WH Cornerstone Newsletter
Independent solutions for life's financial opportunities September 2005

in this issue

Interest-Rate Fluctuations

Coming Up Short?

Striking a Delicate Balance

Insurance and Inflation

Combining Term and Permanent Insurance

Six little known secrets about credit cards


Interest-Rate Fluctuations

The zero percent interest-rate party seems to be winding down. After nearly four years of paying low interest on auto loans and mortgages, Americans are again seeing upward pressure on these and other types of debt.

The Federal Reserve boosted key short-term rates in June 2004 with the promise that more increases would follow. But the correlation between the Fed's actions and the path of consumer interest rates has been murky. For example, the Fed raised short-term rates seven more times in the 11 months after June 2004, yet 30-year mortgage rates remained flat — and even fell slightly — during the period.

Interest-rate fluctuations can be puzzling to the average person and even to some experts. Do you know how your portfolio might be affected by rising rates? If no answer leaps to mind, you might be a good candidate for a bond mutual fund.

Taming the Surly Bonds One of the most important benefits offered by a bond mutual fund is professional management. Bond fund managers are experienced in the bond market. They carefully research, select, and supervise all the debt their funds hold, buying and selling bonds in an effort to maximize a fund's return based on its objectives. Fund managers work not only to help protect your investment from changes in interest rates, but also to potentially profit from these changes.

If you are concerned about how the latest rate increases will affect you, please call. Our goal is to help you evaluate your portfolio.

Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

Bond funds are subject to the interest-rate, inflation, and credit risks associated with the underlying bonds in the fund. As interest rates rise, bond prices typically fall, which can adversely affect a bond fund's performance. The principal value of bonds and bond funds fluctuates with changes in market conditions. When sold, they may be worth more or less than their initial cost.

Read on...

 Quick Links...

Last month my father received a phone call from a local police department stating that his elderly cousin had been taken to the hospital after having been found in her home after suffering what may have been a stroke. By the time he called the hospital, she had passed. Even though they were first cousins, they had only met five years ago through my father’s hobby of researching his family’s genealogy. They had only seen each other four times at family reunions. My father now has the unenviable task of sorting through her personal belongings. She was an only child and both her parents passed away in the 1950’s. A will was found that had been written in 1957. Unfortunately, she never signed it so it is not valid. Her estate is now going through the probate court. If she had lived, who would have made decisions about her health and well being? If you do not already have a plan in place that dictates your will, please don’t wait any longer. Everyone needs an Estate Plan which includes a healthcare proxy and a durable power of attorney. Would you really want to burden your love ones with having to make decisions on your behalf? Or would your rather the state determine what happens to your hard earned assets? Please, don’t let this happen to you or someone you love!

Time to Share. Create a Buzz. On Tuesday, October 18 we will be teaching a one-night course called Women, Beat the Investment Pros! Whether you have $5,000 or $5,000,000 to invest—you could beat the pros! Learn how you can implement this simple strategy of investing into the high-yield, low priced stocks of the Dow Jones Industrial Average. This straightforward strategy will only take you a few hours a year. This class is designed for women looking to take control of their investments. In addition to learning the strategy, you will learn how to open a brokerage account, and to make a trade. Men are welcome too. You learn how to sign up by visiting Duxbury Before & After Dark or give us a call.

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  • Coming Up Short?
  • It's a nightmare scenario many have considered: You're going to retire in 10 or 15 years, knowing full well that you haven't saved enough. Is there anything you can do?

    Luckily, the answer is "yes." Thanks to catch-up provisions now available with most retirement plans, you may be able to make your savings work harder as you approach retirement. Because these plans offer both tax-advantaged contributions and tax-deferred accumulation, they can help boost growth potential and may enable you to reach your financial goals on time.

    Read on...
  • Striking a Delicate Balance
  • When the day comes for you to begin drawing a retirement income, will you know how much you can withdraw safely from your investment accounts? If you don't have a withdrawal plan, you may run the risk of taking too much and running out of money during your lifetime, or being too cautious and living on less income than you need to maintain your lifestyle.

    A systematic withdrawal program may help stretch the life of your accounts to last for a certain period or even indefinitely, depending on your goals.

    Read on...
  • Insurance and Inflation
  • What does the cost of gasoline have in common with your life insurance policy? Both are subject to the effects of inflation. Petroleum-based energy prices have been growing at a nearly 30% annual rate in 2005. Today’s prices at the pump are probably the most visible reminder that inflation is almost always eroding your spending power.

    You may have already adjusted the household budget to account for higher energy costs, but when was the last time you considered the effect inflation might be having on your life insurance coverage?

    Read on...
  • Combining Term and Permanent Insurance
  • Many people are under the impression that they can buy term insurance or permanent insurance — but not both.

    The fact is, combining term and permanent insurance may be an effective strategy for some people.

    Read on...
  • Six little known secrets about credit cards
  • Credit cards—one of life’s necessities! Use them wisely and they can be a huge benefit in your life. Use them unwisely and you will pay dearly—maybe even for years!

    Read on...
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