Archive - June 2012

1
Timeless Investing Principles
2
How To Use Bond Mutual Funds During a Stock Crash
3
Congratulations – You’re Eligible For Social Security!
4
IRS Cracking Down On IRA Rules
5
Why You Should Not Trust Financial Advisors

Timeless Investing Principles

I am always struck by the financial media’s response to market turbulence. Pundits regularly react to events such as the current European debt crisis or the slow-to-recover US economy as if these challenges are somehow unprecedented, requiring a fundamental change in how investors should behave.…

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How To Use Bond Mutual Funds During a Stock Crash

When stocks crash then interest rates go down, which makes bonds go up in value. When stocks crash business conditions are usually bad so investors flee into the relative safety of the bond market, making bonds go up in value. A stock crash may be a deflationary event which drives down interest rates, thus making bonds, with their fixed yield, more attractive, so bond prices may go up if their credit quality is very high.

A basic concept in investing is to keep an allocation of funds in bonds so that when stocks crash you can sell the bonds at …

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Congratulations – You’re Eligible For Social Security!

You’ve waited almost your whole life to take Social Security benefits and now you have the option to wait even longer. Deciding when to take Social Security benefits will impact the amount you receive. Basically, you have three options:

You can start your benefits early, which is any time between age 62 and your full retirement age. However, the amount you receive will be reduced based on the number of months you have left until you would have reached your full retirement age.

You can start your benefits at your full retirement age. Full retirement age is the age at …

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IRS Cracking Down On IRA Rules

It seems that some of the rules the IRS has put in place with regard to IRAs have not always been watched very closely – and the IRS is stepping up efforts to resolve some of this.  According to the article in the WSJ, IRA Rules Get Trickier, an estimated $286 million in penalties and fees were uncollected for 2006 and 2007 tax years’ missed distributions, over-contributions, and the like.

The title of the article is a bit misleading, because the rules are not changing or getting “trickier”, the IRS is just going to be paying closer attention to …

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Why You Should Not Trust Financial Advisors


Last month I received a fax from one of my clients requesting that I liquidate his IRA so that the funds could be invested in a guaranteed annuity product. In the letter, the client stated he was aware that market-driven investments have greater potential for growth but the annuity would provide him a guaranteed return. He also stated that he didn’t want further discussion on the matter, that he understood the pros and cons of the annuity, and that he did not wish to be contacted further.  Upon receipt of his instructions, I immediately liquidated his investments and sent him …
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