Fourth Quarter 2004|Jim Williams| You are likely aware that there are changes coming to the Social Security system. In addition to the much discussed personal accounts, it is likely that benefits for future retirees (probably not current retirees) will be reduced a bit and deferred a bit. I guess that since I have been predicting this for several years, maybe I should take more credit for my abilities at prognostication. Hmmm.
Third Quarter 2004|Jim Williams| I’m sure that most readers of this newsletter know who (what) the SEC is (the Securities and Exchange Commission). I doubt that many know what (who) the FPA is (the Financial Planning Association), much less, why a three-letter association has filed suit against a three-letter government agency.
Second Quarter 2004|Jim Williams| In his column dated July 18, 2004, Jonathan Clements, who writes “Getting Going” in the Personal Finance section of the Wall Street Journal, suggests starting a serious conversation about money with your kids. You may feel some trepidation about approaching the topic, since in our society, conversations about money carry roughly the same taboos as do conversations about sex. But the conversation about money may be every bit as important as a conversation about sex.
First Quarter 2004|Jim Williams| Occasionally when money is available for addition to a portfolio, the question arises as to whether it is a good time to invest. Stocks have been going up for 4 full quarters. Is the run-up over? Are stocks overpriced? Where will the market go next year? Stocks have been going down for the last three years. Isn’t this the end of the world? Shouldn’t we be buying canned goods?
Fourth Quarter 2003|Jim Williams| Two years ago in this newsletter, I addressed the issue of fixed-income asset classes in the investment portfolio. At that time, as now, interest rates were quite low, and the prospects for rising interest rates seemed gathering if not imminent. Rising interest rates mean declining bond prices (the longer the duration of the bond, the greater the decline in price, more about this later). And with yields as low as they are now, it makes fixed income seem like a quite unattractive investment alternative. But let’s remember why we have fixed income in the portfolio.
Third Quarter 2003|Jim Williams| New York State Attorney General Elliot Spitzer is at it again. Good for him. You are probably aware of the latest scandal to hit the financial services industry related to after-hours trading of mutual funds (Janus, Strong, Bank of America/Nations, Bank One Group, Alliance). Why have none of the funds in your portfolio been named in any of these allegations? Is it because we had some special insight into the trading operations of the funds? No. Is it because we’re smarter than everyone else? No. Perhaps it has something to do with what we look at when we evaluate investment vehicles.