You've flooded our e-mail inbox with questions about Stansberry Portfolio Solutions...
So today, I'm dedicating this issue to answering those questions. Tomorrow, we'll share our usual Q&A issue where we'll focus on our regular questions from the rest of our Retirement Millionaire Daily essays.
And if you're simply looking for the webinar replay link, click here. This replay is coming down within the next few days, so make sure that you watch it soon!
As always, if I didn't answer your question, or you have something else to ask, write me here: [email protected].
Q: I listened to the entire presentation... It sounds great!
However, even though it is probably worth the price, there are those of us who are unable or unwilling to take that much money from our nest eggs when we are just starting to grow our account or are near the end of our life and cannot fathom the risk. Would it be feasible to have a similar set of portfolios that would be far less expensive? – L.R.
A: Great question, L.R. Here's my answer...
If you're contemplating subscribing and you have the money to do it, I say: subscribe. There's no risk to doing so. You have a full month after February 1 when we release the full portfolio to look at it and consider whether the strategy makes sense for you. If it doesn't, no problem. You can cancel and get all your money back as long as you do so by March 1.
But if you don't have the money – again, no problem. Keep subscribing to my Retirement Millionaire letter, to Steve's True Wealth letter, or to Porter's Stansberry's Investment Advisory. I believe these are the lowest-cost, highest-value services available for investors.
Stansberry Portfolio Solutions is simply a way for us to "put it all together" for you. It's our way of showing you how we'd use our research to build a balanced portfolio among all the stocks that we recommend.
If you only currently subscribe to one newsletter, the Portfolio Solutions may not be for you. But if you get several of our research advisories, not only will the Portfolio Solutions make your investing process a lot easier, it will also probably save you a lot of money.
Remember: When you subscribe to a Solutions portfolio, you receive access to all the letters we pull recommendations from. And you get that access for life. It can be a tremendous savings compared with your regular annual subscription costs. For the savings specifics, we've laid out what's included and the value of each portfolio level here. (For many folks, it will save you thousands of dollars over a few years' subscription.)
Q: I'm wondering if the Portfolio Solutions will be included with my lifetime Alliance membership. I'm not sure that I would commit to the entire recommended portfolio but think that it would be interesting to compare and contrast with my own. – Alliance member M.E.
A: Of course, M.E. All Alliance Partners receive all this research complimentary with their commitment with our company. Access will be automatically added to your account when each of the portfolios launches on February 1.
And your question brings up a great point... I'm not sure when you joined the Alliance, M.E., but I'll bet that it was at a lower price than it is now ($25,000). And it probably included far fewer newsletters.
Porter opened up Alliance membership back in 2003 for $2,700. At the time, that got you a lifetime subscription to a handful of publications... and a promise that Alliance members would get all of the company's work, with the exception of Stansberry Venture, for as long as Stansberry Research was in business. Today, there are now more than a dozen publications included with the Alliance.
Q: I just listened to your Portfolio Solutions presentation. Thanks for posting as I had previously asked. Intriguing. One question I have is that I just signed up in December for Retirement Millionaire "Apprentice" lifetime program... Can I get a credit towards one of these solutions? – P.D.
A: Absolutely, P.D. Give our dedicated customer service team a call at 1-800-667-4214, Monday through Friday from 9:00 a.m. to 5:00 p.m. Eastern time. They'll help you with the specifics and hopefully come up with an arrangement that you find acceptable.
I can't promise anything, and I know that the value of these memberships is incredible compared with the price... For example, The Capital Portfolio represents a lifetime value of more than $12,000. But tell 'em Doc sent you and see if it helps grease the wheels.
Q: What would be your estimation that the beta would be on each of the Portfolio Solutions? – R.G.T.
A: We haven't finalized the portfolios yet, but here's an example...
With the rough draft that Porter has put together for The Total Portfolio, the beta is roughly 1. That means that it had exactly the same risk as the stock market as a whole. But last year, it produced more than three times the return as the market – climbing 36% compared with the 10% gain in the S&P 500.
So you get the same risk, and up to three times the return. That's the kind of performance that a properly diversified portfolio can get you.
Now, that's looking backward. We're not trying to claim this performance number – or set expectations going forward. But we didn't pick these stocks to try and "fix the stew." Instead, we focused on great businesses that are not as volatile. And the hedges and trophy assets in the portfolio are uncorrelated to the stock market.
Q: I finished Thursday's presentation yesterday – thanks for keeping it available as I was busy all week. You did mention that the portfolios would be appropriate for IRAs. I'm guessing that I'm not alone in having investable assets in both taxable and tax-deferred accounts. Will you offer guidance as to where best to park a recommendation, especially when it comes to REITs, MLPs, BDCs, etc.? – Alliance member E.K.
A: Everything in The Capital Portfolio and The Income Portfolio will be fine to hold in your IRA. With The Total Portfolio, there may be a few short positions, but you can always use a put option to replicate those trades.
However, we can't give individual tax advice with our recommendations. We'll be running these portfolios as if they were all in the same "bucket." What account you should buy them in will depend on your own personal tax situation. Here's my personal rule of thumb...
You want to be sure to put the highest-taxed investments into the IRA and the remainder in other accounts. Most advisors will tell you that this means you should put bonds and other income-producing investments into your IRA... The income on these investments creates taxes every year, which leads to more taxes. When you hold a stock, you don't pay any taxes on capital gains until you sell it. So in a way, the taxes are already deferred on these investments.
That's the traditional answer. But the right move is more complex than that.
It's true that income investments produce more taxable events, but if you have a long time until retirement, your stocks are likely to create more gains. Over virtually all of modern history, stocks have posted a better return than bonds. Since you'll make so much more profit on your stocks, you'll end up paying more taxes by keeping them in a regular account.
The tipping point for this phenomenon seems to be an investment horizon of about 20 years. If you've got more than 20 years until retirement, your stocks should go in the tax-deferred account. Less than 20, and you should put your income investments into the tax-deferred account.
Again, if this is something that interests you, you can view a replay of our webinar and see the details of each of the three Portfolio Solutions products by clicking here.
Or if you'd rather talk to one of our customer service folks, give us a call at 1-800-667-4214, Monday through Friday from 9:00 a.m. to 5:00 p.m. Eastern time. And tell them that Doc sent you.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Retirement Millionaire Daily Research Team
January 19, 2017