Frequently asked questions
Why should I hire Abbilon to help me invest my money?
Because Abbilon is designed to produce superior results over your investment lifetime.
Our investment service is designed to help you earn higher returns with lower risks over your investment lifetime. And that, as opposed to settling for market average returns, ought to be your real goal.
What is your investment philosophy?
Our investment philophy is value oriented and probabilistic.
We believe all financial assets have an intrinsic value - which is the present value of all the cash it will produce in the future. The public prices of assets like stocks, bonds, and mutual funds don't always represent their intrinsic value. In fact, prices often differ significantly from value, sometimes for a long period. Eventually, however, price do reflect the value of the underlying stream of cash it will produce in the future.
If an investor can purchase a diverse group of assets at prices significantly below intrinsic value, she will earn high returns on her investments without incurring equally high risks. This happy result will most likely materialize eaither from selling the asset when price and value converge or by holding the asset for its lifetime and earning the stream of cash the asset produces.
This can only happen, of course, if two conditions are met: 1. the investor correctly estimates the intrinsic value of the asset in question; and 2. no unforseen events materially impact the expected cash flows of the asset. Since those two conditions are not always met, we insist on buying assets only when a significant "Margin of Safety" is present and we can achieve adequate diversification.
We beleive the best way to achieve this results is by use of mathematical methods to find undervalued assets and to create a portfolio that maximizes the probability of investment success.
What types of investments will I own in my account?
Your account will be invested primarily in shares (stocks) of a few good businesses.
Specifically, we will invest your money in shares of 10 to 20 companies, each one operating in different industries and/or countries. We will not purchase index funds or ETFs for you.
Each company will be selected on the basis of fundamental quality and value, as determined based on our quantitative models and fundamental research.
Where will my money be custodied?
Your money will be held by the broke-dealer or custodian bank of your choice. Unless you specifically direct us otherwise, that custodian will be Interactive Brokers, Inc.
How much does Abbilon charge for its services?
Abbilon charges a quarterly advisory fee of 0.25% (1.00% per year) of assets under management (AuM). This fee is deducted directly from your account at the end of each quarter and is based on the value of your account on the last date of the quarter.
Will I pay trading commissions?
Abbilon does not charge trading commissions or receive commission rebates from your broker-dealer. However, your broker-dealer may charge a commission, mark-up or trading fee.
Those fees are independent, separate and apart from the management fee Abbilon charges.
While we recommend using Interactive Brokers, Inc. (“IBRK”) as custodian and broker-dealer for our clients’ money, clients are free to use any broker or custodian they choose. IBRK charges $1.00 per trade. But other charges may apply.
Please review your brokerage account agreement and disclosures for the trading fees.
Are there any penalties or fees for closing my Abbilon account?
No. Clients can close their account or partially withdraw funds whenever they want without incurring any penalties or fees.
What types of accounts does Abbilon currently support?
Abbilon can acts as investment advisor to any kind of investment account. Your broker-dealer or custodian will likely support any type of taxable account, including individual, joint and trust accounts. We can also act as your investment adviser to your Traditional IRAs, Roth IRAs and Simplified Employee Pension (SEP) IRAs, IRA transfers and 401(k) plan.
What is the minimum amount required to invest with Abbilon?
You must be at least 18 years old to open an account.
What are the differences between a Traditional and Roth IRA?
The main difference between a Traditional IRA and a Roth IRA is when you pay income taxes.
With a Traditional IRA, your contribution is tax deductible; i.e., you don’t pay taxes on the contribution amount until you withdraw it (either upon retirement or early with a penalty).
A contribution to a Roth IRA is not tax deductible; you pay taxes before the contribution, but you do not pay taxes later on the amount you earn.
In addition, with a Roth IRA you can leave the money in for as long as you want, letting it grow as you continue to age. With a Traditional IRA, by contrast, you must start withdrawing the money when you reach age 70½.
Roth IRA contributions are limited by income level. In general, you can contribute to a Roth IRA for 2019 if you have taxable income and your modified adjusted gross income is either:
- Less than $173,000 if you are married filing jointly;
- Less than $110,000 if you are single, head of household, or married filing separately (if you did not live with your spouse at any time during the previous year); or
- Less than $10,000 if you’re married filing separately and you lived with your spouse at any time during the previous year.
For more information on contribution limits, please refer to the IRS website.
What is the maximum amount I can contribute to an IRA each year?
The answer is the same for Traditional and Roth IRAs:
- If you are under 50 years of age at the end of 2013: The maximum contribution that you can make to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2019. This limit can be split between a Traditional and a Roth IRA but the combined limit is $6,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a Traditional IRA may be reduced depending upon your modified adjusted gross income (modified AGI).
- If you are 50 years of age or older before the end of 2019: Your maximum contribution to a Traditional or Roth IRA is the smaller of $7,000 or the amount of your taxable compensation for 2019. This limit can be split between a Traditional and a Roth IRA but the combined limit is $7,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a Traditional IRA may be reduced depending upon your modified AGI.
Does Abbilon help clients report taxes?
Your tax documents (Form 1099) are provided to you by your brokerage firm.
Abbilon does not provide individual tax advice. Please consult your tax advisor regarding any questions you may have about your personal taxes.