Author: Jeff

Big government agencies, cities and municipalities are becoming larger and financially unsustainable.  Many jobs performed by humans are being eliminated.  As an employee of a government entity, it’s important to insulate your retirement against the impending robot revolution. Here are 4 common mistakes before retirement to avoid:  

# 1 – Pension Equals Security

The most common mistake government employees make is thinking that a pension equals financial security.   Because of a false sense of security, employees often fail to have a retirement strategy. This illusion creates a heartbreaking situation very late in ones career. By the time an employee plans for retirement, they realize their miscalculation.  This calculation is often too late to correct. Employees often overlook the incredible advantages offered by their 457b, 403b or 401k. Utilized properly, these supplemental retirement options can provide flexibility on when or how to retire in the future.  Instead of being dependent on the pension, with proper planning, you could retire early and comfortably.

#2 – Pension Credit Knowledge

It’s important to review your pension credits annually with a fiduciary financial advisor.  You need to make sure your credits have been calculated correctly.  Employers make mistakes that must be caught by the employee or their financial advisor, BEFORE they retire. Each pension varies on their calculation method, so it’s important that you know how to maximize your credits. If you transfer jobs, will your credits come with you?  Are you looking to retire early and move out of state? Do you need to buy credits?  A financial advisor can help you devise the right exit strategy, maximize your investment, and avoid penalties. 

# 3 – Portfolio is Weak Sauce

It’s important to invest in higher yielding assets for greater returns. Without proper guidance, many employees will only yield 1 or 2% a year from a stable fund, money market, or low paying CD. This is very detrimental to long term portfolio growth. If you have just landed a job with these great benefits, you will need a more aggressive approach. If you are close to retirement, a more conservative strategy can be applicable. Your portfolio needs to be customized by a retirement professional, for the time you plan to invest and your risk suitability. 

#4 – Retirement Account Collecting Dust

A retiree that wants to generate more income to keep up with inflation may want a portfolio with high paying dividend stocks and various bonds ranging from high yield to corporate bonds. Rolling a 457b, 403b, or 401k into an IRA can offer that flexibility. 

With proper planning and strategy, your retirement portfolio can provide you with healthy options. Don’t wait until you are unhappy with your job to find out you made poor investment decisions and you’re trapped. Talk to an investment advisor and let them help you plan for unexpected crisis, layoffs, promotions, and early retirement.  There are lots of options that can help you plan for a safe and comfortable future.

Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. Treveri Capital LLC is a California registered investment advisor. For information about Treveri Capital LLC’s, please consult the Firm’s Form ADV available at www.adviserinfo.sec.gov

Every year people do spring cleaning at their homes.  The cleaning is to sort, organize, get rid of things, and sometimes repair old items.  Just like your house, financial portfolio reviews need to be done periodically.  Although they are reviewed, there are common 401k to IRA rollover mistakes to avoid.

  • Accumulating 401k’s

The days of one job careers are long over.  The median number of years that wage and salary workers had with their current employers is 4.1 years as of January 2020 from US Bureau of Labor Statistics.  This means by the time an individual is in their 40’s, they may have accumulated 4 or 5 different 401k’s. Because each 401k has different fee structures and investments, it’s important to consolidate them.  Consolidating them helps on organizing and tracking because every year there are millions of forgotten 401k accounts (24.3 million accounts 2021 Department of Labor data).

  • Transferring 401k to 401k

Retirement accounts like the 401k are great retirement savings vehicles.  The problem with them is the limited amount of investment choices for an investor.  Instead of rolling over a 401k to an IRA, some individuals make the mistake of transferring an old 401k to another 401k with limited investment choices. The perfect opportunity is when you start a new job and move the old 401k to an IRA.  IRA’s have many more investment choices and the ability to have a fiduciary financial advisor manage it for you.

  • Too Conservative

It’s important to invest the money.  Putting the money in a money market is very safe but lacks the ability for market growth and accumulation.  Being too conservative can be prohibitive to the benefit of these tax deferred accounts.  But keep in mind, portfolio allocation can vary with risk parameters and time frame.

  •  Indirect Rollover

When rolling over your account, it’s important to roll it directly over from one retirement account to another retirement account. Sometimes people do an indirect rollover which is when a check is cut directly to you.  This is a 60-day rollover and you have 60 days to deposit all or a portion into another retirement account.  Keep in mind, 20% is withheld and potential penalties if early distribution. The easiest way to do a direct rollover is by setting up the 2nd retirement account before any transaction occurs so that there’s an account number already established for the rollover.  When you do the rollover it’s going from a retirement account to an existing retirement account.

Smarter 401k to IRA Retirement

Because most people have several jobs before retirement, it’s important keep track and consolidate 401ks to IRA’s.  Being too conservative can hurt you long term on growing the assets.  When rolling over the accounts, it’s ideal to do a direct rollover.  These are simple house cleaning tips to your financial future success.

Treveri Capital is here to help you.  Contact us today HERE.

Copyright © 2021 All rights reserved. No part may be reproduced, altered, or copied in any form without written consent. Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

https://www.bls.gov/news.release/tenure.nr0.htm
https://www.hicapitalize.com/resources/the-true-cost-of-forgotten-401ks/
https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions

In the 80’s Smith Barney a very large financial investment firm used to run TV commercial advertisements that were targeted toward savers and small business owners. The commercials would have an older gentleman saying, “We earn money the old fashion way, we earrrn it!”. Its a very iconic commercial because it portrays to investors that the hired investment firm has “financial advisors” with strong work ethics. Fast forward to today and we have similar terminology with the use of the word “fiduciary” thrown around in the financial advising industry. Although financial advisors have a fiduciary duty to its clients, they are all different.

Blurring the lines of a fiduciary financial advisor is when a investment firm is related to a broker dealer. Broker dealers conduct business based on commissions. The reason this is important to know is because an advisors goal may not be aligned with the individuals financial goal but of generating commissions for the broker dealer. Full disclosures usually has to be made to the client so the client is aware of any potential conflicts of interest. We see this conflict of interest recently with TIAA CREF investment advisors with incentives and firm pressure to peddle proprietary products. They have incentives to peddle firm products with compensation, sales target goals, and will be terminated if not met. The compensation model of the employees is widespread throughout big Wall Street and banks.

Because of these compensation packages, fancy words to incite clients trust are used to give the appearance of a “fiduciary” financial advisor. Again, we see this with the TIAA CREF case page 7 when they used the words “fiduciaries”, “objective”, and “non-commissioned”. But, in reality the advisor is trying to hit their corporate sales goals without getting fired regardless of the clients investment goals. Now, does this sound like a fiduciary looking out for your best financial interest? Will your investment goals be met with the firm proprietary products or employee compensation models? This is a industry wide practice to keep an eye on because the firm may be paid differently based on proprietary products versus non-proprietary products. These issues can be easily eliminated when the broker dealer is an independent third party.

A often overlooked conflict of interest is the 12b-1 fees on funds. This is a fee on mutual funds that get paid out but sometimes are not disclosed to the client as seen recently with an investment advisor failing to disclose conflicts of interest for mutual fund share classes.

A fiduciary financial advisor today can blur many lines depending on how they are structured. At Treveri Capital, we are a non broker dealer with a 3rd party custodian for transparency, and aligning our goals with your financial goals. Our fiduciary duty is earned with your trust as a boutique investment firm catering to individuals investment goals.

Copyright © 2021 All rights reserved. No part may be reproduced, altered, or copied in any form without written consent. Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

We are now seeing how important crypto is within portfolios. Being a non-correlated asset, crypto investment vehicles are being created by major financial institutions. Guggenheim is registering with the SEC a new fund for financial advisors and asset managers.

Cryptocurrency, Digital Assets, or Virtual Currency Investments. The Fund may seek investment exposure to cryptocurrency (notably, Bitcoin), often referred to as “virtual currency” or “digital currency,” through cash settled derivatives instruments, such as cash settled exchange traded futures, or through investment vehicles that offer exposure to Bitcoin or other cryptocurrencies through direct investments or indirect exposure such as derivatives contracts.

Guggenheim Active Allocation Fund- SEC Form N-2 Registration Statement

Some unique characteristics of crypto with it’s beta.

Being a highly non-correlated asset, Bitcoin is very important for portfolios to help minimize volatility risk which is seen with standard deviation. Find out how we can help you and your portfolio. Contact us HERE.

Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor. For information about Treveri Capital LLC’s, please consult the Firm’s Form ADV available at www.adviserinfo.sec.gov.

COVID-19 & Teacher 403B Retirement Savings

I was doing my normal daily routine of looking at news and emails this morning when I came across a Reddit post about a teacher that resigned.  The teacher had asthma and a partner with heart issues.  The school was unwilling to work with the teachers need for telecommuting.  So, the teacher resigned.  Where’s the union at you may ask?  Although the work environment for educators has unforeseeable events, it creates the perfect opportunity to review your 403B or TSA retirement account.

Depending on if you leave the school district or not will be a question you need to ask yourself.  The only time a 403B can be rolled over to an IRA is if you leave your employer which is the school district.  Keep in mind you can get a job in another school district and roll over the account.

The next step you need to determine is if you have a regular 403B or a Tax Sheltered Annuity (TSA).  Typically TSA’s will have higher fees such as surrender charges and Mortality Expense (ME) fees.  Surrender charge fees vary on each contract and need to be looked at.  Also, there’s a mortality expense fee (ME) which is a fee paid to the insurance company for the risk they take.  Depending on any surrender charges will be a factor if you will be penalized now vs. risk the opportunity cost of reinvesting in the current environment.  Each individual is different.

Once you determine that you want to rollover your 403B, you have a wealth of choices to choose from.  This is also a perfect time to review your pension.  Keep in mind you will want to speak with a fiduciary like myself with transparency on business practice, fees, and client interest.

You can setup a free consultation HERE.

Copyright © 2020 ALL RIGHTS RESERVED. No part may be reproduced, altered, or copied in any form without written consent. Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

This is an example of why transparency is so important in the financial world.

Real estate company misappropriated 1,000’s of investors money.

https://www.sec.gov/news/press-release/2020-35

 

Copyright © 2020 ALL RIGHTS RESERVED. No part may be reproduced, altered, or copied in any form without written consent. Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

The initial coin offering (ICO) train is moving full steam ahead. This train has been building steam for awhile starting with Bitcoin. Bitcoin tested out the use of cryptographically distributed ledgers at a global level.  From the bitcoin test, we are now seeing all kinds of different tokens being issued out on crypto ledgers. Along this train ride we are seeing controversies from individuals, issuers, and regulators of what the coins actually are.  Are they pre-sales, hybrids, or equities?

One of the first coins to arrive prior to bitcoin was the “ShutterStock” type of credit or coin. The ShutterStock credit is very easy to understand. It’s an exchange of currency for a credit which can be used to purchase a product. We see this when purchasing a picture on ShutterStock.com. If you make a purchase of $29 dollars to ShutterStock, they in turn give you 2 image credits which can be used to buy a picture. This can be seen as a pre-product buy. A credit is bought in order to purchase a product in the future which is common in crowdfunding or todays ICO’s with their whitepaper.

The second type of coin is the “Beanie Baby”.  Beanie Babies are a hybrid of pre-product release coins with the ability to have some intrinsic value unrelated to ownership in the company.  If done correctly, the Beanie Babies price is driven by the actual product and actual value that is created outside of the product value.  Typical ways of creating this intrinsic value is through premium services that the ecosystem provides to it’s members.  An example of this is seen with decentralizing the network and members setup a server to do some type of mining or validation to get paid. Keep in mind, the intrinsic value can be all hype which can be a form of value.  An example can be seen with the Beanie Babies on eBay as below picture shows.

The third and final coin is the Equity coin or “Crypto Equity”.  The equity coin is actual ownership in a business which passes the Howey Test.  An example of this type of issue is seen with Blockchain Capital. The token is crowdfunded and filed as a Reg D Rule 506c with the SEC which is an unregistered security. This is a very new concept because it allows transparency and an auditable recording of all ownership with the ability to transmit easily to another party.  A more general term is the “Crypto Asset” or “Crypto Security” which can represent other security assets such as debt.  Typically, these types of coins are regulated by the SEC and FINRA.

With all the ICO hype, the coins will be one of the above three categories.  The coins all start at an initial price and go from there.  A ShutterStock coin starts at $1 and ends at $1.  A Beanie Baby coin starts at $1, and depending on supply or demand can increase or decrease in value.   The final coin, Crypto Equity is related to ownership in the company which can go up or down in price just like a publicly traded stock.  We are in a new financial paradigm.

Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.  Securities offered through Rainmaker Securities, LLC – a registered broker dealer, Member FINRA/SIPC. 11390 W. Olympic Blvd, Suite 380, Los Angeles, CA 90064. Investment opportunities listed with Rainmaker Securities, LLC involve a high degree of risk, and are only suitable for “accredited investors” as defined by the U.S. Securities and Exchange Commission. All investors are encouraged to seek legal and other professional counsel prior to making any investments.

Investors be on the alert. Blue skies is really blue skies. The term blue skies came from commissioner Dolley in 1911 of Kansas stating “speculative schemes which have no more basis than so many feet of ‘blue sky‘ ” referencing the amount of company stock issued to the amount of blue sky above you. We are currently seeing the risks, schemes, and exploits with initial coin offerings (ICO) violating various securities laws.

The hype continues daily of the newest companies on Ethereum using smart contracts to issue an ICO on the “blockchain” for their business model.  This is very similar to the Dot-Com Boom of the late nineties.  Blockchain gets internet nerds all warm and fuzzy.

Any business with a dot com at the end of its company name that went public in the late nineties  rocketed in price.  The same holds true today but instead of filing correctly, the startup company skips the  necessary procedures needed to lawfully sell stock to the public.  Instead, they issue an ICO for equity without any proper regulatory filings. Who needs a broker dealer right? Licensed brokers? Nah, waste of time when everyone is thirsty. Just pretend, right?

These companies that raise capital as an ICO usually claim they are incorporated in another country or have some other fake exemption like cash balance receivables as equity or whatever they want to make themselves believe.  What ever the company does, if they solicit US investors it has be filed properly. If it looks like a security, smells like a security, then it is a security. ICO’s  are not exempt from these regulations in the US no matter how they want to slice it up as equity.  Those are some of the basic questions the regulators will ask these ICO’S.

Some of the typical security violation are the 1933 Act, 1934 Act, Reg ATS, or Blue Sky’s laws.  Here’s a typical ICO violation and the full PDF details.

Keep in mind, not all ICO’s are scams. But a good warning, if it seems too good to be true then you may want to question it. Do we all hear pump and dump or ponzi schemes?  FINRA Blockchain Report gives some good insight.  As the old saying goes, “Caveat Emptor” or “Buyer Beware”.

Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

spotify unicorn slayer executive liquidity IPO

This is no Aprils Fools…

This is another case of unicorn slaying.  Lets see how this slay unfolds. Recently Spotify issued a $1B convertible debt from TPG, Dragoneer, and Goldman Sachs clients. We will call them the VC mob (VCM).

Terms:

  1. VCM can convert the debt to equity at a 20% discount of the IPO price.  (print money baby!!)
  2. If no IPO within 1 year, the carnage, oops, I mean the discount increases 2.5% and the interest on the debt (5%) will increases 1% maxed out to 10% every six months there after.
  3. VCM can sell their shares 90 days after IPO.  Spotify employees are locked up for 180 days zombiefied.

What this means is Spotify will IPO ASAP.  The race to zero first reported by The Wall Street Journal.  Treveri Capital specializes in risk management for executive liquidity of pre-IPO companies.

Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If the public markets are any sign of the future, unicorn valuations will be difficult to understand.  Public companies are an indicator of comparable private companies.  Public companies are also the most comparable to any private business when seeking valuations because they are constantly being priced during the day with various buyers and sellers.  Although private companies are protected from the volatility of the daily public  markets, private companies have very uncertain valuation numbers especially when they are juiced up.

Even though public companies are public, their valuations are uncertain.  An example is seen here with Linkedin ($LNKD) and Tableau Software ($DATA).  Over night their valuations were annihilated.  LinkedIn has $9.6 billion (-43.63%) and Tableau Software has $2.1 billion (-49.44%) valuation disappear in 24 hours.

LNKD Unicorn

DATA unicorn valuation

As we can see, Wall Street does not hold back.  Eventually these private companies need liquidity for insiders, investors, or expansion.  They either raise another round of fantasy juice, get bought out, or do an initial public offering (IPO).  During this process, valuation is re-analyzed.  If the public markets are any indicator of the future, be mindful of any private company hiccups.

Is this the start of “The Disappearing Unicorn Act?

 

 

Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.






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