small-cap stocks, day-trading, etc.
  • Anyone can have an aggressive trading account as long as the risk to the personal balance sheet is kept under control


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(Wrap-up of ten-part series on Financial Truths)

In this episode, I tie together all the concepts I’ve introduced throughout this 10-part series on financial truths.  I illustrate a few different asset allocation ranges that will position you for profits and preserve your capital so you can trade for many years ahead.

Pick one of these asset allocation ranges that best suits your goals and risk tolerance, then just make sure your portfolio stays within the ranges at all times.

This process works for long-term investors in a 401(k) or IRA, as well as those with short-term trading accounts.


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Important disclaimers to review

Check out this page for my latest baseline asset allocations.

Download the free asset allocation workbook (Microsoft Excel format) by signing up for free email news and updates.  You will receive a link to download the file immediately upon confirming your email subscription.  You can unsubscribe at any time if you wish.



(CC image from Joe on Flickr)

Section 1: Financial Truths for Traders & Investors

  • Review of the series (find prior episodes here)
  • Why I chose the topics I did
  • How it’s different than what many others teach

Section 2: Take Action

  • A flexible asset allocation framework
  • Start today with the spreadsheet
  • Find the row that best suits you:
    • Choose one of the four categories based on how active you want to be
    • Move to the right side of the table.  Look at the annual loss section, with the 1-in-20-year, 1-in-10-year, and 1-in-5 year loss amounts: which row matches most closely with your personal risk tolerance?
    • Go to the right side of the worksheet and select that row from the drop-down box.  Those will be your asset allocation targets.

Section 3: Not Quite Right?  Here’s How to Adjust

  • Found the closest fit, but want to reduce the risk?  I explain how.
  • Found the closest fit, but want to take on more risk?  I explain how.

Section 4: The Next Level

Section 5: Make Sure You Stay on Track

  • Calculate and monitor your asset allocation
  • Calculate “asset exposure” for each investment or trading position you own
  • Add up the asset exposure by asset class (simple investment universe) or subclass (detailed investment universe)
  • Note: If you are using a highly leveraged strategy, use total assets in the denominator instead of asset exposure




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