Tuesday, December 21, 2010

As the holidays rapidly approach, I would like to take a few moments to wish you a happy and joyous Christmas and Hanukah, as well as a healthy and prosperous New Year. I also wanted to remind you I am always here to assist you with any questions or concerns you might have about your investments or insurance needs. Please feel free to contact me by phone or email any time you’d like to discuss your investments or schedule an appointment.

The economy seems to have averted the dreaded double dip recession and is definitely moving in the right direction. At this juncture, it is difficult to tell exactly where we are in the new business cycle, but my guess is we are still in the recovery phase, as GDP has not surpassed the level achieved before the recession in real dollars. Yet, when you look at profit margins, productivity and the Institute for Supply Management index, it seems as though we might be in mid cycle. Of course, if you focus on the unemployment rate, consumer confidence and capacity utilization you might think we were still in recession. I guess it is safe to say that when you have one of the worst recessions in memory, the recovery will be at least as unpredictable.

According to PNC Wealth Management, the cost of buying all of the gifts in the holiday classic song “The 12 Days of Christmas” surged 9.2% from last year. The total cost for all of the items in the list has jumped $2000.00 to $23,439.38. While the cost of five golden rings rose by 30%, they seemed a bargain compared to the cost of three French hens, which increased by 233%.

Remember, if you plan to add to a Coverdell Education Savings account for 2010, the transaction must be completed by December 31st.. The maximum annual contribution is still $2,000.00 per year. Contributions to 529 College Savings Plans are considered gifts under the federal gift tax regulations and hence any contributions in excess of $13,000 ($65,000 if filing single over five years) or $26,000 ($130,000 if filing married jointly over a five-year period) per donor count against the one-time gift/estate tax exemption. The five-year period is known as the five-year carry-forward option: Once the single donor puts in $65,000 or the married jointly donor puts in $130,000, they are not able to make another contribution (gift) to that individual (without using part of their lifetime gifting exclusion) for five years.

If you’d like a second opinion on your investment or insurance objectives, or would like to develop a plan in the future, please don’t hesitate to contact me.

Happy Holidays

John H. Kaighn

Jersey Benefits Advisors