Trump Accounts are a new type of savings account created under the One Big Beautiful Bill Act (OBBBA) in July. They’re designed to give kids a financial head start and enhance their long-term financial security. In some cases, the government may even contribute to the account, and the money can grow with tax advantages over time.
If you’re planning for a child’s future, it’s worth understanding how these accounts work, who can open one, and how to get started. Getting familiar with the basics now can help you take full advantage once everything is up and running.
Below is a simple overview of what we know so far, with more details expected as additional guidance comes out.
What is a Trump account? This is a new type of savings account created just for kids under 18 who have a valid Social Security number. It works a bit like a retirement account (an IRA), which means the money you put in can grow over time without being taxed right away. The difference is funds for the account can come from multiple sources.
Who can open a Trump account? Only authorized individuals can open the account, in this order: legal guardians, parents, adult siblings, and grandparents.
How to open a Trump account? An authorized individual can submit an election to the IRS on the child’s behalf. This can be done in one of two ways: (1) by filing IRS Form 4547 with the individual’s 2025 federal income tax return, or (2) by using the TrumpAccounts.gov online portal. (The portal is expected to be fully operational by mid-2026.)
Who is eligible to claim the $1,000 federal government free seed money? Any child born between 2025 and 2028 who open a Trump Account are eligible for the unique $1,000 federal seed contribution, provided at no cost to the child or their parent/guardian.
Who can contribute to the Trump account and is there a limit? Other than the federal seed money, parents, guardians, grandparents, family members, and friends can make contributions. Employers can also contribute up to $2,500 each year for an employee's child. Tax-exempt organizations, like those recognized under section 501(c)(3), can contribute as well. The maximum annual contribution for each account is $5,000.
How should the Trump account money be invested? Funds must be invested in eligible mutual funds or ETFs that track U.S. companies, like S&P 500 funds, with fees under 0.1%. Additional criteria may be established by the Treasury Department.
When and how can you use the money in the Trump account? Distributions are generally prohibited before the child turns 18. Once the child reaches age 18, they assume full ownership of the account, and any distributions are then subject to the standard rules that apply to traditional IRAs, including potential taxes or early‑withdrawal penalties if taken before the age of 59 ½, unless an exception applies.
We are happy to report on another very successful year in our plan for the pursuit of your most cherished financial goals. Our plan, and therefore your portfolio, continue to be driven by these goals, rather than by any prognostication around the economy or the markets. That will always be the case, throughout the coming year, and beyond.
Let’s start by restating some of the core beliefs that guide our planning and investment approach and then offer a few comments about the economic/financial backdrop.
General Principles:
We are long-term, goal-focused, plan-driven investors. Our core investment policy is to pursue your goals by investing in broadly diversified portfolios of quality equities.
We believe that the economy cannot be consistently forecast, nor the markets consistently timed. Moreover, we find no predictable pattern in the way markets react to—or choose to ignore—economic developments.
We conclude from these beliefs that the only way to be reasonably confident of capturing the full premium return of equities is to ride out their frequent, sometimes significant, but historically always temporary declines.
We do not react to, much less try to anticipate economic and/or market events. As long as your long-term goals remain unchanged, so will our plan for their achievement. And as long as our plan remains constant, so (except for annual rebalancing) will your portfolio be.
We believe that long-term compounding of quality equities is the most important force guiding us toward the achievement of your goals. And we’re obedient to the late Charlie Munger’s dictum, “The first law of compounding is to never interrupt it unnecessarily.”
Current Commentary:
In 2025, the broad equity market completed its third straight year of double-digit returns, driven by a strong economy and significantly increased corporate earnings. The S&P 500 ended the year up ~17.9%. The consensus of analysts’ forecasts is for even stronger earnings gains approaching 15% in each of 2026 and 2027 (source: Yardeni Research).
Somewhat remarkably, profit margins have continued to expand—to 13.1% in the third quarter of 2025, the highest in 15 years (source FactSet).
The single important weak spot has been the employment picture, which has continued to soften. But even this has its significant bright side: strong economic growth and a flattish employment situation mean that per capita productivity has been rising strongly. Unemployment may have recently ticked up to 4.7%, but the other 95% - plus of the workforce is putting out significantly increased products/services per hour; that allows companies to raise wages without triggering inflation.
After six straight rate cuts, Federal Reserve monetary policy is 175 basis points looser than it was a year ago, even with sticky CPI inflation still pushing three percent. It seems more than reasonable to expect the lagged effects of all this easing to begin showing up in 2026.
The middle class in particular is set to enjoy tax refunds this filing season which have been variously estimated around $150 billion, or half a percentage point bump in GDP. The main engines of this are a higher standard deduction and (especially) a temporary restoration of the SALT tax deduction cap to $40,000 from $10,000. This would seem to be a potentially meaningful near-term economic tailwind.
The burning question all year long was “Are we in an AI bubble?” This replaced the previous year’s burning question “When and by how much will the Fed cut rates?” Which in turn replaced 2023’s “Will there be a recession?”
There was no recession, but that’s beside the point. Which is that the universal burning question is usually if not always the wrong question, and a distraction to the well diversified long-term investor—like us.
There can be no question that the broad equity market is more heavily concentrated in a few huge tech stocks—which can’t all be going to win the AI race— than it’s ever been in our investing lifetimes. And that this concentration has the Index selling at a price/earnings multiple in the neighborhood of its historic peaks.
Our response to this is twofold: (a) Valuation is not, never was and never will be an effective market timing tool. And (b) your imminent portfolio rebalancing will address this issue forcefully.
All of this suggests to us that the next significant market shock—and there always is one; they come along with almost the frequency of the crosstown bus—will probably come out of deep left field—an unknown, as opposed to a known unknown like valuation or the national debt). And like all the shocks past, and all those yet to come, it will have very little to do with us, other than as a potential bargain-hunting exercise.
We wish all our friends and clients—because to us they’re the same thing—a healthy, happy and prosperous 2026. We’re always here to address your questions and concerns. Thank you for being our clients. It is a privilege to serve you.
Have you ever wanted to invest, but stopped short by asking yourself this question?
“The market is pretty rough right now, maybe I should wait until it recovers before investing.”
Then you wait… and you end up asking the following question:
“The market is at all time highs, why don’t I wait for a pull back before I invest more money?”
Human behavior is a funny thing. In the face of decades of precedence and data, we convince ourselves that this time is different. As long-term investors, we know we should invest, but given the market’s current state, we convince ourselves we know better. This conundrum has existed since the inception of the stock market. I won’t go down the path of convincing you that market timing is futile (there are a lot of resources out there to support this), rather offer some ideas on how to invest when you feel like the market is just too hot. You’ve determined these are investable dollars and you’ve settled on an allocation to invest in that aligns your capital with your goals and values, now you just must do it.
Three ideas to invest when the market is at all-time highs:
Dollar Cost Average. This means dividing a large investment into small chunks and committing to investing that among over set internals of time. Perhaps you just sold a business or piece of real estate and are sitting on a large amount of cash. You know you should reinvest but are hesitant. This strategy can allow you to commit to investing while not committing to the exact entry point. There have been a lot of studies on this and usually this does not equate into better investment performance (because the market tends to trend up more often than it trends down), but it does allow for a behavioral control that supports action. That is ultimately far more important. Optimized strategies not supported by practical behaviors usually turn out far from optimal. If putting a lot of money into the market at once is causing inaction, commit to splitting it into smaller amounts over time.
Stop Following the Markets Daily. Short term market swings are very normal, but they can happen fast and trigger unwanted stress and emotion. Since 1980, a drop of 5% or more has occurred in the US stock market 4.5 times a year. If you are stressed or anxious yet you understand market swings are inevitable and actually expected, then following the day-to-day performance of an investment is counterproductive. It is an action that provides no upside whatsoever (your attention in the short term does not change the direction an investment moves), but a spiraling black hole of downside through worry and doubt. For more on the media and your financial plan, click here.
Diversify. Is your worry about a specific asset class the last barrier? Real estate and interest rates or maybe large cap growth stocks and high valuations. These concerns can be legitimate, but we mustn’t let them be crippling. The best way through this is to spread your investments out. The old adage from Don Quixote, “Don’t put all your eggs in one basket.” Following the prior example of real estate and large cap growth stocks, buy those, and then buy something else too. Add international stocks, small company stocks, treasury bills, and corporate bonds. Your best- and worst-case scenarios about all these investments matter a bit less when they are viewed as a collective. If becoming slightly more conservative than your optimal allocation allows you to invest and feel better about it, it may be a worthwhile tradeoff. Action > InactionFor more on diversification read this.
On a spreadsheet or Monte Carlo scenario you could likely find some of these ideas inefficient. However, the goal of financial planning is to allow humans to align their capital with their values. Humans that have feelings, that have fears. Humans that are not spreadsheets. General George S. Patton is quoted as saying, “I would rather have a good plan executed today than a perfect plan executed someday.” Sometimes optimal removes the ability for practical. As an advisor and planner, it is my job to walk with clients as we balance what the math says with what we can effectively execute day in and day out. Stock market highs are exciting for many, and scary for others. It represents uncharted territory and something new. History and math can get us so far in taking action during a high stock market, but we can’t get over the hump of committing to invest, what good are all the stats. The reality of planning lies in a harmonious middle ground where optimized models meet humanity. For many the choice for investing in the market at an all-time high is not optimal or suboptimal, but action vs inaction. Plan in a way that allows you to take the first step. Nick Murray wrote, “If you think the market is ‘too high’, wait ’til you see it 20 years from now.”
When investing for the future, one of the most detrimental behaviors we can fall into is chasing fads. Gold, bitcoin, meme stocks, jpegs of apes, semiconductors, geographic plays, penny stocks, online options trading, the list goes on and on?
“In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses.” ~ John C. Bogle
The founder of Vanguard puts it so eloquently. If you are an investor, you allocate money towards companies adding value and reap the benefits of their growth and profits over decades. When we start looking at days or weeks, we end up on the verge of not investing at all, just speculating.
But sometimes we can start to feel, the S&P 500 just isn’t good enough? Sometimes a diversified basket of companies with strong earnings just doesn’t meet our expectations (likely unrealistic) for what investing should be.
We hear about something from a co-worker or see an Instagram post. Then we go off and find an article to support this newfound thought, and four reddit threads later, we are day trading the Iraqi denar at 4am and renting space to start a bitcoin mining operation.
Here’s the thing about fads, they come fast, they are intense and in our faces. We can’t ignore them because they are on Yahoo finance’s home page and all over Instagram. The talking heads on Fox won’t shut up about it. Our cousin calls us and asks us about it and our friends go out of their way to tell you that they own this faddish investment. We look around and wonder, “am I the only one missing out on this?” Let me go ahead and answer that, no, you are not.
Chasing fads is detrimental to our long term financial success. How do we know we are following a fad?
The “investment” surges in value. The idea of investing has been around for hundreds of years and formal stock markets came to being in the late 1700s. Growth in these markets are measured by small incremental movements over time. Beware of chasing the triple digit surges as these are not sustainable or realistic.
The decision to invest feels time sensitive. If you feel you need to move now, you are likely not making a rational investing decision, you have a fear of missing out (FOMO). If you get the buy it now or never feeling, you are being driven by emotion. Pause. If it is a small amount, take 72 hours to think about it. If the amount is larger, take weeks. Money that makes sense within a financial plan will make sense to invest today and a month from now.
We seek confirmation bias to make you feel better about our choices. We buy bitcoin at the top and realize that it solves very few problems in our society, so we buy books and go to webinars and talk to crypto maxis that will get us jazzed up to keep our manufactured belief alive. I’m picking on crypto here, but substitute options trading, real estate, buying nail salons and car washes. Fads take all shapes and sizes and a good sign you are chasing a fad is that you start venturing down an endless rabbit hole of information to make yourself feel better about your decisions.
The topic takes over media and social media. Media is driven by clicks, by what can draw us in. Nothing in our Facebook algorithm cares about rationality and truth. No influencer on TikTok has a concern for how we invest our money. It all is meant to drive content. If you watch Fox or MSNBC and think they care about providing you with truth, you are sorely mistaken. They are peddling facts that cause the biggest emotional response possible in order to get us to “stick around until after the break.” *cue the pharmaceutical commercials* If we become drawn to an investment opportunity because of media buzz, we should stop right there.
Everyone else is doing it. First off, like I already wrote, no, everyone is not doing it. We can talk to two people at work or at a kid’s sporting event that are trading options at midnight and suddenly we ask ourselves, “Are we the only ones not trading options in our pajamas?” The reality of fads is that the few people who participate in the foolhardy endeavors are usually very loud about their participation. The small minority makes the vast majority feel small. You own a home, contribute to your 401(k), have an emergency fund, are saving for college, but you are not buying options on semiconductor stocks?!?! More people are rational when it comes to planning and investing than you realize, but those who are rational when it comes to investing usually possess the humility and restraint to not broadcast their financial lives at every given opportunity.
An investment portfolio should be very similar to paint drying. It is neither fun to talk about or to watch. When you venture outside of a sustainable diversified portfolio and start pushing into fads, you have to ask yourself, why?
Why do we need the possibility of an outsized return in our portfolios? (there’s an equal chance of loss by the way).
Have you done a poor job of managing your cash flow and now you feel behind?
Are you struggling with insecurity and jealousy because your sibling or neighbor has more than you?
Will more money solve the problems you find yourself in?
I would start with those questions rather than chasing that which you will likely never catch.
If you understand you are chasing a fad, but still need the rush, do it in a responsible manner. A good simple rule of thumb is less than 2% of what you have to invest for the future. Take that and bet on a semiconductor stock or Ethereum or your college roommate’s brewing company. In an ideal world, we could all work around this urge, but I understand for some the speculation can be recreational.
There are reasons we feel the need to go after speculative flash in the pan investments. When we are honest with ourselves, we can get to the real reason we think we need these investments. That honesty within a financial plan might take you somewhere. Masking that truth with chasing the next thing will leave us with an account full of fake internet money and a closet full of Beanie Babies.
Trump Accounts are a new type of savings account created under the One Big Beautiful Bill Act (OBBBA) in July. They’re designed to give kids a financial head start and enhance their long-term financial security. In some cases, the government may even contribute to the account, and the money can grow with tax advantages over time.
If you’re planning for a child’s future, it’s worth understanding how these accounts work, who can open one, and how to get started. Getting familiar with the basics now can help you take full advantage once everything is up and running.
Below is a simple overview of what we know so far, with more details expected as additional guidance comes out.
What is a Trump account? This is a new type of savings account created just for kids under 18 who have a valid Social Security number. It works a bit like a retirement account (an IRA), which means the money you put in can grow over time without being taxed right away. The difference is funds for the account can come from multiple sources.
Who can open a Trump account? Only authorized individuals can open the account, in this order: legal guardians, parents, adult siblings, and grandparents.
How to open a Trump account? An authorized individual can submit an election to the IRS on the child’s behalf. This can be done in one of two ways: (1) by filing IRS Form 4547 with the individual’s 2025 federal income tax return, or (2) by using the TrumpAccounts.gov online portal. (The portal is expected to be fully operational by mid-2026.)
Who is eligible to claim the $1,000 federal government free seed money? Any child born between 2025 and 2028 who open a Trump Account are eligible for the unique $1,000 federal seed contribution, provided at no cost to the child or their parent/guardian.
Who can contribute to the Trump account and is there a limit? Other than the federal seed money, parents, guardians, grandparents, family members, and friends can make contributions. Employers can also contribute up to $2,500 each year for an employee's child. Tax-exempt organizations, like those recognized under section 501(c)(3), can contribute as well. The maximum annual contribution for each account is $5,000.
How should the Trump account money be invested? Funds must be invested in eligible mutual funds or ETFs that track U.S. companies, like S&P 500 funds, with fees under 0.1%. Additional criteria may be established by the Treasury Department.
When and how can you use the money in the Trump account? Distributions are generally prohibited before the child turns 18. Once the child reaches age 18, they assume full ownership of the account, and any distributions are then subject to the standard rules that apply to traditional IRAs, including potential taxes or early‑withdrawal penalties if taken before the age of 59 ½, unless an exception applies.
