Retirement accounts include a variety of different tax deferred arrangements that range from 401-K savings plans, simplified employee pensions (SEPs) and individual retirement accounts (IRAs). First Houston Capital can manage almost every type of retirement account and build a portfolio specifically designed to meet a clients’ goals and risk objectives.
Our core investment philosophy applies to all portfolios regardless of their tax status. We aim to buy great companies among numerous industries that are reasonably priced at the time of purchase. We try to hold winners for big gains and sell the inevitable losers for small losses.
One unique tax deferred character of retirement accounts allows us to move into or out of a stock without concern for the tax consequences. For example, we may sell covered calls against a stock position in retirement accounts to generate extra income and hedge market risk. If the stock is “called” away, the client has likely had a profitable trade but no tax consequences. Such buying and selling in a retirement account does not normally have to be reported to the IRS.
Retirement accounts are not taxable until the owner begins to make withdrawals, often deferred until age 70 1/2.
Please check with your tax advisor before creating a retirement account or adding/withdrawing from an existing account.