Greg Spickard - Investment Advisor

08/03/2024

One winter day in Tennessee...

10/13/2021

Recently, the rules changed relating to non-spouse beneficiaries of IRA accounts. If your spouse passes away and you are the beneficiary of their retirement accounts, including IRA’s and retirement plans, in most situations you can keep those funds intact in your own IRA account. Easy enough.

For example, suppose you have a relative pass away leaving you a $100,000 IRA. You were 35 at the time of inheritance, and the person you inherited it from wasn't your spouse. You can take the entire $100k at once in a lump sum, spread withdrawals out over a decade, or withdraw it all at the end of year 10. Regardless of which option you choose, there can't be any remaining balance within 10 years of the original owner's death. There are some exceptions, but these are the choices for most of us.

You can't contribute money directly to an inherited IRA and borrowing from any IRA isn't allowed. If you don't take out the money according to the proper timeline, the IRS will hit you with a 50% penalty for the amount you should have withdrawn.
When you're taking the money from an inherited IRA, you won't be charged a 10% early-withdrawal penalty, even if you're under age 59 1/2.

Taxes on an inherited IRA are due when the money is withdrawn from the account and taxed at your ordinary income tax rates. Taxes are typically due only on a traditional IRA, not on a Roth IRA (as long as the Roth IRA was open for at least five years).

Don’t wait to take out money at the last possible date, though, as this could result in a large distribution in a single tax year. This could increase your taxable income enough to push you into a higher tax bracket. Not good. Take out money evenly to spread out the withdrawals over the entire 10 year period so you can pay taxes on the inherited IRA over time.

Here’s a thought. Take those distributions from the inherited IRA and use them to fund your own traditional IRA or Roth IRA contribution. Think about your future retirement and use those funds to help you keep and increase your own wealth by investing in a diversified portfolio of investments.

09/02/2021

Unless you’ve been daydreaming during the COVID pandemic, which isn’t a bad idea, by the way, you may have noticed the ongoing noise over Bitcoin recently.

People often ask; is it an investment, digital gold, a scam, a network of computers, or even the future of currency? If you are wondering if you should take a ride on the Bitcoin Bus, here is a brief primer explaining what Bitcoin is and what it isn’t and detailing some of this emerging asset’s unique characteristics.

Bitcoin is a digital asset that is maintained by an internet-based ledger of computer network systems which is not maintained by any government like printed currency or minted coins. Typically, Bitcoin has been identified as a currency to be used for buying and selling goods and services (there are now Bitcoin debit cards) – recently, more and more people think of it as an investment.
But it’s not an investment nor is it a security traded in the market. Bitcoin is an asset similar to owning a home, or gold bars, though you are “holding” it electronically. Bitcoin is not an investment traded on the markets where you can buy securities that are regulated to protect the buyer.

As the Bitcoin Bus lurches forward picking more passengers and speed, it becomes harder for people to recognize just how volatile it can be. Over its history, it’s lost as much as and more than 50% percent in one day! Think about trying to make a large payment in bitcoin when it takes a nosedive – heartburn city. As speculation and belief in Bitcoin ebbs and flows, this volatility tests the resolve of speculators/investors when they experience gut-busting price declines.

Bitcoin is vulnerable to security threats, and you may have limited recovery options in the event of fraud or theft. Fraud, technical glitches, hackers, cyberattacks, or malware could cause bitcoin exchanges to stop operating or permanently shut down. Login information needed to access exchanges can be forgotten, lost, or stolen by hackers or phishers. Once access is denied, it cannot be restored, resulting in the loss of one’s bitcoin account. Third-party wallet services, payment processors, and bitcoin exchanges that play important roles in the use of bitcoins may be unregulated or using developing technologies vulnerable to hacking.

If you’re considering investing in Bitcoin, be prepared to potentially lose much—if not all—of your investment, and work with your financial professional to determine whether Bitcoin makes sense for your portfolio. Depending on how comfortable you are with volatility, it may be wiser to take a step back and stay off the Bitcoin Bus.

08/19/2021

It seems with all the economic news that the topic of student loans gets pushed aside. The big question is will the government wipe out your student loan or won’t they? It’s still unknown at this point. But what we do know now is the government is extending student loan relief again. While you might think, 𝘎𝘳𝘦𝘢𝘵! 𝘚𝘢𝘶𝘳𝘰𝘯 𝘪𝘴 𝘰𝘧𝘧 𝘮𝘺 𝘣𝘢𝘤𝘬! 𝘐 𝘤𝘢𝘯 𝘳𝘦𝘵𝘶𝘳𝘯 𝘵𝘰 𝘵𝘩𝘦 𝘚𝘩𝘪𝘳𝘦! -think again. It’s not free debt and waiting too long to pay it off is not good for your long-term financial future.

Student loan relief will end January 31, 2022—so basically February. It’s been mentioned that this will be the last extension of COVID relief but this is the fifth time it’s been extended. It’s anybody’s guess whether it will be next February. Don’t hold out hope for another extension and keep paying on your loan.

Wait, pay on a loan that’s been extended? Crazy! It might be, but here’s the benefit for you. Keep paying on your student loan and you will not pay any interest. None. Zero. The entire payment goes toward the loan principal and each payment with no interest will make some serious progress on paying off the loan.

Who would do that? - your friends with student loans, that's who. A recent study found that 57% of those with student loan debt kept making payments on their student loans during the suspension period. Smart move for sure! But don’t live in the past. Make better decisions in the future. Maybe the year 2020 set you back financially but 2021 shines brighter and now is the time to see how much progress you can make on your student loan debt over the next six months.

Before you go, don’t think you should hold off paying back your student loans because they might be canceled. President Biden made that a campaign promise but it’s been silent as far as any full-fledged cancellation. Yes, he did wipe out the student loan debt for borrowers with a total and permanent disability. But this was targeted forgiveness that he favors and he conveniently left student loan cancellation out of his budget for the year. Don’t put your hopes on more magical money – get these things paid off!

08/17/2021

As the cost of trading stocks has dropped to zero, more individuals are feeling empowered to purchase and trade stocks, bonds, and other investments. But how much risk you are willing to take with your portfolio may determine if you are acting as an investor or a speculator.

Speculation is very short-term; we are talking about seconds to minutes of trading time, which takes advantage of short-term changes in the price of a stock to make a profit. It's very high risk because you are typically trading in a small number of stocks or even a single stock. No diversification!

Speculation is mostly typical of self-described day traders who rely on "expertise" or "instincts" to buy or sell a stock. The ease and low cost of trading have encouraged a large number of people to enter the market as speculators. These inexperienced speculators are unaware of the risks they take when trading a small number of stocks and many times will lose money as often as they make it. They will make it back on the next trade, maybe!

Investing, on the other hand, seeks long-term returns by choosing a diverse portfolio of quality investments. Often this strategy will stay in place for years such as in a retirement plan, IRA, or college fund. Typically, investors will utilize multiple diversified investments like mutual funds, ETF's or managed accounts to help lower the risk.

The difference between speculation vs investing can be better understood by comparing individual US stock returns over 5 years to US stock mutual fund returns for the same period. A recent Morningstar study showed that 34% of individual stocks lost money over 5 years while less than 1% of US stock mutual funds, which hold a basket of stocks, lost money during the same period.

While no investment can guarantee a positive return, this study demonstrates the value of diversification and holding investments for longer periods of time. In a nutshell, the difference between a speculator and an investor comes down to the quality and number of investments you own and how long you hold them.

08/09/2021

In today's super hot real estate market, Dave Ramsey takes a question on whether or not a young couple should sell their house to pay off debt since the house has significant appreciation. Of course, his answer will not surprise you.

Is Now A Good Time To Sell Our House?Say goodbye to debt forever. Start Ramsey+ for free: https://bit.ly/3w15GxHVisit the Dave Ramsey store today for resourc...

08/04/2021

Bullseye Investment Management sent our most recent newsletter out to clients. Here's a brief overview for my Facebook group.

- not only do we buy and sell mutual funds for clients at the same time the entire fund can also be bought and sold by mutual fund complexes or managers. Recently (8/2) one of the mutual funds we use was sold which messes up the website reporting ONLY for the day when the name and symbol switch gets updated.

- we run our business on the TD Ameritrade platform and TD was recently bought by Charles Schwab. We are noticing major effects on service and expect fees to be raised for us and clients. We are reviewing options that will provide the best-in-class platform.

- a brief market review. Delta variant causing concern which may delay return to normalcy for business. We expect treasury bond rates to increase creating opportunities in investments tied to higher rates. We are focusing on consumer-driven investments as folks have more money to spend once consumer goods become more available. Be prepared for the 3-5% dips and perhaps even somewhat larger declines. Key on long-term.

- Bullseye may start our own branded mutual fund! We are exploring this option which provides efficiencies in managing accounts. It's a big step with upfront costs and time commitments.

- investment results took a bruising in Feb/Mar for tech stocks that we held. New clients during those months felt the most impact. Over time, the month you began has less and less importance, but at the beginning, it has a big impact.

08/02/2021

Roth IRAs have been around for a little over 20 years and are more popular now than ever. With the Roth option, you pay taxes at today's rates on the amounts you save. When it's time to retire and live off your savings, the amount you saved plus any gains you made in the account can be pulled out tax-free.

Concern about the public demand for more and more government-subsidized services makes us wonder what the tax rates will be when we retire. Roth IRAs, of course, provide tax-free retirement income if managed correctly, dissolving this very real concern.

An oft-fielded question at Bullseye is, “What is the best way to save for my kid's (or grandkids) college education?” There are options, of course, though most have limitations because they have favorable tax benefits. We find most state-sponsored 529 plans have very limited investment choices and are historically loaded with such poor-performing options that the tax advantage of using these plans is completely negated by poor results.

Because of the Roth IRA’s tax advantages, they can be a tax-favorable funding option for college expenses. How? When using Roth IRAs for qualified college expenses, original contributions can be withdrawn penalty-free before age 59 ½. This means that contributions will come out before any earnings, earnings and dividend growth are not eligible for penalty-free withdrawals. There is a minimum 5-year investment window that must be met before any Roth funds can be withdrawn penalty-free, so start saving early.

There are other very important and attractive features of using a Roth IRA to pay for a college education. First, if your child decides not to attend college, or receives a full scholarship, the money is yours to remain in your own account for an even better retirement. Second, retirement funds are not considered in calculations while performing financial aid assessments. Third, our ability to buy virtually any investment, enabling Bullseye to actively manage your account and select investments from thousands of choices.

At Bullseye, we are always ready to answer any questions you might have about investment and savings options that are best for you and your personal situation.

07/27/2021

Here’s a short video about my family farm and the pigs we are raising. They are literally tons of fun!

07/23/2021

Does history repeat itself? In a recent Bullseye newsletter, we focused on market downturns or corrections that occurred followed by long periods of recovery that resulted in gains that more than made up for the losses.

Wanna know a not so secret secret? The most successful investors in history BUY when the markets go down. The most unsuccessful investors do the opposite - they bail out. The worst possible outcome is riding the market down, and them jump out and miss the recovery.

At our firm, we meet people who jumped out over the years in bad markets and never got back in. One gentleman got out in 2008 after experiencing the losses we all endured. Then he spent the next 10 years in a CD, and made about 20% total, but he missed a 120% gain. He missed out on a net 100% gain. Let than sink in.

The first chart below shows the 1987 Crash for the S&P 500. 20% losses in 1 day, then some more losses. Buying at the beginning of the year, before the ‘crash’ then holding stocks 10 years produced gains of 205%!

Then more recently the second chart is from the 2008 financial crisis. Similar story, big losses then more losses. If you had invested at one of the worst times in history, at the beginning of 2008, and simply held on for 12 years, you would have ended up making 1% a month on average or 120% over 12 years!

There is only one way to ensure that you get all the gains the market can provide, and that is to stay in the market.