|
Financial Advisory Briefs April, 2008 Presented by
Legend Financial Advisors, Inc.® |
|||
|
“BRIEFS” identifies a number of current
financial planning and investment market issues. For more information, you are invited to
contact our Director of Marketing Christopher J. Kail at (412) 635-9210,
Extension 230, to schedule a conference call with the advisor listed at the
bottom of each brief. You may also
reach us via E-mail at legend@legend-financial.com. For more information on Legend Financial
Advisors, Inc.’s ® (Legend’s) award-winning financial
advisory team, please view their Professional Biographies by going to http://www.legend-financial.com/f_biographies.htm.
|
|||
|
|
|||
|
TABLE OF CONTENTS 1. Economic
Indicators That Matter 3. Debit
And Credit Cards For Kids 4. Umbrella
Liability Insurance Coverage |
|
||
|
|
|||
|
|
|||
|
ECONOMIC INDICATORS THAT MATTER Consumers’ attitudes are important when attempting to gauge the direction of the stock market and the economy. There are also many other economic indicators that economists keep an eye on. They include: 1) The Consumer Confidence Index tracks spending trends in relation to the overall economy. 2) The Consumer Price Index measures inflation by examining the prices for goods and services. 3) The National Association of Purchasing Management (NAPM) Index asks managers of companies about their business in order to judge economic trends. 4) The Employment Situation Report tracks the unemployment rates, the number of new jobs and changes in wages or hours. 5) Leading Economic Indicators are a compilation of indexes that evaluate everything from interest rates to manufacturing orders to housing starts. Monitoring these indicators can offer excellent insight as to where the market is going. For more information, contact Legend’s Lou Stanasolovich, CFP™ at (412) 635-9210, ext. 221. Briefs: 04/08 - 1 |
|||
|
|
|||
|
UNEMPLOYMENT AND
401(K)S Many people who have lost or changed jobs or were forced into early
retirement question what to do with their 401(k)s. They could take the money out immediately,
but unless the cash is needed, the tax penalty will not likely be worth
it. Some other options include: · Leaving the assets in the former employer’s plan if the investment options are good. However, there may be limited control over the assets, such as limitations on the ability to switch investments. · Taking a job that offers a 401(k) and possibly being able to deposit assets from previous employers whether the portfolio options, rules and fees are desirable or not. · Establishing an IRA rollover with a custodian and placing assets from any and all previous employers into it. An IRA rollover can include potential benefits such as lower fees, a possible conversion to a Roth IRA, as well as well as assistance from a financial advisor. For more information, contact Legend’s Diane Pearson, CFP™, PPC™, CDFA™ at (412) 635-9210, ext. 120. Briefs: 04/08 - 2 |
|||
|
|
|||
|
DEBIT AND CREDIT
CARDS FOR KIDS Until recently, parents who wanted their
children to have spending money had few options; they could either give them
cash or their own credit card. However,
parents had little control over how much they spent and what they spent it
on. One option is a card with a
specific amount of cash for spending which debits the account when the child
makes a purchase. Another company
offers a credit card where the purchases can be viewed online and restricted
by the parent. These cards allow for
more parent control, but they usually come with annual fees and many various
other charges. For more information, contact
Legend’s Jim Holtzman, CFP™,
CPA at (412) 635-9210, ext. 119. Briefs:
04/08 – 3 |
|||
|
|
|||
|
UMBRELLA LIABILITY INSURANCE COVERAGE Umbrella insurance coverage is always a good idea for a homeowner or
even a renter for that matter as well as anyone who owns an automobile. It is usually sold in million dollar increments
at a reasonable annual premium of approximately $150.00 to $175.00 annually
for the first $1,000,000 of coverage and then decreases per million of
coverage thereafter. Having a minimum
of $2,000,000 or at least equal to one’s net worth, whichever is greater, provides
in most cases an adequate safety net. Coverage
can be purchased from one’s property and casualty insurer. It is necessary to ask important questions
such as, where does underlying homeowner’s and automobile coverage end? Where does umbrella liability coverage
begin? Are there any restrictions or ambiguities
that would restrict coverage? Some
insurance companies may require a person to buy their maximum homeowners and
automobile coverage plans before allowing the purchase of umbrella coverage. For more information, contact Legend’s Diane Pearson, CFP™, PPC™, CDFA™ at (412) 635-9210, ext. 120. Briefs: 04/08 - 4 |
|||
|
|
|||
|
COLLECTING ON INSURANCE CLAIMS Receiving the full insurance coverage amount
needed to repair damage is not always an easy task. Adjusters are professionals. They
unfortunately work for the insurance company and can be tough minded about
paying out claims. If a substantial insured loss has occurred, it may pay to
hire an independent adjuster in order to level the playing field with the
insurance company. However, most
adjusters charge a percentage of the total amount collected or take a cut of
the difference between the original offer and the final settlement. With the complexity of most insurance
company’s policies, it may be a big help to have a professional evaluate the
situation. For more information, contact Legend’s Jim Holtzman, CFP™, CPA at (412) 635-9210, ext. 119. Briefs:
04/08 – 5 |
|||
|
|
|||
|
KNOWING THE DIFFERENCE BETWEEN MARKET ORDERS AND LIMIT
ORDERS CAN SIGNIFICANTLY ENHANCE THE RESULTS Many people, even those with sizable
equity portfolios, do not understand the mechanics of the stock market or how
stocks are actually traded. When a
person decides to sell their stock, they can do one of two things; they can
place a market order, which means that stock will be sold at the best current
market price, or a limit order, which specifies the lowest price that the
seller is willing to accept. By
placing a market order, the stock will be sold immediately, but when a limit
order is placed the stock cannot be sold until it reaches the specified
price. Knowing the options can
sometimes save tens of thousands of dollars. For more information, contact
Legend’s Diane Pearson,
CFP™, PPC™, CDFA™ at (412) 635-9210,
ext. 120. Briefs:
04/08 - 6 |
|||
|
|
|||
|
In
many of today’s corporate mergers and acquisitions, it is stock rather than
cash that changes hands. Although
common stock is usually involved, it is uncommon for preferred stock to
change hands as well. This more exotic
form of security has several important differences, and is more like bonds
than stocks. It is important to
understand the differences between these two types of options as well as the
benefits of preferred stock. In the
end, preferred stock is not for every investor. For more information, contact
Legend’s Lou Stanasolovich, CFP™
at (412) 635-9210, ext. 221. Briefs:
04/08 - 7 |
|||
|
|
|||
|
Forget
the taxman’s hard-hearted reputation; sometimes he really does want
individuals to have that vacation home.
It seems that way at least with all the tax breaks that make a
vacation home possible without being rich and famous. Of course, there are a few rules that must
be followed, and some small mistakes could cost the taxpayer dearly during
tax time. For more information, contact
Legend’s Jim Holtzman, CFP™,
CPA at (412) 635-9210, ext. 119. Briefs:
04/08 – 8 |
|||
|
|
|||
|
CD’S AND THEIR HIDDEN COSTS Few things are safer than traditional CDs, also known as certificates
of deposit. Usually issued by a bank,
they are just one step from a passbook savings account. Unfortunately, recent interest rates and a
shaky stock market have sparked fresh interest in this dull, old saving
vehicle. New versions, while offering
tempting inexpensive rates, have special provisions that could severely cost
investors. For more
information, contact Legend’s Diane Pearson, CFP™, PPC™, CDFA™
at (412) 635-9210, ext. 120. Briefs: 04/08 – 9 |
|||
|
|
|||