The Kate Upton Effect and Self Directed IRAs

by Darwin on October 15, 2012

Brought to you by Broad Financial:

The Kate Upton Effect is one which is familiar to any grown man who normally considers himself the paradigm of reasonable sensibility. In short, the effect consists of you scanning the news of the day and quickly noting everything of importance. Bernanke doubles down – check. Germany backs the Euro – check. Kate Upton learns to cat dance – Really? And this doesn’t strike you as strange. In fact, you’re already looking for the link to the video. (Women experience a similar phenomenon with Robert Pattison. “He broke up? And he said he needs comforting? Really?”) It doesn’t even strike you as strange that Kate Upton should hold a legitimate place in the earth shattering news of the day. It’s taken for granted – she’s Kate Upton. Enough said.

The Kate Upton Effect can be similarly discerned in attitudes towards investment assets. It’s not merely a matter of jumping on a passing bandwagon; rather, at any given time there is a stock or asset class which can do no wrong. Google, Walmart, Apple: all of these have once lived in that magical realm normally only occupied by deities and… uh… Kate Upton. The merest mention of any of these investments at the height of their prowess would elicit soft sighs of the promised land. A Shangri-La of investment opportunity backed by the undeniable eternity of the most successful and powerful company that the world has ever known. To suppose their financial mortality would be nothing short of heresy. Abandon hope all ye competitors who enter here.

And yet, the wheel turns. The current Zeus of the financial world is downgraded to merely wildly successful as another behemoth takes his place. The question that remains in the wake of the transition is one of the individual investor. Should we be concerned that individuals may have been swept up in the roaring wake, only to be discarded by the capricious gods that have reidentified their national brand? Sadly, the situation is all too commonplace. In every transition the newsrooms are full of stories of those who didn’t make it. Answers, aside from repeating the mantra of diversification, are few and far between.

And yet, one platform seems to have resisted the siren call of the current megalith. Strangely enough, it is the most individual of platforms, the self-directed IRA, which shows a persistent resistance to following the herd. The reason for this anomaly seems to lie in the rational of those who opt out of the standard and into the alternative. By and large, these are individuals who have quietly become disenchanted with the vagaries of Wall Street, and have decided that their fortunes lie elsewhere. They no longer believe the hype they are fed regarding the next wonder asset; rather, they turn to investments for which they already have an intrinsic feel. Some invest in local real estate, while others extend into businesses of which they already have experience. Whatever the case may be, they identify their knowledge points, and seek to develop them with profit making capability. An unusually conventional conception of a wonderfully freedom-inducing mechanism.

Which is not to say that Kate Upton should not sit squarely astride the headlines of utmost importance. In fact, if she were interested in a self-directed IRA, I’d happily bring her up to speed with everything she needs to know. She could even call today.


To find out more about using a self-directed IRA to invest in real estate, gold, or private business, please call Broad Financial at 800.352.3000.

{ 1 comment… read it below or add one }

Roger @ The Chicago Financial Planner October 15, 2012 at 10:27 pm

I don’t have the foggiest idea who Kate Upton is (OK I’m hopelessly unhip) but I do know that anyone considering a self-directed IRA needs to do their homework as to any custodian they might consider using and to make sure they fully understand the rules involved with a self-directed IRA before going ahead with one. I’m not trying to discourage anyone from going this route, but as with any investment strategy investors need to understand what they are trying to accomplish and the potential upside potential and downside risks.


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