Welcome to Chesapeake Investment Advisors, Inc. Greetings!
Here's the second newsletter--I want to thank everyone who responded to our first effort--the advice was very helpful. I acknowledge the first one was a bit thin on content but I wasn't sure how these were going to go over and surprisingly, most of the feedback was grateful that the content was easy to read and short. So we will continue with that format with this edition.
If you are receiving this for the first time it's probably due to an email address error in our first mailing--I had several bounce-backs and discovered that most of the time it was due to an errant comma or missing dot or backslash or some problem in the uploaded email address.
By far, the most frequent comment on the last edition seemed to center on my photo at the end. Most of the comments suggested using a better looking double. A few even suggested replacing my photo with one of my dog, Duncan. As you may know, Duncan the Sheltie is very photogenic, and I will try to get him to go along with it, but he's a little shy about putting his image out on the Internet. He even hinted at compensation for use of his photo; negotiations are ongoing.
Marty |
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New Office Manager
If you have called us in the last couple of months you noticed that Wendy is no longer answering the phones. The first week of February Wendy's husband accepted a very nice job in Pennsylvania near Pittsburgh. Wendy asked that we tell everyone that she misses them and is sorry she didn't get to say good-bye personally--but when the opportunity came along they felt they had to jump at it.
The new voice you hear is Jenna Putman--a recent graduate with a History degree from Salisbury University, Jenna lives in Chestertown, just two blocks from the office. You can often find her trusty assistant, Trapper, a Shiba Inu puppy either barking at a delivery or sprawled out on her office floor taking a nap.
By the way, Jenna is the same Jenna that worked the counter at Play it Again Sam's coffee shop; as a result, our office coffee has really improved in quality.
Feel free to email Jenna with any account requests--i.e., beneficiary changes, check requests, or automatic deposit requests. Jputman@chesadvisors.comHere's Jenna celebrating her graduation in Florence, Italy last summer.
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I Think I'll Watch at Home
The old maxim, "A penny saved is a penny earned" did not account for Uncle Sam's taxes. Actually a penny saved is equal to a penny and a half earned. It requires just about a buck and a half of pre-tax earnings to get one dollar in your pocket. Let's look at a disposable income example.
A recent listing for a couple of Personal Seat License's (PSL's)for the NFL Baltimore Raven's stadium season tickets was asking $6,998. Doesn't sound too bad, if you say it fast; but a typical taxpayer would need to earn about $10,500 in pre-tax salary merely to have the right to buy season's tickets to the Ravens' games. PSL's do not include the actual game tickets--which add another $1,800. All in, someone in the 35% federal tax bracket, plus the State tax, plus FICA, would use up about $13,200 of salary to see in-person all ten home games next football season.
(I remember when I joined the State Police the starting salary for a Trooper was $13,500--I thought I had struck it rich.)
The bottom line; when one considers all the time and effort and taxes to come up with every dollar in your pocket, perhaps we should consider keeping them there.
I think I'll watch next season from my nice warm living room. |
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| Concept of the Week:
Rebalancing
Well constructed
portfolios consist of diversified asset classes which often move at different rates and times. Periodic rebalancing resets assets classes back to the base or standard allocation--keeping the intended mix of stocks, mutual funds, bonds and fixed income within allowable variations. If allowed to work, rebalancing institutionalizes buying low and selling high. Loring Ward accounts for example rebalance at a 4% variation and this occurs in the first week of the last month of the quarter. I like to rebalance at least annually provided there are no tax serious
consequences.
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| Book I am reading now: The Ascent of Money, by Niall Ferguson. Penguin Press--2008
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