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| Shoreline Wealth & Investment Management |
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Newsletter
August 2004 |
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A bullish case for the stock market? I've been writing for quite a while why the market looked uninspiring at best. There are a few positve signs which deserve mention. The dividend yield on the S&P 500 today is just shy of 2% and earnings are expected to grow at 5- 6% per year. If price-to-earnings multiples stay constant, the long-term investor would earn 7-8% per year - not bad. Bonds are another story. These are negatively affected by a weak dollar and rising rates. An exception (or a pain-reducing way to be in bonds) are Treasury Inflation Protected Securities (TIPS) which have the inflation rate (3-5%) added to the value annually.
CELEBRATING 24 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 Burst? First let me state that I thought real estate topped out a couple of years ago - but then falling interest rates made housing more affordable increasing demand, prices and loans for other consumer purchases. Now a couple of cracks are becoming obvious, even to the most die-hard real estate buyer. The first is rising interest rates - if rates rise from 6.2% to 8% over the next year, housing prices will have to fall by 20% in order to have the same monthly payments. Secondly, housing rates have risen at 3.2 times the average income, a statistic that is unlikely to continue. And finally, the equity of average homeowner has fallen to 55% from 72% just a few years ago. As I stated earlier, I was wrong before but I don't think I'll be wrong much longer. Feel free, however to send your thoughts along.
| 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... » |
| Using Exchange Funds to Sell Low Cost Basis Holdings |
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 An exchange fund is a private investment fund that offers you a way to dispose of a low-basis stock and diversify your portfolio without immediately incurring capital gains tax liability. To diversify your investment portfolio, you can contribute stock on a tax-free basis and receive an interest in a limited partnership known as the exchange fund.
Full Story » |
| Valuation Discounts: Disinheriting Uncle Sam - Part 7 |
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 Valuation discounting techniques can be effective tools to transfer wealth between generations and minimize estate taxes. A professional appraiser will determine the value of the business, stock portfolio, real estate, or other assets subject to the proposed transaction based on such factors as closing stock prices, anticipated future earnings, marketability, and the value of underlying tangible assets - and then determine a specific discount percentage.
Learn More » |
| 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 » | |
| 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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