November 2008 - Forecasts & Trends

As we near the end of 2008, it is important that we take our eyes off of the gyrating stock market for a while and consider year-end tax planning opportunities. One of the best ways I have seen to minimize the effects of estate taxes is the "gift tax exclusion." In 2008, a couple can gift $12,000 each, for a total of $24,000, to a child, grandchild or anyone they want. This is a great way to remove assets from your estate, but can also be a good way to teach fiscal responsibility, even to adult children. This week, I'll discuss the gift tax exclusion and detail a way it can be used to pass along your investment philosophy to the younger generation. Plus, I'll take time during this Thanksgiving Week to let you in on some of the things I am thankful for, even during these tough economic times....

While there has always been debate about the value of buy-and-hold investing, the last decade or so has really dealt a blow to this passive investment strategy. I have always said that the long-term statistics (some spanning 75 years or more) used by passive investing proponents to "prove" their point are totally unrealistic in relation to the actual time horizons of many investors. Over shorter periods of time, a buy-and-hold portfolio can suffer major losses, possibly right at the time investors need their money the most. Now is just such a time. After suffering through two major bear markets since 2000, individual investors and even many professionals are seeking out the kind of actively managed investment alternatives that I have recommended since 1995. This week, I'll revisit the perils of index investing, as well as provide a brief economic overview....