Early Retirement and the Work Dilemma

MMM Great News

I came across this article while research early retirement (#FIRE). I have long thought about the fact that I still want to work in retirement and plan to work until the day I die. Not because I’ll need the money, but rather, I’ll need the activity and accomplishment that comes with work. Maybe I won’t work as hard; maybe harder if I find something to be passionate about (PGA Tour card?).

Regardless of where you are on the work/retirement spectrum, this is a good read as it covers why we should want to continue working in retirement.

Please click on the link to go to “Great News- Early Retirement Doesn’t Mean You’ll Stop Working” by Mr. Money Moustache (MMM)

California Government is Hurting Public Safety – Badly!

AB953 Facebook.com Post

IF AB392 becomes law in California, there will be less people willing to be police officers. Tenured officers will retire, creating a younger, less experienced police force. That group will then make bad decisions which will subject them to criminal prosecution.
From there, it will be even harder to hire police officers and the costs will soar for salaries and benefits for the police. The laws put into place in the last couple years that limit pensions for police have already made it harder to hire police officers. Booming economy hurts this process, too.
Those costs will pale in comparison from the increased crime. That is crime that is above and beyond the already increased crime caused by AB109, Prop 47 and Prop 57. Those laws were made solely to put the cost of crime on the citizen and taxpayer, instead of the State goverment. How much does a loved one cost? The State of California has put a price on it; the cost of incarcerating the suspect. They are already free and soon will no longer have to worry about the police interfering. Don’t believe me? Read up on AB953 (https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB953), which has essentially made proactive policing a dead sport.
Get ready for a tip past the fulcrum point of California EVER being safe again. Please think about who you vote for and what your support.


Weekend Market Summary for 03/23/19 by InvestmentHouse.com

032419 Weekend Status

One of my favorite macroeconomic websites is, of course, Investmenthouse.com. This week the newsletter talks about:

– Weak German PMI reports, weak Japanese output, yield curve inversion fears bring out the first serious sellers in a long time. 
– After a solid break upside Thursday, SP500 and NASDAQ are sold back into the range. 
– Small and midcaps threaten to break their uptrends. 
– Friday was likely inversion panic, but was it even warranted? 
– The market never peaks the first day of an inversion, so even if Friday was an yield curve inversion with meaning, the top is still a lot of upside moves away. 
– Even if this wasn’t an inversion to worry about, the move itself deserves respect, and some areas look very ready to sell. 

The big issue was the 3 month/10 Year inversion, however, there is not a lot of evidence that the 3mo/10yr inversion is a precursor to a recession. Most economists theorize that the 2yr/10yr inversion is a more sure sign. Of course, a short term inversion would happen before a 2 year, right? So, it can be an early indicator, but probably not an indicator with the certainty of a longer range inversion.

Note: I love their references to old-time movies or TV shows, read at their website for this week’s reference!

One more quote from the story, “The market is at one of those gut check points for the near term. Will the indices shake off the inversion worry and continue the upside, will they test back to midpoint or the bottom of the October/December consolidation range, or will they fully correct to the December low?”

So, in a nutshell, they’re suggesting a little more downside in the short-term, but saying the 3 month/10 year inversion, even if it were to show a recession, would not take shape for several more months.

Our Opinion? I believe there will be some more downside, although Monday may be tricky. The chart above shows a down arrow on Person Pivots (PPS on ThinkorSwim) and a break below the previous bar. The Implied Volatility is moving up, as well. It could be algorithims that overreacted to the inversion news, yet I believe it may just be time for some selling, too. Monday may be dubious as there is often an akward day after a PPS, which could be up at times, then a move down or flat. Tuesday will tell the real story from the technicals I keep an eye on.

I am playing this downside as an attempt to capture some long theta against the increase in volatility. I will wait a day or two to sell some calls against my long vol plays and probably adjust/roll expiring trades with the increased volatility. I have several trades that will need to be rolled starting on Thursday, so hopefully there is a few extra days of downside to get those plays in.

To read the original article, or to subscribe yourself, visit: InvestmentHouse.com

Other Skills That You Can Learn From Option Trading

ES on 041918

One thing I’ve learned by trading options is it has taught me to be a better decision-maker. I found decisions come easier, faster and with more conviction. Not too many career choices, nor hobbies can improve on decision-making quite like option trading. Even for public safety professionals and doctors, decision-making can be difficult. Time is often on their side and the consequences of each portion of a decision can be analyzed and scrutinized.

The same thing can be true for entering a trade. I would liken the entry of a trade to a decision that a police officer may make, or doctor may make for the care of a person. However, the exit of a trade would be more similar to a life or death decision of a police officer or that of an ER or trauma doctor. In other words, once you’re in the trade the intensity forces you to make decisions on the fly without the knowledge of what the future holds.

You will find that making decisions becomes easier once you’ve been trading options. Smaller decisions like where to go to dinner, can plague many people. I often will ask my wife and daughter what’s for dinner only to wait hours before a decision is made.

On the entry of a trade you find you are more willing to dismiss a bad trade once you’ve been trading for a while. Many newer traders might have visions of grandeur and want to make a trade than on its face is not beneficial or likely probable. That’s not to say that experienced options traders won’t make a bad trade, or have a trade go bad for them. What I’m getting at is that most experienced traders will make their decision on probability of profit and the risk they are taking on that trade. More experienced traders that have learned to hedge their whole portfolio may even make a decision on a trade to hedge the risk on other traits, whether they’re good or bad. Again, this improves this decision-making.

A decision should be no more than a critical analysis of the options presented, then a choice made towards one of those options. Many people can get mired in every little aspect or the results of a bad decision.  I often find when I think critically about a trade, then compare that trade to my general trading rules, the decision is very clear to make the trade or not. Similarly, when presented with a problem in our own personal lives, the process should be the same. Look at the options, compare them to our general life rules, or ethos, then act on that decision.

Another skill that is refined by options trading, is one math and probabilities. Learning to do the math in your head and come up with the probabilities of a trade in “general” terms improves how you look at other things in your life. For example, I noticed many people will get a calculator out to figure the tip on a bill at a restaurant. Your brain will come up with ways to simplify this. What I do now, is take the tab, round to the nearest $10 and double just the number in the $10 increment. If your bill was $80, I would take the eight and double it. So, a 20% tip would be $16.

Now, the largest irony is many people would like to learn to trade options or invest. However, they do not want to take the time to challenge themselves and learn something new. For that, they’ve left themselves in a box which they cannot get out. Others learn to trade and don’t want to expand into other investments. Although I agree with you should trade what you know, could there be room for improvement?

I’ve written on how options are safer and can be hedged easily to protect a large portfolio. Also, the cost of entry into an options trade can often be much lower than another trade involving stocks. I will expand on this and other writings.

In the meantime, if you are interested in trading options and need a good brokerage, I would recommend TastyWorks. You can click on the link here and it will help us keep up postings to help you be more profitable.

Visit TastyWorks: Click Here to Signup!

Dividend Assist by Dividend.com

Dividend.Com Assist

Recently, I discovered a new feature that help me project my dividend income in one of my retirement accounts. About a year ago I subscribe to dividend.com to look for new opportunities in dividend paying stocks. I use both dividend.com and CEF connect.com to find opportunities in high-yield stocks and closed-end funds.

I found myself having to download my brokers dividends and then trying to extrapolate out how much my dividends would be. This was time-consuming, and frustrating, in that you could not project quarterly dividends easily without simply averaging them out with your monthly dividends.

Enter dividend assist by dividend.com. Once you’ve entered the stocks in your brokerage account, it will project three months, six months, and one year out.  The projections give you a reliability percentage which I suspect will be useful once I’m actually retired and want to know how certain net income is. The ability for the financial planning between the quarterly and monthly dividends will be helpful, as well. For example in the featured image of this article you can see the income is slightly higher in April and October. Hypothetically, I would probably budget that money for things like property tax payments that occur at these times of year.

Unfortunately, dividend.com is a paid for site. It’s about hundred $49 per year, however, the time savings of dividend assist coupled with the ability to find high-yield stocks is probably worth the money. It certainly is to me.

They do have a free 14 day trial and I suggest you try the dividend assist portion of the website before you make your decision. HTTP://dividend.com

Yield Curve Fears on the Horizon? From #RealInvestmentAdvice

I recently came across the website RealInvestmentAdvice.com and their discussion on the yield curve flattening.  I also read the Investmenthouse.com and their discussion on the FED always overshooting interest rate hikes.  This weekend’s newsletter from Investmenthouse.com even referred to the FED member’s justifications towards the flattening that the yield curve is no longer accurate; this time it’s different; etc.  It appears we will be a victim of the fed again.

There are two factors at work with rate hikes, one is size (25 basis points, versus 50 basis point rise) and time.  My question, if we know there is data showing a softening and there could be a need to postpone (versus withdrawl) and planned rate hike, what’s the harm?  I believe the fear is the market will react to that and they fear a selloff.  That is not the FED’s mandate however.  Just like previous presidents, secretaries of state, and congress, there has been very little decisive action, unless there is maximum pain in not making that decision.  Hopefully, the FED takes a play out of President Trump’s playbook and decides to be proactive versus reactive.

For reference, as of this writing, the 2/10 yield curve is sitting at .21 and heading for inversion.

For more on this from an excellent article, head over to:  http://realinvestmentadvice.com/dont-fear-the-yield-curve/

The Need for More – Diderot Effect from Medium

Diderot Image

What a great article.  I want to bring good things to my readers and this is one I came across which outlines why people buy things they don’t need and feel they need more.

The advice is sound and I feel an ackowledgement this happens to all of us is important.  I would add one more factor to this whole buying “Stuff” thing.  I think everyone has a couple items that are their weakness.  For me it’s Tech and Computers.  I always feel I need the best-of-the-best and then need all the accessories, too.  Some I use, some I don’t.

I would add to the article to use Pareto’s law to identify the top few things that are your “weakness” and train yourself to minimize purchases, skip a generation of new and learnt to make due.  If not for the cost savings, perhaps for your emotional well-being.

Read more at:  The Diderot Effect: Why We Want Things We Don’t Need — And What to Do About It

Setup a Watchlist from a Scan in ThinkorSwim (TOS) From TDAmeritrade (Revised)

In this video we explain how to convert a scan into a watchlist on the think or swim platform from TD Ameritrade. This can be useful if you want to limit your underlying stock or ETF decisions based on a smaller group of stocks that have certain guidelines in common, for example, average trading volume.

The video shows an average trading volume scan and how I converted it into a watchlist. Additionally, I show how to customize the columns on the watchlist. I have found this is an easier process to find stocks of interest than to use the scan tab for my basic trading guidelines. This is the perfect way to find high IV rank stocks quickly.

This video was previously posted on Selltheta.com, however, we’ve consolidated our posts to reside on ChristianMeadows.com.  Instead of forums, please feel free to post a comment below and we’ll try answer your questions.