Update on 401-K Meddling

By -

First off, since I haven't bothered putting a tag up, please note you can get to my Twitter account here in case you want to get my tweets. I've got something like 2,800 followers, and it's been at that number for a long time, so I suspect a few of you might not know about it.

Second, for those who had contacted me about The Fund That Shall Not Be Named and were wondering what was going on, I'm still waiting (after four months……….) for the bureacratic numbskulls in California's state government to bless my RIA. My understanding is that this entire process consists of making sure a person has no securities violations. That should, I believe, take all of 7 seconds, but apparently 4 months isn't enough time. So until that comes through, I'm stuck. But you'll hear from me if and when things are all lined up.

That, to me, is just another great example of government versus business. A well-run business doing the same thing would charge an expedite fee! I have been ready, willing, and able to hand over however many thousands of dollars it would take to speed things up. But, nope, they don't have such a thing. Plus, by the way, California is broke. Don't you think it would make sense for a bankrupt state to exploit easy ways to raise money like that? Bureacratic nincompoops.

I got a lot of helpful feedback to my post about 401-k insanity yesterday. In a nutshell, Principal has completely shutterered the use of any inverse ETFs and any leveraged ETFs. Some people wondered why I simply didn't use options. Umm, people, this is Principal

Here's a helpful analogy: thinkorswim is to Harvard as Principal is to Humpty Dumpty Preschool. This is a VERY unsophisticated platform, and they don't offer options of any kind.

In fact, today, I went to liquidate one of my ETFs, and I got this message………


So even just trying to sell a postion, I had to call them and wet-nurse them through closing this position, because they have restricted ETFs absolutely, including the simple act of closing out a position! Incredible.

You may recall this is the account I grew about 380% last year. I was able to do that – even with NO margin available, TERRIBLE commissions, and BAD executions, simply due to aggressive ETF purchases. I spent something like $25,000 commissions last year on this little account (which, ahem, started as a $43,000 account!) and still managed to wind up at something like a quarter million bucks.

So the only choice I'm left with at this point is (gack, cough, barf) mutual funds, which price ONCE per day, at the END of the day. So I'm buying four bearish funds at rotten prices, because – in case you didn't notice – the market was down hard today.

There will come a time soon that I'll be closing this 401-k account forever. That's the result Principal gets from me, as their customer, for this stupid new protocol.