Keeping Our Heads Above Water
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Bruce Doole
January 13th, 2010
FROM THE DEPTHS TO THE…SURFACE?
What a year it was! We started off with our economy and financial markets continuing to descend with no clear end in sight. A new president was inaugurated, making history in the process and hope abounded that things would start to turn around. Springtime came and lo and behold… the financial markets came off life support and the economy showed signs of slowing its descent. This was driven by positive economic growth for the end of the year which should approach 4% in the 4th quarter of 2009. This is after almost two years of declines in US economic growth. The markets mostly ignored the lack of new jobs and little movement in housing prices, mainly focusing on improvements in the financial and technology sectors. Apparently, if most large banks can return the money the government loaned them and technology companies are doing well, the markets follow. The current administration is pushing hard for the return of these funds so they can spend it on trying to create new jobs. You may be asking, if the first trillion spent on creating jobs didn’t work, why would the second trillion work? Maybe that’s why we aren’t in politics because we have a hard time answering these questions in a way that makes sense.
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Maximizing Social Security Benefits
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Nathaniel Ritchison
January 13th, 2010
No matter what age you are you’ve probably considered the question, when should I begin taking my social security benefits? This question has become especially timely given the financial reformations that are sweeping through the health care industry and Medicare, and will likely include Social Security in the future. It appears that most retirees are applying sooner rather than later with the applications for retirement benefits skyrocketing by 23% this past year. Who can blame them? Most Americans are applying for benefits as soon as they become eligible in fear that legislation will reduce their benefit in the future. However, once we look at the facts, you may not want to run to apply for your retirement benefit the day you turn 62. Consider these important factors before applying for your retirement benefit: your retirement age, your retirement income plan, and your life expectancy.
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Recovery, Now What?
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Bruce Doole
October 13th, 2009
WE’VE HAD SOME RECOVERY IN THE MARKETS, NOW WHAT?….Last year at this time, we were writing about the extraordinary market conditions we were facing and that the hurricane force winds that were driving the economy down would eventually subside and we would have a recovery at the end of this year. It turns out that the economic recovery started earlier than was expected, albeit slowly and as they usually do, the markets anticipated the recovery by a few months and started moving back up the second week of March. Our patience in holding on to our investments has paid off and we have started to sell some of our investments that are back in profits. As we have been reading, the Federal government and the Federal Reserve have taken significant measures to add liquidity to the markets (put more money into the banking system) and keep interest rates at an all-time low. In addition, the Federal deficit has increased dramatically as has the issuance of new Federal debt. This will have to lead to inflation which will mean higher interest rates in the next few years. We are thus starting to prepare for this eventuality by investing in stable short term and inflation protected government bonds, natural resource funds, and international funds that are based on non-dollar denominated currencies. We will also be looking at companies that make products that tend to keep pace or even stay ahead of inflation like consumer staples, drugs, medical devices, and energy – especially renewable energy.
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