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| Shoreline Wealth & Investment Management |
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Newsletter
September 2007 |
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The Stock & Bond Markets -
The adage that "when the going gets tough, the rich go shopping" seems validated by Tiffany's annual sales increases of 20%. This has been a difficult market to predict, trade or hide from and while breakfast may well be at Tiffany's, the rest of the investment world is eating cake (as the queen said before she was beheaded). Consumer confidence has fallen from the highest level in almost 6 years given the housing recession, increased monthly payments for those with variable-rate mortgages and the psychological shift of realizing housing prices don't just go up, probably the greatest factor. People spend based on how rich they feel and they're insecure now and less likely to increase their debt to spend as aggressively as they had, a harbinger for sales in a variety of industries since consumer spending accounts for 70% of the economy. Our position is to be broadly diversified in stocks (industries and globally), bonds (U.S. Treasury only) and cash (up to 50% if you're insecure, prudent or just waiting for lower prices to buy in).
The U.S. Treasury bond market continued to rally in August as investors (note: bond buyers are really lenders, not investors) continued their "flight to quality" while credit markets dried up and everyone waits to see what the Fed will do next.
CELEBRATING 27 YEARS
Since 1980, I have been providing financial advice to investors and I'm proud to say that our service and performance (see "Bottom Line" section on the right) continue to be superior to the market and our peers. Thanks for your support.
Real Estate Bubble? -
Home prices fell by 3.2% in the 2nd quarter, the biggest drop since 1987 when the record-keeping of that statistic began. Meanwhile, the National Association of Realtors cut its forecast for new and existing home sales every month this year and said demand would fall to a 5-year low in 2007. The pain is being felt up and down the food chain with Toll Brothers, the largest U.S. luxury homebuilder, reporting a 3rd quarter profit decline of 85%. As with our stock and bond recommendation above, even real estate only investors might consider raising some cash from their existing holdings and keep some "powder dry" in the event of more uncertainty or opportunity.
| Selecting an Advisor |
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 Warren Buffet, the most successful investor of the 20th century learned his craft from Benjamin Graham, author of several books including the legendary "Intelligent Investor." This has been recently updated by Jason Zweig who includes 16 key questions to ask your advisor and 11 an advisor might ask ...
Read on... »
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| Private Investments vs. Publicly-Traded Investments |
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 Alternative investment vehicles such as hedge funds and private equity are often offered exclusively to high- net-worth individuals. In fact, it is the high-net-worth investor for whom this type of investment is best suited. Most alternative investments are structured as private limited partnerships open to no more than 100 accredited investors but the financial services industry has attempted to further democratize this type of investing ...
Full Story »
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| Business Transfer: Disinheriting Uncle Sam |
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 Federal and state estate and gift taxes (55% maximum), together with the generation-skipping transfer tax (GSTT) on transfers to persons two or more generations younger at a flat rate of 55%, combined with income taxes imposed over the years, can reduce the value of the business that a family can retain through the generations to an amount as low as 12 percent of the initial value. However, strategies to avoid this include ...
Learn More »
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| Looking for a Speaker for Your Event? |
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 Shoreline Wealth & Investment Management has given presentations to Fortune 500 companies as well as many local groups and organizations. If you are looking for a professional presentation on topics ranging from investments to estate taxes to business or tax law, please contact us.
Click here for more details »
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| The Bottom Line |
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| This is where we provide the performance of our conservative, moderate and aggressive portfolios and compare these to the S&P 500 and NASDAQ Indexes. While they are an important consideration, performance is only a portion of the evaluation investors should consider when evaluating investment management. Other considerations include the risk taken to generate the returns, the quality of the service, the reasonableness of the fees and, more important now than ever, the integrity of the investment manager.
Find out more.... |
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email: cbloom@cfiemail.com
voice: 805.886.3624
web: http://www.swimllc.com/
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Shoreline Wealth & Investment Management · 3905 State Street Suite 7173 · Santa Barbara · CA · 93105
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