Retirement Ready Income Programs

MCIM Strategies Produce Better Retirement Income

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The Market Cycle Investment Management (MCIM) methodology was developed in the 1970s. The process combines risk minimization, base income generation, and disciplined trading strategies while focusing on the highest quality companies, in terms of fundamentals.

If you speak MPT, these Investment Grade Value Stocks are generally "low beta" securities.

MCIM concepts, strategies, and processes are explained and illustrated in "The Brainwashing of the American Investor" and in hundreds of investment articles. MCIM portfolios, with their income growing foundation, are especially well designed for use in retirement savings (IRA) and investment (Self Directed 401k) programs.

As the investor ages, it's a simple matter to transition from a more aggressive "max-60%" equity asset allocation to a more conservative 50% or 40% equity exposure. As retirement looms larger on the horizon (and for the first few years of investing) a "zero % equity" allocation may be most suitable.

For more information, Google "Market Cycle Investment Management" and "Investment Grade Value Stock Index, or search the article archive at Kiawah Golf Investment Seminars.

Reasonable Performance Expectations using the MCIM Program

Regardless of direction, all cyclical movements should be excellent investment opportunities for retirement focused investors. MCIM portfolios befriend market, economic, and interest rate cycles using volatility friendly strategies that logically could produce:

ONE: Moves to cash before corrections take over from stock market rallies: Profit taking disciplines kick in as securities rise 7% to 10% above cost basis. At the same time, buying guidelines preclude purchase of equities before they are down at least 20% from 52-week highs. These disciplines produce high equity allocation "Smart Cash" levels during significant rallies.

TWO: Higher market value "lows" during corrections: MCIM Portfolios include a "base Income" floor produced by a) an allocation of at least 40% to income purpose securities, b) additional income from all equity securities in the portfolio, and c) the likelihood that both income CEFs and Investment Grade Value Stocks will fall less in market value and rebound more quickly than securities of lesser fundamental quality. 

Peak to Trough to Peak Analysis Around the Financial Crisis

THREE: Annual growth of realized "base income": Cost based asset allocation dictates that from 40% to 100% of all realized income will be reinvested as soon as practical in income-purpose securities

FOUR: Faster movement to new market value highs during the next rally because: a) Fewer new equity positions may be established until a minimum 20% price erosion has occurred, making the manager more patient, b) programmed additional income assures cash availability for security purchase throughout corrections, and c) a flexible selling discipline that allows the manager to take smaller than target profits when buying opportunities are plentiful.

FIVE: No major disappearing "unrealized" profits because of strict profit-taking rules and manager discipline. 

SIX: Reduction of analysis paralysis, appreciation of both rallies and corrections, and love of market volatility.

The past fifteen years have included two major market cycles and one significant economic crisis. Study the methodology to see how well the MCIM approach might have worked for most investors during this interesting segment of financial history.

Peak - Trough - Peak Analysis From Before the Financial Crisis 'Till 7/31/15

Market Cycle Investment Management takes the "what to do now" product shopping confusion out of inexperienced hands and focuses decision-making responsibility squarely on the manager. Investors can expect MCIM managers to buy only the best quality companies, and only when they are at clearly defined "bargain" prices.

Also, MCIM managers always take profits when targets are reached and are trained to remain focused on growing retirement income for future use by the investor.  

The Market Cycle Investment Management, "cost based asset allocation" methodology keeps portfolios on a high quality, growth and income, track from start up through retirement, without head scratching or rebalancing. The approach is best suited for use in tax deferred, self directed 401(k) and IRA portfolios.

Tax Free/Tax Advantaged portfolio management is equally benefited from MCIM disciplines.


 
Retirement Ready Income Programs
2971 Maritime Forest Drive
Johns Island, SC 29455
Phone (800) 245-0494 • Fax (843) 243-8509
Contact Steve directly for additional information: 800-245-0494
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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.