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June 7, 2011 |
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,
With summer nearly here, we are looking forward to enjoying more of the great outdoors. But in our financial markets, you may find friends and family who remain chilled by recent economic and market negative news. We hope you’ll consider forwarding this newsletter to them and pointing out my most recent Applied Investing Series Letter, "You Gotta Have (Market) Faith," to help them warm to the idea of remaining invested according to the steadiness of the years, instead of the variant seasons of our markets.
So have some faith in the market - and then go outside and play.
Best,
John A. Frisch, CPA/PFS, CFP
President & Founder
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You Gotta Have (Market) Faith
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AWA's Applied Investing Series
Faith and reason. When it comes to investing in our markets, are they like oil and water? It’s true that reason drives the manner in which we structure portfolios — based on the academic evidence regarding market activity and guided by your personal goals. But in the broader sense, sometimes reason appears to let us down, and it can take faith in our markets alone to stay the course as planned. If blind market faith is occasionally required to stick with a prudent investment strategy, I say, bring it on.
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Maintain a Good Credit Rating
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Installment debt, in itself, is not a bad thing. It enables us to make major purchases that would be nearly impossible to finance up-front. The problem is, in this consumer society, we're bombarded with advertisements for literally thousands of "must-have" products. The result is that while our parents tended to pay with cash and buy only what they could afford, we have the "buy now, pay later" mentality.
Unfortunately, our massive appetite for credit may be eroding our financial security, as more Americans continue to rely on borrowed money to maintain their existing lifestyles.
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Tax Issues with a Gain/Loss on Home
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You may be able to exclude from income any gain up to $250,000 for a single taxpayer and $500,000 for a joint return. To exclude the gain, you must have owned and lived in the property as your main home for two of the five years prior to the date of the sale. If you lose money on a sale, the loss is not tax deductible.
Your Adjusted Basis
A dollar amount known as your adjusted basis determines whether you experience a gain or a loss. If you purchased or built your home, your initial cost basis typically is the cost to you at the time of purchase. If you inherit a home, the cost basis is the fair market value on the date of the decedent's death or a later valuation selected by a representative of the estate.
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Is Long Term Care a Good Idea?
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There is a good possibility that you or your spouse will eventually require some form of long-term care. According to the U.S. Department of Health and Human Services, about 40% of people aged 65 or older will enter a nursing home for some period of time during their lifetimes.
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Getting to Know ETFs
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Qubes. StreetTracks. HOLDRs. Names of popular rock groups? Not even close. They're all investments called exchange-traded funds (ETFs) and many people use them to build a diversified portfolio. Maybe you should, too -- if you understand the risk/reward trade-offs.
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About Us:
Located in Woodbridge, VA, Alliant Wealth Advisors (formerly Millennium
Capital Management Corp) was founded to help a select group of families
achieve all that is important to them financially. To achieve our mission
we use a consultative wealth management process, which includes both
investment consulting and advanced planning. Our approach assumes that
every client is unique; every client has varying needs and objectives;
and no two clients share the same risk tolerances, time horizons and
dreams. In addition to providing our expertise we work with clients'
existing advisors and, where there is a gap to fill, we use our own
outside experts in the fields of tax, legal and high-end Insurance.
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