What Should You Expect and Plan For? 
The Right Answer is Unique to You!

So much of my industry focuses on products and ¡°conventional wisdom¡± about investment products as if there is a magical right answer for everyone. 

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Have you ever thought or said any of the following statements?

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¡°The stock market is the best investment long term.¡±

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¡°I must be in the stock market to stay ahead of inflation.¡±

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¡°It makes sense to defer taxes in my IRA or 401K till I¡¯m in a lower tax bracket.¡±

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¡°The stock has lost money but still has a good dividend.¡±

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¡°It is too expensive to convert to a Roth IRA.¡±

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¡°My current advisor is a nice guy/gal.¡±

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¡°I don¡¯t want to sell because of the capital gains taxes I¡¯d pay.¡±

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¡°They are only paper losses.¡±

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These are common statements and thoughts which may or may not have anything to do with your specific situation.  Don¡¯t fall for boilerplate planning and challenge conventional wisdom at all times!

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Consider this¡¦

The S&P500 on August 12, 1998 was 1,084.

The S&P500 on August 12, 2010 was 1,084.

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Japan¡¯s stock market is 75% below the level it was 21 years ago (1989)!

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1-year Average CD Rates by Year

Calendar Year

1Y Term

 

1993

4.033%

 

1994

5.223%

 

1995

6.311%

 

1996

5.889%

 

1997

6.136%

 

1998

5.728%

 

1999

5.871%

 

2000

7.091%

 

2001

4.586%

 

2002

2.956%

 

2003

2.054%

 

2004

2.674%

 

2005

4.188%

 

2006

5.404%

 

2007

5.443%

 

2008

3.933%

 

1-year average rate across all years: 4.775

 

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$100,000 invested at 4.5% from 1998-2010 = $156,900

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Other things to consider...

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  • 109 U.S. banks have failed so far this year; 23 since July 1st.

  • FDIC has already spent $18.93 billion this year, well above the $15.33 billion pre-paid assessments for all of 2010.

  • The 20 year return on Gold is slightly over 5% annualized.  All of that cumulative gain has been in the last 6 years.

  • Consumer Price Index (inflation) was -.4% in 2009 and has averaged 2.6% during the past ten years.  From 1970-1982, the average was 8.18%.

  • The highest marginal tax bracket ever was 94%, last seen in 1945.  The top marginal tax bracket was 70% in 1980; 50% in 1986.  The top marginal tax bracket today is 35%.

  • The U.S. has the highest unemployment rate in over 25 years and the largest financial deficit in history.

  • According to RealtyTrac, more than 1 million American households are likely to lose their homes to foreclosure this year. This is about 10 times as high as during an average year. 25% of the U.S. household sector has a sub-600 FICO score.

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Hmmm, now what?

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What should you expect and plan for?  The right answer is unique to you!  Call 1-866-486-4947 or email ryan@pca-inc.org to schedule a visit to discuss your options.

  • Stock market performance

  • Fixed interest rates with principle guarantees

  • Taxes

  • Inflation

  • Healthcare costs