e-newsletter october 2012 - jsw financial october 2012 table of contents: -check out our upcoming...
TRANSCRIPT
E-newsletter
October 2012
Table of Contents:
- Check out our upcoming event!
- Ops center
- Long Term Disability insurance and Long Term Care insurance
- How can you profit from a gecko or a duck?
- Joel’s Corner: Not a Time to be a Hero in This Market
Check out our upcoming event!
We are excited to invite you to our Tailgate on Thursday, November 8, 2012, when the Virginia
Tech Hokies take on the Florida State Seminoles. Our Tailgate will begin at 4 PM and last until
game time. Food and beverages will be provided. Look for the JSW Banner in the Stadium Lot
2 parking spaces 665 & 666. Please scroll down to view the invite and the map of our location.
Please contact Beth with any questions or regrets by phone at (540) 961-6706 or by email at
[email protected]. We look forward to seeing you there!
Ops center
For those of you required to take a minimum distribution from your IRA, did you know that you can view your required amount on your monthly statement? The information can be found in the Retirement Summary on or about page 3 of your statement. Official RMD notices were mailed by First Clearing in September. If you are concerned or are unsure if you have taken enough, please call us so we can help get the process started.
Long Term Disability insurance and Long Term Care insurance
Over the last several months I’ve been reviewing differing aspects about long-term disability insurance (DI) and long-term care insurance (LTCi). Below you will see a chart comparing the two:
DI LTCi
Insures: Income LTC Expenses
Covers until: Retirement Death
Available to: Earners Only Everyone
Last month in the June e-newsletter, I outlined “12 Things to contemplate when considering Long-term Care insurance.” And, if you are affluent, here are some additional items for you to consider. Here are some things that Long Term Care Insurance has the potential to help you with:
Retaining control
Reducing volatility— Enabling you to gift more freely
Affording expensive care
Overcoming reluctance to spend own money
Alleviating the stress of investing more aggressively
Avoiding untimely liquidation
Taking advantage of potential tax breaks
As questions arise, please don’t hesitate to call on us for additional information. We are here to help you make the right decisions for yourself and for your future.
- Sara Bohn
How can you profit from a gecko or a duck?
When contemplating insurance many people, me included, automatically think of the cost to protect valuable assets such as your home or car, from a catastrophic event. We pay the premiums and hope that we will never have to file a claim. Insurance companies hope this as well. The fewer claims, the more profits they make. By the looks of their corporate headquarters buildings and the number of ads they have on TV, they are doing pretty well. Wouldn’t it be nice if we could follow their business model and make some profits for ourselves? Now, I am not suggesting that you start an insurance company and begin writing policies on your neighbors’ cars. But, among the number of ways the managers we work with reduce the downside risk in portfolios, one is similar to the insurance model. It’s called a Put Write
strategy and it’s being used extensively by Bayhawk Asset Management. Through the use of Put options, they are paid a small premium to agree to buy a set amount of various stock market index funds at today’s values for a set period of time, usually a month or less. If the market goes up or stays flat during that time, the contract expires and the manager keeps the premium. If the market index drops however, the manager must buy the agreed upon amount of the index fund at the agreed upon price. Once that happens, they immediately sell the index fund at the current price and take a loss. This strategy makes the most profit when the markets are markets are flat or trending up gradually. In this case it can perform as well as or better than the market overall. If the market moves up quickly this strategy will still make money, just not as much as the market. If the market drops quickly, the strategy will also lose money. However, it will fall a little less than the market since it did collect a premium from selling the Put options. The costs of the Put options typically go up during periods of rapid market swings so the manager is able to collect higher premiums. This adds some protection in case the market continues to drop and in some cases adds to profits as markets begin to settle down since the cost of Put options typically stay elevated for a while. Options strategies involve significant risk, including (among others) supply & demand in the option markets and the markets on which the options trade. Options markets may be volatile, and depending on the strategy used, could subject the option trade to unlimited losses. The use of options trading may not be suitable for all investors.
- Mike Jones
Joel’s Corner: Not Time to Be a Hero in This Market
After completing my research for this newsletter, I came away with a couple of succinct basic points, as well as a graph to support my suggestions.
Most market analysts are likely wrong in forecasting an increase in S&P earnings leading to the next secular bull market. Part of the reasons is that current data is used by the majority of analysts working for investment companies, with a lack of nominalization, as used in the Schiller and Crestmont Research studies. (Source: Hayes Research) The important thing is to realize earnings may start to drop, but don’t panic.
The good news (see chart below) is that just because earnings fall, there have been many times that a recession does not necessarily follow. In my opinion, this is the case now. The economic recovery is making a gradual comeback, albeit slow. Bernanke and the Feds were wise to keep their powder dry.
Even better news, is that the stock market will hold its own during these volatile times, although with single digit returns in my opinion.
A well-diversified investment strategy, which in my opinion includes absolute return strategies and other alternative investment strategies, continues to be warranted here. Having said that, please remember no one strategy is best for everyone. That’s why all of our portfolios are customized to your goals and emotional needs.
A great concern of mine is that clients need to have a “cash flow strategy,” not simply an investment plan. This is regardless of your age or whether you are entering retirement. Cash flow plans address taxes, major expenditures (like college costs), health issues, and helps to prepare one for short-notice life-style changes. At JSW Financial this usually begins with a cash flow plan, then continues into a choice of life planning paths. Each client is different, even if their basic profile appears similar. I recommend all clients schedule an appointment with our team of Certified Financial Planners (CFP’s) to document at least a baseline cash flow management plan. No real storm clouds on the horizon that we haven’t dealt with before: European crisis, the conflicts in Syria and in Iran, the struggles of the global and domestic economies, et al... the sun will come out again. So, please, contact us today with your concerns and we at JSW Financial will help you discover a financial plan tailored for your individual needs. Until later,
Joel
Securities & Advisory Services Offered through VSR Financial Services, Inc. A Registered Investment Adviser and Member FINRA/SIPC.JSW Financial is independent of VSR. The above commentary contains opinions and analysis that are provided by the authors for informational purposes only and should not be used as the primary basis for an investment decision. VSR and JSW Financial do not provide tax or legal advice or services. Individuals should consult with their own legal or tax advisor concerning their own specific situation.
Join us on Thursday, November 8 when
the Hokies take on the Seminoles.
Look for our JSW Banner in the
Stadium Lot 2 parking spaces 665
& 666. (Map on back)
Please contact Beth with any
questions or regrets 540.961.6706 or
JSW Financial • 1995 S Main St, Suite 903 • Blacksburg, VA 24060www.joelswilliams.com • [email protected]
Securities & Advisory Services Offered through VSR Financial Services, Inc. A Registered Investment Adviser and Member FINRA/SIPC. JSW Financial is independent of VSR.
Tech vs. Florida St. Tailgate Event
Our tailgate event will start
at 4 pm and go until game
time. Food and beverages
will be provided.
Stadium lot 2 parking spaces 665 & 666. Look for our JSW Financial banner on our tent. If you have any problems finding us, please call Beth’s cell - 540-239-4573
Public
14A
14
H
Public RV
1
8
15
17
7 2
3
5
Public RV
Public RV
Basketball
practice fa
cility
Coliseum
Soccer and lacrosse
Fieldhouse
Alumni Mall
To U.S. 460 bypass
Southgate Dr.
Duck Pond Dr.
Tech Center Dr.
Spring Rd.
Grove Ln.
Kent St.Otey St.
N. Main St.
Perry St.
The Inn at Virginia Tech
Smith
field
Rd.
Where to park for Virginia Tech football A look at the lots that are available for people to park at when attending football games at Virginia Tech
Public/Public RV Parking
ADA (shuttle provided)
Public
Contributor Lots1. Cassell Coliseum2. Stadium3. Maintenance lot4. Track/softball5. Chicken Hill6. Health & Safety 7. Veterinary School8. Litton Reaves9. Litton Reaves Overflow10. Engel11. Price Hall12. Davidson12A Hahn13. Soltitude14. Derring14A. B lot15. I lot/Cage16. Duck Pond Overflow17. Smithfield Rd.18. Media Building
Drillfield Dr.
Lane Stadium
D R I L L F I E L D
Public
Public
6
9
16
18
Washington St.
Washington St.
1213
12A
11
10
W. Cam
pus Dr.
W. Campus Dr.
Stanger St.
4TrackBaseball
Softball
Graphic by Jon Ness/Media General News Service ~ Source: www.hokietickets.com
Stadium Lot 2
JSW Tailgate