Greetings!
Hello Everyone, We'd like to wish all our Irish friends an early happy St. Patrick's Day. With all this cold weather, I'm ready for some nice hot Irish stew! I don't know about you, but I can't wait for summer and the boating season to start. I guess I've really gotten spoiled since our Wisconsin days, and now I'm complaining when it's in the 50's in March. As I stated in our last newsletter, we've made some updates and added information to our website, so check it out. There's lots of good information for your use. Also, Global Financial Private Capital who is our primary money management team has a new consumer website (www.gf-pc.com) that is awesome. I'd encourage everyone to take a look at it. It will give you a very good perspective on how managing money has changed today, and how you can take advantage of it. On that note, I'd also like to announce that we now have a new program with Global Financial. It's an ETF that's designed to replace CD'S and provide for a better rate of return. Yet, it's still a 100% liquid account. The national average for 1 yr. CD rates ranges between .26% & .70% according to this week's Bankrate.com website. Ben Bernanke just stated this past week that the feds intend on sticking to their near 0% rate policy for "as long as it takes". The year 2019 was mentioned, but nothing is certain except that we know rates are staying low for quite awhile. Our new program is called MINC, and it will launch by the end of the month. The original rate will be between 2% & 2.5%. The program works much like a money market account, but with higher rates. In my opinion, this would be a much better place to park cash for liquidity and safety than what's currently available in the market today. If you'd like more information, give us a call to set up a time to stop by the office.
Sincerely,  James D. Stillman |
Tax Free Retirement: Is It Even Possible?
Lake Norman Magazine, March 2013
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One of the biggest concerns we continually hear from the folks we meet is, "what impact are ever increasing taxes going to have on our retirement planning"? That's assuming taxes will continue to go up of course. With $16.5 TRILLION in national debt (and rising), underfunded liabilities such as Medicare, Medicaid, and Social Security totaling over $100 Trillion, and the full implementation of the Patient Protection and Affordable Care Act in 2014, I would guess taxes will have to go up a lot!
What are folks to do? Remember, in most cases, if you defer a tax (IRA'S, 401k's, etc.) you also defer the "tax calculation". If you knew taxes would be higher in the future (or felt very strongly they would), why defer the tax? That's like asking a farmer, "Would you rather pay taxes on the seed or the harvest"? In most cases, paying later means paying more.
So, what's the answer? Here are two strategies that will provide "tax free income" in retirement. Note: These strategies are probably better suited for younger folks that are still working and have 15 - 20+ yrs. to build a retirement account.
Read more... |
Sequestration
GFPC Thought for the Week (240)
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Sequestration means a series of automatic, across-the-board budget cuts to government agencies, totaling $1.2 trillion over 10 years, to be split 50/50 between defense and domestic discretionary government spending. It has been coming for more than a year; with Congress already pushing it back once to March 1, 2013 as part of the year-end fiscal cliff deal.
It's all part of an attempt to control the U.S. national debt, which is still growing at an alarming rate and approaching $17 trillion, or 100% of Gross National Product. In other words, the size of our national debt is approximately equal to what the nation produces each year!
Although few can argue with the financial need to quickly cut the national debt, sequestration would involve forced cuts applied in an arbitrary manner. More importantly, it will further weaken our already weak economic and employment prospects.
Read more...
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Nobody Ever Made Money from Panicking
GFPC Thought for the Week (242)
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Chris Bertelsen, our Chief Investment Officer, was recently a guest on Fox Business News and explained why it pays to be a contrarian and to "love what other's hate."
Contrarians believe that widespread optimism for a stock can often lead to inflated prices that then become hypersensitive to missteps. When a stock carries such a high valuation, the company must perform perfectly to maintain its current share price - we call this "Priced for Perfection." Expectations for continued growth rise in tandem with the elevated share price - the higher the expectations for growth the bigger the risk for a sell off if the company makes even the smallest mistake.
Let's look at the chart below showing Apple's stock performance in 2012. The stock soared for the first nine months and one was hard pressed to find a single bear on Wall Street as its valuation pushed the price above $700 prior to the iPhone 5 debut.
Not too soon after the launch, rumors began to circulate that initial sales on the iPhone 5 may not meet these lofty expectations (red arrow). The company ultimately missed its estimates in the subsequent earnings call (blue arrow) and the price of the stock dropped quickly.
Read more...
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