April 2010 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

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  • Is a Roth Conversion Right for You?

    Since their introduction in 1997, Roth IRAs have become increasingly popular. Unlike traditional IRAs, contributions to a Roth IRA are not tax-deductible, but earnings grow on a tax-free basis if held for the required amount of time. The ability to have completely tax-free income at retirement is a big plus, especially for young people.

    The Roth IRA rules also allow for someone with a traditional IRA to convert it to a Roth IRA. Prior to 2010, only those with incomes under $100,000 could do a Roth conversion, but now anyone can convert their traditional IRA to a Roth. However, just because it is now permissible doesn't mean that it's a wise financial decision for everyone.

    In this week's E-Letter, I'm going to discuss the pros and cons of converting a traditional IRA to a Roth IRA and when such a conversion may be feasible. I'll also let you in on a key factor in the decision to convert and how politics may actually come into play. I think you'll find this discussion very interesting.

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  • Financial Reform or Government Takeover

    Senator Chris Dodd (D-CT) recently introduced the latest bill on financial regulatory reform. The Senate bill (like the House version passed late last year) would create a huge new government bureaucracy that would oversee the maze of banking and securities regulators we already have. These reforms would give the new regulators the power to downsize companies considered 'too-big-to-fail' or shut them down altogether. This is an unprecedented power grab. As is the case with the House version, the Senate reform bill contains many other onerous provisions, and would make it next to impossible for small businesses and start-ups to raise money! What, you haven't heard about this? Well, you have now, and much, much more in this issue.

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  • Bonds: What the Smart Money is Doing Now

    Responses to my March 23 E-Letter about the possibility of another serious financial crisis in the future continue to roll in. Many of these respondents want to know how to position their assets in case another financial apocalypse is waiting around the corner. This week, I'll begin to answer that question by focusing on a debt/equity hybrid of sorts known as convertible bonds.

    More specifically, I'm going to revisit one of the most innovative and unique bond strategies that I have ever encountered. Greg Miller, CPA, founder and CEO of Wellesley Investment Advisors, has developed a trading strategy that relies on strict fundamental analysis to select among the various convertible bond offerings available. Plus, I'll let you in on a special feature found in many convertible bonds that can actually serve to further reduce the risk of this special investment class.

    I have a major allocation of my personal portfolio with Wellesley, and suggest that you seriously consider this program. With interest rates near all-time lows and the possibility of rising rates in the future, you owe it to yourself to consider Wellesley's convertible bond strategy as a possible replacement for your current bond allocation.

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  • Interesting Articles of Late

    For this week's E-Letter, I have chosen to reprint four of the most interesting articles I have read over the last week. The first two articles are from well-known writers that have come to agree with me that we are headed for another financial crisis if President Obama continues his plan to double the national debt over the next decade.

    The third article is from Larry Kudlow, well-known economist and host of CNBC's The Kudlow Report, who argues that Obama's latest plan to use TARP money to bail out homeowners who are about to default is just plain wrong and unfair to those lower and middle class families who are working extra hard to make their mortgage payments.

    The final article is a column by George Will of ABC News' This Week. As you may know, Obama plans to take up immigration reform very soon, as he is in desperate need of some new voters. George Will makes a brilliant suggestion for how to solve the illegal immigration problem once and for all that I'll bet you haven't thought of.

    I will be back to our usual format next week. I hope everyone had a great Easter holiday. I sure did!...