“The evening news on television is where they begin with ‘Good Evening’ and then proceed to you why it isn’t” —– Author unknown. Dear Clients and Friends, As if we haven’t had enough of politicians and politics here in the United States, we now have to sort out the ramifications of Socialist (and disruptive) victories in France and Greece. In France, Francois Hollande became the new president, riding into office on a wave of anti-German and anti-austerity sentiment. Rather than cut spending in a country where there has not been a balanced budget since 1974 and government expenditures are 56% of GDP (the highest % to GDP of any emerging or developed country in the world), he wants to further raise taxes on a population that already has a top income tax rate of 45%, a wealth tax of 0.5% and a VAT (Value Added Tax) of 21.2%. In Greece,
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“I’ve learned, that to ignore the facts, doesn’t change the facts” — Andy Rooney Dear Clients and Friends, Tuesday was the day that income taxes were due to be paid to the U.S. Treasury. Like many Americans, I wrote the check, attached it to my return and mailed it off to Washington (by way of San Francisco first). This also is an election year and we will continue to hear ad nauseam about how some need to pay more in taxes while others should pay less. Some believe that the government is efficient in the way it allocates collected taxes while others do not. Some feel that free markets are scary and government can eliminate risk while others feel that private relationships – family, friends, business and charity – will do a better job over time. The fact is that there is no economic system (capitalism or socialism) in existence
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As we near the tax filing deadline (4/17/12) for 2011 tax returns, our office is staying busy processing 2011 IRA and ROTH IRA contributions and dealing with other tax reporting issues. Tax-deferred strategies are gaining more publicity as we are on the eve of some extraordinary tax benefit expirations at the end of 2012. These benefits have collectively saved investors billions of dollars over the past decade. Howard Silverblatt, Senior Index Analyst at S&P Indices, reported that “individual investors will have saved $358 billion on qualified dividend tax cuts from 2003 through the 2012 expiration date.” One nifty little tax-savings strategy which doesn’t get discussed much is the cleverly titled “Backdoor IRA”. This strategy typically benefits a very small number of people or the “tails” of the bell curve for our statistician friends. But you never know if you don’t ask and many people who could otherwise benefit from it,
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“The faintest ink is more powerful than the strongest memory” – ancient Chinese proverb Dear Clients and Friends, In episode 3-10 of the AMC hit series “Mad Men”, Paul Kinsey (Michael Gladis) experiences a late night epiphany while racking his brain to produce copy for a Western Union advertisement. There is momentary joy and relief as the idea comes to him, however in all of the excitement there is one problem, he forgets to write the idea down on paper. I digress a bit with my recall of that scene from the “Mad Men” but it reminds me of my posting of February 27, 2012 where I had to “write down” my thoughts regarding the possibility of a housing recovery this year before I forgot about the powerful implications such a recovery would have for employment and the overall economy. Doug Kass reiterates that “housing is the straw that stirs
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“Own Your Numbers” By Patrick Rudy, CFP®CPA AIF® As a Certified Public Accountant who formerly spent much of my time working with financial statements, I tend to view the world through balance sheets and cash flow statements. Naturally, in financial planning for individuals and families, we use modified versions of these statements very heavily as well. Lately I have been getting more involved with several local financial literacy initiatives and have been thinking more about household financial statements and how they are used. It seems the prevailing sentiment in consumer finance is to focus largely on the cash flows of a purchase as opposed to its balance sheet implications. It is important to consider both aspects of a big ticket purchase and furthermore to think about it in different ways. When counseling individuals and families on household financial management issues and best practices, I frequently encourage folks to “own their
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Trust Advisory Committees – A Strong Team For Your Trustee By Rob Wrubel, CFP®, AIF® My last newsletter talked about Eli Manning and his pursuit of being considered an elite quarterback in the National Football League. Well, the Giants won, and all the naysayers have capitulated. Manning and his team beat the New England Patriots and their elite quarterback for the second time now in the Super Bowl. Eli Manning could not achieve this goal without a strong team – made up of coaches, team members, trainers and everyone else on board committed to winning. As a parent, spouse or sibling of a special needs person, you also need a strong team. Your planning team should include an estate planning attorney, CPA and financial planner/investment adviser who are all passionate about special needs families. These team members must be professionals committed to lifetime learning about the issues facing special needs
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“War does not determine who is right — only who is left” — author unknown. Dear Clients and Friends, My more optimistic view for 2012 has been largely determined by the likelihood of fewer “black swan” events. After all, can you imagine another year where we see: an earthquake/tsunami/nuclear reactor melt- down, the rapid overthrow of three oppressive and entrenched dictatorships in Middle East (the Arab Spring), flooding for the ages in Thailand and Indonesia, the downgrading of U.S. government debt (as a do nothing Congress…did nothing) and last but not least, a potential implosion of the Euro that threatens the solvency of every major bank in Europe? Although it would take a “black swan” the size of a small planet to top the swans of 2011, I am growing a little concerned about Iran’s belligerent stance on nuclear development, their view of Israel (and vice versa) and their threat
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“Show me a player who rides the same blackjack table all night and I will show you a guy headed to the ATM.” —- Keith McCullogh Dear Clients and Friends, I mentioned in a previous e-mail that a sustained recovery in housing could, in rapid fashion, reduce the unemployment rate by over 1%. Ed Yardeni of Yardeni Research Inc. recently re-iterated that “There are usually two bottoms for housing following a housing bubble: 1) when housing starts, new home sales, and residential construction bottoms, and 2) when housing prices bottom. The bottom is in for construction and we are getting close on prices.” Earlier this month we got some good news on the housing front. The National Association of Homebuilders index rose to 29 in January, its fifth straight increase and well above the forecast level of 26, and up from 25 in December. It stood at 14 as recently
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Refinance Your Mortgage To Help Meet Your Goals By Rob Wrubel, CFP®, AIF® Mortgage rates keep coming down. It seems impossible that it could happen as they have now been low for so long but it keeps happening. Last week, I saw a 30 year fixed rate at 3.875%. Bankrate.com shows a 15 year rate at 3.16%. Unbelievable. At Cascade, we take a comprehensive approach to working with clients to help them achieve life goals through financial planning, saving and investing. Your ability to save over time or reduce expenses for major purchases can make a significant difference in your planning. Low rates could help you purchase a dream home, second home or make improvements to your existing home. Low rates can help homeowners stay in their current residences for years to come. Low rates can help you add additional money to investments or free up income to pay for
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“He who lives by the crystal ball, soon learns to eat ground glass” — Edgar R. Fielder, “The Three R’s of Economic Forecasting – Irrational, Irrelevant and Irreverent” Dear Clients and Friends, According to Brian Westbury, Chief Economist for First Trust, there are three types of people involved in the prognostication business these days. They are: the EOTWT’s, better known as the “end of the world” types, the IASPAWT’s, who are known as the “it’s a slower, post- apocalypse world” types, and finally the EIGTBOT’s, otherwise known as the “everything is going to be OK” types. As we start a new year, those who embrace the EOTW concept, are still chewing away on the ground glass, the IASPAWT’s are enjoying a satisfying Kobe beef burger, and the EIGTBOT’s are just sitting down to a thick and juicy 16 oz. New York strip. Throughout 2011, the EIGTBOT’s invited the EOTWT’s and
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