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Monthly Archives: February 2008

Financial To Do List: Medicare Part D Open Enrollment

If you are over 65 and enrolled in Medicare, or if your parents (or grandparents) are over 65 and enrolled in Medicare, check on coverage for prescription drugs and make any changes during the Medicare Part D open enrollment period, November 15-December 31, 2007.  (NOTE: if you are over 65, enrolled in Medicare, AND have prescription drug coverage through a Medicare Advantage plan OR are receiving prescription drug coverage through an employer sponsored retiree health plan, enrolling in Part D may cancel some of your insurance coverage and generally should NOT be done without consulting your current insurance plan.)

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LPL Economic Update PowerPoint

Lincoln Anderson’s PowerPoint on the current state of the economy. To view the powerpoint, please click on the link below:

http://www.mwboone.com/library/articles/Economic_Update_Feb_22_2008.ppt

Stock Market Observations: Price to Earnings (P/E) Ratios — Check Your Numbers

It is commonly accepted that the P/E (Price Earnings Ratio) is a key metric in evaluating the not only individual stocks but the valuation of the stock market as a whole.

P/E ratios for the US stock market are generally understood to reflect fair valuation when they range between 14 and 20.  Exactly where depends on many factors including interest rates and whether looking at current year, trailing 12-month or forward twelve months.

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Lincoln Anderson’s Economic Update

  Financial markets continue to be roiled by sub-prime mortgage concerns. And a number of doom and gloom prognosticators are saying we are in a recession or predicting recession. I continue to disagree with these gloomy assessments of the U.S. economy. I am confident we are not in a recession, and I do not expect a recession this year.

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The Dismal Science — Economics: Black Swans and the Mortgage Crisis fine’

“A single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans.  All you need is a single black [one].     

                                  ” From “The Black Swan”
                                   By Nassim Taleb (2007)

The mortgage crisis meets the description of a “black swan”.  Recently, the Wall Street Journal published a description of how one trader (Mr. John Paulson) was able to profit handsomely from betting on this “black swan”.  (January 15, 2008, Trader Made Billions on Subprime).  How handsomely?  Profits of $15 billion in 2007, nearly equal to Citigroup write-offs reported in their December 31 quarterly earnings announcement. 

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Keep Investing: Bad Markets are Better for Investors

There are some very basic things about investing that few people ever seem to fully grasp.  The most obvious is that investing at low prices is better than investing at high prices.  I should be able to end this piece here and let you figure out the implications, but since they seem so little understood I feel compelled to explain some.

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Fears of the Falling US Dollar

 We all know that it is more expensive to fill our gas tanks – did you know that there is also a direct relationship to the lower dollar? Many commodities are priced in U.S. dollars (e.g., gold and oil), which makes these items cheaper for non-U.S. citizens to obtain and makes them more expensive for us to purchase.

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You May Love Each Other, But Should You Invest Together?

It’s one of the most important questions a couple will face in their relationship but it so rarely gets asked until a relationship is well underway – should we pool or separate our money for investment?

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When Recession Fears Surface, Check Your Plan – Or Make One

It’s been a wild few weeks on Wall Street. When trading reopened on Tuesday after the Martin Luther King holiday, the Federal Reserve Board responded to world pressure and swooped in with a rate cut to put a floor on Dow losses that were approaching 20 percent since last October. By today, things seemed to be stabilizing.

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When is a Prenup a Great Valentine’s Day Gift? When it’s Time to Remarry

No, it’s not exactly candy and flowers. But for couples attempting another try at marriage, a prenuptial agreement can either set the groundwork for a new and trusting relationship, or a good reason to call it a day.

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