Economic Commentary and Insight
Preserving wealth for future generations has always been a challenging endeavor for the affluent. A seemingly never-ending succession of negative global events has made the market more uncertain and wealth preservation much more challenging. Consequently, effective wealth preservation solutions are in high demand.
Steven Monaco of RCW Financial will discuss the opportunities and advantages of U.S Rare Coin numismatic portfolios.
Date of Event: April 5-6, 2016
The major asset markets started 2016 on a bearish note, with most asset prices falling significantly. This uncertainty has many investors seeking clarity. In recent conversations with Michael Contursi, Executive VP of RCW Financial, a rare coin asset management firm, he indicated that many of their clients are concerned about recent volatility and asked if I could share my thoughts. While I am no expert on rare coins, I do have some strong views on the recent shocks to the global economy.
Recently, I had what I think was a very revealing conversation with a hedge-fund portfolio manager. We were discussing the values and virtues of traditional, publicly traded stock and bond investments verses the more private and more privately traded world of alternative investments. The hedge-fund PM really surprised me by stating “as an investor, things that are not publicly traded on a regulated exchange terrify him!” I wondered why this highly sophisticated investment professional (as well as millions of stock and bond investors) mistakenly put so much faith in public markets and the “liquidity” they supposedly provide.
Earlier in the month, I had the good fortune to attend Art Basel, the art world’s premier platform for bringing artists and their patrons together. The volume of art that was displayed and purchased was staggering. It was quite an event.
Most people have heard the old adage “shirtsleeves to shirtsleeves in three generations,” where heirs squander their family’s hard earned assets over time. This scenario can be partially prevented with proper estate planning controls, such as spendthrift trust provisions, in addition to multi-generational wealth transfer strategies. One such strategy- owning rare U.S. coins- may also accomplish the elusive triad: capital preservation, growth and tax efficiency.
I recently met with two of my clients who are both transitioning into retirement. They initially invested in rare coins because they were simply looking for alternatives as a way of diversifying their holdings and preserving wealth. During our discussion they shared that their investments into rare coins have quickly become their favorite investment. The explanation was simple. Rare coins have given them something many other investments recently have not… peace of mind.
If the Fed would have raised rates back in September it would have strengthened the U.S. dollar making it advantageous from a trade perspective with foreign economies. The only reason the Federal Reserve could have had for NOT raising rates in September was to help the U.S. and European international companies that trade with China, however the Fed’s plan didn’t work because within days of the anticipated rate hike, China responded by devaluing their currency by the largest amount in history which resulted in a positive trade advantage for China. The Fed must have known that they do not have the tools to win this specific battle with China or the rest of the world for that matter, as they devalue their currencies.
Sometimes you get an unexpected wake up call, a call to action if you will. If it happened in your hotel room, the famous errant alarm clock going off, well in that case you just push the snooze button, grumble a bit and go back to sleep at 2:45 a.m. Then, there is the other kind of wake up call, not just the annoyance version. This kind of call to action comes based on something truly significant and it can be so very important to evaluate or re-evaluate something of considerable importance such as your health, a family matter, or financial situation. It’s the latter mention that I will be focusing on in this article.
We all read or hear about the US debt almost daily. What are our sources: Mass Media, Politicians, and the Financial Sector? Pardon my cynicism in believing any of these institutions would tell the truth, the whole truth, and nothing but the truth on the debt. So, who is mudding up the waters? Who is the small player and who is the big player on US debt? To answer this question, we need to take a non-agenda driven look at the US debt.