Committed to providing superior financial advice and service for over 20 years, Suzie Pierce Sawyer is a registered Financial Advisor who helps her clients pursue their financial goals. Suzie is a graduate and active alumnus of the University of Mississippi. Prior to her career as a financial advisor, she was associated with WLOX Broadcasting for 14 years. Suzie is associated with Trinity Investment Services, which offers securities through Century Securities Associates, Inc., Member SIPC & FINRA, a subsidiary of Stifel Financial Corp. and sister firm of Stifel, Nicolaus & Company, Incorporated. Home office: 501 North Broadway, St Louis, Missouri 63102, (314) 342-4051. Stifel is a full-service investment firm established in 1890, which provides brokerage, trading, investment advice, and related financial services to individual and institutional investors. Trinity Investment Services specializes in providing retirement plan solutions for individuals and businesses utilizing the vast resources and other experienced professionals at Stifel Nicolaus. Trinity was honored to be a recipient of the Better Business Bureau 2008 Business Integrity Award sponsored by the Better Business Bureau and Mississippi Business Journal. We were also the 2008 Tapestry Award winner in the category of Personal Services presented by the Mississippi Gulf Coast Chamber of Commerce. It is a privilege for us to be recognized publicly as persons of honor, especially when we strive for this in our lives. In an effort to provide advice and service to the community, Suzie is a featured contributor for several publications. Throughout her career, Suzie has also been affiliated with professional organizations. She has been a member of the FINRA (formerly NASD) Board of Arbitrators since 1995. Locally, she has served as a former member and officer of the Board of Directors for Coast Transit Authority and Westminster Academy, and is a current member of the Gulf Coast Chamber of Commerce, the Better Business Bureau of Mississippi, and a past Board member of the Harrison County Beautification Committee. She is an active member of St. James Catholic Church in Gulfport, where she serves as a Eucharistic Minister. Suzie has been married to her husband and business partner, Bob, since 1982, and they have two children, John and Betsey.
Submitted by Anonymous from Biloxi, MS
Q: With the start of the new year, I’d like to take control of my finances. Can you recommend any steps I can take to get my individual retirement accounts in order?
Answered 01/30/12 09:01:06 by Suzie Sawyer
A: Getting your financial house in order is a great idea. You can help make the most of your IRAs by utilizing these simple IRA resolutions: • Make contributions earlier – By not delaying your $5,000 contributions, IRA holders have the opportunity to receive more tax-deferred earnings on investments, or tax-free earnings for Roth IRAs, over a longer period of time. This is especially true for those who are age 50 or older, as “catch-up” contributions allow an additional contribution of $1,000 per year. • Consider consolidation – Do you have multiple IRAs at other firms? By consolidating, you can reduce annual fees and paperwork for multiple IRA accounts. • Review distribution planning and elections – Are you aware of the distribution options available for IRAs, such as the Rule 72(t) program? Or are you aware that a non-spouse beneficiary of assets held in a participant’s 401(k), or other type of employer- sponsored plan, now has the option to directly transfer those assets into an inherited IRA? • Check current beneficiary designations – Are your primary and secondary beneficiaries still in order? Could there be a need for a change because of marriage, birth, death, or divorce? • Review multiple beneficiary designations – Do you have multiple beneficiaries named on your IRA, and is each beneficiary’s designated share correct and clearly specified? Do the beneficiaries know they are beneficiaries of IRAs? • Locate a copy of the IRA agreement – Do you have a copy of your Individual Retirement Account Application? Have you reviewed it and other details regarding your situation with your attorney or CPA? • Consider Roth IRAs – Are you not contributing to a traditional IRA because you cannot deduct contributions? If so, you may want to consider a Roth IRA. Qualified tax-free Roth distributions may be what you need for retirement and/or estate planning. For assistance with these and any other financial issues, contact your investment professional today.Submitted by Anonymous from Gulfport
Q: I’ve heard a lot about Long-Term Care Insurance – is this something I should consider?
Answered 12/19/11 15:45:18 by Suzie Sawyer
A: Since no one knows what the future may bring, we plan and prepare. “Freedom consists not in doing what we like, but in having the right to do what we ought.” – Pope John Paul II We buy insurance not because we want to, but because we don’t know the future. Long-Term Care (LTC) Insurance is defined as coverage for the variety of health and supportive services necessary for a person who requires some form of daily, ongoing assistance. There is much to consider when it comes to LTC Insurance, but please don’t make that an excuse to procrastinate. The time to buy insurance is always before you need it. Most people acknowledge the risk of needing long-term care at some point in their lives – generally during retirement. Some thoughts to consider if you are between the ages of 45 to 64 (median age group for purchasing LTC Insurance): - Look into some of the newer inflation growth options that are available. Your LTC Insurance plan should account for the rising costs of care. -The right-sized policy can lower your premium. Plans that offer unlimited benefits are the most costly, since there are no claim limits. Shorter duration policies with a set benefit period are less expensive and increasingly favored. -Self-funding a greater portion of your cost of care can enable you to achieve significant savings (meaning start saving some money). -Good health gets you good rates. No one can predict when their health will change, and your health at the time you apply is a key variable in the premium you’ll pay. If you are currently healthy, you may save 10-20% on your premium versus being turned down if your health declines. -Most LTC policies offer some form of “shared care” option, which allows couples to share benefits and may include a couples discount on your premium. There is no cost or obligation when you request a quote. Consult your financial professional to find a policy that is right for you.Submitted by Anonymous from Biloxi
Q: Considering the state of the economy and the current volatility in the stock market, would now be a good time for me to move my money into other investments?
Answered 07/29/11 08:34:38 by Suzie Sawyer
A: While completely pulling out of the stock market certainly is one option during rocky times, you may find it more beneficial to keep your money invested in stocks and wait for things to hopefully improve. Consider the following: - Staying Invested: Many times volatility in the stock market causes people to park their investments in cash. However, just as many of those staying in cash also fail to see an upward trend taking place in the market and, for them, not being fully invested may mean missing out on gains and achieving lower returns. In fact, in the 12 months following the end of a bear market, a stock portfolio fully invested in the S&P 500 had an average total return of 37.8%; by missing the first six months of that recovery by holding cash, returns would have only been 7.7% (Source: Ned Davis Research, Inc.) - Utilizing Dollar-Cost Averaging: When the market is volatile, many investors wonder “Is it the right time to buy?” Dollar-cost averaging can help ease those concerns by committing a fixed amount to an investment at a regular interval. Investors buy more shares when prices are low and fewer shares when prices are high, usually resulting in a higher average price per share than average cost per share. Investors should consider their financial ability to continue purchases through periods of low price levels or changing economic conditions. Such a plan does not assure a profit and does not protect against loss in a declining market. Stay tuned for additional strategies for riding out a volatile market in our next feature. For more information on how to best survive a volatile market, consult your financial advisor today. ____________ Part 2: In our last feature, we were asked the question, “Considering the state of the economy and the current volatility in the stock market, would now be a good time for me to move my money into other investments?” First, we addressed the need to stay invested. Many times volatility in the stock market causes people to park their investments in cash. However, just as many of those staying in cash also fail to see an upward trend taking place in the market and, for them, not being fully invested may mean missing out on gains and achieving lower returns. We also delved into dollar-cost averaging, which involves committing a fixed amount to an investment at a regular interval. Investors buy more shares when prices are low and fewer shares when prices are high, usually resulting in a higher average price per share than average cost per share. To be effective, investors must consider their ability to continue investing when prices decline. (Such a plan does not assure a profit and does not protect against loss in a declining market.) Here are some additional recommendations for dealing with a volatile stock market: - Evaluate Your Current Portfolio: Portfolio weightings in different asset classes may shift over time due to performance. It is important to periodically review your portfolio to make sure you are properly diversified and to determine whether your current mix of investments is still suitable for your goals and risk tolerance. -Ignore the Media: Each day, we are bombarded with 24-hour coverage of investment news and too many financial publications to count. While the media provides a valuable service, they typically offer a very short-term outlook. Investors should instead seek to gain a longer-term perspective. -Stick to Your Long-Term Investment Plan: There are no secrets to managing a volatile market and many investors start to “doubt their beliefs and believe their doubts.” The best way to navigate a choppy market is to have a long-term plan, a well-diversified portfolio and to stick to it! To help you keep a balanced perspective, always consult your financial advisor before making changes to your portfolio. By following this advice, you’ll be better prepared to cope with any surprises the stock market may send your way. For more information on how to best survive a volatile market, consult your financial advisor today.Submitted by Anonymous from Gulfport, MS
Q: My father has recently passed away. What are the rules for taking money from an IRA that lists you as a beneficiary?
Answered 06/23/11 14:24:02 by Suzie Sawyer
A: The rules surrounding distributions from an inherited IRA are complex. If you’ve inherited an IRA, it’s a good idea to familiarize yourself with the five-year rule, which could potentially be used to your advantage. It states that a beneficiary, who is an individual, has until the end of the fifth year following the year of the owner’s death to withdraw the entire balance of the account. The five-year rule may only be used in certain cases. If the deceased was the holder of a traditional IRA and passed away before attaining age 70 ½, the beneficiary may utilize the five-year rule. Or, if the deceased was the holder of a Roth IRA and died at any age, including after age 70 ½, the beneficiary may utilize the five-year rule. If the individual has inherited a Roth IRA, and the deceased died more than one year ago, the five-year rule may come in handy. If this individual has missed required minimum distributions (RMDs), he or she is subject to a 50% penalty on the outstanding amounts and may be subject to interest for late penalty payments. However, the individual is within the window of the five-year rule. He or she can forgo the RMD method and make sure to withdraw the entire balance of the inherited Roth IRA by the fifth year following the year of the owner’s death. This action will keep the individual from being subjected to the 50% penalty for a missed distribution. If the individual has inherited a traditional IRA and the original holder died at an age younger than 70 ½, he or she can start taking RMDs based on his or her single life expectancy (SLE) the year following the year of death. But what if the individual does not want to relinquish the inheritance and does not want to increase his or her taxable income that year? The five-year rule will allow him or her to skip RMDs until five years after the year of death. This gives an individual some time to allow for tax planning when accounting for the extra income derived from the recently inherited IRA. Because these rules are so specific & mistakes often equal penalties, please consult your financial advisor and/or tax professional.Submitted by Anonymous from Biloxi MS
Q: Should I factor in life expectancy figures when determining how much I’ll need to save for retirement?
Answered 05/26/11 09:56:27 by Suzie Sawyer
A: When it comes to retirement income planning, life expectancy figures can be severely misleading. Many people will outlive their own life expectancies. Therefore, people ought to think long and hard about longevity risk—the very real possibility of living 20, 30, or 40 years (or more) past retirement age. While a healthy 65-year-old man has a life expectancy of age 81, he has a 50 percent probability of reaching age 85 and a 25 percent probability of reaching age 92. For a woman age 65, the odds rise to a 50 percent chance of reaching 88 and a one-in-four chance of living past her 94th birthday. The odds of at least one member of a 65-year-old couple reaching 92 are 50 percent, and there is at least a 25 percent chance of one of them reaching 97. (Source: Society of Actuaries, Annuity 2000 Mortality Table.) There has never been a generation in history that has been faced with a challenge of the magnitude and scope that faces you today. Your retirement may last as long as your working life. What happens if you do live to be 95, 100, or beyond? If you retire at 60, you may need income for another 35, 40, or possibly even 50 years. Will your income last as long as you do? We all know the averages don’t matter. None of us knows anyone with 2.3 kids. Let’s make sure we don’t use average life expectancy rates to make a mistake in our planning.Submitted by Anonymous from Biloxi, MS
Q: Should I consider stock market averages when planning for retirement?
Answered 04/06/11 12:40:44 by Suzie Sawyer
A: One way to misunderstand raw information is to confuse abstractions with reality. Market averages are such an abstraction. Averages do not actually exist. Market results exist—and nothing compels actual market results to obey averages. Let’s look at an example. According to Ibbotson Associates, looking back from 1926 through the end of 2010, the S&P 500® stock index averaged a return of about 9.9 percent annually. But out of all those 85 years, how many times did it actually provide a calendar year return between 9 percent and 10 percent? Did you guess 20? 30? 10? Try zero. Is that too narrow of a band? Then let’s find out how many times the market’s return was between 8 percent and 12 percent. Surely 30 or 40 of those 85 years, right? Actually, the market’s return was in the 8 to 12 percent range just five times. In fact, the market’s loss was greater than 20 percent more times than it returned a gain of 8 to 12 percent. But that’s only part of the story. The market’s gain has been 20 percent or greater 32 times out of those 85 years, also according to Ibbotson. The stock market is like electricity. If used prudently with the right risk management tools, like insulation, regulators, and wall sockets, you can have light to read a book at night, enjoy air-conditioning in the summer, and listen to music on the radio. Using it without proper respect and understanding can give you quite a shock. The stock market’s returns don’t go in a straight line—they never have. Expecting a return of 9 to 10 percent each year would have left you feeling a little off course in the past 85 years. Making sure your retirement plan is up to task requires planning for the inevitable times invest¬ments will under-perform their historical averages. A professional financial advisor can help you structure your portfolio based on your risk tolerance and time horizon.Submitted by Anonymous from
Q: I know I should be saving for retirement. But how can I keep from making costly mistakes with my savings?
Answered 03/02/11 12:42:36 by Suzie Sawyer
A: A comfortable and confident retirement is on most people’s list of reasons to invest. The financial services industry has done a pretty good job of educating investors about the growth phase. But little has been done in preparing investors – or even advisors – to adequately handle the retirement income phase. And the rules are different. As you think toward retirement, what should you do to prepare yourself for the income phase of investing – where your money pays you? If you make a mistake early in the growth phase, it may be relatively easy to recover. Let’s say you don’t contribute the legal limit to your 401(k), IRAs, or other retirement plans. Or you take some wild risks, or even cash out of the market at the wrong time – you may still have years to decades to make up for lost time. Early mistakes are easier to fix. A mistake in the income phase is different; it could jeopardize your lifestyle for the rest of your life, as well as your legacy. An income-phase mistake can have an impact on your income every month for the rest of your days. These kinds of life-changing financial mistakes generally fall into two categories. The first I call the “hope strategy,” in which we simply hope that things will work out fine and make no effort to learn about what we can do to increase our chances of enjoying a comfortable retirement. The second kind of mistake is doing the opposite, which is “drowning in information.” In this case, investors consume a vast amount of raw data and then act, or decide not to act, based on a misunderstanding of this information. A professional financial advisor can help you avoid making these mistakes as you prepare to make the most of your retirement savings.Submitted by Anonymous from D'Iberville
Q: How do you recommend I organize and maintain my files so that everything is easily accessible?
Answered 01/24/11 08:51:24 by Suzie Sawyer
A: Last month we discussed cleaning up files and records. This month I want to give you some tips on how to keep them better organized. I usually recommend that my clients organize their files into four sections: a “routine” drawer holds an unpaid bills file, correspondence files, insurance files, and files on such items as hobbies, travel, and community activities. A second drawer contains more permanent files relating to assets, liabilities, and property records. Here is where you would keep records relating to property ownership, investment accounts, automobiles, boats, and other assets. You would also keep mortgage information, loan information, and other information relating to your property. A third drawer is for family. Keep personal records, files on children and/or grandchildren, and personal correspondence in this group. Finally, in the fourth drawer keep all tax records and family estate planning information. Tax returns should be kept for seven years. Family trusts, wills, and other planning documents should be kept here, bound permanently into their files. Thin is better when it comes to file contents. Keep the number of documents or papers in individual files to a minimum. When files grow too thick, separate their contents into multiple files. Periodically take a group of files and “scrub” by reviewing their contents and throwing out paper which is out of date or for which you no longer have any use. If you are unsure about throwing out records, consider the source. If the source is likely to have a copy or record, let the source warehouse the records for you. Whole files which are no longer needed, but which you feel the need to keep, can be stored in cardboard file boxes in the garage or attic. Finally, keep important records, which cannot easily be replaced, in fireproof boxes or in a safe deposit box.Submitted by Anonymous from Wiggins, MS
Q: The amount of paperwork in my home office seems overwhelming! How can I get a better handle on the mail and other items that I’m constantly inundated with?
Answered 12/23/10 09:22:29 by Suzie Sawyer
A: Recently I was faced with the task of cleaning up the files and records of an elderly client who found himself without family or resources equal to the task. Like many of his peers, over the years he had accumulated a lot of “stuff” in the form of records, mementos, and a table heaped with junk mail. Particularly among the elderly, accumulations like his are not uncommon. When faced with the “throw out or keep” decision, “keep” prevails too many times…especially as we age. Therefore, considering that space is expensive and giving up what little we have to “stuff” can detract from our lives, it makes good sense to develop a home filing system or procedure that holds the “keep” to a minimum. Start by applying some basic rules of administration, such as: “handle a piece of paper one time, then file.” Next, develop a system to sort mail and do so daily. Try sorting mail into three piles: junk that doesn’t get read on its way to the waste basket; bills that immediately go into an unpaid bills file; and reading material that you plan to read later. Next, I like to keep a composition book around my desk for notes in lieu of writing down information on scraps of paper or sticky notes. This acts as a chronological journal to which I refer from time to time, often to find that forgotten reminder or telephone number. Finally, I equate the design of a home filing system to that of the process of setting up kitchen cabinets. Keep like items together. Keep those files that you are most likely to use on a daily basis close at hand. Files that you are less likely to use can be kept in less handy spots. Please be sure to read next month’s Q&A when I will discuss how to create a filing system to keep your documents better organized.Submitted by Anonymous from Biloxi, MS
Q: I’m in my mid-50s and beginning to think about retirement. My biggest concern is if I will have enough money saved. How can I be sure I don’t outlive my savings?
Answered 09/28/10 08:36:47 by Suzie Sawyer
A: Part 1 of 3 - Posted September 25, 2010 Being nervous that you will outlive your retirement funds is a familiar concern. Some experts estimate that annual retirement needs could range anywhere from 70 to 100% of your current income. Planning for retirement as early as possible is a significant step towards acquiring the funds you’ll need to pursue your future goals. Our way of thinking about retirement needs an overhaul. We persist in asking our retirees to make what author Mitch Anthony (The New Retirementality) calls “age-justments,” turning off who they are and the activities that drive their pulse … simply because they reached age 62. In reality, the good news is retirement is not like flipping a switch. It’s not a black and white transition – it is really a three-phase process, and each phase has a different investment process. The first phase of retirement truly begins well before actual retirement. It occurs between ages 50 and 61, when the kids have left home and our focus becomes wealth accumulation. At this time, we concentrate on building our nest egg, paying off our debt, and thinking about where we wish to live and what kind of life we would like to have for the last third of our lives. You may be thinking about travel, down-sizing, moving to that little cottage by the beach, or even continuing to work in some capacity. At this point, the investment focus is growth-oriented and the larger portion of our portfolio will be in equities. Please check back for November's Ask the Expert to see our discussion on phase two of retirement. Then join us again in December when we will discuss part three. ------------- Part 2 of 3 - posted October 25, 2010: Last month, we discussed the first phase of retirement, when our focus is wealth accumulation. This month, I’d like to tell you about the second phase, from ages 62-75. This time in our lives may be the most misunderstood time in retirement. As we leave work life behind and begin trading leisure time for human capital (the present value of future earnings), real change begins. Retiring does not mean simply quitting work, but rather choosing how we use our time. We have the freedom to do what we want, without having the economics of the endeavor as the chief motivating factor. A study done by the Gallup® organization found that 60% of retirees want to become entrepreneurs or seek a more fulfilling job, 10% are seeking a new work-life balance, 15% hope to enjoy a traditional retirement, and the remaining 15% do not want to retire. From an investment perspective, those who continue to work and earn, at whatever they choose to do, may be able to take more risk with their investments because they continue to build human capital. Their portfolios should generally reflect some bias toward equity or growth investments, consistent with their risk tolerance. As production of human capital tapers off, and the need to depend upon investments for support or other retirement goals increases, this riskier strategy should begin to transition to less risky investments. Please join us again in December for part three, when we discuss the third stage of retirement. ------------- Part 3 of 3 - Posted November 23, 2010 Over the past months, we have been discussing the three phases of retirement. In October, we discussed the first phase, when we focus on wealth accumulation. Last month, we talked about the second, possibly most confusing phase, when we have the freedom to do what we want with our time, without having the economics of the endeavor as the chief motivating factor. This month, let’s delve into the third phase of retirement. This phase begins around age 75. Health concerns may arise, and we may decrease expensive travel and recreation that we previously pursued. The option of generating human capital has diminished, and with it so should the risk in our portfolio. This does not mean that we abandon all stocks in favor of bonds … rather that we become more cautious, concentrating on preservation of capital. According to Social Security actuary tables for 2006, men born today have a life expectancy of 75.1 years and women have a life expectancy of 80.21 years. Of course, heredity and lifestyle choices play a part in our quality of life issues – particularly after age 75. Many seniors continue to travel, sail, golf, etc. as they have the extra time to do so. Being nervous that you will outlive your retirement funds is a familiar concern. Planning for retirement as early as possible is a significant step towards acquiring the funds you’ll need to pursue your future goals. Life, as with all things in nature, has seasons. Your investment strategy should reflect seasons as well. The Stifel Nicolaus Wealth Strategist Report® is a financial planning tool that provides an in-depth analysis of your retirement goals relative to your current financial situation. If you are interested in this service, please contact my office by calling (228) 864-4460.Submitted by Anonymous from Ocean Springs
Q: I've begun saving for my retirement. How will I know if I'm saving enough?
Answered 08/27/10 11:08:57 by Suzie Sawyer
A: It’s almost impossible to overstate the importance of savings and a patient investment policy in preparing for retirement. Save early and often. I was reading through a MetLife survey on retirement readiness, much of it related to the emotional side of readiness, and was struck by a couple of responses. MetLife surveyed a diverse group, starting with pre-retirees as young as age 45, up through actual retirees, who composed about 20% of the sample. Here’s what really struck me: they asked the pre-retirees “Do you plan to retire...?” and these are the responses they got. Earlier than you planned/expected: 6% About the same time as you planned/expected: 47% Later than you planned/expected: 46% Most people, in other words, expect to retire on their own schedule, while a big chunk also figure they will have to work longer than they thought. But when they asked the actual retirees, who have already gone through the transition, “Did you retire...?” there was a completely different outcome. Earlier than you planned/expected: 64% About the same time as you planned/expected: 33% Later than you planned/expected: 3% Almost two-thirds ended up retiring earlier than they thought they would, and almost no one retired later than they expected. And, really, the reason for early retirement doesn't matter. The message is simply this: You are expecting to retire on your schedule, but two-thirds of you may well have your retirement accelerated. To be prudent, you will need to have your capital accumulation completed earlier than you think. You may be planning to save for another ten years; but you might only have five. Search out experienced advisors who provide consistent investment planning strategies, such as using relative strength as a risk management tool, and will consider your individual needs and goals. It’s later than you think.Submitted by Anonymous from Pass Christian
Q: Exchange traded funds have been in the news a lot lately - what are they and how can they benefit me?
Answered 08/04/10 15:28:55 by Suzie Sawyer
A: Exchange traded funds (ETF) are one of the fastest-growing investment products in today’s global marketplace. The change in breadth and scope of the product set has been dramatic, growing from one fund in 1993 to more than 880 currently, according to data from the National Stock Exchange. ETFs are most simply described as a basket of securities that typically seeks to track a specific market index, is traded on public exchanges like stocks, and utilizes a unique in-kind creation/redemption process to keep up with demand for the fund. The benefits of ETFs include transparency, intraday pricing and trading, tax efficiency, and relatively low costs. Common uses of ETFs include diversification, portfolio completion, sector rotation, tax-loss harvesting, cash equitization, duration/credit adjustment, hedging, and manager replacement. ETFs fall into multiple benchmark categories; there are now ETFs covering every major market index and sector of the equity and fixed income markets, specialized ETFs that cover specific industries, commodities, currencies and market niches, and international ETFs that are country- or region-specific. Many view ETFs as an excellent means of investing in a favorite sector while mitigating the risk of being exposed to the fortunes of a few companies. ETFs are also viewed as precise tools that can be used to diversify an entire portfolio, particularly now that ETFs have made so many different benchmarks investable. ETFs are subject to market risk, including the possible loss of principal. There will be brokerage commissions associated with buying and selling exchange traded funds unless trading occurs in a fee-based account. Diversification and asset allocation do not ensure a profit and may not protect against loss. Investors should consider an ETF’s investment objective, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other important information, is available from your Financial Advisor and should be read carefully before investing.Submitted by Anonymous from
Q: How does the market generally perform during mid-term election years?
Answered 06/29/10 14:28:26 by Suzie Sawyer
A: Mid-term elections are right around the corner and becoming an ever popular item of news coverage. While votes will not be cast for a few more months, past election cycles (since 1898) have produced above-average returns from the 12 months beginning with the conclusion of the 2nd quarter of mid-term election years. Mid-term election calendar years have, on average, produced nothing spectacular, but the 12 months starting with the end of June have been a bit more impressive. For example's sake, we calculated 12 months returns in such a fashion (June 30 – June 30) for both mid-term and presidential elections. Both election years, on average, tended to produce above-average returns. The mid-term election time period is not generally positive for incumbent parties (based upon presidency), which tend to lose materially within the lower house, but out of 28 mid-term elections since 1898 the Dow Industrials have "won" during 19 of those years within that June 30-to-June 30 window with an average return of 12.65%! The Presidential election years have also been quite strong during that window, producing 19 up years and only 9 down years, and an average return of 13.29%. We can compare these numbers to the average return of the Dow in all years beginning on June 30, which is +7.39% going back to 1898. If you would like more information on election-year returns, please e-mail me at sawyers@centurysecurities.com with the subject line: Election Year Market Returns. I will be happy to e-mail you back the chart showing these figures. The information contained herein from Dorsey Wright and Associates has been prepared from sources believed to be reliable but is not guaranteed by us and is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell any securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors.Submitted by Anonymous from Ocean Springs
Q: My portfolio took a significant hit in 2008. What happens if we get another 2008? Is ¡§buy and hold¡¨ an answer for the long term?
Answered 05/28/10 11:17:31 by Suzie Sawyer
A: Between October 9, 2007 to March 9, 2009, the Market lost $11 trillion; the S&P 500 Index was down 57%, the Dow was down over 57%, and the NASDAQ 100 was down 52%. Investors saw an average loss of 56.78%. You may be wondering at this point what to do. Do you or your current advisor have a strategy to mitigate the risk of another bear market? With the markets as volatile as they¡¦ve been in recent years, simply subscribing to traditional asset allocation principles may not be enough to help you weather the next storm ¡V there are so many other factors to take into consideration when it comes to managing your portfolio. Here at Trinity Investment Services, for example, our investment methodology utilizes the following: „X Market Indicators ¡V Is risk high or low? „X Sector Indicators ¡V Opportunities „X Inventory ¡V Fundamentals, Funds, ETFs, etc. „X Point & Figure Chart ¡V When to buy & managing the trade „X Advice Based on Managing Trades, Including Sell Side Discipline Your expectations should meet reality ¡V whatever that is for you. We manage risk using technical analysis, trailing stop losses and investment selection. Here¡¦s the question you should ask yourself: Is it time to look around and explore alternatives? Possible answer #1: No. Next action: Stay put with your current advisor(s). Hope for the best. Possible answer #2: Yes. Next Action: Get a second opinion from us at Trinity Investment Services. We can help you with risk management, because we understand that bear markets hurt.Submitted by Anonymous from gulfport,ms
Q: i want to convert my traditional ira to a roth, but need to know how much i would have to pay in regards to taxes in the next two years? thank you
Answered 05/04/10 18:16:36 by Suzie Sawyer
A: Thank you for your question regarding Roth IRAs. For those who weren’t aware, the elimination of Adjusted Gross Income (AGI) limitations in 2010 now allows many retirement savers to take advantage of Roth IRAs. Since traditional IRAs are funded with pre-tax dollars while Roth IRAs are funded with post-tax dollars, anyone wishing to convert a traditional IRA to a Roth must pay tax on pre-tax contributions and earnings. The amount of tax you pay in a Roth IRA conversion is determined by your tax bracket. As you may already know, individuals who convert a traditional IRA to a Roth in 2010 will be allowed to spread the tax due on the conversion amount evenly over their 2011 and 2012 tax returns. You may want to consider making a traditional IRA non-deductible contributions of $5,000 for 2010 (plus “catch-up” contributions if age 50 or older) for the purpose of a 2010 conversion. Why? Converting these contributions (plus the earnings) to a Roth IRA penalty-free will only require taxes to be paid on the earnings. If you are married, this same strategy may apply for your spouse as well. It’s important to note that the value of all your IRAs (not including Roth IRAs) must be aggregated to determine the taxable vs. non-taxable portion of any conversion. Specific questions in regards to your taxes owed must be discussed with your tax professional. If you can handle the tax burden and if your CPA advises you to convert, saving for retirement in Roth IRAs can be one of the best strategies, as assets that remain in a Roth for five years and until age 59 ½ can generally be withdrawn tax- and penalty-free.
