How to Gain Freedom AND Security in Your Portfolio

How to Gain Freedom AND Security in Your Portfolio



How to Gain Freedom AND Security in Your Portfolio

Those who desire to give up freedom in order to gain security will not have, nor do they deserve, either one.
– Benjamin Franklin

Mr. Franklin may have uttered these words when a good part of America was in a mood to drop the gloves and slug it out. But like many Franklin quotes, its message rings as true today as it did in the 18th century.

Regardless of your ethnic heritage, political persuasion or financial disposition, the message of “freedom for all” remains a bellwether for all Americans – native born and newly arrived. But as the United States of America celebrates its 242nd birthday this July 4th, many forget that everybody in 1776 wasn’t fully on board with this whole “independence from Great Britain” thing.

Ben Franklin-note

Freedom, security and money: Ben knew a little something about all three.

In fact, the revolutionaries, or “patriots,” were likely even outnumbered by a silent (or in some cases not) majority of “Tories” – those who preferred things to stay as they were. Tories chose to remain loyal to the British crown. At the very least, they did not favor conflict.

They didn’t have certain freedoms, but they felt secure in the broad reaching arms of the crown. (Note to our clients and readers from Great Britain – Relax! It’s ancient history. You know we love ya!)

Then the war came. And when the incredible, unthinkable victory fell to the patriot cause, many Tories, rightly or not, suffered greatly.

They were banished, farms and property seized, physically abused and chastised, and in some cases, executed. Many fled to Canada or back to England.

They had lost both their freedom and security.

Thus Ben’s words of wisdom, while aimed at future generations, no doubt sprung from the plight of the Tories.

The sad truth of this is that many who were considered Tories were not flag waving supporters of British rule. They were just people who were afraid. And who could blame them? When it came time to make that gut wrenching, potentially life threatening decision (at that time, you almost HAD to choose a side), many chose the security of British rule over the potential freedom of a patriot victory.

They picked security over freedom – and paid the price for doing so.

Are you a Tory Investor?

retired couple on a bench

Give me Liberty: Making portfolio decisions may not mean life or death. But at times, it can feel like it.

Few people can understand or relate to the stress and anxiety felt every day by the investor with a large nest egg or estate to protect. We’re the 1% so let’s face it. We’re not going to get a lot of sympathy from the general public.

“What a great problem to have!” most will sarcastically think.

And of course, it is.

But the stress and anxiety of protecting

your wealth, let alone growing it, is a constant companion. Managing your and your family’s wealth is an awesome responsibility – not to be taken lightly.

And much of it is driven, admit it or not, by fear. Fear we make the wrong decision. Fear we will lose it. Fear our money is not working as hard, or earning as much as it could, or should be. Fear of being forced into a restrictive lifestyle in retirement. Fear it won’t be there to pass on to our kids, or grandkids.

Fear is why so many opt for the Tory route to managing their wealth. They trade freedom for what they think is security. Stocks, bonds, maybe a little real estate on the side. Am I right?

Heck, these things are even called securities!

Why? Because they make you feelsecure. And having some of them is probably a good idea. But if you’re betting the farm on traditional buy and hold investments, you’re making the same mistake as the Tories.

What if…

Stocks, however, have been so high for so long, most taking security there have Forgotten they can still go down. And yet, some disturbing warning signs have been rumbling in the background as of late, like distant but closing British cannons.Italy and Greece, back in the news. TheEurozone economy starting to cough. Thetrade war story won’t go away. The national debt is spiraling out of control – projected to explode over 50% in the next 10 years to33.85 trillion by 2028. Interest rates are rising. The market remains at dizzying levels. And that is before we even discuss geo-political flash points.

What if …the unthinkable happens? What if stocks, bonds and real estate collapse into a death spiral again – like they did 10 years ago?

What then? What would happen to you, your portfolio, your family’s security?

Potentially, the same thing happens to you as happened to the Tories. All that you worked for, all that you earned – burned like a South Carolina tobacco field.

But, let’s set that most dramatic possibility aside for a moment. Let’s just assume we have a more garden variety bear market in stocks.

Even in a not so dramatic downturn, those who play it “safe” may not be as safe as they think. Interest rates are rising. That hasn’t historically been a favorable environment for stocks. Sure you can take advantage of higher bond yields. But the intrinsic value of bonds tends to decline as rates rise.

The Red Coats are coming! Stocks have historically tended to underperform in periods of rising interest rates.

Maybe you get to keep your farm. But you still get tarred and feathered. Is that really the way you want to go?

Choosing Freedom to Gain Safety

By choosing freedom, you also gain security. Nowhere is this truer than in your portfolio.

Franklin’s unspoken message was that by choosing freedom, you also gain security.

The same can be said for managing a sizable net worth.

Securities are great, until of course, their values start moving down. Then they don’t feel so secure. Sure some assets in securities is a good idea – no one is disputing that.

But freedom means choosing some investments that are not necessarily dependent on values moving constantly higher. Freedom means choosing investments that can provide you income and capital gains even when prices are moving lower. As we said right here last month, freedom means freeing you and your family’s well being from dependence on (and addiction to) constant and never ending price appreciation.

How about FREEDOM from having to worry about the bottom dropping out of the stock market again? That one helps you sleep better at night. But that kind of sleep only comes from security.

Real security comes from real diversification.

And real diversification means getting at leastsome of your assets working completely outside of the stock and bond markets (and preferably even outside of real estate as well).

This does not mean, of course, throwing your money at any and every interesting idea that comes down the pike.

Muster Your Defenses

Proper vetting is imperative for any type of investment. But that little bit of elbow grease up front can eliminate a lot of anxiety down the road. You want to have your defenses in place long before Paul Revere comes shouting in the night.

Personally, I prefer a strategy that makes me a winner better than 80% of the time – before I even pick a market. And when I do pick a market, I likereal assets I can touch and feel – that I know are always going to have a value. I don’t get that with a piece of paper.

Some modern theories paint some of our famous patriots as self serving landowners – fighting mainly to preserve their own wealth and financial gain. Maybe so. But their lives were at risk none the less. (The signers of the Declaration of Independence likely would have been hanged if captured. And given General Washington’s fighting style, it is a miracle he survived the war. Several battles were fought with Washington in front of the ranks, leading troops into the carnage.)

Regardless, there may be a grain of truth to some of this. If so – these guys really took asset protection seriously! And they gave us a great gift in doing so.

Let’s celebrate freedom together as a nation this Independence Day 2018 and remember that our political disagreements today are nothing like the disagreements we had in 1776! After all, we still have freedom and we still have security.

And if you want to give yourself and your portfolio a bit more security and a big jolt of freedom – consider the alternatives available to you.

I know of one.

If you don’t, this month’s newsletter can help show you the way to Independence Hall.

We’ll be there when you’re ready. Have a great month!

Regards, James

For more information about managed option selling accounts with James Cordier and, visit www. (Recommended opening account deposit US $1MM)

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