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March 2008 |
Capital Retirement Strategies, Inc.
Specializing in retirement plans
and personal investment management
In This Issue
March Madness! For sports fans, "March Madness" is a wonderful time of year- college basketball's NCAA tournament is one of the most unpredictable and emotional sporting events in the country. Even non-sports fans get hooked due to the popularity of office pools and filling out "brackets." For investors and their advisors, this year's March Madness in the Markets has also certainly been unpredictable and emotional. Bear Stearns, one of the nation's largest investment banks, was sold for pennies on the dollar. For a while, it looked like gold and oil would continue to rise without pause. Three hundred point drops in the Dow Jones Industrial Average were followed by 400-point gains the following day. Investors were tempted daily to cash in their chips, while other braver souls went bargain hunting. I read an article by Marshall Loeb on marketwatch.com last week that mentioned a recent 10-year period where if you had bought an S & P 500 Index fund and held it for 10 years you would have earned a total of 88%. But if you happened to miss the 20 best days over the time period- perhaps trying to time the market or getting out when things looked bad- you would have lost 20%! The bottom line- stock gains come in bursts and if you're on the sidelines, even for a short time, you miss the whole point of owning stocks in the first place. Time in the market is absolutely more important than trying to time the market. If you or someone you know is having trouble dealing with the stress of this crazy market, please give me a call.
This month we have a fascinating article entitled, "Creating Wealth and Prosperity with Feng Shui." Our guest contributor, Natalia Kaylin, is one of the area's foremost experts in the art and science of this ancient practice. It may come as a surprise to some people, but feng shui practitioners are often consulted by many successful doctors, attorneys, businesspeople and large corporations before they move into new office space. And yes, my new office was "feng shui 'd" by Natalia before I even signed the lease! If you live in the Concord area, check out my new financial column, Dollars & Sense, in The Concord Journal. My first article was in last week's paper. If you read something here you like, please consider forwarding my newsletter to someone who may also find it of value. Thanks for reading! Best regards,
5 Easy Ways to Improve Your Finances in 2008 Make Your Savings and Investments Automatic Most people, if given the choice between saving or spending their money, will choose spending. Let’s face it- spending is more fun! Most of us lack the discipline to live within our means, and save or invest on a regular basis. Don’t beat yourself up over it. Set up your investment plans so that they take place automatically. If you work for a company that offers a 401(k) plan, that’s one of the easiest and most popular ways to make your savings automatic. You make your retirement investments through the ease of payroll deduction, and you never have to think about it! Even if you don’t have a 401(k) plan, most mutual fund companies offer systematic investment plans that allow you to transfer as little as $50 or $100 a month from your checking or savings account into a mutual fund. Bump Up Your Retirement SavingsWhen was the last time you increased the percentage of income that you’re saving for your retirement? The IRA contribution limits were raised for 2008 so you can put away even more than last year. If you make contributions to an IRA or Roth IRA, you can now contribute up to $5,000 a year. If you’re over 50 years old, you can put in $6,000. If you have a 401(k) plan, consider bumping up the percentage of your pay that you contribute. For example, if you’re currently deferring 5% of your salary each pay period, consider increasing it to 6 or 7%. By increasing it just slightly, you’ll hardly notice the difference in your paycheck. If you’re already maxing out your 401(k) or other company-sponsored retirement plan, open a Roth IRA and begin contributing to that on a regular basis. How’s Your Credit? There are several compelling reasons to check your credit at least once a year. Identity theft has become a significant threat to us all. You can catch a possible theft of your identity early by getting a copy of your credit report from one of the major credit reporting agencies. You can get a free report once a year or any time you’ve been denied credit. And don’t overlook your monthly credit card statements. Before sending in your payment, check the bill for any suspicious activity or charges that you don’t recognize. Another reason to check your credit report is that mistakes are made frequently- as many as 79% of reports contain errors according to the U.S. Public Interest Research Group. If you see something incorrect on your report, you can dispute it by writing to the agency that reported it. If they can’t confirm the validity of the report within 30 days, they are required to remove the negative item from your record. Rebalance Your PortfolioRemember way back when you picked your funds or set up your 401(k)? If you haven’t reviewed the performance of your portfolio and the asset allocation in the past year or two, it’s probably time to do it now. Over time, some investments in your portfolio may have outperformed others. If that’s the case, you may be exposed to more risk than you had planned when you set up your account. The actual stocks and funds you own are important, but not nearly as important as the asset allocation of your portfolio. Make sure your account is properly diversified. Review Your Insurance PoliciesChances are, there have been some changes in your life since you bought your last policy. Do you have enough life insurance? Remember when a life insurance policy of $100,000 or $250,000 seemed like a lot of money? If you’re providing for a family and paying a mortgage, that’s probably not enough. Term life insurance can provide a large amount of coverage at a surprisingly affordable cost. For example, $1 million of 20-year level term insurance costs less than $60 a month for a healthy 35 year old. It’s a good idea to consider the purchase of disability insurance as well. This is the insurance that replaces your income (generally up to about 60%) if you’re disabled and unable to work due to an injury or illness. And don’t overlook your property coverages- ask your insurance agent about an umbrella policy. This is a personal liability policy that will protect your assets in the event of a lawsuit. Again, this is surprisingly affordable, even for $1 million. Don’t let another year go by without getting your finances in order. A few relatively easy changes can make a significant impact on your financial situation. Let this be the year!
Creating Wealth and Prosperity with Feng Shui By Natalia Kaylin, Eastern Sciences Feng shui is known for creating beautiful, healthy and balanced environments that are in harmony with people and nature. It is observed that if a property has “good feng shui”, it will support good luck and good health for its occupants. Everything will fall into place easily, life and work will improve, and we will feel balanced and strong. On the other hand, if the feng shui qualities of a site are not supportive we may experience difficulties maintaining balance in our home and life and we will feel more stressed and work harder than seems necessary to reach our goals. Consciously or subconsciously, people are attracted to good feng shui sites. When we visit different homes, we notice that we feel different. Some homes have truly wonderful energy that makes you not want to leave, while others will trigger negative responses. Feng shui explains why this happens for both cases. Whether we are aware of it or not, our environment influences us. With a deep understanding of exactly how this works, a feng shui expert can manipulate the energy in our homes and work places to balance and enhance just about any aspect of our lives. A good feng shui design has always been a good solar design. It analyzes subtle energy differences of different compass directions and utilizes their impact in the orientation of the building and its rooms to enhance the potential for success and well being. Feng shui originated in China several thousand years ago and historically was used by the rich and powerful to make them even more rich and powerful. This is why many feng shui principles are related to enhancing wealth. Southeast is the direction of the rising sun and it relates to prosperity and wealth. Having land in the east and southeast sections of your property that is slightly higher than the land in the west or northwest supports greater prosperity for the family. If the east/southeast section is lower or the same height, it is a good idea to raise the energy there by introducing fast growing, tall and strong plants. Brighter colored plants and light poles are other options. Water is the element that increases the vitality of a site. Careful consideration is needed when placing a water feature but in many cases the southeast would be a very appropriate place, especially for moving water. Water that flows towards a building is associated with bringing in Chi (energy) and wealth while water that flows away from the building carries wealth away. We can also enhance our potential for wealth by placing a healthy and preferably large plant in the southeast sector of our home or office. Southeast is a very appropriate place for a water fountain, fish tank or pictures of moving water. It will create a beautiful site and raise the Chi. The colors in the southeastern room should be rather rich and reflect vitality and warmth. Good colors to use in the decor are greens, reds, purples and shades of gold. Besides special considerations, feng shui also deals with the time component. Years, seasons, days and hours have some repeating patterns which can be described in terms of the five elements (water, wood, fire, earth and metal). For example, the fire element could describe the middle of the day and summer. The wood element which describes rising energy is related to spring and morning. Wood is the element that relates to wealth for this specific reason: we want our wealth to grow. Different industries also can be described in terms of five elements. For example, fire industries refer to finance, the stock market, energy, electricity and entertainment. In China at the beginning of every year, beginning in February (by the lunar calendar), feng shui masters make predictions that are based on the consideration of time patterns. This year is the year of the earth rat. The rat is a strong water element sign and because water and earth are in an antagonistic relationship, we might expect some tension and confrontation in certain areas. Some masters even define the investment strategy for the year. Last year was the year of the fire pig. Because the pig is a water sign, and water tends to extinguish fire, this would be translated into a less peaceful year with many ups and downs. Some of Master Raymond Lo’s predictions for the previous year were quite on target: “Fire is the symbol of the financial markets and yin fire is illusive candle fire. Illusion of a good market can also generate over optimism that will drive up the stock market in the first half of 2007, when the spring and summer months of wood and fire make the candle fire appear stronger. However, yin fire standing on Water Pig – the terminator of fire, is illusory fire. But the stock market is often driven by illusion of profitability. So it is expected that the economy and the stock market will shoot up to very high levels in the months from February till about July. However, investors have to be cautious towards autumn and winter as there will be a substantial set back as the fire element will disappear during those months.” Here is what Master Lo says regarding this year: “Generally, the Rat is considered to be good with money and investment strategies so after the dramatic fluctuations that we experienced last year, we can look forward to more stability in the stock market.” (The beginning of the year didn’t prove this statement, but most of the year is still ahead of us. - NK) “The strong water of the Rat year favors earth and metal industries, as earth conquers water, so the Rat is a symbol of money to the earth industry, which includes property, mining, hotel, chemicals, insurance… As for metal industries, metal gives birth to water, so the strong water element in the year indicates productivity and strong activity in metal industries – this include machinery, computer, high tech industries, skincare, health business (and of course metals itself: gold, silver and other metals -NK). The Wood industries, which include textile, fashion, books, publications, paper, forestry and furniture are also into a profitable year as wood conquers earth, so the earth showing up in 2008 symbolizes the money of wood industry. But the profit will only be superficial as the earth element is weak.” “The less prosperous industries in 2008 will be businesses of water and fire elements. Water industries refer to shipping, communication, drinks, etc. The strong water appearing in the Rat year will bring stronger competition in the water areas and this will very much weaken their profitability. Fire industries refer to finance, the stock market, energy, electricity, entertainment and airline businesses. As fire conquers metal and produces Earth element, so to Fire industry, metal represents money and earth represents productivity. In 2008 metal element is absent and earth element is weak. That is why it is a relatively weak year for the industries related to the fire element.” The spring is here with its ruling wood element that represents new beginnings, growth, innovation and action. It is the perfect time to come up with new ideas and start implementing them. If something sprouted in your mind during the last few months, it is time to align yourself with the energy of the universe and let it grow. We are a part of nature and when we live in harmony with its natural cycles we feel stronger, happier and more balanced. Natalia Kaylin is one of the leading Feng Shui experts in New England. Her services include residential and business consultations, workshops, classes and public lectures. For more information please visit her web site www.easternsciences.com.
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If you've recently had something great happen in your life or in your career, I'd love to recognize you for it! Send an email to dave@capretirement.com and I'll try to get it in an upcoming issue of Capital Concepts.
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