newsletter
Climbing a Wall of Worry
March 2010
Enclosed is our spring Client Quarterly. (Please contact our office if you would like to receive a copy.)
As we predicted, this year seems to be shaping up to be
volatile. Nonetheless, we believe
the stock market will perform better than many are predicting. There’s a little saying on Wall
Street -
‘As long as the market is climbing a wall of
worry, we’re ok.’
The market certainly did that last year and it seems to be
continuing to do that this year.
Sir John Templeton in February 1994 –
Bull markets are born
on pessimism, grow on skepticism, mature on optimism, and die on euphoria.
Currently we seem to be in the skepticism phase. Even so, the housing market appears to
be stabilizing. It looks like
interest rates will remain fairly low for the near to intermediate future. Voters are finally worrying about the
national debt and all of the long term indices are at historical lows. In our view, these are all optimistic
signs.
The estate tax has expired for 2010, but there is still a good chance Congress will make changes that are retroactive to January 1st (a real can of worms). In the meantime, check with your attorney to confirm that there aren’t unintended consequences to the way your estate is distributed to heirs. The way your will or trust is worded with respect to the treatment or avoidance of estate taxes could cause problems.
Removal of the income limits for conversions to ROTH IRAs
has been a hot topic this year. We have addressed the conversion issue a few
times now and page 3 of the Client
Quarterly provides even more food for thought on the topic. The decision of whether or not to do a
conversion requires a number of assumptions - current vs. future tax rates,
investment rates of return, number of years before withdrawals begin, and
length of time withdrawals will last.
But even after crunching all the numbers, the looming question that
remains is…
Will Congress change
the tax laws, like they did on Social Security income?
At any rate this will be a very interesting year with mid-term elections, unprecedented national debt (and international debt), developments in the Middle East and Europe and watching for the ultimate outcome of estate tax laws and the trend in unemployment, just to mention a few.
With so much going on, just remember that we are available
to answer any questions you have.
P.S. If you haven’t completed your
IRA contributions for 2009 you have until April 15th. Please contact us right away if you plan
to make a 2009 contribution so we can confirm that everything is in good order.
Securities
through KMS Financial Services Inc.
520.884.7550
jpw@financial-architects.com brienne@financial-architects.com
3971 E. Paradise Falls,