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Monthly Archives: July 2008

With the Market So Uncertain, Are Immediate Annuities A Good Way To Preserve Your Retirement Savings?

One day, the market is up 400 points. The next day, down 300. Stocks in 2008 haven’t won any points for stability. In periods of market uncertainty, you’ll hear a lot about safe harbor investments that will supposedly guarantee income for life.  One of these alternatives is an immediate annuity.

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Weekly Economic Commentary

Financial market participants actually paid attention to the economic data released last week – despite the fact that it was the peak week for Q2 2008 earnings reports. Their reaction to the data was just as volatile as the year thus far – near panic on Thursday as the market digested a big jump in jobless claims and a weak reading on existing home sales, and near euphoria on the much better than expected durable goods, new home sales and consumer sentiment data released on Friday.

To read the rest of this article, please click on the link below:

http://www.mwboone.com/library/articles/WeeklyCommentary_7_28_08

Asian Contagion Part 2?

A pullback in the outlook for inflation would likely propel a powerful stock market rally in the U.S. With the primary driver of overall inflation stemming from global food and energy commodity price pressures, the key to falling inflation may be slower pace of emerging market growth. This slowdown appears to be unfolding.

China has been an engine of growth for a long time. However, the Chinese economy faces many challenges in the quarters ahead that may lead to a slowdown in growth:

 To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/articles/lpl_weeklyCommentary_7_29_08

 

Peak Oil or Oil Peak?

"The huge surge in crude oil prices over the last seven years – up about 600% – stirs ferocious debates about causes ad concequences. Supply side causes under debate include OPEC supply constraints, geopolitical risk, "asymmetric warfare", the inevitable eventful result of declining reserves referred to as "peak oil", the lack of a coherent energy program in the U.S. over the last 30 years, or those darned environmentalists and Not in My Backyarders (NIMBYs). On the demand side, it’s the rising emerging market energy demand led by China, rich Americans gorging on cheap oil, and surging financial investment demand for commodities (also referred to as "those darned speculators"). The there’s  the dollar exhange rate, only down about 35% against the 600% rise in oil, but who’s counting".

To see the rest of this Lincoln Anderson article on oil, please click on the link below:

http://www.mwboone.com/library/articles/Lincoln_Anderso_Oil_Peak_7_31_08.pdf

 

Bad Banking, Bad Regulation, But Still Solid Credit Market Performance

"Very poor decision making by financial insitutions and poor supervision of their operations have been at the heart of the financial sector woes. The problems affecting these financial institutions come from two basic sources: 1) very weak credit standards, mostly in mortgage loan originations and 2) high leverage of some financial instiutions’ balance sheets.

IndyMac was a poster child for lax origination standards. It was the biggest "alt A" mortgage originator. (An Alt A mortgage has either little to value ratio-or a combination of these issue.) Why lenders thought these loans were a good idea, much less the even lower quality subprimes, I will never understand. Subprime mortgage originators like Countrywide put together mortgage pools that were quite risky at the onset and are now experiencing high default rates".  

To see the rest of theis article, please click on the link below:

http://www.mwboone.com/library/articles/Credit_Crunch_7_31_08.pdf

Eliminate Debt and Save Money? It’s All About Getting a Plan

With widespread concern about the value of homes, rising health care costs and the general outlook for the economy, now more than ever, Americans need to set a new course with regard to managing their household finances.

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Real Diversification

  “I’m diversified” .  We hear that every day from people whose “diversification” spans the entire spectrum  all the way from A to B, when it should go from A to Z.   They don’t realize that their financial life is as easy to turn over as a pencil standing on its point.  If you want to create a strong and resilient financial life that is difficult to turn over even in a storm, you need to position yourself like a crab, with many points on the ground.

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Inflation and Valuation

Fears of recession have given way to fears of inflation. The odds of a recession in 2008 have declined from earlier this year judging by the incoming economic data, the upward revisions to Wall Street economists’ GDP estimates and, more colorfully, by the odds reflected in bets placed on the online betting site Intrade, where the odds of recession have fallen back to a normal level of 30-35% from 70-75%.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/articles/Weekly_market_Commentary_7_15_08.pdf

Weekly Economic Commentary

The good news is that there isn’t any economic data due out in the early part of this week. But that’s also the bad news, because the lack of any "real" news on the health of the economy in the early part of the week means financial market participants will focus even more attention on the latest crisis in the U.S. financial system – governement sponsored enterprises. To the extent that the markets do pay attention to the economic data, the concerns remain the same:

To view the rest of this weekly commentary, please click on the link below:

http://www.mwboone.com/library/articles/LPL_weekly_Economic_commentary_7_14_08.pdf

 

It’s Time to Start Thinking About the Estate Tax Again

Back in 2001, the Economic Growth and Tax Relief Reconciliation Act triggered a gradual increase in the dollar threshold of estates subject to the estate tax. In tax years 2007 and 2008, estates valued at more than $2 million may be taxed as much as 45 percent, while in tax year 2009, the threshold will increase to $3.5 million. The year after that, the tax will be repealed for a year.

 

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