Take Notice

The Economy: Through the hoopla of the mid-terms you can occasionally hear the rumble of thunder. China is supposed to be juggling a slowdown. The EU is supposed to be planning the overthrow of the government of Italy. Russia is supposed to possess new super-weapons. Emerging markets are supposed to be bankrupt because of the rising dollar. Tariffs are supposed to be slowing the global economy. Real estate is supposed to have tipped to a buyer's market. Automobile sales are supposed to be tumbling. Peak Profit is supposed to be here. Hence stocks are getting the willies and actually going down for a change. Some indices had a 5% move on Tuesday. A swoon at the open followed by a rally into the close as the Plunge Protection Team rode to the rescue. How much longer these cowboys can keep winning on San Juan Hill is the trillion dollar question. Word is that individual investors are buying the dip while institutions, insiders and professionals are heading for the exit. One thing is certain, AI and algos work both ways. They buy into rising markets and sell into falling markets. While the US economy continues to expand the Fed continues to raise interest rates. Eventually markets will take notice and the Rough Riders will have had their day.

Food for Thought:  A "Liquidity Event" is strictly defined as cashing out of a private company that is going public in an IPO. Liquidity events can be more broadly classified as cashing out of any situation or event where you suddenly come into money. You may be retiring and cashing out your $9 million 401k. Aunt Mabel may have passed and left you her $22 million beachfront La Jolla property that you sell. You may have won the lottery. In this sense, "Liquidity Event" refers to suddenly finding yourself a Beverly Hillbilly. These are life events that happen to all of us blessed with similar First World Problems. These are both emotionally charged and exciting times. There are several things to remember when this type of good fortune comes your way: First, make sure you are properly advised by professionals as you begin to move forward. Second, start financial, legal and tax planning as soon as possible. Third, create or modify your existing financial plan. DIY will only insure that Uncle Sam takes a disproportionate amount of your estate. Contact us if we can help you or your friends.