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March 2011 AAM Newsletter
Hello and thank you for reading my e-newsletter.
I hope you find the information useful. If you enjoy the newsletter please forward to a friend. Please also let me know what you like to see so that I may continue to provide relevant content.
If you are a client of mine, thank you for your continued business and please update me on any changes in your situation do that I can make the appropriate changes to your financial plan and investments.
If you are not a client please consider giving me a call or emailing me if you would like to begin a plan to get you to your financial goals. I consider myself different from many of the advisors out there for the following reasons :
1) You will get no pressure to purchase any products because I am a fee-only advisor and a NAPFA® Member
2) You will have a comprehensive financial plan completed by a Certified Financial Planner ™ Practitioner or CFP® – I have committed to financial planning and continuing education.
3) You will have a reasonable fee for the services performed. I charge less than the typical large financial planning firm by being a small shop and keeping my business expenses low.
Ronald J. VanSurksum, CFP®
The stock markets moved solidly higher the first half of February as economic news and corporate earnings continued to show an improving economy. Mid-February brought trouble in the Mid-East, rising oil prices and a return to market volatility. For the month the S&P 500 index gained about 41 points to 1,327, a gain of about 3.2%. Oil ended the month at almost $97 per barrel up 5%. Gold surged as well gaining over 6% to $1,412 per oz. The Dollar ended the month slightly lower against other major world currencies dropping less than 1% to $77.24.
World concerns are dragging the markets lower. First it was the unrest and protests in the Mid-East resulting in the removal of a 30-year dictator in Egypt and now what appears to be a failed attempt to remove Libya’s president. All of this upheaval has caused oil prices to soar and concerns in the US of possible disruption in the oil supply and greater tensions ahead.
On top of that we now have all of the concerns coming out of Japan in the aftermath of the earthquakes, tsunami and potential nuclear meltdown. All of our hearts and prayers are with the Japaneese people as they try to put the pieces back together and hopefully avoid any additional disaster.
As a long-term investor I look at these situations as an opportunity to buy stocks at a lower price than I could at the beginning of the month. For my more conservative clients, these are the reasons why we keep enough funds in a safe position to avoid selling stocks when the markets go down. Keep in mind that markets will always have corrections and recoveries and this is no different. Keep the faith and pray for those who need our prayers in their time of need.
For weekly market updates please visit my blog which is now part of my new website at www.aamllc.com
Mortgage rates have retreated back under the 5% mark. The Schwab Bank 15-year rate is now at 4.18% and the 30-year rate is at 4.82%. These rates are as of 03/16/2011 and assume no points, no origination fee and a $250,000 mortgage. Again, if you have the equity in your home and a 5+ year time frame this could be a great time to refinance and lock in historically low rates.
With the money you save you could be paying off your mortgage sooner, paying off other bills, increasing your cash reserves or building up your long-term investments. Another great thing to do would be to save for that vacation you have always wanted.
CD rates were flat to slightly lower the last month. Charles Schwab has access to CD’s from banks all over the country. Here are some of the current CD’s offered.
6 mo CD @ 0.25% 1-Yr CD @ 0.45%
2-Yr CD @ 0.9% 5-Yr CD @ 2.2%
Currently I am not doing much with CD Ladders. I will start using them again as rates begin to rise. If you want to know what I am doing as an alternative let me know.
Tips and Suggestions
It’s IRA season. Consider a traditional or a Roth IRA contribution for 2010 or 2011. Come talk to me if you are not sure which is best for you.
After your taxes are complete let’s get together to discuss and plan for 2011. Too many times we just look backwards to complete out taxes and do not look forward to try and reduce future taxes.
Do you have that Christmas credit card debt paid off yet? If not let’s meet to develop a plan to pay off the old debt and save for Christmas 2011 and avoid next year’s debt.
If you have any question or if you would like to have help with your financial plan please give me – your Fee-only Certified Financial Planning ™ Practitioner a call.
All articles are now found on my website which has been combined with my blog : www.aamllc.com
Standard & Poor’s Economic Report: The Sum of Oil Fears
By David Wyss, Chief Economist, and Beth Ann Bovino, Senior Economist
MARCH 2011 — The continued wave of rebellion in the Middle East sent oil prices soaring above $100/barrel, their highest level in over two years. The unrest in Libya and the threat of unrest in Saudi Arabia added to worries of supply disruptions, especially within Europe. How much disruption will occur is completely speculative at this point. But even small changes in output can cause big price swings.
Government Stepping In to Help Americans Pay for LTC Costs
The federal government is concerned about the rising costs of long-term health care for senior citizens and the disabled. And it is actually taking action.
Simple Steps to Help Reduce Credit Card Debt
The U.S. has a cumulative revolving debt of more than $850 billion, according to the Federal Reserve. A whopping 98% of that figure is comprised of credit card debt — with 54 million households in arrears for an average balance of $15,788.1
New Fee Disclosure Rules Help Make Costs More Transparent
Ask most retirement plan participants how much they pay to participate in their workplace plan, and answer will probably be, “Nothing.”
Want more information on how I can help you? Give me a call or drop me an email to review or set up a free initial consultation.