Senate Finance Ranking Member Chuck Grassley (R-IA) introduced a bill that would make permanent a number of education-related tax relief measures. Included in the measure were provisions to permanently include the costs of computer technology and Internet access as a qualified higher education expense (now scheduled to expire the end of 2010) and to permit up to four investment changes per year in 529 accounts. You are currently allowed only two changes in 2009 and is slated to revert back to one after this year. The bill also hopes to make amendments to the Coverdell educational savings account.
Opportunities in International Investing
More and more, we are finding it easier to justify our higher allocations to international equities. Roughly 55% of the investable equity universe, by market cap, is outside of the U.S. Also, world GDP has outpaced the U.S. GDP every year this decade; moreover, emerging markets have seen average GDP growth since 2000 of 5.9% – compared to 1.8% for the developed economies. International investing may also be a hedge against a weaker domestic currency.
source: J.P.Morgan Asset Management
Posted in Home Tagged asset allocation, Asset Classes, Diversify, International, Investments Comments closed
Bubbles…Is Gold next?
The WSJ recently published a chart that we thought was worth examining, and then noting here. The chart draws an excellent comparison between the recent surge in gold prices to previous bubbles of the last decade, giving us a cautionary perspective for those pouring money into gold today:
The Power of an Investment Policy Statement
Before we can give appropriate investment advice, we work with our clients to construct a comprehensive Investment Policy Statement (IPS). Creating an Investment Policy Statement (FPA Press), by Norm Boone and Linda Lubitz Boone, spells out the purpose and benefits of using an Investment Policy Statement:
- Identifies specific client objectives, risk tolerance, and time horizon.
- Explains the investment strategy and defines asset-allocation policy.
- Establishes a process for making investment decisions and guidelines for future decision-making.
The IPS may also serve as a forum for client-advisor communication and moderate influences against making decisions in an emotionally-charged environment, helping to avoid negative investment behavior. The policy statement may also establish a record of decisions and an objective means of measuring performance, as well as help with monitoring progress.
The information gathering process insures that we raise and discuss all pertinent investment issues.
For a sample Investment Policy Statement, or to discuss your investment process with us, please call 843-577-7701 or email info@kaizenwm.com
20-year Annualized Returns by Asset Class
20-year period ending 12/31/08.
S&P 500 Index = 8.4%
Average Investor = 1.9%
The culprit = Investor Behavior
source J.P. Morgan Asset Management
Quarterly Market and Investment Strategy, Third Quarter, 2009
Macroeconomic Conditions
Data from a number of countries have provided an improving picture of the world economy. As Credit Suisse’s chief economist Neal Soss noted, the world economy is doing better than it was doing a few months ago, but is still far from doing well. In other words, almost all macroeconomic variables have stopped their dramatic dive, but only a few have bounced back to normal range. Most variables still support a weak economy.
Inflation remains in check in most countries, both industirialized and emerging. Negative inflation in Japan (minus 2.3 percent) and the United States (minus 1.4 percent) signals that aggregate demand remains weak and pricing is limited; however, a large part of the negative values comes from decreasing energy prices.
United States
Unemployment remains the major problem for the U.S. Many companies are still laying off workers…
Please email info@kaizenwm.com for a complete copy of the PDF.
Market Commentary Q409
Despite the wild ride, investors should toast the markets in 2009
Investors received welcome relief from the markets rally. Many areas of the market that fared poorly in 2008 bounced back in 2009. U.S. equities turned in two of their biggest quarterly returns in over a decade, while corporate bonds had one of their best years ever. As investors moved up the risk curve, Treasuries suffered one of their worst years in the past two decades. Also, sovereign creditworthiness remains in the spotlight, as Dubai struggles and Greece received a credit downgrade. Commodity markets rebounded as well, as investors bet on an economic recovery.
email us at info@kaizenwm.com for a complete PDF copy.