In This Issue
Featured Article
Post Election Investment Moves
Curt's Quick Comment
Preventing Identity Theft
From the Financial Presses
Quick Links
Featured Article
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Financial Strategies
Planning Techniques, Procedures and Guidance for Military Professionals

Welcome to the November issue of Financial Strategies.  First of all, for those of you on the east coast I hope you made it through the storm o.k.  Like my days as a Fighter Pilot, I saw a major storm coming and I got in an airplane and ran away.  My wife, Cathy, rode out the storm without me...for at least the third time since our marriage.

In this issue, I start by talking about things you might want to consider doing with your investments based on the outcome of the election.  In my Quick Comment I talk about some insurance considerations that Sandy reminds us about.

With the holiday season rapidly approaching many of us will spend a lot of time on-line shopping.  The third article talks about how to protect yourself from identity theft and what to do if your identity is stolen.

Finally, as always, I've posted a couple of articles that I found interesting.  The first article covers the options you have concerning the conversion of a Traditional IRA to a Roth IRA (and back again).  The second article covers college funding for those of us who may have had children later in life.

Thanksgiving is just around the corner and I hope that you have a chance to get together with family and friends and enjoy the holiday.

Curtis L. Sheldon, EA
C.L. Sheldon & Company, LLC
(703) 542-400 or (800) 928-1820
Post Election Investment Moves


As of this writing, the election is a matter of days away.  I think most of us can agree that whoever is elected, the future direction of our nation will move one way or another.  So, what is an investor to do?  There are some things to keep in mind.


If Governor Romney is elected


Start with your goals.  You can't develop an effective investment strategy if you don't know where you are going.  Why would you accept a great deal of risk if you can reach your goals without the risk?  Align your investment choices and goals.


Don't ignore expenses.  Investment expenses can eat up a large portion of your returns.  We get lulled into a certain level of complacency with fees because they are stated in terms of assets.  For example, 2% of investment assets.  When couched in these terms, the difference between 2% and 1% fees doesn't sound that big.  But if your return on those investment assets is 4% it means that if the fees are 2%, the investment company keeps 50% of your returns versus 25% if the investment company charges 1% of assets.  Over 20 years the difference can amount to thousands of dollars.


Think about taxes.  We never want to let the tax tail wag the dog, but we can't ignore taxes in our investment decisions either.  Investments should be selected and placed in accounts (taxable, tax-deferred, tax-free) based on what will put the most money in your pocket after tax.  We also want to look at whether decreasing taxable income today (through the use of 401(k) plans or IRAs) will have a multiplying effect by reducing our AGI below the amount that limits other deductions and credits.


Rebalance as appropriate.  If your investment portfolio has an allocation that aligns with your goals and risk tolerance it may need periodic rebalancing.  You can do this based on the calendar or based on a deviation from the desired allocation (or both).


Don't make avoidable mistakes. I saw Ben Stein (who I respect a great deal) on TV the other day and I thought he has some good advice on things you shouldn't do. He said:

    1. Don't try to predict the future
    2. Don't think you can pick winning stocks
    3. Don't try to do it all by yourself

It might be worth thinking about.


If President Obama is reelected


See above.  Investment strategies should be based on the long term.  Presidents come and go.  And, sometimes in spite of them, Capitalism continues to be the best option for long term wealth building and improving standards of living.  Make sure you go along for the ride.


Investment planning is a key, but not the only, part of an effective financial plan and financial strategy.  But as many of the readers of the newsletter know, tactics are not strategy.  When we start adjusting our investment plan based on day to day changes, even big ones like the election, we're setting ourselves up for reaction to events versus planning for them.


Curt's Quick Comment

In the aftermath of Hurricane Sandy, there is an increase in the awareness of insurance.  You may have heard about flood coverage on the news.  Unless you have taken action beyond buying a "standard" homeowner's insurance policy there are two key perils you are not protected from.
  1. Floods (other than from sewer backup)
  2. Earthquakes (called earth movement on an insurance policy)

To protect yourself against flood damage,  you can purchase a flood policy.  If you live in areas subject to flooding there is a good chance if you bought your home your lender required this.  If the insurance isn't required by your lender, you have the option to buy it.  If this storm has done nothing else, it should make you think about your assumptions concerning your risk of damage from flooding


To transfer the risk of damage from earthquakes, you can purchase a rider for your homeowner's policy.

Preventing Identity Theft


Millions of Americans fall victim to identity theft each year -- and their financial losses are in the billions. In 2010 (the latest data available), an estimated 8.6 million Americans experienced identity theft, causing losses of $13.3 billion.1


What can you do to help reduce your chances of having your identity stolen? The steps below can help you prevent significant losses. 
  • Check your credit reports every year. You have the right to obtain a free copy of your credit report every 12 months from each of the three credit reporting bureaus -- Equifax, Experian, and TransUnion. Check thoroughly to ensure that there aren't any unidentified accounts on your report.
  • Place a freeze on your credit reports. This can help stop an identity thief from opening a credit card account under your name. You simply contact the three credit bureaus and request a credit freeze. This prevents lenders who don't already have a relationship with you from viewing your credit report. If they can't access your credit report, they won't issue a new account. There is often a fee to request a freeze, depending on your state of residence and whether you've ever been the victim of identity theft in the past.
  • Monitor your email. You want to be on the lookout for phishing scams, particularly those that appear to come from a credit card company, bank, retailer, or anyone else you do business with. Many of these emails will direct you to a phony website that will ask you to input sensitive data, such as your account numbers, passwords, and Social Security number.
  • Be careful online. When banking or shopping online, be sure to use websites that protect your financial information with encryption, particularly if you are using a public wireless network via a smartphone. Sites that are encrypted start with "https." The "s" stands for secure. Also be sure to use anti-virus and anti-spyware software.

What do you do if your identity is stolen? First, call one of the three credit bureaus and ask them to place a 90-day fraud alert on your credit report. They must contact the other two bureaus to place fraud alerts on your reports. You also want to get a copy of all three credit reports.


Second, file a complaint with the Federal Trade Commission (FTC). You'll create an FTC Affidavit, which you should then take to your local police department and file a police report. Your copy of the FTC Affidavit and the police report make up an Identity Theft Report, which can help you:

  • Get fraudulent information removed from your credit report.
  • Stop companies from collecting debts caused by the theft.
  • Get information about accounts that were illegally opened in your name.



(1) Source: Bureau of Justice Statistics, November 2011.

Required Attribution

Because of the possibility of human or mechanical error by S&P Capital IQ Financial Communications or its sources, neither S&P Capital IQ Financial Communications nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall S&P Capital IQ Financial Communications be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.

2012 S&P Capital IQ Financial Communications. All rights reserved.

From the Financial Presses


Should You Undo or Redo a Roth? 


Deciding whether to convert a traditional IRA to a Roth IRA in 2012 is a big decision. It includes several variables, such as your age, income tax bracket, and your overall financial status. Another complicating factor is the 3.8% Medicare surtax on certain investment income that will take effect in 2013. Consider all of these points before pulling the trigger....(To read more click here)


Older Parents: Paying for College


Did you have children relatively late in life? The recent trend of postponing the child-rearing years can have an unexpected impact when your children are ready to enter college. You could find yourself in a tight money squeeze at the same time you're trying to squirrel away more funds for your looming retirement-if you haven't retired already...(Read more here)

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC 's current written disclosure statement discussing our advisory services and fees is available for review upon request.
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).
Military Professionals have unique financial benefits and unique financial needs.  If you think you would like some help developing your Financial Strategy please give us a call at (703) 542-4000 for a free initial consultation or for more information go to our website at .