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Archive for June, 2011

30
Jun

New and existing investment vehicles (funds, annuities, etc.) offer prototection from the unexpected.

Bret Arend’s June 30th commentary discusses why you don’t need the protection being promoted.  Many people react to the marketing and the news bites about the current economic environment by purchasing these products.  The article discusses seven reasons why they probably do not need these products. 
Sometimes following the KISS (keep it simple stupid) principle can save money and increase returns or minimize losses.  
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27
Jun

Standard mileage rates increase for July 1, 2011 through December 31.2011

The new mileage rates announced by the IRS are $.555 for business mileage and $.235 for medical and moving mileage.  The rate for charitable mileage stays at $.14.
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13
Jun

Structured Notes with Principal Protection are often not understood

The SEC recently released an alert (Link) about structured notes.  Terms like “principal protection,” “capital guarantee,” “absolute return,” “minimum return” are generally not risk-free.  Not only do many consumers not fully understand these products, the people who “sell” them may not understand them any more than most consumers.  I have called investment firms where a client had purchased structured notes (many years before they became a client) to find out the terms, interest calculations, etc.  I have been told to call the wholesalers or issuing firm for that information.  
During periods of economic uncertainty these products are heavily promoted.  Many people buy them out of fear.  Unfortunately, they may get less than they expect or suffer a loss.  Often they loose flexibility and liquidity when they most need flexibility and liquidity. 
The SEC alert will provide a basic understanding and questions to ask. 

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