There has been a great deal of press in recent years given to portfolio diversification, in particular to the use of hedge funds as a means of alternative investment strategy. Many times these funds are referred to as vehicles to use for diversification, because they are not linked to traditional investments, such as stocks and bonds. However, on a closer inspection, it becomes evident hedge funds, while using sophisticated tools such as derivatives, controlling purchases in companies, merger arbitrage and venture capital, are still very much connected to traditional investments, and also remain illiquid, expensive and prone to risk.
Are these investments suitable for your portfolio? The answer depends on your appetite for risk, tolerance for illiquidity and overall investment goals. In the past, these funds were marketed to very high net worth individuals, but recently, this unregulated asset class has been marketed to a larger group of investors, in order to increase market performance during times of low returns. Some fee-based Financial Advisors have been recommending them, to increase returns in portfolios, where the advisory fee is deducted from quarterly returns, and paid directly by the client. Many hedge funds have had lackluster performance recently, and this can lead managers to increase the risk, in order to increase the return for the year. Accurate data has only been collected on hedge funds for about 10 years. This doesn't give much information on which to " base an analysis, so you need to exercise caution in interpreting such results", according to Vikas Agarwal, of the J. Mack Robinson College of Business at Georgia State University.
After the technology bubble burst in 2000, there was a rotation out of tech into real estate, energy, natural resources, bonds and emerging markets. Long term holders of real estate and these other asset classes saw huge gains, and mutual funds in these asset classes were the market leaders since the tech bust. Last year, investors began to move money out of real estate as the sector cooled rapidly. In my opinion, the idea is not to switch asset classes and try to time these these rotations, but rather to attempt to build a portfolio, which holds positions in all of these asset classes. This requires a great deal of discipline, because it means holding and purchasing positions, which may be out of favor, at the same time you are building positions in sectors, which are in favor. This is why I recommend adding to your portfolio through dollar cost averaging, and monitoring performance on a calendar year basis. When you look at your statement, check a newspaper, or review performance on the web, you get a snapshot of performance on that date. You will get the year to date return, which is valuable, but the 3 and 5 year returns are as of the date you are looking. While this information is definitely useful, be sure to check your year end data to analyze your annual performance. This should keep you from making knee jerk decisions based on short term news events.
John Kaighn
Jersey Benefits Advisors
http://Jerseybenefits.com
http://JohnKaighn.com
Tuesday, April 24, 2007
Saturday, April 21, 2007
Market & Economic News Update
The flurry of positive earnings reports and somewhat benign inflation news has given the Dow Jones Industrial Average enough legs to be within 39 points of the 13,000 mark, as the markets take a breather this weekend. Even with a 4.5% drop in Shanghai, the US markets barely blinked, before resuming their upward surge. Given all of the negatives lurking out there, such as the housing slowdown, the trade imbalance, the declining dollar and rising oil prices, the market has exhibited some remarkable strength. This is because the strong earnings demonstrate the economy may not have slowed as much as previously thought during the first quarter. If this strong economic performance continues during the second quarter, further gains in the averages should continue.
While the 13,000 mark is really of no consequence, other than a number attained, every time the average breaks a 1,000 point increment, it does give one the opportunity to pause and reflect about it being a milestone of sorts. Of course with the declining dollar, it is a good thing we are not evaluating our portfolios in Euros, because if that were the case, we might not be quite as ecstatic. While the decline in the dollar gives the indices a lift which boosts portfolio values and also improves the trade balance, too steep a decline can also be a trigger for inflation. What this means is the Federal Reserve will have to continue their balancing act between controlling inflation and moderating growth for the forseeable future. My guess is we could see interest rates remain in a holding pattern, unless economic growth picks up further in the second quarter.
The growth in Gross Domestic Product will be reported on Friday and Lehman Brothers is anticipating 1.8%, while the consensus is somewhere around 2.1%, less than the 2.5% growth in the fourth quarter of 2006. Anything below the 2% level will have investors clamoring for a rate cut, but I really don't think the Fed will comply. It is still a wait and see situation, which is a very familiar scenario at this juncture. Stay tuned for further updates.
While the 13,000 mark is really of no consequence, other than a number attained, every time the average breaks a 1,000 point increment, it does give one the opportunity to pause and reflect about it being a milestone of sorts. Of course with the declining dollar, it is a good thing we are not evaluating our portfolios in Euros, because if that were the case, we might not be quite as ecstatic. While the decline in the dollar gives the indices a lift which boosts portfolio values and also improves the trade balance, too steep a decline can also be a trigger for inflation. What this means is the Federal Reserve will have to continue their balancing act between controlling inflation and moderating growth for the forseeable future. My guess is we could see interest rates remain in a holding pattern, unless economic growth picks up further in the second quarter.
The growth in Gross Domestic Product will be reported on Friday and Lehman Brothers is anticipating 1.8%, while the consensus is somewhere around 2.1%, less than the 2.5% growth in the fourth quarter of 2006. Anything below the 2% level will have investors clamoring for a rate cut, but I really don't think the Fed will comply. It is still a wait and see situation, which is a very familiar scenario at this juncture. Stay tuned for further updates.
Thursday, April 19, 2007
Reflecting on the Virginia Tech Tragedy
As a counselor and parent of a college graduate and college student I need to offer my most sincere condolences to the parents, students and staff members of Virginia Tech, who were so horrendously affected by the tragedy on your campus. There are really no words that can convey to you the extreme sadness that I feel, and I know the feelings you are experiencing, especially those who lost loved ones, can't even begin to be understood by most of us. The outpouring of grief by so many people who don't even know you must help somewhat, but in the end, the utter senselessness of this entire experience must be completely overwhelming. I only hope you can find some hope and healing in the days to come.
As the media continues to churn out multiple stories about this horrific event, one of the themes that constantly emerges is why wasn't more done to stop this from happening. This is the one thing you can always count on from the pundits in our media establishment. It seems they always want to find closure by placing the blame on one or more of the institutions involved in the tragedy. Unfortunately, our medical, psychiatric, education and law enforcement communities are ill equipped to determine in advance whether an individual has the capacity for this level of violence. Since many politicians and corporate CEO's exhibit some of the personality traits of psychopaths, and there is truly a fine line between genius and insanity, as evidenced by the endless parade of celebrities involved with self destructive behaviors, the impulse to say this young man should have been stopped long ago, due to the "signs he exhibited" is foolhearty. Most psychopaths are very intelligent and adept at acertaining the intent of psychological tests, and if we tried to isolate people from society, due to "signs they exhibited", it would probably be the least sophisticated and least violent of our psychiatric population, not the cold hearted killers. It usually takes a triggering event to cause a psychopathic personality to resort to violence of this scale, and this triggering event may be something that is eventually uncovered.
So, as you watch the various specials on television and read the multitude of solutions offered by journalists, try to remember the innocent victims of this tragedy and feelings of their families, who are suffering beyond belief. Don't be quick to rush to conclusions about who failed to do what in the heat of the moment, because it is easy to do that in hindsight. There is just one person to blame for this terrible act, and that is Cho Seung-Hui. We are all ultimately accountable for our actions, and while it is truly unsettling to attempt to understand why such a random, violent act occurs, the perpetrator of this massacre has met his fate and will surely face a wrath worse than any we could devise in this world.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors, a counselor in the Middle Twp. School District and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
As the media continues to churn out multiple stories about this horrific event, one of the themes that constantly emerges is why wasn't more done to stop this from happening. This is the one thing you can always count on from the pundits in our media establishment. It seems they always want to find closure by placing the blame on one or more of the institutions involved in the tragedy. Unfortunately, our medical, psychiatric, education and law enforcement communities are ill equipped to determine in advance whether an individual has the capacity for this level of violence. Since many politicians and corporate CEO's exhibit some of the personality traits of psychopaths, and there is truly a fine line between genius and insanity, as evidenced by the endless parade of celebrities involved with self destructive behaviors, the impulse to say this young man should have been stopped long ago, due to the "signs he exhibited" is foolhearty. Most psychopaths are very intelligent and adept at acertaining the intent of psychological tests, and if we tried to isolate people from society, due to "signs they exhibited", it would probably be the least sophisticated and least violent of our psychiatric population, not the cold hearted killers. It usually takes a triggering event to cause a psychopathic personality to resort to violence of this scale, and this triggering event may be something that is eventually uncovered.
So, as you watch the various specials on television and read the multitude of solutions offered by journalists, try to remember the innocent victims of this tragedy and feelings of their families, who are suffering beyond belief. Don't be quick to rush to conclusions about who failed to do what in the heat of the moment, because it is easy to do that in hindsight. There is just one person to blame for this terrible act, and that is Cho Seung-Hui. We are all ultimately accountable for our actions, and while it is truly unsettling to attempt to understand why such a random, violent act occurs, the perpetrator of this massacre has met his fate and will surely face a wrath worse than any we could devise in this world.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors, a counselor in the Middle Twp. School District and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
Friday, April 13, 2007
Wondering Why You Are Not Getting Rich Quickly?
The one thing I have learned, when it comes to building wealth, is the fact that there are no short cuts to instant riches. While there have been a few high profile incidents of extreme wealth being created almost overnight, as in the case of Google and a few other "instant" successes, even in these cases there has been huge risk and extensive capital expended in order to create the wealth. In fact the most important factors which lead to success in business are the willingness to assume risk, willingness to expend capital, the ability to focus on an idea and bring it to fruition and some good old fashioned luck.
While I'll be the first to recognize there are some people who just seem to stumble into a situation and are in the right place at the right time, or that some folks will win the lottery, sell a stock at just the right time, or buy and sell real estate for a quick profit, most people who have built wealth have done so over time. Furthermore, they approach investing with a disciplined plan and the relentless pursuit of their dream. I will focus the rest of this article on the people who build wealth through a disciplined approach. Following this model is more likely to lead to the desired goal of financial security.
Many people wish to own their own business and be an entrepreneur, but many of us don't have the "brainstorm idea" which leads to a blockbuster business, or one that totally changes the dynamics of a business model. Luckily, this is not necessary in order to succeed as an entrepreneur. While it would be nice to come up with one of these blockbuster ideas, there are plenty of other ways to become the owner of your own business. Purchasing an existing business is one such way to join the ranks of the business world. There are individual businesses and franchises which can be purchased outright, or financed by various means. This is usually an expensive endeavor, and usually requires leaving your full time job in order to manage the business. This also involves a degree of risk, but if you do your homework, and devote the time it takes to manage the leverage of the purchase price, plus the day to day operations, it can be an excellent way to build long term wealth.
If the idea of owning a business while maintaining a full time job is more your cup of tea, there are many business models which can facilitate this. Again, there is no free ride, because nobody is going to provide you with all of the tools to run a profitable business, without some cost. Unless you are strictly interested in doing a specific task at home for a fee, most of the business models I've reviewed for an at home or online business require money to be spent for hosting a site, joining affiliates and marketing. These are reasonable expectations when you utilize an existing franchise, or affiliate program. Developing multiple streams of income is very desireable and can be achieved by developing a home business along with your full time job. While your goal may be to eventually quit your full time employement, or augment retirement, developing an online or home business can be a rewarding way to be an entrepreneur.
So, if getting rich quickly is your main goal, then there is a good possibility you will continue to go from one "cocktail party conversation" trend to another, such as day trading or real estate flipping. We all know where those bubbles have led. This is the equivalent of gambling, and while I know full well sometimes people do quite well gambling, I don't recommend it as an investment technique. If building real wealth is your goal, then developing streams of income and systematically investing in diversified assets will lead to ever increasing equity and financial security. One day you'll look at your portfolio of investments and realize you've built wealth faster than you thought you would.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
While I'll be the first to recognize there are some people who just seem to stumble into a situation and are in the right place at the right time, or that some folks will win the lottery, sell a stock at just the right time, or buy and sell real estate for a quick profit, most people who have built wealth have done so over time. Furthermore, they approach investing with a disciplined plan and the relentless pursuit of their dream. I will focus the rest of this article on the people who build wealth through a disciplined approach. Following this model is more likely to lead to the desired goal of financial security.
Many people wish to own their own business and be an entrepreneur, but many of us don't have the "brainstorm idea" which leads to a blockbuster business, or one that totally changes the dynamics of a business model. Luckily, this is not necessary in order to succeed as an entrepreneur. While it would be nice to come up with one of these blockbuster ideas, there are plenty of other ways to become the owner of your own business. Purchasing an existing business is one such way to join the ranks of the business world. There are individual businesses and franchises which can be purchased outright, or financed by various means. This is usually an expensive endeavor, and usually requires leaving your full time job in order to manage the business. This also involves a degree of risk, but if you do your homework, and devote the time it takes to manage the leverage of the purchase price, plus the day to day operations, it can be an excellent way to build long term wealth.
If the idea of owning a business while maintaining a full time job is more your cup of tea, there are many business models which can facilitate this. Again, there is no free ride, because nobody is going to provide you with all of the tools to run a profitable business, without some cost. Unless you are strictly interested in doing a specific task at home for a fee, most of the business models I've reviewed for an at home or online business require money to be spent for hosting a site, joining affiliates and marketing. These are reasonable expectations when you utilize an existing franchise, or affiliate program. Developing multiple streams of income is very desireable and can be achieved by developing a home business along with your full time job. While your goal may be to eventually quit your full time employement, or augment retirement, developing an online or home business can be a rewarding way to be an entrepreneur.
So, if getting rich quickly is your main goal, then there is a good possibility you will continue to go from one "cocktail party conversation" trend to another, such as day trading or real estate flipping. We all know where those bubbles have led. This is the equivalent of gambling, and while I know full well sometimes people do quite well gambling, I don't recommend it as an investment technique. If building real wealth is your goal, then developing streams of income and systematically investing in diversified assets will lead to ever increasing equity and financial security. One day you'll look at your portfolio of investments and realize you've built wealth faster than you thought you would.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
Tuesday, April 10, 2007
First Quarter Update
Market Watch
The markets began the new year adding to the gains of 2006 with the DJIA racing to a high of 12,786.64, the S&P 500 increasing to 1,459.68 and the NASDAQ reaching 2,524.94 before hitting some headwinds in February. At the close of the first quarter, the DJIA was down 0.9% for the year closing at 12,354.35, while the S&P 500 closed the quarter up 0.2% at 1,420.86 and the NASDAQ finished at 2,421.64 up 0.3% for 2007. While the Dow is still above its high set during the Tech Wreck of 2000, the S&P 500 still has not reached it previous high of 1,527.46, which is a technical feat I feel needs to happen for this bull market to continue. Since the S&P 500 is an index that tracks a broad range of large companies, its march toward the all time record is an indicator of the overall health of the market and the economy.
The headwinds I spoke of earlier came in the form of higher oil prices, Greenspan's recession remarks and the slumping housing market. Oil prices have been bouncing around between $60 and $67 a barrel, rebounding from just under $60 a barrel in January. The tensions in the Persian Gulf over British sailors being taken hostage by the Iranian Navy (shades of 1979) has been the latest culprit fueling the rise in the price of oil.
Greenspan's speech placing the odds of recession in 2007 at 25% stopped the market's advance in its tracks in February. It should really come as no surprise that the possibility of a recession exists, especially since we are in the mature phase of the current expansion, know as prosperity. There are many factors which could tip the economy into negative growth and end this current expansion, but that is just the nature of the economic cycle. For the foreseeable future, it looks as if interest rates will remain on hold and growth will continue to ease from the pace of 2006.
One of the biggest drags on the economy of late is the continued slump in the housing market exacerbated by the concern that the meltdown in the sub prime mortgage market will spill over into the prime market. While defaults by borrowers are increasing, which in turn has caused bankruptcies by lenders, the real concern is how the sub prime debacle will effect the many derivative investments which have been securitized from these sub prime loans. Mortgages in many cases are not held by the companies that write them, but are bundled into securities and sold to investors to spread the risk. As the value of these assets declines, banks, hedge funds and private equity firms head for the exits. This unwinding of positions always leaves someone "holding the bag". I hope the risk management tools used in the collateralized mortgage obligation market are better than the risk management tools used by Amaranth Advisors in assessing the risk of the natural gas markets in September 2006!
Just to add a touch of irony to the current rage of private equity ventures taking public companies private, the granddaddy of private equity firms, Blackstone Group, has filed its plans to go public. Blackstone has been highly successful and according to Mike Santoli of Barrons, " Blackstone will have little problem achieving a $40 billion market cap", and no doubt, "it will become a core holding in an alternate asset management sector." The stock will "open with a big pop-which means it immediately will be unattractively valued. The idea of having access to permanent capital rather than dialing up pension funds for every cent Blackstone invests makes some sense. In other words, you can respect the logic of the deal without buying the stock."
Have You Reviewed Your Life Insurance Lately?
When was the last time you took a serious look at your life insurance coverage. Life insurance was created to provide cash for your family in the event of your death. The goal being to provide your beneficiaries a means to ease the financial burden that results from the death of a parent or spouse. The beneficiaries may choose to use the benefits of a life insurance policy in any way they choose, such as paying for funeral expenses, covering mortgage payments or investing the proceeds and taking systematic payments to augment income. Generally, the death benefit from a life insurance policy is paid free of any federal tax.
One of the most important questions to ask when evaluating life insurance needs is the amount of coverage needed. Many financial planners recommend an amount of five to seven times gross annual salary as a guideline when purchasing life insurance, but as with all things in life, each family's goals are different. It is always best to take an inventory of your family's current financial situation and then try to evaluate future needs. Listing current and anticipated future expenses, as well as income sources is a good place to start. If there are children, you might want to consider the cost of their education. The younger the children, the more of a need for coverage, due to the length of time they will be dependent on one parent, in the event of a death of a parent. Of course, this is exactly the time when a family may have the least amount of income available for insurance!
This is why there are different types of policies available. The two broad categories of life insurance are :
· Term Life Insurance
· Permanent Life Insurance
Term Life Insurance provides protection for the pure cost of insurance for periods of 5, 10, 15, 20 or 30 years and is usually significantly less expensive than permanent insurance. The death benefit is only paid if you die during the specific term of the policy. At the end of the term, the policyholder may be able to convert to a permanent policy or begin a new term, at a higher cost.
Permanent Life Insurance provides protection as long as you continue to pay your premiums, which can be fixed or tailored to your specific needs. Permanent policies include Whole Life, Universal Life and Variable Universal Life. These policies have a "cash value" feature, which means part of the premiums go into an account which builds up monetary value over time. This is why the cost of a permanent policy is higher than term. Many times a combination of the two types of policies can provide coverage and savings in stages for a lifetime. Feel free to contact me if you would like to review your insurance needs.
IRS Deadline and Retirement Plan Deferral Limits
For those of you still wanting to make an IRA contribution for 2006, the IRS deadline is April 17, 2007. The limit for 2006 is $4,000 with a catch up contribution of $1,000 for those 50 & older. The contribution limits for 2007 will also be $4,000 and the catch up will remain $1,000. Maximum salary deferrals for 401k, 403b and 457 plans is $15,000 for 2006, and for 2007 the deferral limits increase to $15,500. The annual catch up amount, which can be deferred into these plans for those 50 and older, is $5,000 for 2006 and will remain the same for 2007.
Whether you are saving for retirement, retiring soon or already retired, there are many ways to protect and grow that nest egg and consolidate assets. Developing multiple income streams in retirement is advantageous.
Company Information:
Investment Advisory services offered through:
Jersey Benefits Advisors
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: kaighn@jerseybenefits.com
http://www.johnkaighn.com
Securities offered through:
Transamerica Financial Advisors, Inc.
A registered Broker/Dealer
1150 S. Olive St. Suite T-25
Los Angeles, CA 90015
800-245-8250
Member NASD & SIPC
Third Party Administration and Insurance Services offered through:
Jersey Benefits Group, Inc
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: jerseybenefits@yahoo.com
http://www.jerseybenefits.com/
http://www.johnkaighn.com
All opinions expressed in this newsletter are solely those of John Kaighn & Jersey Benefits Advisors, formerly known as Kaighn Financial Services.
The markets began the new year adding to the gains of 2006 with the DJIA racing to a high of 12,786.64, the S&P 500 increasing to 1,459.68 and the NASDAQ reaching 2,524.94 before hitting some headwinds in February. At the close of the first quarter, the DJIA was down 0.9% for the year closing at 12,354.35, while the S&P 500 closed the quarter up 0.2% at 1,420.86 and the NASDAQ finished at 2,421.64 up 0.3% for 2007. While the Dow is still above its high set during the Tech Wreck of 2000, the S&P 500 still has not reached it previous high of 1,527.46, which is a technical feat I feel needs to happen for this bull market to continue. Since the S&P 500 is an index that tracks a broad range of large companies, its march toward the all time record is an indicator of the overall health of the market and the economy.
The headwinds I spoke of earlier came in the form of higher oil prices, Greenspan's recession remarks and the slumping housing market. Oil prices have been bouncing around between $60 and $67 a barrel, rebounding from just under $60 a barrel in January. The tensions in the Persian Gulf over British sailors being taken hostage by the Iranian Navy (shades of 1979) has been the latest culprit fueling the rise in the price of oil.
Greenspan's speech placing the odds of recession in 2007 at 25% stopped the market's advance in its tracks in February. It should really come as no surprise that the possibility of a recession exists, especially since we are in the mature phase of the current expansion, know as prosperity. There are many factors which could tip the economy into negative growth and end this current expansion, but that is just the nature of the economic cycle. For the foreseeable future, it looks as if interest rates will remain on hold and growth will continue to ease from the pace of 2006.
One of the biggest drags on the economy of late is the continued slump in the housing market exacerbated by the concern that the meltdown in the sub prime mortgage market will spill over into the prime market. While defaults by borrowers are increasing, which in turn has caused bankruptcies by lenders, the real concern is how the sub prime debacle will effect the many derivative investments which have been securitized from these sub prime loans. Mortgages in many cases are not held by the companies that write them, but are bundled into securities and sold to investors to spread the risk. As the value of these assets declines, banks, hedge funds and private equity firms head for the exits. This unwinding of positions always leaves someone "holding the bag". I hope the risk management tools used in the collateralized mortgage obligation market are better than the risk management tools used by Amaranth Advisors in assessing the risk of the natural gas markets in September 2006!
Just to add a touch of irony to the current rage of private equity ventures taking public companies private, the granddaddy of private equity firms, Blackstone Group, has filed its plans to go public. Blackstone has been highly successful and according to Mike Santoli of Barrons, " Blackstone will have little problem achieving a $40 billion market cap", and no doubt, "it will become a core holding in an alternate asset management sector." The stock will "open with a big pop-which means it immediately will be unattractively valued. The idea of having access to permanent capital rather than dialing up pension funds for every cent Blackstone invests makes some sense. In other words, you can respect the logic of the deal without buying the stock."
Have You Reviewed Your Life Insurance Lately?
When was the last time you took a serious look at your life insurance coverage. Life insurance was created to provide cash for your family in the event of your death. The goal being to provide your beneficiaries a means to ease the financial burden that results from the death of a parent or spouse. The beneficiaries may choose to use the benefits of a life insurance policy in any way they choose, such as paying for funeral expenses, covering mortgage payments or investing the proceeds and taking systematic payments to augment income. Generally, the death benefit from a life insurance policy is paid free of any federal tax.
One of the most important questions to ask when evaluating life insurance needs is the amount of coverage needed. Many financial planners recommend an amount of five to seven times gross annual salary as a guideline when purchasing life insurance, but as with all things in life, each family's goals are different. It is always best to take an inventory of your family's current financial situation and then try to evaluate future needs. Listing current and anticipated future expenses, as well as income sources is a good place to start. If there are children, you might want to consider the cost of their education. The younger the children, the more of a need for coverage, due to the length of time they will be dependent on one parent, in the event of a death of a parent. Of course, this is exactly the time when a family may have the least amount of income available for insurance!
This is why there are different types of policies available. The two broad categories of life insurance are :
· Term Life Insurance
· Permanent Life Insurance
Term Life Insurance provides protection for the pure cost of insurance for periods of 5, 10, 15, 20 or 30 years and is usually significantly less expensive than permanent insurance. The death benefit is only paid if you die during the specific term of the policy. At the end of the term, the policyholder may be able to convert to a permanent policy or begin a new term, at a higher cost.
Permanent Life Insurance provides protection as long as you continue to pay your premiums, which can be fixed or tailored to your specific needs. Permanent policies include Whole Life, Universal Life and Variable Universal Life. These policies have a "cash value" feature, which means part of the premiums go into an account which builds up monetary value over time. This is why the cost of a permanent policy is higher than term. Many times a combination of the two types of policies can provide coverage and savings in stages for a lifetime. Feel free to contact me if you would like to review your insurance needs.
IRS Deadline and Retirement Plan Deferral Limits
For those of you still wanting to make an IRA contribution for 2006, the IRS deadline is April 17, 2007. The limit for 2006 is $4,000 with a catch up contribution of $1,000 for those 50 & older. The contribution limits for 2007 will also be $4,000 and the catch up will remain $1,000. Maximum salary deferrals for 401k, 403b and 457 plans is $15,000 for 2006, and for 2007 the deferral limits increase to $15,500. The annual catch up amount, which can be deferred into these plans for those 50 and older, is $5,000 for 2006 and will remain the same for 2007.
Whether you are saving for retirement, retiring soon or already retired, there are many ways to protect and grow that nest egg and consolidate assets. Developing multiple income streams in retirement is advantageous.
Company Information:
Investment Advisory services offered through:
Jersey Benefits Advisors
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: kaighn@jerseybenefits.com
http://www.johnkaighn.com
Securities offered through:
Transamerica Financial Advisors, Inc.
A registered Broker/Dealer
1150 S. Olive St. Suite T-25
Los Angeles, CA 90015
800-245-8250
Member NASD & SIPC
Third Party Administration and Insurance Services offered through:
Jersey Benefits Group, Inc
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: jerseybenefits@yahoo.com
http://www.jerseybenefits.com/
http://www.johnkaighn.com
All opinions expressed in this newsletter are solely those of John Kaighn & Jersey Benefits Advisors, formerly known as Kaighn Financial Services.
Subscribe to:
Posts (Atom)
