Merry Christmas to you and your family. I hope you have a time of peace, comfort, and joy. This week the news talked about having a Santa Claus Rally which is the subject for this week. At the end is some trivia on Santa Claus so that you can answer the question is their really a Santa Claus? The first paragraph is the weekly review from Vanguard. I hope that you have a Wonderful Christmas!!!!!
Vanguard
As holiday shoppers grabbed last-minute gifts and Europe's leaders continued to search for solutions to their debt crisis, the latest economic reports offered more positive news than negative. Third-quarter GDP's lower-than-expected growth rate was still the best for the year, and leading economic indicators rose for the seventh straight month, while the battered housing market reported progress on a number of fronts. For the week ended December 23, the S&P 500 Index rose 3.7% to 1,265 (for a year-to-date total return—including price change plus dividends—of about 2.7%). The yield on the 10-year U.S. Treasury note rose 17 basis points to 2.03% (for a year-to-date drop of 127 basis points).
Santa Claus Rally
A Santa Claus rally is a rise in stock prices in the month of December, generally seen over the final week of trading prior to the new year. The rally is generally attributed to anticipation of the January effect, an injection of additional funds into the market, and to additional trades which must, for accounting and tax reasons, be completed by the end of the year. The Santa Claus rally is also known as the "December Effect."
Santa Claus, also known as Saint Nicholas, Father Christmas, Kris Kringle, and simply "Santa", is a figure with legendary, mythical, historical and folkloric origins who, in many western cultures, is said to bring gifts to the homes of the good children during the late evening and overnight hours of Christmas Eve, December 24.[1] The modern figure was derived from the Dutch figure of Sinterklaas,[2] which, in turn, may have part of its basis in hagiographical tales concerning the historical figure of gift giver Saint Nicholas. A nearly identical story is attributed by Greek and Byzantine folklore to Basil of Caesarea. Basil's feast day on January 1 is considered the time of exchanging gifts in Greece.
Santa Claus
Santa Claus, also known as Saint Nicholas, Father Christmas, Kris Kringle, and simply "Santa", is a figure with legendary, mythical, historical and folkloric origins who, in many western cultures, is said to bring gifts to the homes of the good children during the late evening and overnight hours of Christmas Eve, December 24. The modern figure was derived from the Dutch figure of Sinterklaas, which, in turn, may have part of its basis in hagiographical tales concerning the historical figure of gift giver Saint Nicholas. A nearly identical story is attributed by Greek and Byzantine folklore to Basil of Caesarea. Basil's feast day on January 1 is considered the time of exchanging gifts in Greece.
Santa Claus is generally depicted as a portly, joyous, white-bearded man wearing a red coat with white collar and cuffs, white-cuffed red trousers, and black leather belt and boots (images of him rarely have a beard with no moustache). This image became popular in the United States and Canada in the 19th century due to the significant influence of Clement Clarke Moore's 1823 poem "A Visit From St. Nicholas" and of caricaturist and political cartoonist Thomas Nast. This image has been maintained and reinforced through song, radio, television, children's books and films. The North American depiction of Santa Claus as it developed in the 19th and 20th century in turn influenced the modern perceptions of Father Christmas, Sinterklaas and Saint Nicholas
in European culture[citation needed].
According to a tradition which can be traced to the 1820s, Santa Claus lives at the North Pole, with a large number of magical elves, and nine (originally eight) flying reindeer. Since the 20th century, in an idea popularized by the 1934 song "Santa Claus Is Coming to Town", Santa Claus has been believed to make a list of children throughout the world, categorizing them according to their behavior ("naughty" or "nice") and to deliver presents, including toys, and candy to all of the well-behaved children in the world, and sometimes coal to the naughty children, on the single night of Christmas Eve. He accomplishes this feat with the aid of the elves who make the toys in the workshop and the reindeer who pull his sleigh.
Saturday, December 24, 2011
Sunday, December 18, 2011
Taxes
We have only 2 weeks left to the end of the year, my how time flies. This means that we are 4 months away until we have to pay our taxes on April 15th. Our government has given us ways to reduce our tax obligation if we act before December 31st, more on this in the middle section. The first section is from Vanguard. The last part is a link that tells the Christmas story in social network language, just copy and paste.
Vanguard
The U.S. economy is showing enough momentum to keep the Federal Reserve in wait-and-see mode, though risks from abroad continued this past week. Europe's drift back toward recession and signs of slowing in Asia remained potential stumbling blocks for the U.S. recovery. Meanwhile, the sovereign bond market's cool reaction to a plan to enforce fiscal discipline in Europe kept alive concern that nations could default—with uncertain repercussions for the fate of the Eurozone and the global economy. For the week ended December 16, the S&P 500 Index fell 2.8% to 1,220 (for a year-to-date total return—including price change plus dividends—of about -1.0%). The yield on the 10-year U.S. Treasury note fell 21 basis points to 1.86% (for a year-to-date decline of 144 basis points).
Common Ways to Reduce Your Taxes
Here are few actions for your consideration that can reduce your tax obligation:
1) Sell assets like stock that have gone down in value in a non-retirement account. It is important to avoid the wash sale rule if you repurchase it within 30 days so wait 31 days. A similar asset can be purchased during this 31 day period to keep a portfolio in balance.
2) Contribute to a traditional IRA or 401(k). A contribution to a traditional account is tax deductible while a contribution to a Roth IRA or Roth 401(k) is not tax deductible.
3) Make a donation to a charity. A church or charity can always use your support.
4) Make your January house payment in December to deduct the interest.
5) Contribute to your medical expense account if you have one, either a FSA or HSA.
I would be glad to review this you on an individual basis if you have a question.
A Social Network Christmas - You Tube Link
http://www.youtube.com/watch?v=sghwe4TYY18
Vanguard
The U.S. economy is showing enough momentum to keep the Federal Reserve in wait-and-see mode, though risks from abroad continued this past week. Europe's drift back toward recession and signs of slowing in Asia remained potential stumbling blocks for the U.S. recovery. Meanwhile, the sovereign bond market's cool reaction to a plan to enforce fiscal discipline in Europe kept alive concern that nations could default—with uncertain repercussions for the fate of the Eurozone and the global economy. For the week ended December 16, the S&P 500 Index fell 2.8% to 1,220 (for a year-to-date total return—including price change plus dividends—of about -1.0%). The yield on the 10-year U.S. Treasury note fell 21 basis points to 1.86% (for a year-to-date decline of 144 basis points).
Common Ways to Reduce Your Taxes
Here are few actions for your consideration that can reduce your tax obligation:
1) Sell assets like stock that have gone down in value in a non-retirement account. It is important to avoid the wash sale rule if you repurchase it within 30 days so wait 31 days. A similar asset can be purchased during this 31 day period to keep a portfolio in balance.
2) Contribute to a traditional IRA or 401(k). A contribution to a traditional account is tax deductible while a contribution to a Roth IRA or Roth 401(k) is not tax deductible.
3) Make a donation to a charity. A church or charity can always use your support.
4) Make your January house payment in December to deduct the interest.
5) Contribute to your medical expense account if you have one, either a FSA or HSA.
I would be glad to review this you on an individual basis if you have a question.
A Social Network Christmas - You Tube Link
http://www.youtube.com/watch?v=sghwe4TYY18
Sunday, December 11, 2011
Improving Housing Prices
I hope that all of you are in the Holiday spirit. While I was watching the Republican debate last night, the most important thing that I was a commercial sponsored by AAG which made me very happy, perhaps you saw it as well.
The first paragraph is from Vanguard. The last section is part of an article that I found on if a person should hire someone to manage their portfolio. As an investor, I am looking forward to the rest of the year as our politicians will be relatively quiet and no European summits.
Vanguard
Growth in service-sector activity slowed for the third month in a row as other economic reports issued mixed signals. News from Europe continued to weigh on the markets, even as some European Union nations announced a plan to address the debt burden plaguing the EU economies. For the week ended December 9, the S&P 500 Index rose 0.9% to 1,255.2 (for a year-to-date total return—including price change plus dividends—of about 1.8%). The yield on the 10-year U.S. Treasury note rose 2 basis points to 2.07% (for a year-to-date drop of 123 basis points).
AAG Commercial - Improving Housing Prices
While watching the Republican debates last night on ABC, I saw this commercial sponsored by a company called AAG which made me happy. This is a very important commercial because it says that the economy is improving and the prices of houses are going up. The commercial stated that AAG was interested in offering reverse mortgages. The reason that this is important is that for the first time in a long time someone is advertising for a reverse mortgage and this only happens when the value of the home is going to be going up. This is like someone sounding a bell that said happy days are hear again. As a good friend of mine says, as housing goes so goes the economy.
A reverse mortgage is where a financial company buys your home from you and you continue to live in it. You get a monthly payment that is specified in the contract. This financial company will not buy your home if they believe that the value of the home is going down, they only buy if the price is going up. What AAG is saying in this commercial is that with the prices of housing going up and interest rates being low that they are very happy to make money with your home.
If AAG is buying homes, now would be a good time for others to buy as well. If you have been waiting for a bell to go off to say that now is a time to buy that home. Well it just went off.
Should I Hire a Financial Adviser or Go It Alone? By Walter Updegrave | CNNMoney.com
The answer depends largely on how comfortable you are going it alone -- and how good a job you think you could do overseeing your finances without help from a pro. Let's start with one key aspect of retirement planning: investing. As long as you're familiar with the concept of asset allocation and you're comfortable picking funds, you shouldn't have trouble building a diversified portfolio on your own. And you can get plenty of assistance short of hiring an adviser: These days most 401(k) plans provide tools to help you assess your investing options and assemble an appropriate lineup for your age and risk tolerance.
The problem is, if you screw up, you can end up losing a lot more than you might save. In a recent study, benefit consultant Aon Hewitt and advice firm Financial Engines looked at the 401(k) returns of more than 425,000 savers from 2006 through 2010. The findings: The median annual return of those who got professional help was almost three percentage points higher than the return for those who invested on their own, even after taking fees into account.
One reason for that performance gap is that the investors who flew solo were far more likely to be too aggressive or too conservative. Emotions also played a role: Do-it-yourselfers were more apt to cash out of stocks in the 2008 crash. As a result, their returns lagged substantially when the market rebounded in 2009.
A shot at better investment returns isn't the only reason to seek help. During your working days, sticking with a sufficient savings rate is crucial. Setting aside 12% to 15% a year (including a company match) is an oft-cited rule of thumb, yet a 2011 Vanguard study estimated that fewer than a third of 401(k) participants put away that much.
While you're saving for retirement, you have plenty of free tools to guide you, plus low-cost access to professional help through target-date funds. But as you near the end of your career, the stakes go up.
Turning your retirement savings into a reliable income is essential, and that can be daunting to tackle on your own. An October report from MetLife found that 40% of pre-retirees believe they can spend 7% or more each year without depleting their savings -- most advisers consider 4% to 5% a safe withdrawal rate.
The first paragraph is from Vanguard. The last section is part of an article that I found on if a person should hire someone to manage their portfolio. As an investor, I am looking forward to the rest of the year as our politicians will be relatively quiet and no European summits.
Vanguard
Growth in service-sector activity slowed for the third month in a row as other economic reports issued mixed signals. News from Europe continued to weigh on the markets, even as some European Union nations announced a plan to address the debt burden plaguing the EU economies. For the week ended December 9, the S&P 500 Index rose 0.9% to 1,255.2 (for a year-to-date total return—including price change plus dividends—of about 1.8%). The yield on the 10-year U.S. Treasury note rose 2 basis points to 2.07% (for a year-to-date drop of 123 basis points).
AAG Commercial - Improving Housing Prices
While watching the Republican debates last night on ABC, I saw this commercial sponsored by a company called AAG which made me happy. This is a very important commercial because it says that the economy is improving and the prices of houses are going up. The commercial stated that AAG was interested in offering reverse mortgages. The reason that this is important is that for the first time in a long time someone is advertising for a reverse mortgage and this only happens when the value of the home is going to be going up. This is like someone sounding a bell that said happy days are hear again. As a good friend of mine says, as housing goes so goes the economy.
A reverse mortgage is where a financial company buys your home from you and you continue to live in it. You get a monthly payment that is specified in the contract. This financial company will not buy your home if they believe that the value of the home is going down, they only buy if the price is going up. What AAG is saying in this commercial is that with the prices of housing going up and interest rates being low that they are very happy to make money with your home.
If AAG is buying homes, now would be a good time for others to buy as well. If you have been waiting for a bell to go off to say that now is a time to buy that home. Well it just went off.
Should I Hire a Financial Adviser or Go It Alone? By Walter Updegrave | CNNMoney.com
The answer depends largely on how comfortable you are going it alone -- and how good a job you think you could do overseeing your finances without help from a pro. Let's start with one key aspect of retirement planning: investing. As long as you're familiar with the concept of asset allocation and you're comfortable picking funds, you shouldn't have trouble building a diversified portfolio on your own. And you can get plenty of assistance short of hiring an adviser: These days most 401(k) plans provide tools to help you assess your investing options and assemble an appropriate lineup for your age and risk tolerance.
The problem is, if you screw up, you can end up losing a lot more than you might save. In a recent study, benefit consultant Aon Hewitt and advice firm Financial Engines looked at the 401(k) returns of more than 425,000 savers from 2006 through 2010. The findings: The median annual return of those who got professional help was almost three percentage points higher than the return for those who invested on their own, even after taking fees into account.
One reason for that performance gap is that the investors who flew solo were far more likely to be too aggressive or too conservative. Emotions also played a role: Do-it-yourselfers were more apt to cash out of stocks in the 2008 crash. As a result, their returns lagged substantially when the market rebounded in 2009.
A shot at better investment returns isn't the only reason to seek help. During your working days, sticking with a sufficient savings rate is crucial. Setting aside 12% to 15% a year (including a company match) is an oft-cited rule of thumb, yet a 2011 Vanguard study estimated that fewer than a third of 401(k) participants put away that much.
While you're saving for retirement, you have plenty of free tools to guide you, plus low-cost access to professional help through target-date funds. But as you near the end of your career, the stakes go up.
Turning your retirement savings into a reliable income is essential, and that can be daunting to tackle on your own. An October report from MetLife found that 40% of pre-retirees believe they can spend 7% or more each year without depleting their savings -- most advisers consider 4% to 5% a safe withdrawal rate.
Sunday, December 4, 2011
2012 IRS Retirement Plan Limits
I hope you had a very Happy Thanksgiving. I traveled to Nebraska last week to attend a funeral for my oldest brother on Friday November 25th which impacted my ability to write last weekend. One thing from this experience is that one of the most important things you can do is have a positive impact on the lives of others.
The topic for this week is the IRS limits during 2012 for Retirement plans. A weekly recap from Vanguard is the first section. The last section is words of wisdom from Bill Gates at a high school commencement address that you may find interesting. I especially like Rule 11.
Vanguard
Improvements in U.S. employment and manufacturing suggest the nation's economic recovery has regained traction. However, risks abound. The nation's housing and employment situation remain weak. A slower global economy and turmoil in the Eurozone pose a challenge to any recovery. For the week ended December 2, the S&P 500 Index rose 7.4% to 1,244 (for a year-to-date total return—including price change plus dividends—of about 0.9%). The yield on the 10-year U.S. Treasury note rose 8 basis points to 2.05% (for a year-to-date drop of 125 basis points).
2012 Retirement Plan Limits
It is my personal view that it is important for all of us to contribute to a retirement plan on a regular basis. If the US Government continues with the 2% reductionn in payroll taxes for 2012, it would be prudent to put this savings into a retirement account. Below are the IRS limits for next year:
•401(k) and 403(b) elective deferrals were increased to $17,000, up from $16,500 last year; the catch-up elective deferral limit remained at $5,500
•The taxable wage base for social security rose to $110,100, up from $108,600 last year
•Defined Benefit plan benefit limits moved higher to $200,000, up from $195,000 last year
•Annual contribution plan limits rose to $50,000, up from $49,000 last year
•Annual compensation limits were raised to $250,000, up from $245,000 last year
•The threshold for highly compensated employees moved higher to $115,000, up from $110,000 last year
•The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $58,000 and $68,000, up from $56,000 and $66,000 in 2011; for married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $92,000 to $112,000, up from $90,000 to $110,000; for an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $173,000 and $183,000, up from $169,000 and $179,000
•The AGI phase-out range for taxpayers making contributions to a Roth IRA is $173,000 to $183,000 for married couples filing jointly, up from $169,000 to $179,000 in 2011; for singles and heads of household, the income phase-out range is $110,000 to $125,000, up from $107,000 to $122,000; for a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000
•The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $57,500 for married couples filing jointly, up from $56,500 in 2011; $43,125 for heads of household, up from $42,375; and $28,750 for married individuals filing separately and for singles, up from $28,250
Bill Gates Commencement Address
Bill Gates, Chairman of Microsoft, gave a Commencement address at a high school. He gave the students eleven rules to remember as they go out into the future.
Rule 1 - Life is not fair - get used to it!
Rule 2 - The world doesn't care about your self-esteem. The world will expect you to accomplish something BE-FORE you feel good about yourself.
Rule 3 - You will NOT make $60,000 a year right out of high school. You won't be a vice-president with a car phone until you earn both.
Rule 4 - If you think your teacher is tough, wait until you get a boss.
Rule 5 - Flipping burgers is not beneath your dignity. Your grandparents had a different word for burger flip-ping - they called it opportunity.
Rule 6 - If you mess up, it's not your parents' fault, so don't whine about your mistakes, learn from them.
Rule 7 - Before you were born, your parents weren't as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you thought you were. So before you save the rain forest from the parasites of your parent's generation, try delousing the closet in your own room.
Rule 8 - Your school may have done away with winners and losers, but life HAS NOT. In some schools, they have abolished failing grades and they'll give you as MANY TIMES as you want to get the right answer. This doesn't bear the slightest resemblance to ANYTHING in real life.
Rule 9 - Life is not divided into semesters. You don't get summers off and very few employers are interested in helping you FIND YOURSELF. Do that on your own time.
Rule - 10 Television is NOT real life. In real life, people actually have to leave the coffee shop and go to jobs.
Rule - 11 Be nice to nerds. Chances are you'll end up working for one.
The topic for this week is the IRS limits during 2012 for Retirement plans. A weekly recap from Vanguard is the first section. The last section is words of wisdom from Bill Gates at a high school commencement address that you may find interesting. I especially like Rule 11.
Vanguard
Improvements in U.S. employment and manufacturing suggest the nation's economic recovery has regained traction. However, risks abound. The nation's housing and employment situation remain weak. A slower global economy and turmoil in the Eurozone pose a challenge to any recovery. For the week ended December 2, the S&P 500 Index rose 7.4% to 1,244 (for a year-to-date total return—including price change plus dividends—of about 0.9%). The yield on the 10-year U.S. Treasury note rose 8 basis points to 2.05% (for a year-to-date drop of 125 basis points).
2012 Retirement Plan Limits
It is my personal view that it is important for all of us to contribute to a retirement plan on a regular basis. If the US Government continues with the 2% reductionn in payroll taxes for 2012, it would be prudent to put this savings into a retirement account. Below are the IRS limits for next year:
•401(k) and 403(b) elective deferrals were increased to $17,000, up from $16,500 last year; the catch-up elective deferral limit remained at $5,500
•The taxable wage base for social security rose to $110,100, up from $108,600 last year
•Defined Benefit plan benefit limits moved higher to $200,000, up from $195,000 last year
•Annual contribution plan limits rose to $50,000, up from $49,000 last year
•Annual compensation limits were raised to $250,000, up from $245,000 last year
•The threshold for highly compensated employees moved higher to $115,000, up from $110,000 last year
•The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $58,000 and $68,000, up from $56,000 and $66,000 in 2011; for married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $92,000 to $112,000, up from $90,000 to $110,000; for an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $173,000 and $183,000, up from $169,000 and $179,000
•The AGI phase-out range for taxpayers making contributions to a Roth IRA is $173,000 to $183,000 for married couples filing jointly, up from $169,000 to $179,000 in 2011; for singles and heads of household, the income phase-out range is $110,000 to $125,000, up from $107,000 to $122,000; for a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000
•The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $57,500 for married couples filing jointly, up from $56,500 in 2011; $43,125 for heads of household, up from $42,375; and $28,750 for married individuals filing separately and for singles, up from $28,250
Bill Gates Commencement Address
Bill Gates, Chairman of Microsoft, gave a Commencement address at a high school. He gave the students eleven rules to remember as they go out into the future.
Rule 1 - Life is not fair - get used to it!
Rule 2 - The world doesn't care about your self-esteem. The world will expect you to accomplish something BE-FORE you feel good about yourself.
Rule 3 - You will NOT make $60,000 a year right out of high school. You won't be a vice-president with a car phone until you earn both.
Rule 4 - If you think your teacher is tough, wait until you get a boss.
Rule 5 - Flipping burgers is not beneath your dignity. Your grandparents had a different word for burger flip-ping - they called it opportunity.
Rule 6 - If you mess up, it's not your parents' fault, so don't whine about your mistakes, learn from them.
Rule 7 - Before you were born, your parents weren't as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you thought you were. So before you save the rain forest from the parasites of your parent's generation, try delousing the closet in your own room.
Rule 8 - Your school may have done away with winners and losers, but life HAS NOT. In some schools, they have abolished failing grades and they'll give you as MANY TIMES as you want to get the right answer. This doesn't bear the slightest resemblance to ANYTHING in real life.
Rule 9 - Life is not divided into semesters. You don't get summers off and very few employers are interested in helping you FIND YOURSELF. Do that on your own time.
Rule - 10 Television is NOT real life. In real life, people actually have to leave the coffee shop and go to jobs.
Rule - 11 Be nice to nerds. Chances are you'll end up working for one.
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