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Greetings!
Summer has finally arrived, and we hope it will be a
sunny and dry one!
We have changed the format of our e-mail newsletter
this quarter, and we hope you enjoy it!
| Take Our Quiz! |
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Our question of the quarter is:
How many times has the S&P 500 stock index declined
by at least 10% since 1926?
a. 15 times l b. 10 times l c. 13 times l d. 22 times
The S&P 500 has declined by more than 10% 13 times
since 1926, with declines lasting for as short a period
as two months and other periods lasting as long as 34
months, according to research provided by Ibbotson
Associates. So, if you answered C, you were right.
In six cases the recovery was longer than the decline.
There has always been a recovery, although sometimes
it was a long and painful return to market growth.
Year-to-date all the indices are up as follows: S&P 500
+11.1, Nasdaq +21.7% and DJIA +7.8%. At Coastal
Financial Planning, we began moving new money into
the equities market in January. We will continue to
dollar cost average into the market to take advantage
of the market shifts. Additionally, we will be reducing
exposure to products like Ginnie Maes and TIPS, which
were the anchors for many portfolios last year.
Also, I
have concerns that the Nasdaq has risen too rapidly.
Remember three years ago when the bubble burst
in the tech sector? If you look at the flow of funds,
new money is disproportionately going into this sector.
If you do want to start moving money into tech,
consider looking at Microsoft and Qualcom. Neither of
these stocks have participated in the tech rally, and
year-to-date both are down. Both stocks hold market
leadership positions and have large cash reserves.
There are also discussions on offering dividends in the
immediate future. Remember, you don't want to jump in
and out of investments, but you do want to
consistently rebalance your portfolio to capitalize on
market activity.
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| Relief from telemarketers! |
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For those of us that hate telemarketers calling us
randomly during the day both at home and at work,
there is relief. The Federal Trade Commission created a
do not call consumer registration bank. Consumers can
log onto www.donotcall.gov for a nationwide
registration program that puts you on a list removing
you from telemarketers' phone calls. You must enter
each phone number you want removed from the list.
The marketers have three months to remove you from
their list and after that time they will be penalized with
fees that will range up to $11,000. These marketers
will be required to buy a "do not call" list from the FTC
at a cost of $7,000.
The first day this site was operational it logged in
60,000 requests per minute.
Register your phone numbers now! »
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| Upcoming Speaking Events |
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I will be speaking at the following event in July. Please
bring a friend and join me at this educational session.
Monday, July 28th - 12:00 p.m.
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Brown Bag Educational Session, sponsored by Texas
Instruments - Attleboro, MA
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Topic: Financial Planning - Looking beyond your
investments. This presentation will cover the financial
basics that are overlooked, and will allow for a 30
minute Q & A session.
Please contact me for more information at 401-727-
8151.
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| From Angela Thomson, CFP. |
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Angela Thomson is the founder of Coastal Financial
Planning. She is a graduate of Bryant College. She
completed her CFP® course work in conjunction with
Northeastern University, and is a CFP® licensee.
Additionally, she is a registered investment advisor.
She serves as an adjunct professor at Bryant College
teaching the CFP® Program.
Mrs. Thomson hosted Public Access Television's weekly
series, "Your Money", and has conducted various
workshops covering women and investing, funding
college education, retirement planning and investing in
uncertain times.
She has published several articles including "Your Young
Investor", "Retirement Savings and Investments for
Women" and "Weaving Your Way Through the IRA
Maze", and is frequently quoted in the Providence
Journal.
Angela Thomson serves as an officer for the Financial
Planning Association of Rhode Island. She also
volunteers as a Money Mentor, working in conjunction
with the Commonwealth of Massachusetts Treasurers
office and also with the Rhode Island Chapter of the
Financial Planning Association.
Coastal Financial Planning is located at 13 East
Butterfly Way, Lincoln, RI 02865.
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| 2003 Jobs & Growth Tax Relief Act - What it means to you. |
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The recently passed Jobs & Growth Act should impact
most consumers. For individuals, tax rate
reductions will occur as follows:
*if you were in the 27% tax bracket you new rate is
25%,
*the 30% bracket is reduced to 28%,
*the 35% bracket is reduced to 33% and
*the 38.6% bracket has been reduced to 35%.
Child Tax Credits for the next two years will be
increased from $600 to $1,000. Dividend Income for
2003 will be reduced to a 15% maximum income tax
rate. Stocks must be held 60 days prior to the ex-
dividend date, which we will calculate for you. Capital
Gains rates have been reduced for sales occurring after
May 6, 2003, with a maximum gain rate of 15%.
For small businesses there will be an additional first
year depreciation allowance to deduct the cost of
tangible personal property placed in service during the
tax year.
How do you optimize your portfolio based on these
changes? Future emphasis should be given to dividend
paying stocks. Many of our senior clients have had
exposure to these types of investments, and we will
broaden the scope to our younger clients. While other
firms have taken a buy and hold strategy, we have
always adhered to a buy and analyze strategy, with an
eye toward holding periods. The changes in both
dividend income and capital gains will allow for more
flexibility when moving in and out of stocks and mutual
fund investments.
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