Archive for February 2026
A client of mine recently shared a real-life story from a friend – let’s call him John.
John recently retired from his long-time job and had accumulated $1mm in his 401k. He correctly recognized that, without his salary, he and his wife are now in a much lower tax bracket, maybe 12%. To take advantage of this, he converted all of his $1mm into a Roth IRA.
John was totally flabbergasted to learn that he owed more than $300k in federal tax and nearly $100k in state tax from this conversion. To raise money to pay these taxes, he was forced to sell some appreciated investments, which led to his owing even more tax. What went wrong?
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Yesterday, the price of gold dropped 10% in one day. Even with that decline, it is still up 12% this year and up 84% since the beginning of 2025. Today, I will write a bit about gold because I have built a small position for all of my clients since 2022, after the Russia-Ukraine conflict started.
Remember when the US and EU froze Russia’s foreign reserves? That move, which was intended to hit Russia hard, sent a chill through central banks everywhere, especially in the Global South. Until then, the US dollar had served as a reserve asset in many sovereign central banks, meaning that they needed to acquire US dollars before they could issue their own currencies.
The Great Dollar Diversification
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The Investment Scientist 