Retirement Ready Income Programs

The Investment Grade Value Stock Index - Continued

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History of the Investment Grade Value Stock Index

The IGVSI was developed in December of 2007 to provide a benchmark for the equity portion of Market Cycle Investment Management portfolios. For more than ten years, Investment Grade Value Stock investors had been frustrated by the inadequacies of the DJIA and the NYSE indices. During that period. NYSE Issue Breadth and New High vs. New Low Statistics frequently moved in different directions than the averages.

Since 2005, the popularity of Closed End Index Funds has altered the statistical playing field, making NYSE "market stats" nearly worthless. There are fewer than 400 Investment Grade Value Stocks, yet NYSE "issue breadth" numbers report trading of over 3,000 issues per day. Similarly, the advanced/declined" number have become derivative report cards, making it difficult for IGVS investors to zoom in on their area of interest.

Hoping to answer the now ludicrous question: "whatever happened to stocks and bonds?", several old school diagnostics are presented here.

The IGVSI chart tracks the most fundamentally sound companies on the planet. The IGVSI "Bargain Stock Monitor" analyzes individual issue and sector pricing for better decision making. IGVSI Issue Breadth and 52-week "High vs. Low" numbers help to complete the equity environment trend picture, and the "Expectation Analyzer" discussion will help you fine-tune your performance expectations.

Two other indices, the Working Capital Model Select Income (WCMSI) and the Working Capital Model Select Municipals (WCMSM) report on the movement of managed closed-end income funds of the type contained in Market Cycle Investment Management portfolios.

All of these important numbers are presented for your information only...

Most investors misuse, even abuse, the statistics they have contact with. Statistics are historical data, and none can actually predict anything. What they are best used for is to formulate performance expectations --- a skill that must be mastered for long-term investment success.

The IGVSI is a new index, but one that is becoming an accepted benchmark for assessing the performance of the "Equity Bucket" of Market Cycle Investment Management portfolios.

The income portion of a portfolio demands separate attention, and a pretty much blind focus on income. Click here for a helpful article on that subject, or study Chapter Five of The Brainwashing of the American Investor "What Your Mother Never Told You About Income Investing".

The WCMSI is presented with the IGVSI to give you a feel for what is going on in the income portion of your investment portfolio --- the WCMSM examines a sampling of closed-end Municipal Bond funds.

Click for Details --> IGVS - Part 1 <--

 
Retirement Ready Income Programs
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Please read this disclaimer:
Steve Selengut is registered as an investment adviser representative. His assessments and opinions are purely his own. None of the information presented here should be construed as an endorsement of any business entity; the information is only intended to be educational and thought provoking.

Please join the private article mailing list or Call 800-245-0494 for additional information

Risk Management: Income, 401k, and IRA Programs

Take a free tour of a professional investment managers' private SEP IRA program during ten years surrounding the financial crisis:

CLICK HERE

In developing the investment plan, personal financial goals, objectives, time frames, and future income requirements should all be considered. A first step would be to assure that small portfolios (under $50,000) are at least 50% income focused.

At the $100,000 level, between 30% and 40% income focused is fine, but above age 50, the income focus allocation needs to be no less than 40%... and it could increase in 10% increments every five years.

The "Income Bucket" of the Asset Allocation is itself a portfolio risk minimization tool, and when combined with an "Equity Bucket" that includes only Investment Grade Value Stocks, it becomes a very powerful risk regulator over the life of the portfolio.

Other Risk Minimizers include: "Working Capital Model" based Asset Allocation, fundamental quality based selection criteria, diversification and income production rules, and profit taking guidelines for all securities,

Dealing with changes in the Investment Environment productively involves a market/interest rate/economic cycle appreciation, as has evolved in the Market Cycle Investment Management (MCIM) methodology. Investors must formulate realistic expectations about investment securities--- by class and by type. This will help them deal more effectively with short term events, disruptions and dislocations.

Over the past twenty years, the market has transitioned into a "passive", more products than ever before, environment on the equity side...  while income purpose investing has actually become much easier in the right vehicles. MCIM relies on income closed end funds to power our programs.

To illustrate just how powerful the combination of highest quality equities plus long term closed end funds has been during this time... we have provided an audio PowerPoint that illustrates the development of a Self Directed IRA portfolio from 2004 through 2014.

Throughout the years surrounding the "Financial Crisis", Annual income nearly tripled from $8,400 to $23,400 and Working Capital grew 80% $198,000 to $356,000.

Total income is 6.5% of capital and more than covers the RMD.

https://www.dropbox.com/s/b4i8b5nnq3hafaq/2015-02-24%2011.30%20Income%20Investing_%20The%206_%20Solution.wmv?dl=0

Managing income purpose securities requires price volatility understanding and disciplined income reinvestment protocals. "Total realized return" (emphasis on the realized) and compound earnings growth are the key elements. All forms of income secuities are liquid when dealt with in Closed End Funds. 



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Please read this disclaimer:
Steve Selengut is registered as an investment advisor representative. His assessments and opinions are purely his own and do not represent the views of any other entity. None of his commentary is or should be considered either investment advice or a solicitation of business. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be or should be construed as an endorsement of any entity or organization. The reader should not assume that any strategies, or investments mentioned are any more than illustrations --- they are never recommendations, and others will most certainly disagree with the thoughts presented in the article.