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| Shoreline Wealth & Investment Management |
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Newsletter
September 2005 |
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The Stock & Bond Markets -
July's gain was followed by August's pain. The S&P 500 is now flat for the year, the NASDAQ down about 2% and Warren Buffet's Berkshire Hathaway is down about 5% year-to-date. There are some scenarios in which the market could improve by year-end but only against a substantial "head wind" including oil prices above $70/barrel, rising interest rates, natural disasters (i.e. hurricanes) and unnatural disasters (i.e. war, terrorism, politics). Diversification is extremely important.
There's a new kind of bond investors should be wary of and hedge fund managers have embraced which has become the fastest growing sector of the bond market called CDOs. Banks create loan asset pools ranging from mortgages to standard loans, divide these pools into separate pieces with various rates, maturities and risks. The market is "thin," risks are high and fees charged (according to Bloomberg) are triple what they are for regular bonds.
CELEBRATING 25 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? -
Good news for landlords! A 5-year trend of declining rental rates and/or rebates/incentives has ended in much of the country. Those who missed the opportunity to buy a home, those who no longer qualify at the higher mortgage rates, those who believe there's a bubble and sold in order to avoid a substantial loss in value and those who have seen the supply of rentals decline due to so many rental being turned into condos are now feeling the squeeze on rental rates. Global Real Analytics recently stated that rental rates climbed in 2004 in 85% of the metropolitan areas vs. declining in 85% in 2003 represents a substantial reversal of fortune depending upon which side of the equation you find yourself. While record percentage increases in the value of homes may be easing (and according to Federal Reserve Chairman Alan Greenspan the "housing boom will inevitably simmer down [and] home price increases will slow and prices could even decrease"), the pain investors in rental property experienced in the past 5 years also seems to be easing.
| 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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