What does Tines Capital Do?
Tines Capital (TC) is a fee-only fiduciary that focuses primarily on helping individuals and families invest their money inside various accounts such as Traditional IRA, Roth, SEP, and taxable accounts. Before we invest any money for clients we do our best to make sure our clients are in an appropriate condition to invest, understand their investments, and have what we believe is the best set of investments for them. In addition to investment management we do offer financial planning and access to several powerful financial planning tools.
Are you Ready to invest?
For most people with debt that has an interest rate of 5% or more, we will often recommend that you pay down debt before employing our investment management services. Paying down debt locks in savings and gives you a guaranteed return on your money. There are of course exceptions to this guideline, but in general we like to see clients with very healthy debt levels before they think about investing. If you have questions on how to get your debt and finances in order before investing ask us questions here and subscribe to the TC Blog.
Where is the Money Kept?
TC uses Interactive Brokers as a custodian, meaning they have possession of the funds we manage for our clients. Clients receive an online login where they can monitor positions, view performance reports, download tax documents, and transfer funds at their convenience. Before you open your first account, we will work with you to determine what type(s) of accounts are appropriate. Then we will guide you through the process of opening the correct type of account(s) at Interactive Brokers that will allow us to select investment for you and withdraw our agreed upon fee which typically ranges between 1-3% of assets under management per year, depending on the investment portfolios selected.
How much do I need to Start?
In addition to the fees TC charges, clients will have to pay commissions and fees to Interactive Brokers. In our opinion the fees at Interactive Brokers are very good, but we typically recommend that people wait to start an account until they have $6,000 per account.
What are the investment options?
TC offers a mix of portfolios and strategies that can suite just about anyone. Depending on your situation and goals we may recommend that you use one or several of our portfolios described below.
- Custom Passive Portfolio (CPP) uses index fund ETFs to give clients a lower cost solution. TC will work with the client to set up target allocations based on a client’s profile. A regular rebalancing interval will be selected and TC will regularly rebalance the portfolio for the client to keep them diversified and inline with their goals.
- Rotation Portfolio (RP) actively increases or decreases allocations to various assets as determined by TC’s Rotation Portfolio algorithm. The assets are limited to unleveraged positions in major stock and bond exchange traded funds. It is roughly as aggressive as a 100% stock portfolio.
- Tactical Portfolio (TP) actively increases or decreases allocations to various assets as determined by TC’s Tactical Portfolio algorithm. This strategy is ideal for those willing to take on a bit more risk than a 100% stock portfolio. The assets that are traded include ETFs for stocks, bonds, precious metals, REITs, and volatility products. It is roughly 1.6 times as aggressive as a 100% stock portfolio.
- Leveraged Portfolio (LP) actively increases or decreases allocations to various assets as determined by TC’s Leveraged Portfolio algorithm. This algorithm uses leveraged exchange traded funds, but never shorts or uses borrowed money to purchase funds. This strategy is extremely aggressive. It is roughly 3 times as aggressive as a 100% stock portfolio. You can see some SEC warnings about Leveraged ETFs here.
|Leveraged Portfolio (LP)||Tactical Portfolio (TP)||Rotation Portfolio (RP)||Custom Passive Portfolio (CPP)|
|Objective(s)||Profits from Active Trading and Speculation||Profits from Active Trading and Speculation||Profits from Active Trading and Speculation||Growth and/or Preservation|
|Approximate Aggressiveness Compared to 100% Stock Portfolio *1||~3x||~1.6x||~1x||~1x or less|
|Max Leverage Factor *2||3||1||1||1|
|Can be traded in an IRA?||Yes||Yes||Yes||Yes|
|TC Advisory Fee||3% AUM||3% AUM||1% AUM||1% AUM|
|Trades Cryptocurrency Stocks||Yes||No||No||No|
|Trades Precious Metals||Yes||Yes||No||No|
|Trades Volatility Products||Yes||Yes||No||No|
|Account Type Needed||Margin||Margin||Margin||Cash|
|Minimum Time Horizon||4+ Years||4+ Years||4+ Years||Various|
|Required liquid net worth by age||$20K @ 21-30|
$50K @ 31-40
$75K @ 41-50
$100K @ >50
|$20K @ 21-30|
$50K @ 31-40
$75K @ 41-50
$100K @ >50
|>$20,000 @ any age||>$20,000 @ any age|
|Required income by age||$40K @ 21-30|
$45K @ 31-40
$50K @ 41-50
Any @ >50
|$40K @ 21-30|
$45K @ 31-40
$50K @ 41-50
Any @ >50
|>$40,000 @ any age||No minimum.|
|Recommended Minimum to Open Account||$6,000||$6,000||$6,000||$6,000|
*1 Approximate Aggressiveness Compared to 100% Stock Portfolio: This metric is not a guarantee. It is designed to give a estimate of how much volatility is expected for an average day compared to a typical 100% stock portfolio. For example, assume that a typical 100% stock portfolio has an average daily move between 1% and -1%. A portfolio with ~3x for this metric would be expected to have an averaged daily move of about 3% to -3%. However, this is an approximation and not a guarantee. Real results may be much better or worse than the approximations. Also, the move of a strategy on any individual day will often not coincide with the approximation. The strategies will often lose money on days when a 100% stock portfolio has a positive return and make money when a 100% stock portfolio has a negative return.
*2 TC believes it is critical to avoid taking naked or short positions. Furthermore, Tines Capital believes investing with the use of margin or borrowed money is unnecessary and too risky. Instead TC uses long positions in leveraged ETFs/ETNs and options to obtain leverage. Tines Capital believes investing in appreciating asset classes with the use of leveraged ETFs and ETNs tends to produce higher total returns, if the leverage can be obtained at a low cost and good timing is used to reduce massive drawdowns. It is essential that any position that is taken has a defined risk that is not greater than the original investment value. Tines Capital’s Leveraged Portfolio often has a leverage factor between 1.5 and 3, where a factor of 0 would mean 100% cash, 1 would mean 100% invested without leverage, and 3 would be 100% invested in 3X ETFs. If want to read up on our investment methods in more detail you can review item 8 and other sections in our firm brochure here.
What performance Can be Expected?
It is crucial that clients only invest funds into portfolios with an appropriate time horizon as shown in the table above. Tines Capital cannot guarantee any level of returns or protection from loss for any strategy. However, clients will have access to reports from Interactive Brokers that clearly show your account performance over time. You can view a tutorial on how you will be able to access these reports here.
Before we invest money for anyone we like to have a conversation that allows you to ask all the questions you want about our investment methods. Though we are not going to give away our secret sauce, we believe people are better investors and more consistent when they understand the basics of their investments.
In that same conversation or in a subsequent one, we will review your existing investments, income, age, risk tolerance, and goals. This helps us provide you with the best advice on what account types and which of our portfolios we think is ideal for you. Then if you want to move forward we will help you open the appropriate accounts and transfer funds to them for us to manage.
So schedule a meeting here to get started!