Insights

Fourth Quarter 2002|Jim Williams| President Bush recently announced a series of tax-reduction proposals that are being characterized and analyzed within the context of an economic stimulus plan. The centerpiece of the proposals is the elimination of taxes on dividends paid by recipients of those dividends, and the proposals would also accelerate reductions in the federal tax rate and marriage penalty. . Congressional Republicans are strongly in favor of the bill. Democratic opposition to the Bush plan is significant.

Third Quarter 2002|Jim Williams| Section 529 plans have become quite popular because they allow you to save for future college education costs while eliminating federal income taxes on qualified distributions. These plans have no income restrictions and contribution amounts are very generous. The beneficiary of a 529 plan can be anyone you wish, including the account owner, with no age limitations. Whether they’re a good idea depends upon your circumstances.

Second Quarter 2002|Jim Williams| We are now under a constant barrage of bad news in the financial pages. The declines in stock values have been dramatic. The S&P 500 is trading at levels we last saw over 5 years ago. The internet bubble, the irrational exuberance bubble, the speculative bubble, are all being erased. This is what fills the headlines. Let me urge you to consider where the pain is really coming from.

First Quarter 2002|Jim Williams| Recall that the fundamental reason for fixed income in a diversified portfolio is to moderate the volatility of the equity component of the portfolio while maintaining a reasonable yield and a store of value. A perpetual argument exists among bond investors about the relative merits of using bond funds versus direct investments in individual bonds.

Fourth Quarter 2001|Jim Williams| With all the recent lowering of interest rates by the Federal Reserve, and with money market yields below 2% it would seem that interest rates are about as low as they can get. This is a circumstance that gives us cause to examine the role of fixed income in our portfolios. Why would anyone want to hold bonds knowing that interest rates are going to go up?

Third Quarter 2001|Jim Williams| Watching the abrupt decline in portfolio values after the terrorist attacks was disconcerting, to say the least. The horrible events themselves left many of us with a sense of loss, and a feeling that our personal security was impaired. These emotions were compounded by the reaction of the financial markets. Here's a comparative look at the market impact of several crisis events and the amount of market recovery after the end of the market reaction to the crisis