you live in interesting times....
got off to a late start this year with the e-newsletter
as the month of January has flown by. But not
to fear we are still up and running. This month
I have compiled some random tips for the year
along with some commentary to let you consider.
So let's get rolling:
(those age 65 and up!) this is for you:
mentioned in last months newsletter Congress has
officially suspended the 2009 RMD's. This means
that if you are age 70 1/2 or the beneficiary
of an IRA and were subjected to the minimum distribution
rules you can take a year off.
of note is that the Social Security administration
has caught up to the 21st century. You can now
apply for SS benefits via your computer instead
of spending half a day visiting the local SS office.
Go to www.socialsecurity.gov
for more info.
Recession or Depression?:
caught your attention didn't it? The question
is are we in a really nasty recession or will
economists tell us years from now that we just
lived through a once in a lifetime depression?
I'll define the two below, but before you go and
get all depressed let's take a look at it since
we are currently living it. The fact is life goes
on, businesses are created and new industries/technologies
are developed in both recessionary and depressionary
economic times. And the simple fact is that this
to shall pass, it just takes time and a little
belt tightening. (How bad is it really when people
are still buying their Blackberry's and Nintendo
when a nations living standards drop and prices
increase. The downturn is defined as a decline
in a nations GDP for 2 consecutive quarters.
massive decrease in business activity, falling
prices, reduced purchasing power, excess supply
over demand, rising unemployment and other negative
What's that mean for my investments?:
the face of such bad economic news there is no
way the market could actually go up, correct?
This is a tough call, but in actuality the market
has discounted much of what we are currently going
through. A stock price is simply the value placed
on a future stream of a companies earnings. So
if over the next 10 years the market sees growth
then yes the market could begin to recover this
all indications the markets are setting up for
a decent size move. Just not sure which way it
will be at this point. If we follow the script
from the 70's then the upside may surprise you.
If we follow the script from the recession of
early 2000's then we unfortunately have one more
With the massive amount of stimulus fixing to
be unleashed along with rumblings of a "bad
bank" to take all the toxic assets from banks,
the momentum may be on the upside. Couple this
with a pattern shaping up in the dollar index
which projects the value of the dollar to move
down (my interpretation) then asset classes should
get a boost (stocks, bonds, commodities). At least
that is the gut feeling at this point. This is
by no means the all clear for an immediate recovery
as this market is known to change on any news
out of Washington or the Fed.
the time many of you recieve this we will be finding
out from our Central Bankers what their next course
of action will be. Hopefully they haven't used
up all their bullets and have something creative
in the works.
although it isn't fun to go through this mess
once we do get to the other side the next wave
of global expansion should be a doozy of a bull