tag:blogger.com,1999:blog-33464334557307964082024-03-13T21:52:02.821-04:00The Kaighn ReportBusiness, Securities, Investment, Education and Insurance Information provided by John H. Kaighn. Securities and investment advice offered by Signator Investors, Inc., Inc. .John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comBlogger129125tag:blogger.com,1999:blog-3346433455730796408.post-56978496512880809332013-02-19T11:29:00.001-05:002017-12-20T10:20:27.164-05:00New Location for Future PostsAll future blog posts for The Kaighn Report will appear on our website: <a href="http://www.jerseybenefits.com/" target="_blank">Jersey Benefits Group, Inc. </a> The web address is <a href="http://www.jerseybenefits.com/">http://www.jerseybenefits.com</a> Please bookmark the address for your future reference.John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-65782064245558690152013-01-04T22:28:00.003-05:002013-01-04T22:58:18.370-05:00JERSEY BENEFITS ADVISORS INVESTOR NEWSLETTER WINTER 2013<div style="text-align: center;">
<span style="font-family: Perpetua; font-weight: bold; language: EN; mso-ansi-language: EN;"><span style="font-size: large;">Market Watch</span></span><span style="language: EN;"><o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Well, I
have to say the politicians certainly didn’t disappoint me.<span style="mso-spacerun: yes;"> </span>Just as I thought would happen, the
“political leaders” of our fair land waited until the last possible moment to
reach a quite wimpy, less than grand bargain to avoid careening the economy
over the fiscal cliff.<span style="mso-spacerun: yes;"> </span>While I am
pleased they were able to take time from their endless blame game to craft a
compromise, I am extremely angry at the complete disregard for working people
and retirees exhibited by these so called leaders.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">While they
played out their silly drama, the markets relinquished several percentage
points worth of gains, which will be reflected as lower returns on the IRA and
401k statements of the average working people they purport to represent.<span style="mso-spacerun: yes;"> </span>Although the agreement did spark a triple
digit gain on the 31st of December when the Senate passed its compromise, the
returns for the year could have been much better had they gotten their act
together a month ago.<span style="mso-spacerun: yes;"> </span>Alas, we all knew
that wasn’t happening. <o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Fortunately,
while the markets were quite
<span style="language: EN; mso-ansi-language: EN;">skittish
during the period between Thanksgiving and the end of the year, we were able to
hold onto most of the upside in the market for 2012 and wind up with some
respectable gains.<span style="mso-spacerun: yes;"> </span>The Dow Jones
Industrial Average* finished at 13,104.14 clocking a 7.25% gain for the
year.<span style="mso-spacerun: yes;"> </span>The S&P 500* closed at
1,421.19 which was a 13.41% annual increase.<span style="mso-spacerun: yes;">
</span>The NASDAQ*<span style="mso-spacerun: yes;"> </span>ended the year at
3,019.51 adding 15.89%.<span style="mso-spacerun: yes;"> </span>Overall, not a
bad year to be invested in equities.<o:p></o:p></span></span></div>
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<span style="language: EN; mso-ansi-language: EN;">If the first
day of trading in the new year is any indication of the type of year we are
going to have, and we all know it is considered to be a positive indicator,
then we are certainly off to a rousing start.<span style="mso-spacerun: yes;">
</span>The market has been on an upswing since it bottomed out in March of<span style="mso-spacerun: yes;"> </span>2009, and the economy has been on the mend
since Gross Domestic Product began growing again in July 2009.<span style="mso-spacerun: yes;"> </span>This represents three years and six months of
recovery and expansion in the economy, albeit at a less than stellar pace.<span style="mso-spacerun: yes;"> </span>I have been saying for some time now this
could be a longer than average economic cycle, due to the fact we are growing
slowly.<span style="mso-spacerun: yes;"> </span>If the politicians can just
<span style="language: EN; mso-ansi-language: EN;">begin to
grasp the concept that the markets like the idea of compromise, perhaps they
will start to actually take some problem solving steps toward making Social
Security solvent and Medicare sustainable. <o:p></o:p></span></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Although
I’ve been a bit perturbed by the recklessness of Congress and the
Administration, the statistics regarding housing, unemployment, retail sales,
manufacturing, and GDP lead me to the conclusion there is room for this
expansion to continue.<span style="mso-spacerun: yes;"> </span>The financial
turmoil we have witnessed has been referred to as a “black swan” event, meaning
a random, unexpected debacle that deviates beyond what is normally expected of
a situation and that would be extremely hard to predict.<span style="mso-spacerun: yes;"> </span>However, many people have been so affected by
it psychologically, they don’t recognize the improvement and seem to be waiting
for the next catastrophe to happen.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">While I am
not advocating unabashed enthusiasm for the current situation, I do think the
spending cuts needed, which have been deferred for two months, will be
enacted.<span style="mso-spacerun: yes;"> </span>Hopefully, the politicians will
again manage to compromise on the cuts and increase the debt ceiling, which
also must be addressed at the same time.<o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;"></span><br />
<span style="language: EN; mso-ansi-language: EN;">The problems
are not insurmountable if addressed.<span style="mso-spacerun: yes;"> </span>We
will survive as a country, but the politicians will be tarnished by not
compromising for the greater good.</span><span style="language: EN;"><o:p></o:p></span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;"><span style="font-size: large;"><strong></strong></span></span> </div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;"><span style="font-size: large;"><strong>2013
Contribution Limits Raised For Many Retirement Plans</strong></span></span><span style="language: EN;"><o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">There have
been some changes in the contribution limits for retirement plans for
2013.<span style="mso-spacerun: yes;"> </span>Participants in 401k, 403b and
most 457 plans can contribute $17,500, while the catch up contribution for
those 50 & older remains at $5,500.<span style="mso-spacerun: yes;">
</span>The limit for IRA and ROTH IRA contributions rises to $5,500 and the
catch up for 50 and older remains $1,000.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Contributors
to a SIMPLE IRA can contribute $12,000 to their plan in 2013, up from the
current level of $11,500.<span style="mso-spacerun: yes;"> </span>The catch up
for those 50 and older remains $2,500.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">These are a
few of the changes the IRS announced, due to statutory triggers being met by an
increase in the cost of living index.<span style="mso-spacerun: yes;">
</span>All of the changes can be reviewed at the following link:
<a href="http://www.irs.gov/">http://www.irs.gov</a></span></div>
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<span style="language: EN; mso-ansi-language: EN;">No inflation,
huh?</span><span style="language: EN;"><o:p></o:p></span></div>
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</strong></span><br />
<span style="font-size: large;"><strong><span style="font-family: Perpetua; font-size: 12.35pt; language: EN; line-height: 100%; mso-ansi-language: EN;"><span style="font-size: large;">Update on</span> <span style="font-size: large;">the Patient Protection and
Affordable Care Act</span></span></strong><span style="language: EN;"><o:p></o:p></span></span></div>
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<span style="language: EN; mso-ansi-language: EN;">In 2014, under the Patient Protection and
Affordable Care Act of 2010, the states are supposed to set up insurance
marketplaces or exchanges where individuals and small businesses can go to shop
for health insurance policies.<span style="mso-spacerun: yes;"> </span>As of the
December 14, 2012 deadline, only 17 states and the District of Columbia had
established the exchanges.<span style="mso-spacerun: yes;"> </span>Seven other
states have opted to establish Partnership Exchanges with the Federal
Government.<span style="mso-spacerun: yes;"> </span>This means the Feds will be
involved in running the exchanges in over half of the states.<o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">While this
could change going forward, in the states where the Feds are running the
exchanges, the chances are there will be a “one size fits all” approach to
health insurance.<span style="mso-spacerun: yes;"> </span>This would result in
exchanges which are less flexible than exchanges tailored to meet challenges
specific or unique to each state.<span style="mso-spacerun: yes;"> </span>It is
hoped the exchanges will create competition between insurance companies and
drive down the cost of insurance.<o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;"></span> </div>
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<span style="language: EN; mso-ansi-language: EN;">C</span><span style="language: EN; mso-ansi-language: EN;">ompanies
with fewer than 25 employees are not required to offer health insurance, so it
is a fairly safe bet the companies that currently don’t offer insurance will
continue to not offer it.<span style="mso-spacerun: yes;"> </span>Those that do
provide health insurance coverage to their employees will have an incentive to
drop coverage, which will help the bottom line.<span style="mso-spacerun: yes;">
</span>This means employers and employees in companies that employ less than 25
workers will probably be going to the exchanges, despite the convoluted tax
credits which are available, provided the insurance and the company
qualifies.<span style="mso-spacerun: yes;"> </span>Hopefully, the options
provided by the exchanges will be more affordable for these individuals.<o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Businesses
with less than 50 employees are also not required to provide health insurance
and have no consequences for not providing coverage.<span style="mso-spacerun: yes;"> </span>Again, there are tax credits if coverage is
provided, but attempting to qualify for them may be an effort many employers
with less than 50 employees are not willing to make.<span style="mso-spacerun: yes;"> </span>Many companies at this employee level may
also choose to simply discontinue health care coverage and utilize the exchanges.<o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Finally, if a
company has 50 or more workers, it is required to provide health insurance for
its employees, starting in 2014.<span style="mso-spacerun: yes;"> </span>Failure
to provide coverage will result in an assessment of $2,000.00 per full time
employee, after the first 30.<span style="mso-spacerun: yes;">
</span>Furthermore, coverage must meet the definition of affordable, meaning
the employer must pay for 60% of the premium and the worker can’t be required
to pay more than 9.5% of family income, before deductions and adjustments, for
coverage offered by employers.<span style="mso-spacerun: yes;"> </span>The
policy offered by the employer must also meet a minimum standard for “essential
health benefits”.<span style="mso-spacerun: yes;"> </span>The outline of this
“comprehensive policy” can be found on the website: </span><br />
<span style="language: EN; mso-ansi-language: EN;"><a href="http://www.healthcare.gov/">http://www.</a></span><a href="http://www.healthcare.gov/"><span style="language: EN; mso-ansi-language: EN;"></span></a><span style="language: EN; mso-ansi-language: EN;"><a href="http://healthcare.gov/">healthcare.gov</a>.</span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;"><span style="font-size: large;"><strong>Company Information</strong></span></span><span style="language: EN;"><o:p></o:p></span></div>
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<span style="language: EN;"><o:p><span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;"></span></o:p></span><br />
<span style="language: EN;"><o:p><span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">Investment Advisory Services offered through:<o:p></o:p></span></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Jersey Benefits Advisors<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">P.O. Box 1406<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Ocean City, N.J.<span style="mso-spacerun: yes;"> </span>08226<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Phone:<span style="mso-spacerun: yes;">
</span>609 827 0194<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Fax:<span style="mso-spacerun: yes;">
</span>609 861 9257<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Email:<span style="mso-spacerun: yes;">
</span>kaighn@jerseybenefits.com<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;"><a href="http://www.jerseybenefits.com/">Http://www.jerseybenefits.com</a></span><span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;"><o:p></o:p></span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;"> <o:p></o:p></span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">Securities offered through:<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;"><span style="font-size: small;">Transamerica Financial Advisors, Inc.<o:p></o:p></span></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">A registered Broker/Dealer<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">570 Carillon Parkway<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">St. Petersburg, FL<span style="mso-spacerun: yes;"> </span>33758-9053<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">800-245-8250<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Member FINRA & SIPC<o:p></o:p></span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">Transamerica Financial Advisors, Inc. is <o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;"><span style="font-size: small;">not affiliated with Jersey Benefits Advisors</span></span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;"><o:p></o:p></span> <span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">Third Party Administration and Insurance <o:p></o:p></span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">Services offered through:<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Jersey Benefits Group, Inc<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">P.O. Box 1406<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Ocean City, N.J.<span style="mso-spacerun: yes;"> </span>08226<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Phone:<span style="mso-spacerun: yes;">
</span>609 827 0194<o:p></o:p></span><br />
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Fax:<span style="mso-spacerun: yes;">
</span>609 861 9257<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Email: kaighn@jerseybenefits.com<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;"><a href="http://www.jerseybenefits.com/">Http://www.jerseybenefits.com/<o:p></o:p></a></span></div>
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<span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">All opinions expressed in this newsletter are </span><span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">solely those of John Kaighn and Jersey Benefits </span><span style="font-family: Perpetua; language: EN; line-height: 100%; mso-ansi-language: EN;">Advisors.</span></div>
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The S and P 500, the DJIA and the NASDAQ are unmanaged indexes that are widely
used as indicators of </span></span><span style="font-family: Perpetua; font-size: 7pt; language: EN; line-height: 100%; mso-ansi-language: EN; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><span style="font-size: small;">Market </span></span><span style="font-family: Perpetua; font-size: 7pt; language: EN; line-height: 100%; mso-ansi-language: EN; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><span style="font-size: small;">Trends.<span style="mso-spacerun: yes;">
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<span style="font-family: Perpetua; font-size: 7pt; language: EN; line-height: 100%; mso-ansi-language: EN; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><span style="font-size: small;"><span style="mso-spacerun: yes;">* </span>Past performance does not guarantee future results.<span style="mso-spacerun: yes;"> </span>The performance of these indexes does not
reflect fees </span></span><span style="font-family: Perpetua; font-size: 7pt; language: EN; line-height: 100%; mso-ansi-language: EN; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><span style="font-size: small;">and charges associated with investing.<span style="mso-spacerun: yes;"> </span>It is not possible to invest directly in an
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Cost Averaging through a systematic savings plan is an excellent way to build
an account without a sizeable initial investment.<span style="mso-spacerun: yes;"> </span>Saving a portion of our pay each month is
very important.<span style="mso-spacerun: yes;"> </span>Company sponsored
pension plans are one method to save and should be used for retirement.<span style="mso-spacerun: yes;"> </span>Other systematic investment accounts, SUCH AS
ROTH IRA’S, TRADITIONAL IRA’S, COVERDELL ACCOUNTS, 529 PLANS, BROKERAGE
ACCOUNTS AND ANNUITIES<span style="mso-spacerun: yes;"> </span>can also be
opened, and debited directly from your checking or savings account. For more
information, just call to set up an appointment. REFERRALS ARE ALWAYS WELCOME.<span style="mso-spacerun: yes;"> </span></span><span style="font-family: Perpetua; font-size: 8pt; language: EN; line-height: 100%; mso-ansi-language: EN; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><o:p></o:p></span></div>
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Kaighn<span style="mso-spacerun: yes;"> </span></span><span style="language: EN;"><o:p></o:p></span></div>
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John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-28575685140287996332012-12-05T10:52:00.001-05:002012-12-12T23:50:58.929-05:00Good News for 529 College Investing Plan Participants<h2 id="anc8">
Here is some valuable information for New Jersey Residents investing in a Franklin Templeton 529 College Investing Plan for a student who attends school in New Jersey.</h2>
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Clients wishing to help a current New Jersey resident pay for college will enjoy additional benefits by investing with Franklin Templeton 529 College Investing Plan.<br />
<table bgcolor="#ffffff" border="0" cellpadding="10" cellspacing="0" class="tableborderCallOut" style="width: 100%px;"><tbody>
<tr bgcolor="#f3f3e6"><td><b style="background-color: transparent;">Double tax-free tax status.</b><span style="background-color: transparent;"> Franklin Templeton 529 College Savings Plan is a tax-free investment for New Jersey residents. Your client will not owe either federal or New Jersey state income taxes on earnings or assets withdrawn to pay for qualified educational expenses.</span><sup style="background-color: transparent;">2</sup><br />
<span class="brownbody"><br /><b>Up to a $1,500 college scholarship.</b> Franklin Templeton 529 College Savings Plan offers a scholarship rewarding students who pursue higher education in New Jersey. The plan offers increasingly larger scholarships based upon how long your client invests, up to a maximum of $1,500 scholarship for over 12 years of saving.<sup>5</sup><br /><br />Please access the <a href="https://www.franklintempleton.com/forms-literature/literature-details/529-HNDBK">Investor Handbook</a> for more information. Use the Scholarship Request <a href="https://www.franklintempleton.com/forms-literature/literature-details/529FT-NJSCH">form</a> to apply.<br /><br /><!--core content data table--></span><br />
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<tr><th>Contribution</th><th>Full Years Account Open</th><th>Scholarship Amount</th></tr>
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<tr><td class="fc">$1,200</td><td>4</td><td>$500</td></tr>
<tr><td class="fc">$1,800</td><td>6</td><td>$750</td></tr>
<tr><td class="fc">$2,400</td><td>8</td><td>$1,000</td></tr>
<tr><td class="fc">$3,000</td><td>10</td><td>$1,250</td></tr>
<tr><td class="fc">$3,600</td><td>12</td><td>$1,500</td></tr>
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<b>Limited interference with financial aid.</b> The first $25,000 of contributions to a Franklin Templeton 529 College Savings Plan will not be considered when determining a student beneficiary's eligibility for financial aid awarded by the state of New Jersey.<br />
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Investors should read the <em><a href="https://www.franklintempleton.com/forms-literature/literature-details/529-HNDBK">Investor Handbook</a></em> carefully before investing and consider whether their or their account beneficiary's home state offers any state tax or other benefits that are only available for investment in its qualified tuition program.</td></tr>
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John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-4846080221928135172012-12-04T12:32:00.001-05:002012-12-04T14:37:01.953-05:00How About a Scenic Overlook?I knew there was going to be a great deal of chatter about the deal that needs to be reached between Congress and the President concerning the fiscal cliff, and I must say the media hasn't disappointed me. While there have been some talks between the President and Boehner to attempt to find common ground, the right and left wings of the two Parties, through their mouthpieces in the national media, continue to paint a picture of polarization. What seems like a fairly straightforward compromise dictated by the results of the election, is being presented as bogged down.<br />
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The only way to solve this issue is for enough of our elected representatives to step up and realize there need to be cuts in spending and increases in revenue. There is simply no other way to make the adjustments necessary now to avoid worse options in the future. Some Republicans have hinted they are willing to abandon the Norquist camp and will consider some tax revenue increases. Limiting itemized deductions for some taxpayers is the route they would take to increase revenue without raising tax rates. The President continues to insist the election results dictate increased tax rates on upper income individuals. This is one area where the common ground is quite obvious, but it seems like they can't get passed the semantics regarding increased revenue as opposed to increased tax rates.<br />
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I do feel there will be no mad cap plunge over the fiscal cliff, but rather the citizenry will have an opportunity to observe, from a scenic overlook, a country on the verge of enjoying a period of better growth, increased Federal revenue, more balanced spending as a percentage of GDP, a manageable debt level, and a restructuring of the various entitlement programs, if the politicians can reach a compromise. Our forefathers had the insight to create a government with checks, balances, filibusters and other procedures designed to protect minority interests while reflecting the majority's point of view on most issues. Compromise on issues important to the majority of citizens must be foremost in the minds of our government employees. If they were to irresponsibly choose to plunge the economy over the fiscal cliff, we will survive, but the President's legacy will definitely pay the price.<br />
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Look for this drama to drag on until Christmas or the end of the year, with the media making a huge deal about each and every proposal and counter proposal. This Congress will make just enough of a compromise, such as postponing some tax increases, delaying some of the more draconian cuts, or some other stop gap measure designed to take us to the edge, but not go into a free fall, until the next Congress can pick up the issue and hopefully reach the bargain necessary. My hope is the markets are prescient on this issue and won't recoil at the end of December, providing another flat year for the indices, or worse!John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-48393854379383583422012-11-21T10:11:00.002-05:002012-11-21T10:11:56.416-05:00The Desolate Wilderness and This Fair LandI usually write the bulk of the material that appears on my blog, but every now and then I feature other authors who have a flair for great writing. This is a piece that is an annual ritual in a national publication that corresponds with the Thanksgiving Holiday season. It does a nice job of reminding the reader of the reasons to be thankful and to whom we owe that gratitude. I hope you enjoy it<br />
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<b>The Desolate Wilderness</b><br />
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Here beginneth the chronicle of those memorable circumstances of the year 1620,as recorded by Nathaniel Morton, keeper of the records of Plymouth Colony, based on the account of William Bradford, sometime governor thereof:<br />
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So they left that goodly and pleasant city of Leyden, which had been their resting place for above eleven years, but they knew that they were pilgrims and strangers here below, and looked not much on these things, but lifted up their eyes to Heaven, their dearest country, where God hath prepared for them a city (Heb. XI, 16, and therein quieted their spirits. When they came to Delfs-Haven they found the ship and all things ready, and such of their friends as could not come with them followed after them, and sundry came from Amsterdam to see them shipt, and to take their leaves of them. One night was spent with little sleep with' the most, but with friendly entertainment and Christian discourse, and other real expressions of true Christian love.<br />
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The next day they went on board, and their friends with them, where truly doleful was the sight of that sad and mournful parting, to hear what sighs and sobs and prayers did sound amongst them; what tears did gush from every eye, and pithy speeches pierced each other's heart, that sundry of the Dutch strangers that stood on the Key as spectators could not refrain from tears. But the tide (which stays for no man) calling them away, that were thus loath to depart, their Reverend Pastor, falling down on his knees, and they all with him, with watery cheeks commended them with the most fervent prayers unto the Lord and His blessing; and then with mutual embraces and many tearsthey took their I leaves one of another, which proved to be the last leave to many of them.<br />
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Being now passed the vast ocean, and a sea of troubles before them in expectations, they had now no friends to welcome, them, no inns to entertain or refresh them, no houses, or much less towns, to repair unto tb seek for succour; and for the season it was winter, and they that know the winters of the country know them to be sharp and violent, subject to cruel and fierce storms, dangerous to travel to known places, much more to search unknown coasts. Besides, what could they see but a hideous and desolate wilderness, full of wilde beasts and wilde men? and what multitudes of them there were, they then knew not: for which way soever they turned their eyes (save upward to Heaven) they could have but little solace or content in respect of any outward object; for summer being ended, all things stand in appearance with a weatherbeaten face, and the whole country, full of woods and thickets, represented a wild and savage hew. If they looked behind them, there was a mighty ocean which they had passed, and was now as a main bar or gulph to separate them from all the civil parts of the world.<br />
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<b>This Fair Land</b><br />
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Anyone whose labors take him into the far reaches of the country, as ours lately have done, is bound to mark how the years have made the land grow fruitful. This is indeed a big country, a rich country, in a way no array of figures can measure and so in a way past belief of those who have not seen it. Even those who journey through its Northeastern complex, into the Southern lands, across the central plains and to its Western slopes can only glimpse a measure of the bounty of America.<br />
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And a traveler cannot but be struck on his journey by the thought that this country, one day, can be even greater. America, though many know it not, is one of the great underdeveloped countries of the world; what it reaches for exceeds by far what it has grasped. <br />
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So the visitor returns thankful for much of what he has seen, and, in spite of everything, an optimist about what his country might be. Yet the visitor, if he is to make an honest report, must also note the air of unease that<br />
hangs everywhere.<br />
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For the traveler, as travelers have been always, is as much questioned as questioning. And for all the abundance he sees, he finds the questions put to him ask where men may repair for succor from the troubles that beset them. <br />
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His countrymen cannot forget the savage face of war. Too often they have been asked to fight in strange and distant places, for no clear purpose they could see and for no accomplishment they can measure. Their spirits are not quieted by the thought that the good and pleasant bounty' that surrounds them can be destroyed in an instant by a single bomb. Yet they find no escape, for their survival and comfort now depend on unpredictable strangers in far off corners of the globe.<br />
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How can they turn from melancholy when at home they see young arrayed against old, black against white, neighbor against neighbor, so that they stand in peril of social discord. Or not despair when they see that the cities and countryside are in need of repair, yet find themselves threatened by scarcities of the resources that sustain their way of life. Or when, in the face of these challenges, they turn for leadership to men in high places-only to find those men as frail as any others.<br />
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So sometimes the traveler is asked whence will come their succor. What is to preserve their abundance, or even their civility? How can they pass on to their children a nation as strong and free as the one they inherited from their forefathers? How is their country to endure these cruel storms that beset it from without and from within?<br />
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Of course the stranger cannot quiet their spirits. For it is true that everywhere men turn their eyes today much of the world has a truly wild and savage hue. No man, if he be truthful, can say that the specter of war is banished. Nor can he say that when men or communities are put upon their own resources they are sure of solace; nor be sure that men of diverse kinds and diverse views can live peaceably together in a time of troubles.<br />
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But we can all remind ourselves that the richness of this country was not born in the resources of the earth, though they be plentiful, but in the men that took its measure. For that reminder is everywhere in the cities, towns, farms, roads,<br />
factories, homes, hospitals, schools that spread everywhere over that wilderness.<br />
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We can remind ourselves that for all our social discord we yet remain the longest enduring society of free men governing themselves without benefit of kings or dictators. Being so, we are the marvel and the mystery of the world, for that enduring liberty is no less a blessing than the abundance of the earth.<br />
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And we might remind ourselves also, that if those men setting out from Delftshaven had been daunted by the troubles they saw around them, then we could not this autumn be thankful for a fair land.<br />
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These editorials have appeared annually in the <a href="http://wsj.com/">Wall Street Journal</a> since 1961.<br />
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<b>HAPPY THANKSGIVING</b><br />
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John H. Kaighn<br />
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<a href="http://jerseybenefits.com/">Jersey Benefits Advisors</a>John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-66412089213696200452012-11-09T14:44:00.003-05:002012-11-13T15:20:51.297-05:00Taking StockThe election is over and many people are talking about the roughly $6 billion dollars that was spent only to wind up with the exact same result. Well, I will take the money being spent over the way some countries solve their change of power during cantankerous times, which could range from resorting to revolution and civil war to arresting and jailing opponents. Yes, it certainly would be nice if we could have a campaign of a month or three months with no mudslinging, but the election is about being the president of the largest, most prosperous economy on the planet, so there should be a spirited debate about the various options for leadership. In the end, one side won, one side lost, each made a speech and now its time to solve the issue of the fiscal cliff, which I discussed in the recent newsletter and follows this post.<br />
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Meanwhile, I am posting a video for anyone who would like to view it from Franklin Templeton Investments which talks about the case for investing in stocks now. It highlights the current disconnect between investors' perception of the stock market and reality. <span style="font-family: Arial, sans-serif; font-size: 10pt;"> </span><a href="http://bcove.me/jsqxei5y" target="_blank">View the video</a> here and contact me if you have any questions or would like a recommendation for your investments. <a href="http://www.johnkaighn.com/TS-brochure.pdf" target="_blank">View the brochure</a> here if you would like to read more information about Franklin Templeton's research and the reasons they feel now is the time to be Taking Stock.<br />
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John H. Kaighn<br />
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<a href="http://jerseybenefits.com/" target="_blank">Jersey Benefits Advisors </a><br />
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<br />John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-66895947516494187252012-10-16T10:22:00.002-04:002012-10-24T07:29:19.360-04:00Jersey Benefits Advisors Investor's Newsletter Fall 2012<h2 style="text-align: center;">
<span lang="en-US" style="font-family: "Perpetua Titling MT"; font-weight: bold; language: en-US; mso-ansi-language: en-US;">Market Watch</span></h2>
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<span style="font-family: Times New Roman;"><span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">With the revised release of second quarter GDP, which was a paltry 1.3%, the Federal Reserve sprang into action and announced plans to buy $40 billion dollars worth of agency mortgage backed securities a month, until the economy begins to grow at a faster pace.<span style="mso-spacerun: yes;"> </span>The plan has been dubbed Quantitative Easing 3, or QE3.<span style="mso-spacerun: yes;"> </span>Keeping in line with the Fed’s dual mandate of maintaining stable prices and stable employment, Chairman Bernanke announced the latest round of easing because an economy growing at 1.3% can’t produce enough jobs to lower unemployment, which stands at 7.8% as of September 2012.<span style="mso-spacerun: yes;"> </span>This move was greeted almost simultaneously with cheers and boos, but the market generally seemed to approve.<o:p></o:p></span></span><br />
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">At the end of the third quarter, the Dow Jones Industrial Average (DJIA*) stood at 13,437.13.<span style="mso-spacerun: yes;"> </span>This represented a 4.32% gain for the quarter and a 9.98% gain for the year.<span style="mso-spacerun: yes;"> </span>The S&P 500* added 5.76% for the quarter to reach the 1,440.67<span style="mso-spacerun: yes;"> </span>point level.<span style="mso-spacerun: yes;"> </span>The index has increased by 14.56% year to date.<span style="mso-spacerun: yes;"> </span>The NASDAQ* closed at 3,116.23, which gave the technology heavy index a
<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">6.96% gain for the quarter and brought its year to date return to 19.62%.<span style="mso-spacerun: yes;"> </span>These were attractive gains for the quarter, and these returns would be considered respectable for an entire year.<span style="mso-spacerun: yes;"> </span>Let’s hope the final quarter manages to maintain or add to these levels.<o:p></o:p></span></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">As we have discussed for quite some time, the market has been climbing a wall of worry, due to concerns about recession in Europe, apprehension about the Fed’s loose monetary policy leading to inflation, unease about the effect of a slowdown in China and other emerging markets on the global economy and the looming fiscal cliff.<span style="mso-spacerun: yes;"> </span>Bernanke has stated on more than one occasion that the Fed would not have to continue monetary easing if the Congress and Administration would act in a more responsible way to address fiscal policy.<span style="mso-spacerun: yes;"> </span>Between now and the election, there will more than likely be no meaningful outcomes for fiscal policy, and so we will have to listen to the drama concerning the fiscal cliff right up to the end of the current quarter.<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">With that said, look for an eleventh hour agreement before the end of the year
<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">whereby Congress addresses fiscal matters and attempts to come up with a plan for handling the threatening consequences of sequestration, or the blunt, automatic across-the-board budget cuts enacted by law by the </span><a href="http://thomas.loc.gov/cgi-bin/query/z?c112:S.365:"><span lang="en-US" style="color: black; language: en-US; mso-ansi-language: en-US; text-decoration: none; text-underline: none;">Budget Control Act of 2011</span></a><span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">, a consequence of Congress’s failure to agree on a bipartisan deficit reduction plan. <o:p></o:p></span></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">As a result, the first installment of cuts goes into effect January 1st of 2013, cutting $2.4 trillion from federal debt over ten years.<span style="mso-spacerun: yes;"> </span>Over the same ten year period, $1.2 trillion is slated to be cut from discretionary spending, which doesn’t even address entitlement spending.<span style="mso-spacerun: yes;"> </span>The sequestration in conjunction with the expiring Bush Era tax cuts threatens to undermine the current, lackluster expansion and shave anywhere from 2% - 3.6% from GDP, depending on whose forecasts you cite.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">With GDP currently growing at 1.3%, it is a very real possibility that without an agreement to mute the effects of the of the budget cuts and tax increases, we could be looking at a possible recession in 2013.<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">As I have stated before, this expansion is one of the weakest expansions this country has ever experienced, coming out of a recession.<span style="mso-spacerun: yes;"> </span>With that said, it suffices to say the last recession was the worst since the Great Depression.<span style="mso-spacerun: yes;"> </span>If an agreement can be reached on budget cuts and tax increases, the expansion may continue.<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: "Perpetua Titling MT"; font-size: 13.5pt; language: en-US; mso-ansi-language: en-US;"><span style="font-size: large;">More Parents Are Saving For College<o:p></o:p></span></span></h3>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">According to a survey conducted by the College Savings Foundation, the number of parents who have saved at least $5000 for their children’s college years has increased from 40% to 45% since 2009.<span style="mso-spacerun: yes;"> </span>The number of families saving has steadily increased since the 2009 survey, when less than a third of all families had saved that much.<span style="mso-spacerun: yes;"> </span>“Coming out of 2008 and early 2009, many families sat on the sidelines and said they wouldn’t make a decision about saving for college until things turned around,” said Roger Michaud, chairman of the College Savings Foundation and a senior vice president at Franklin Templeton Investments.<span style="mso-spacerun: yes;"> </span>Considering the cost of a four year college education can run as high as $250,000, families need to save more.<span style="mso-spacerun: yes;"> </span>Call me for information on 529 Plans.<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US;"><span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">Family & friends gathered for a Labor Day luau to celebrate my 60th birthday. Thanks, Margie for the surprise of a lifetime. <span style="mso-spacerun: yes;"></span>$%! <span style="mso-spacerun: yes;"></span>%& <span style="mso-spacerun: yes;"></span>You really got me this time!</span><o:p></o:p></span></div>
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<span lang="en-US" style="font-family: "Perpetua Titling MT"; font-size: 15.899pt; language: en-US; mso-ansi-language: en-US;">Have You Reviewed Your Life Insurance Lately?</span></h2>
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When was the last time you<span style="mso-spacerun: yes;"> </span>took a serious look at your life insurance coverage.<span style="mso-spacerun: yes;"> </span>Life insurance was created to provide cash for your family in the event of your death.<span style="mso-spacerun: yes;"> </span>The goal being to provide your beneficiaries a means to ease the financial burden that results from the death of a parent or spouse.<span style="mso-spacerun: yes;"> </span>The beneficiaries may choose to use the benefits of a life insurance policy in any way they desire, such as paying for funeral expenses, covering mortgage payments or investing the proceeds and taking systematic payments to augment income.<span style="mso-spacerun: yes;"> </span>Generally, the death benefit from a life insurance policy is paid free of any federal tax.<span style="mso-spacerun: yes;"> </span><br />
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">One of the most important questions to ask<span style="mso-spacerun: yes;"> </span>when evaluating life insurance needs is the amount of coverage needed.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>It is always best to take an inventory of your family's current financial situation and then try to evaluate future needs.<span style="mso-spacerun: yes;"> </span>Listing current and anticipated future expenses, as well as income sources is a good place to start.<span style="mso-spacerun: yes;"> </span>If there are children, you might want to consider the cost of their education.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Of course, this is exactly the time when a family may have the least amount of income available for insurance!<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">This is why there are different types of policies available.<span style="mso-spacerun: yes;"> </span>The two broad categories of life insurance are :<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;"><span style="mso-spacerun: yes;"></span> ·<span style="mso-spacerun: yes;"> </span>Term Life Insurance<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;"><span style="mso-spacerun: yes;"> </span>·<span style="mso-spacerun: yes;"> </span>Permanent Life Insurance<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">Term Life Insurance provides protection for the pure cost of insurance for periods of 5, 10, 15, 20 or 30 years and is usually less expensive than permanent insurance.<span style="mso-spacerun: yes;"> </span>The death benefit is only paid if you die during the specific term of the policy.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></div>
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<span lang="en-US" style="language: en-US; mso-ansi-language: en-US;">Permanent Life Insurance provides protection as long as you continue to pay your premiums, which can be fixed or tailored to your specific needs.<span style="mso-spacerun: yes;"> </span>Permanent policies include Whole Life, Universal Life and Variable Universal Life.<span style="mso-spacerun: yes;"> </span>These policies have a "cash value" feature, which means part of the premiums go into an account which builds up monetary value over time.<span style="mso-spacerun: yes;"> </span>This is why the cost of a permanent policy is higher than term. Many times<span style="mso-spacerun: yes;"> </span>a combination of the two types of policies can provide coverage and savings in stages for a lifetime.<span style="mso-spacerun: yes;"> </span>Feel free to contact me if you would like to review your insurance needs and discuss the options available to you.<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7pt; language: en-US; mso-ansi-language: en-US; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><span style="font-size: small;">Dollar Cost Averaging through a systematic savings plan is an excellent way to build an account without a sizeable initial investment.<span style="mso-spacerun: yes;"> </span>Saving a portion of our pay each month is very important.<span style="mso-spacerun: yes;"> </span>Company sponsored pension plans are one method to save and should be used for retirement.<span style="mso-spacerun: yes;"> </span>Other systematic investment accounts, SUCH AS ROTH IRA’S, TRADITIONAL IRA’S, COVERDELL ACCOUNTS, 529 PLANS, BROKERAGE ACCOUNTS AND ANNUITIES<span style="mso-spacerun: yes;"> </span>can also be opened, and debited directly from your checking or savings account. For more information, just call to set up an appointment. REFERRALS ARE ALWAYS WELCOME.</span><span style="mso-spacerun: yes;"> </span></span><span lang="en-US" style="font-family: Perpetua; font-size: 8pt; language: en-US; mso-ansi-language: en-US; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Jersey Benefits Advisors<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">P.O. Box 1406<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Ocean City, N.J.<span style="mso-spacerun: yes;"> </span>08226<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Phone:<span style="mso-spacerun: yes;"> </span>609 827 0194<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Fax:<span style="mso-spacerun: yes;"> </span>609 861 9257<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Email:<span style="mso-spacerun: yes;"> </span>kaighn@jerseybenefits.com<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;"><a href="http://www.jerseybenefits.com/">Http://www.jerseybenefits.com</a></span><span lang="en-US" style="font-family: Perpetua; language: en-US; mso-ansi-language: en-US;"><o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Transamerica Financial Advisors, Inc.<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">A registered Broker/Dealer<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">570 Carillon Parkway<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">St. Petersburg, FL<span style="mso-spacerun: yes;"> </span>33758-9053<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">800-245-8250<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Member FINRA & SIPC<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; language: en-US; mso-ansi-language: en-US;">Transamerica Financial Advisors, Inc. is <o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; language: en-US; mso-ansi-language: en-US;">not affiliated with Jersey Benefits Advi-<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Jersey Benefits Group, Inc<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">P.O. Box 1406<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Ocean City, N.J.<span style="mso-spacerun: yes;"> </span>08226<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Phone:<span style="mso-spacerun: yes;"> </span>609 827 0194<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Fax:<span style="mso-spacerun: yes;"> </span>609 861 9257<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;">Email: kaighn@jerseybenefits.com<o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-style: normal; language: en-US; mso-ansi-language: en-US;"><a href="http://www.jerseybenefits.com/">Http://www.jerseybenefits.com/</a><o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; language: en-US; mso-ansi-language: en-US;">All opinions expressed in this newsletter are <o:p></o:p></span></span></div>
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<span lang="en-US" style="font-family: Perpetua; language: en-US; mso-ansi-language: en-US;">solely those of John Kaighn & Jersey Benefits <o:p></o:p></span></span></div>
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John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-85090497997594689322012-10-04T10:33:00.001-04:002012-10-04T10:33:48.475-04:00<br />
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman","serif"; font-size: 24pt;">John H. Kaighn
Becomes a Member of the Financial Services Institute<o:p></o:p></span></b></div>
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<i style="mso-bidi-font-style: normal;"><span style="font-family: "Times New Roman","serif"; font-size: 18pt;">FSI Advocates
for Main Street Americans’ Access to Independent, Affordable Financial Advice<o:p></o:p></span></i></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman","serif";">Woodbine,
NJ – </span></b><span style="font-family: "Times New Roman","serif";">Local
financial advisor <a href="http://jerseybenefits.com/" target="_blank">John H. Kaighn</a>, of <a href="https://tfa.transamerica.com/wps/portal/isi/Public_Home/!ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3hnx1AvSx_fQD9jE-cQk5AgX0MjAwjQDwfpMIs3wAEcDfT9PPJzU_ULsvPKAaqfQa4!/dl3/d3/L2dBISEvZ0FBIS9nQSEh/" target="_blank">Transamerica Financial Advisors, Inc.,</a>
today announced he has become a member of the Financial Services Institute
(FSI) in Washington, D.C. FSI advocates for Main Street Americans’ access to
unbiased, affordable financial advice, delivered by a growing network of over 35,000
independent financial advisor members.<b style="mso-bidi-font-weight: normal;"> <o:p></o:p></b></span></div>
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<span style="font-family: "Times New Roman","serif";">“I am proud to become
a member of the FSI, an organization that works hard every day, to protect my
clients’ access to quality financial advice,” <b style="mso-bidi-font-weight: normal;">said Kaighn.</b> “FSI helps educate elected officials and regulators on
what Americans need from financial advisors and how the industry works with
clients to secure their financial futures. They also help ensure that I can
continue to offer my clients and potential clients the advice they need.”<o:p></o:p></span><br />
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<span style="font-family: "Times New Roman","serif";">“We are very
pleased to have <a href="http://www.johnkaighn.com/" target="_blank">John H. Kaighn</a> as a new member,” <b style="mso-bidi-font-weight: normal;">said FSI President & CEO Dale E. Brown.</b> “Our advocacy is only
as effective as our engaged members. </span><span style="color: windowtext; font-family: "Times New Roman","serif";">And conscientious </span><span style="font-family: "Times New Roman","serif";">advisors
like John help bring real-life experience to our efforts. We plan to work
closely with Mr. Kaighn as we advocate for independent financial advisors and
the hard-working clients they serve.”<o:p></o:p></span><br />
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<b><span style="font-family: "Times New Roman","serif";">About the
<a href="http://www.financialservices.org/" target="_blank">Financial Services Institute</a> (FSI):</span></b><span style="font-family: "Times New Roman","serif"; mso-bidi-font-weight: bold;"> FSI is an advocacy organization for independent
financial services firms and independent financial advisors. Established in
January 2004, we have well over 100 broker-dealer members and over 35,000
financial advisor members. Our member firms have upwards of 180,000 financial
advisors affiliated with them. Our mission is to create a more responsible
regulatory environment for independent broker- dealers and their affiliated independent
financial advisors through effective advocacy, education and public awareness.
And our strategy includes involvement in FINRA governance, constructive
engagement in the regulatory process and effective influence on the legislative
process. For more information, please visit </span><a href="http://www.financialservices.org/"><span style="font-family: "Times New Roman","serif"; mso-bidi-font-weight: bold;"><span style="color: blue;">www.financialservices.org</span></span></a><span style="font-family: "Times New Roman","serif"; mso-bidi-font-weight: bold;">. <o:p></o:p></span><br />
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<br />John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-32588384136732253682012-09-19T11:18:00.002-04:002012-11-13T15:26:58.928-05:00What's Not To Like?The scripted political conventions are now history, the Federal Reserve has announced a plan to buy $40 billion a month of agency mortgage-backed securities (QE3), oil prices are on the rise, and the market has been rising steadily throughout the year. One could ask, "what's not to like?" The messages are quite mixed and are emblematic of the debate the country is having with itself. <br />
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The advent of <a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=8&cad=rja&ved=0CEYQtwIwBw&url=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fee95102a-fdba-11e1-8fc3-00144feabdc0.html&ei=0NZZUJiRBNPq0QHosIGwDg&usg=AFQjCNHF6nZKofbGQPiJBpFDXM49sdzf1g" target="_blank">QE3</a> certainly looks political in nature, because it could be construed to help the current administration, except when you factor in the fact that Ben Bernanke is a Republican. Of course, since Romney wants to replace Ben if he wins the election, perhaps it is just a case of Ben seeking job security. One would hope the Fed's motivations are not quite that transparent.<br />
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The election is being framed as a contrast between Big Government vs Limited Government, yet I still can't quite understand how Romney is going to create jobs, since that is what private industry does, unless of course he plans to add government jobs. Oh yeah, that's right, it is the conditions which have to be altered to stimulate the Great American Jobs Machine. So, what he is really going to do is cut down on regulation and limit the agencies which are creating laws and regulations which are chocking us. At least I hope I understand that to be the case.<br />
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The President likes to remind us daily how his administration has created 4 million new private sector jobs, which sounds good as a sound bite, until you realize the economy lost 8 million jobs during the recession. Of course, we all know that is George Bush's fault, because he gave all those millionaires tax cuts and sank the economy. Hey, but don't worry, <a href="http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf" target="_blank">Dodd and Frank</a> have given us a brand new set of regulations designed to stop any of those Wall Street types from "rolling the dice" on home ownership in the US. Oops, I think those were Barney's words, right????<br />
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So, I heard a guest on CNBC use a football analogy to describe the election, just after the left released a video recording which would have you believe Romney insulted 1/2 the US population as not being responsible for themselves. He said that right now there are 2 minutes left in the 4th quarter, with Romney down 10 points and Sanchez as the quarterback for Team Romney. I wonder what odds the fantasy football fans give Romney? The media is calling it dead even, but I really think I should contact Rachel Maddow and get her take on things. I am sure she will be as spot on with an analysis of the election, as she was with her analysis of Chris Christie's speech at the RNC.<br />
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The Republic will survive, whatever the outcome of this election, but it is hard to say whether there will be a clear mandate for either party to do anything. Perhaps the mandate will be to compromise. After all, once the election is over, the stock market won't have a wall of worry with which to contend, but rather investors will be concerned with sailing right over the fiscal cliff we've all heard so much about. Oh well, that's another day! John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-7901926956380011222012-08-27T11:56:00.000-04:002012-09-06T09:57:56.969-04:00Which Simple Rule for Monetary Policy?<br />
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Monday, August 27, 2012</h2>
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By John B Taylor</div>
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Economics One Blog</div>
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The discussion of "Simple Rules for Monetary Policy" at last week’s FOMC meeting is a promising sign of a desire by some to return to a more rules-based policy. As described in the FOMC <a href="http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20120801.pdf" style="color: #0066cc;">minutes</a>, the discussion was about many of the questions raised in recent public speeches by FOMC members <a href="http://www.federalreserve.gov/newsevents/speech/yellen20120411a.htm" style="color: #0066cc;">Janet Yellen</a> and <a href="http://www.newyorkfed.org/newsevents/speeches/2012/dud120524.html" style="color: #0066cc;">Bill Dudley</a>. A big question is which simple rule?<br /><br />Yellen and Dudley discussed two rules. Using Yellen’s notation these are<br /><br />R = 2 + π + 0.5(π - 2) + 0.5Y<br />R = 2 + π + 0.5(π - 2) + 1.0Y<br /><br />where R is the federal funds rate, π is the inflation rate, and Y is the GDP gap. Yellen and Dudley refer to the first equation as the Taylor 1993 Rule and the second equation as the Taylor 1999 Rule, though the second equation was only examined along with other rules, not proposed or endorsed, in a paper I published in 1999.<br /><br />The two rules are similar in many ways. Both have the interest rate as the instrument of policy, rather than the money supply. Both are simple, having two and only two variables affecting policy decisions. Both have a positive weight on output. Both have a weight on inflation greater than one. Both have a target rate of inflation of 2 percent. Both have an equilibrium real interest rate of 2 percent.<br /><br />The two rules differ substantially, however, in their interest rate recommendations as this amazing chart constructed last April by Bob DiClementi of Citigroup illustrates. The chart shows two rules along with historical and projected values of the federal funds rate. The rule labeled “Taylor” by DiClementi is the rule I proposed. The other rule is labeled “Yellen” by DiClementi because it corresponds to the rule apparently favored by Yellen. The projected values are the views of FOMC members.<br /><br /><div class="separator" style="clear: both; text-align: center;">
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Observe that the first rule never gets much below zero, while the second rule drops way below zero during the recent recession and delayed recovery. The difference continues though it gets smaller into the future. Note that the projected interest rates by FOMC members span the two rules.<br /><br />This big difference between the two rules in the graph can be traced to two factors: (1) The second rule has a much larger GDP gap, at least as used by Yellen. (2) The second rule has a much bigger coefficient on the GDP gap.<br /><br />In my view, a smaller value of the GDP gap and a smaller coefficient are more appropriate. This view is based on a survey of estimated gaps by the San Francisco Fed and simulations of models over the years. But given the striking differences in DiClememti's chart, more research on the issue by people in and out of the Fed would certainly be very useful. </div>
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John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-78728517915239375732012-07-09T08:38:00.000-04:002012-08-07T08:44:02.712-04:00JERSEY BENEFITS ADVISORS CLIENT NEWSLETTER SUMMER 2012<br />
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MARKET WATCH</h2>
In my last newsletter I talked about the possibility the second quarter might be a good time to deploy some capital into the markets, especially since the first quarter was not very volatile, and the major indices had produced gains many investors would be pleased to garner for a full year. As the European crisis played out over the last three months paring the Euro 12% against the dollar, oil and gas prices declined by 12.5%, and emerging markets shed about 18% of their value. Meanwhile, US markets revisited their December 31, 2011 level, briefly, and then slowly climbed back to a point that is quite respectable for mid year.<br />
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<span lang="en-US">As we closed the books on the first half of the year, the DJIA*, at 12,880.09, has gained 5.42% year to date, even though it fell 2.5% in the second quarter. The S&P 500* ended at 1,362.16 for a 8.31% gain year to date, while dropping 3.3% in the second quarter. The NASDAQ* is still sporting a double digit gain for the year at 12.66%, even though it gave back over 5% during the second quarter. Needless to say, the markets never just go up in a straight <o:p></o:p></span>line. My guess is there will probably be more chances to invest, if you have been sitting on the sidelines during the first half of the year, although, there is some talk of a possible summer rally this year, due to a couple of events that transpired the last few days of June. </div>
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<span lang="en-US">The European Union took an unexpected step toward solving the crisis which has embroiled the Euro since 2010, by agreeing to create a banking union. Rather than having the funds flow through profligate governments, they’ve agreed to have money flow right to the banks, more than likely through a German controlled entity. Also, the Supreme Court issued a ruling on the Patient Protection and Affordable Care Act, basically upholding the mandate for all Americans to buy insurance, not on the premise of the Commerce Clause, but rather by stating the mandate is a tax, which is within the power of Congress. While neither of these events bring closure to these issues, the European summer vacation season should keep the debt issues of Spain, Italy, Portugal & Greece at b</span>ay, while it will take a Republican Presidential victory and control of both Houses of Congress to allow Mitt Romney to make good on his pledge to repeal the act. Hence, there is a good chance we could have a better market this summer, rather than revisiting the doldrums experienced during the last two summers. </div>
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<span lang="en-US">Manufacturing had been a bright spot for the US economy, expanding for 34 consecutive months, until the most recent report, which showed a drop off for the month of June. The index had a reading of 49.7 down from a 53.5 reading in May. A number below 50 indicates contraction in the sector. The interconnectedness of the various markets around the world means the pain being felt in Europe translates to less exports from China and other emerging market economies being purchased by Europeans. It also means less income for the Chinese and the other emerging market economies who in turn purchase a large percentage of our exports. Another rather large percentage of our manufactured products are usually exported to Europe. <o:p></o:p></span></div>
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<span lang="en-US">The 3rd revised GDP estimate for the first quarter remains at 1.9%. The employment report for June indicated the economy added an anemic net 80,000 jobs and the unemployment rate remained 8.2% The report will lead to calls for more stimulus. This has certainly been a less than stellar expansion, thus far. Perhaps this will be a longer than average expansion this time around. </span></div>
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<b>Privacy Policy And Variable Annuity Update</b></h2>
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<span lang="en-US"> <o:p></o:p></span><span style="font-family: Perpetua; font-weight: bold; text-align: center;">PRIVACY POLICY</span></div>
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<span lang="en-US">At Jersey Benefits Advisors and Jersey Benefits Group, Inc. protecting your privacy is very important to us. We want you to understand what information we collect and how we use it. We collect and use information from you on applications and other forms as well as information about financial transactions with us and from non-affiliated third parties. This “nonpublic personal information” is obtained in connection with providing a financial product or service to you.<o:p></o:p></span></div>
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<span lang="en-US">We do not disclose any nonpublic personal information about you without your express consent, except as permitted by law. We may disclose the nonpublic personal information we collect to persons or companies that perform services on our behalf. <o:p></o:p></span></div>
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<span lang="en-US">We restrict access to your nonpublic personal information and only allow disclosures to persons and companies as permitted by law to assist in providing products or services to you. <o:p></o:p></span></div>
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<span lang="en-US">We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information at all times.<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-weight: bold; language: en-US; mso-ansi-language: en-US;">VA BENEFIT EXCHANGE</span><span lang="en-US"><o:p></o:p></span></div>
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<span lang="en-US">You usually know you’ve got something good when someone offers to buy out your interest. This is essentially the position in which some holders of older variable annuities with Guaranteed Minimum Income Benefits (GMIB) find themselves . While the offer might be a good deal for a client who purchased the annuity as a way to guarantee a stream of income during retirement, but has had something change, so now they need cash, most clients who purchased the annuity for retirement income will be better served remaining with their current contract. <o:p></o:p></span></div>
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<span lang="en-US">AXA Equitable Life Insurance and Transamerica Life Insurance Company are two companies who have unveiled programs to “buy out” some existing contract holders in a move that will help reduce the companies’ liabilities. Most of the products being offered the buy out from Transamerica have GMIB’s of 6% compounded annually, and their cost for the rider is about half the cost of the current rider. “The fact that insurers are willing to offer the arrangement only emphasizes the true value of the living benefit”, said Andrew Murdoch, an advisor with Somerset Wealth Strategies, Inc. <o:p></o:p></span></div>
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<span lang="en-US">According to Dave Paulsen, CEO of Transamerica Capital, Inc., “This offer is completely optional for our customers, and we don’t require anybody to use it. For those who will benefit by accepting the offer, there is some benefit for Transamerica, as well, as some older capital-intensive assets would be removed from our books.” Recently, VA providers have been increasing the pricing of GMIB’s due to hedging costs. <o:p></o:p></span></div>
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<span lang="en-US">Many people have multiple retirement accounts with various employers, because they have changed jobs. One of the problems with this is the duplication of objectives within each account. Having a lot of funds, in several accounts, does not always provide the diversification we aim to achieve. It also makes it very difficult to keep track of your assets, when you have statements coming from multiple brokers and mutual fund companies. <o:p></o:p></span></div>
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<span lang="en-US">Many employees find themselves or a family member in the situation of having multiple employer plans. Most people can consolidate these assets into one diversified IRA or ROTH IRA. Call me if you would like to consolidate your accounts. I will analyze the assets, make recommendations and help you with the paperwork. <o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7pt;">* The S&P 500, the DJIA and the NASDAQ are unmanaged indexes that are widely used as indicators of Market Trends.</span><span style="font-family: Perpetua; font-size: 7pt;"> </span><span style="font-family: Perpetua; font-size: 7pt;">Past performance does not guarantee future results.</span><span style="font-family: Perpetua; font-size: 7pt;"> </span><span style="font-family: Perpetua; font-size: 7pt;">The performance of these indexes does not reflect fees and charges associated with investing.</span><span style="font-family: Perpetua; font-size: 7pt;"> </span><span style="font-family: Perpetua; font-size: 7pt;">It is not possible to invest directly in an index. </span><span lang="en-US" style="font-family: Perpetua; font-size: 7.0pt; language: en-US; mso-ansi-language: en-US; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;">Dollar Cost Averaging through a systematic savings plan is an excellent way to build an account without a sizeable initial investment. Saving a portion of our pay each month is very important. Company sponsored pension plans are one method to save and should be used for retirement. Other systematic investment accounts, SUCH AS ROTH IRA’S, TRADITIONAL IRA’S, COVERDELL ACCOUNTS, 529 PLANS, BROKERAGE ACCOUNTS AND ANNUITIES can also be opened, and debited directly from your checking or savings account. For more information, just call to set up an appointment. REFERRALS ARE ALWAYS WELCOME. </span></h2>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;"><a href="http://www.jerseybenefits.com/" target="_blank">Jersey Benefits Advisors</a><o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">P.O. Box 1406<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Ocean City, N.J. 08226<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Phone: 609 827 0194<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Fax: 609 861 9257<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Email: kaighn@jerseybenefits.com<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Http://www.jerseybenefits.com</span><span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt; language: en-US; mso-ansi-language: en-US;"><o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt; language: en-US; mso-ansi-language: en-US;">Securities offered through:<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Transamerica Financial Advisors, Inc.<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">A registered Broker/Dealer<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">570 Carillon Parkway<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">St. Petersburg, FL 33758-9053<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">800-245-8250<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Member FINRA & SIPC<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt; language: en-US; mso-ansi-language: en-US;">Transamerica Financial Advisors, Inc. is <o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt; language: en-US; mso-ansi-language: en-US;">not affiliated with Jersey Benefits Advi-<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt; language: en-US; mso-ansi-language: en-US;">sors.<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt; language: en-US; mso-ansi-language: en-US;">Third Party Administration and Insurance <o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt; language: en-US; mso-ansi-language: en-US;">Services offered through:<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;"><a href="http://www.jerseybenefits.com/" target="_blank">Jersey Benefits Group, Inc</a><o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">P.O. Box 1406<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Ocean City, N.J. 08226<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Phone: 609 827 0194<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Fax: 609 861 9257<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Email: kaighn@jerseybenefits.com<o:p></o:p></span></div>
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<span lang="en-US" style="font-family: Perpetua; font-size: 7.3pt;">Http://www.jerseybenefits.com/<o:p></o:p></span></div>
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<br />John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-66751183982891175252012-06-26T21:17:00.000-04:002012-06-26T21:17:14.298-04:00SEC Official Warns Insurers about VA Benefit Exchanges<br />
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Nash says switch must be in best interests of contract holders</div>
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By <a href="http://www.investmentnews.com/apps/pbcs.dll/personalia?ID=dmercado" style="color: #9e0b0f; font-weight: bold; text-decoration: none;">Darla Mercado</a></div>
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June 26, 2012 4:26 pm ET</div>
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An official with the Securities and Exchange Commission called upon life insurers to protect their legacy variable annuity clients — and to make sure that swapped benefits are suitable.</div>
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<li style="color: #9e0b0f; font-size: 14px; line-height: 18px; margin: 5px 0px; padding: 0px;"><a href="http://www.investmentnews.com/article/20120625/FREE/120629955" style="color: black; font-size: 12px; text-decoration: none;">Finra: brokers must update client info even if they keep their VA</a></li>
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“When a company discontinues the sale of a contract, one option is to orphan the contract, allowing investments to dwindle,” said Susan Nash, associate director for disclosure and insurance product regulation at the SEC. “I urge you to focus on the long-term interests of your existing contract owners, as well as the reputation of your company.”</div>
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She spoke Tuesday morning at the Insured Retirement Institute's Government, Legal and Regulatory Conference.</div>
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Ms. Nash also commented on a new practice among life insurers with large books of legacy variable annuity business: the offer to clients to drop accumulated living or death benefits in exchange for an incentive, such as an increase in account value.</div>
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“In some cases, incentives may be offered to contract holders when they relinquish contracts that have living benefits,” Ms. Nash said. “These exchanges may raise questions of suitability.”</div>
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She added that “there is often an easily identified class of investors for whom the switch would not be advantageous,” namely those who could expect to use their living-benefit features.</div>
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“I encourage you to closely scrutinize these exchange transactions from the investors' viewpoint what exactly is being given up,” Ms. Nash said.</div>
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Ms. Nash also called for clear disclosure to clients and advisers on variable annuity contracts. Such disclosure should “provide information to contract purchaser that helps them make informed purchase decisions,” as well as “provide information to existing contract owners to help them understand how their investment has performed and changed,” she said.</div>
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The SEC is also boosting its staff, searching for an expert on derivatives to advise the department on “novel and complex investment products, including novel variable product designs,” Ms. Nash said.</div>
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The agency recently bolstered its expertise on exchange-traded funds in January when it brought in Barry Pershkow as senior special counsel in its investment management division.</div>John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-19731255721341591402012-06-04T12:02:00.000-04:002012-06-04T12:02:36.073-04:00A.M. Best Affirms Ratings of AEGON N.V.’s U.S. Operations, Upgrades Ratings of Transamerica Life Canada<br />
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<span style="color: #333333; font-size: 13px; line-height: 18px;">I came across this article on Business Wire concerning Aegon, the parent company of Transamerica. I thought it would be of interest to clients who are invested with me, as well as anyone who might be looking for an Advisor to help them with their investments. There is nothing like a 3rd party endorsement of the company through which you place your business.</span></h1>
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<span style="color: #333333; font-size: 13px; line-height: 18px;">OLDWICK, N.J.--(</span><span class="author source-org vcard" itemid="http://www.businesswire.com" itemprop="provider publisher copyrightHolder" itemscope="itemscope" itemtype="http://schema.org/Organization" style="color: #333333; font-size: 13px; line-height: 18px;"><span class="org fn" itemprop="name"><a href="http://www.businesswire.com/" itemprop="url" style="color: #2e5173; text-decoration: none;">BUSINESS WIRE</a></span></span><span style="color: #333333; font-size: 13px; line-height: 18px;">)--</span><b style="color: #333333; font-size: 13px; line-height: 18px;">A.M. Best Co.</b><span style="color: #333333; font-size: 13px; line-height: 18px;"> </span><span style="color: #333333; font-size: 13px; line-height: 18px;">has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of the life/health subsidiaries of</span><span style="color: #333333; font-size: 13px; line-height: 18px;"> </span><b style="color: #333333; font-size: 13px; line-height: 18px;">AEGON N.V.</b><span style="color: #333333; font-size: 13px; line-height: 18px;">’s (AEGON) (Netherlands) [NYSE: AEG] U.S. operations. AEGON’s U.S. life/health companies are collectively referred to as</span><span style="color: #333333; font-size: 13px; line-height: 18px;"> </span><b style="color: #333333; font-size: 13px; line-height: 18px;">AEGON USA Group</b><span style="color: #333333; font-size: 13px; line-height: 18px;"> </span><span style="color: #333333; font-size: 13px; line-height: 18px;">(AEGON USA). In addition, A.M. Best has affirmed the debt ratings of “aa-” of the outstanding notes issued under the funding agreement-backed securities (FABS) programs sponsored by</span><b style="color: #333333; font-size: 13px; line-height: 18px;">Monumental Life Insurance Company</b><span style="color: #333333; font-size: 13px; line-height: 18px;"> </span><span style="color: #333333; font-size: 13px; line-height: 18px;">(Cedar Rapids, IA), a member of AEGON USA. The outlook for all the above ratings is stable.</span></h1>
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A.M. Best also has upgraded the FSR to A- (Excellent) from B++ (Good) and ICR to “a-” from “bbb+” of <b>Transamerica Life Canada</b> (TLC) (Toronto, Ontario), an indirect, wholly owned subsidiary of AEGON. The outlook for both ratings has been revised to stable from positive.</div>
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Additionally, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of <b>Canadian Premier Life Insurance Company </b>(CPL), a subsidiary of AEGON N.V. The outlook for these ratings is stable. (See below for a detailed listing of the companies and ratings.)</div>
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The affirmation of AEGON USA’s ratings reflects its favorable earnings performance and risk-adjusted capitalization during 2011. International Financial Reporting Standards (IFRS) earnings for AEGON Americas (which includes its domestic, Canadian and Latin American operations) were $933 million for year-end 2011. Although AEGON USA recorded a 2011 U.S. statutory net loss of 2.5 billion as a result of unique statutory accounting requirements for reinsurance transactions, which dictate that recapture losses are recognized through income, surplus was not negatively impacted as reinsurance treaty gains are re-classed to surplus. The group’s risk-adjusted capitalization remained strong as its year-end 2011 regulatory capital ratio improved slightly over the previous year and is significantly higher than historical levels.</div>
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AEGON USA’s stand-alone credit profile considers its strong market position in a number of U.S. life and annuity market segments, a large multi-channel distribution platform, diversified sources of earnings and a strong positive cash flow. The organization also benefits from meaningful economies of scale, strong brand name recognition and effective asset/liability and liquidity management. AEGON USA’s ratings also recognize A.M. Best’s assessment of the financial strength and support of AEGON. As a result, the stand-alone ratings of AEGON USA receive rating enhancement in consideration of AEGON’s overall creditworthiness and the strategic and financial importance of the U.S. operations to AEGON.</div>
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A.M. Best notes that the group has taken various initiatives to de-risk its balance sheet and improve its risk profile. The quality of the investment portfolio was upgraded by reducing hedge fund holdings and increasing positions in treasuries and other short-term investments. The institutional spread-based business (primarily guaranteed interest contracts, funding agreements and funding agreement-backed securities) remains in run off to reduce exposure to credit risk, lower required capital and shift to a more balanced mix of business between spread and fee-based products. AEGON USA also reduced its exposure to equity market risk by increasing the size of the macro hedge covering its variable annuity business.</div>
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Despite this improved risk profile, A.M. Best notes the possibility of additional material credit losses within the organization’s general account investment portfolio. Although pre-tax IFRS asset impairments declined to $352 million in 2011 from $506 million in 2010, additional realized losses and impairments are likely to occur in 2012, given AEGON USA’s sizable structured asset portfolio and exposure to direct commercial real estate. In addition, the group’s substantial variable annuity portfolio exposes its earnings to volatility, as declines in the capital markets would translate to lower fee income and higher required reserves on secondary guarantees. While the additional equity hedging will serve to reduce volatility, AEGON USA’s earnings remain somewhat correlated to capital market performance.</div>
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In August 2011, AEGON closed the divestment of its life reinsurance business,<b> </b>Transamerica Reinsurance (TARe), to <b>SCOR SE</b>, a global reinsurance company. Although A.M. Best notes that the removal of the TARe earnings has resulted in a contraction of AEGON USA’s operating profile, A.M Best views positively the divestiture as it lowers the organization’s required capital, reduces the need to arrange redundant reserve (XXX/AXXX) financing and allows senior management to focus on its core businesses of life insurance and asset accumulation.</div>
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The ratings of TLC reflect the enhanced scope of its overall business profile through market positions maintained in its core business lines, its multi-channel distribution platform, reduced risk profile and adequate capitalization. In addition, A.M. Best views positively TLC’s enhanced risk management practices, including more comprehensive hedging strategies and its decision to exit portions of its segregated funds product offerings for new business. A.M. Best also notes that while TLC recorded a significant 2011 net loss on a Canadian IFRS basis, the company did produce a small net gain on a Universal IFRS basis, which is how TLC’s performance is measured by AEGON. The ratings also consider the significant historical financial support (including the 2011 CAD 200 million capital contribution) TLC received from AEGON. As a result, the stand-alone ratings of TLC receive rating enhancement in consideration of AEGON’s overall creditworthiness and the strategic and financial importance of the Canadian life operations to AEGON.</div>
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A.M. Best believes AEGON USA, TLC and CPL are well positioned at their current rating levels for the foreseeable future.</div>
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Factors that could result in negative rating actions for these entities include a significant and sustained decline in their consolidated risk-adjusted capitalizations as measured by Best’s Capital Adequacy Ratio (BCAR) model, net operating performances that do not meet A.M. Best’s expectations or a decline in the creditworthiness of AEGON, which could constrain its future financial support for these entities.</div>
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The FSR of A+ (Superior) and ICRs of “aa-” have been affirmed for the following members of <b>AEGON USA Group</b>:</div>
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<li class="bwlistitemmargb" style="margin-bottom: 10px; padding: 0.25em 0px;"><b>Transamerica Life Insurance Company</b></li>
<li class="bwlistitemmargb" style="margin-bottom: 10px; padding: 0.25em 0px;"><b>Transamerica Financial Life Insurance Company</b></li>
<li class="bwlistitemmargb" style="margin-bottom: 10px; padding: 0.25em 0px;"><b>Western Reserve Life Assurance Co. of Ohio</b></li>
<li class="bwlistitemmargb" style="margin-bottom: 10px; padding: 0.25em 0px;"><b>Monumental Life Insurance Company</b></li>
<li class="bwlistitemmargb" style="margin-bottom: 10px; padding: 0.25em 0px;"><b>Stonebridge Life Insurance Company</b></li>
<li class="bwlistitemmargb" style="margin-bottom: 10px; padding: 0.25em 0px;"><b>Transamerica Advisors Life Insurance Company</b></li>
<li class="bwlistitemmargb" style="margin-bottom: 10px; padding: 0.25em 0px;"><b>Transamerica Advisors Life Insurance Company of New York</b></li>
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The following debt ratings have been affirmed:</div>
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<b>Monumental Global Funding Limited—</b> “aa-” program rating</div>
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-- “aa-” on all outstanding notes issued under the program</div>
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<b>Monumental Global Funding II—</b>”aa-” program rating</div>
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-- “aa-” on all outstanding notes issued under the program</div>
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<b>Monumental Global Funding III—</b>”aa-” program rating</div>
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-- “aa-” on all outstanding notes issued under the program</div>
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The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized includes: “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology can be found at <a href="http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ambest.com%2Fratings%2Fmethodology&esheet=50237953&lan=en-US&anchor=www.ambest.com%2Fratings%2Fmethodology&index=1&md5=00aa12ef0807be37c75f2fb664736fc2" style="color: #2e5173; text-decoration: none;" target="_blank">www.ambest.com/ratings/methodology</a>.</div>
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<b>Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit </b><a href="http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ambest.com%2F&esheet=50237953&lan=en-US&anchor=www.ambest.com&index=2&md5=d7af29ce0fb2863a5abc70f184d927ed" style="color: #2e5173; text-decoration: none;" target="_blank">www.ambest.com</a><span class="bwuline" style="text-decoration: underline;">.</span></div>
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<b>Copyright © 2012 by A.M. Best Company, Inc.</b> <b>ALL RIGHTS RESERVED.</b></div>
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Contacts</h2>
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<b>A.M. Best Co.</b><br /><b>Robert Adams</b><br /><b>Senior Financial Analyst</b><br /><b>908-439-2200, ext. 5225</b><br /><a href="mailto:robert.adams@ambest.com" style="color: #2e5173; text-decoration: none;" target="_blank">robert.adams@ambest.com</a><br /><b>or</b><br /><b>William Pargeans</b><br /><b>Assistant Vice President</b><br /><b>908-439-2200, ext. 5359</b><br /><a href="mailto:william.pargeans@ambest.com" style="color: #2e5173; text-decoration: none;" target="_blank">william.pargeans@ambest.com</a><br /><b>or</b><br /><b>Rachelle Morrow</b><br /><b>Senior Manager, Public Relations</b><br /><b>908-439-2200, ext. 5378</b><br /><a href="mailto:rachelle.morrow@ambest.com" style="color: #2e5173; text-decoration: none;" target="_blank">rachelle.morrow@ambest.com</a><br /><b>or</b><br /><b>Jim Peavy</b><br /><b>Assistant Vice President, Public Relations</b><br /><b>908-439-2200, ext. 5644</b><br /><a href="mailto:james.peavy@ambest.com" style="color: #2e5173; text-decoration: none;" target="_blank">james.peavy@ambest.com</a></div>
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Recent Stories from A.M. Bes</h2>
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</div>John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-17021780488283326382012-05-21T12:04:00.002-04:002012-05-21T12:04:39.166-04:00Seven Ways to Borrow for College<br />
Look for borrower protection, consider credit unions and apply for multiple loans.<br />
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May 21, 2012 9:54 AM<br />
By Lynn O’Shaughnessy<br />
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As recently as the early 1990s, most students didn't require student loans, but today about two-thirds of students end up borrowing for college.<br />
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While families are increasingly relying on loans, many teenagers and their families fail to make the best loan choices. <br />
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The latest student loan year began July 1 so this is an excellent time for you and your clients to become familiar with the intricacies of college debt. Families that understand their options are more likely to make smarter decisions and ultimately cut the cost of college.<br />
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Here are seven tips to get you up to speed.<br />
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<span style="font-weight: bold;">1. The best college loan for students is the Stafford Loan.</span><br />
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The Stafford Loan is designed exclusively for students, who must attend college at least halftime to qualify. Regardless of credit scores, all students receive the same fixed rate and protections.<br />
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There is a limit on the amount of money that students can borrow each year through the Stafford Loan program. Here are the maximum amounts: <br />
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Freshmen: $5,500<br />
Sophomore: $6,500<br />
Juniors: $7,500<br />
Seniors: $7,500<br />
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There are two types of Stafford Loans—a subsidized and unsubsidized version. The subsidized loan is the more valuable one because a student with one of these will not be responsible for the interest that accrues while they are in school. The federal government covers the interest payments. <br />
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The interest rate on the unsubsidized loan is 6.8 percent. As I write this column, the subsidized interest rate was scheduled to increase from 3.4 percent to 6.8 percent though Congress has been debating whether to maintain the lower rate. <br />
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Students will learn if they qualify for a subsidized Stafford when they receive their financial aid packages. The decision depends on the financial wherewithal of the family and the cost of the institution. The greater the cost of the school, the more likely a student will qualify for the subsidized loan. Six percent of subsidized Stafford borrowers come from households with incomes in excess of $100,000 and 24 percent have family incomes between $50,000 and $100,000. <br />
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<span style="font-weight: bold;">2. Look for borrower protection.</span><br />
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I'd argue that the most attractive feature of the Stafford is its built-in safety net, which is a plus for students who worry that they will end up underemployed or without a job and won't be able to repay their loans. <br />
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This won’t be a problem with the Stafford as long as students apply for the <a href="http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp">federal <span style="font-weight: bold;">Income-Based Repayment Plan</span> or IBRP</a>. Essentially this program allows qualified students to repay their loan based on what they can afford not what they owe.<br />
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<span style="font-weight: bold;">3. Consider parent options.</span><br />
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While the Stafford is a no brainer for students, parents' choices are more complicated. Parents can borrow through a home equity line, the federal PLUS Loan for Parents or cosign a private student loan for their child. Some parents also dip into their retirement accounts, which I certainly wouldn't recommend—and I'm sure you wouldn't either. <br />
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The PLUS Loan offers parents a fixed interest rate of 7.9 percent and charges a 4 percent fee on the loan amount. Parents can begin paying 60 days after the loan is disbursed or wait until six months after the child graduates, stops attending school or drops below half-time status. <br />
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Because the PLUS interest rate is high in this low interest-rate environment, using a home equity line of credit will probably be cheaper. The caveat is that none of us knows what will happen to interest rates in the future.<br />
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For those who itemize, the interest on equity lines is tax deductible. In anticipation of having to borrow to pay for my own children's degree, my husband and I took out a line of credit with Charles Schwab years ago at one percentage point below prime. My daughter has graduated from college and my son is halfway through and I haven't had to touch it yet, but that's where I would turn if I needed cash for college. <br />
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<span style="font-weight: bold;"><br /></span><br />
<span style="font-weight: bold;">4. Check out credit unions. </span><br />
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Credit unions are relatively new players in the private loan niche and they are well worth taking a look at. The non-profit credit unions are routinely going to be the cheapest alternative. While rates can change, recently the rates on private loan rates through credit unions were as low as 4.7 percent. An excellent place to look for college credit union loans is cuStudentLoans.org.<br />
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<span style="font-weight: bold;">5. Check school credit unions. </span><br />
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Some colleges and universities maintain their own credit unions to tap for student loans. Institutions with credit unions include Harvard, University of Chicago, Amherst, Mount Holyoke Smith, Princeton, MIT and the California State University system.<br />
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<span style="font-weight: bold;">6. Apply for multiple loans.</span><br />
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Unfortunately, you won't know what private loan rate you will qualify for if you don't actually go through the process of applying. Unfortunately, many parents do not apply for multiple loans, according to Sue Kim, the chief executive officer of AllTuition, which is a private loan comparison site. She told me that shoppers look at many loans on AllTuition, but rarely apply for more than one. <br />
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If you're interested in comparing private college loans, try these three comparison sites:<br />
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<a href="https://www.alltuition.com/"><span style="font-weight: bold;">Alltuition</span></a><br />
<a href="http://www.simpletuition.com/landing/certifiedprivateloans.html"><span style="font-weight: bold;">CertifiedPrivateLoans.com</span></a> <br />
<a href="http://www.estudentloan.com/"><span style="font-weight: bold;">eStudentLoan</span></a><br />
<span style="font-weight: bold;"><br />7. Don't over borrow. </span><br />
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That advice might seem imminently doable to follow, but when a teenager is in the midst of selecting a college it can be tough to remain financially disciplined. A parent, for instance, recently asked me about her daughter who wanted to borrow $27,000 a year for school. I told the mom that this would amount to financial suicide and recommended that the daughter find a different school. After responding to the mom’s email with my advice, I never heard back from her.John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-26584096234928255152012-04-10T21:51:00.000-04:002012-04-26T21:56:34.407-04:00Jersey Benefits Advisors Investor Newsletter Spring 2012<b>Market Watch</b><br />
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In the early weeks of April, much of the vegetation here in the Mid Atlantic region seems to be springing to life a bit ahead of schedule. It almost makes you feel like it is safe to put the summer plants outside, but the wary gardener knows a nasty frost can rear its ugly head at anytime in this very changeable season. With the best quarterly start for the markets since 1998, the prudent investor should also realize there are always dangers lurking ,when the markets jump off to such a stellar start.
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At the end of the first quarter, the Dow Jones Industrial Average* closed at 13,212.04, which is an 8.14% gain. Meanwhile, the S&P500* ended at 1,408.47 posting an advance of 12%. Not to be outdone, the NASDAQ* roared to a close of 3,091.57 which was an eye popping 18.67% year to date increase. Needless to say, there is the distinct possibility there may be a bit of a pullback from these levels as we progress through the spring. This is in keeping with the natural ebb and flow of the markets, as investors evaluate the forces that have an effect on their psyche and decision making.<br />
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<span style="language: EN; mso-ansi-language: EN;">As we head
into Easter, a bit of a pullback has already begun, and the same concerns we’ve
discussed before are still very much in the minds of investors.<span style="mso-spacerun: yes;"> </span>As I am writing this, the markets are
reacting to concerns about the message in the FOMC minutes released this
week.<span style="mso-spacerun: yes;"> </span>While the Fed is still committed
to holding interest rates at their current level until 2014, one statement in
the report concerned the lack of a need for any more quantitative easing (QE),
and so some investors started selling, because of their concerns the Fed won’t
be quite so accommodating.<span style="mso-spacerun: yes;"> </span>Yet, a less
than accommodating Fed can also be read as a sign of economic improvement.<span style="mso-spacerun: yes;"> </span>It just depends on your particular point of
view.<o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">There have
been many positive signs of economic improvement, which is why the markets
performed so well in the first quarter.<span style="mso-spacerun: yes;">
</span>As the employment picture slowly improves, more people are beginning to
feel confident that the economy is truly in expansion mode.<span style="mso-spacerun: yes;"> </span>Demand for products continues to increase,
with auto sales being the most recent indicator that the automobile industry is
making a comeback.<span style="mso-spacerun: yes;"> </span>Even with the setback
from
t<span style="language: EN; mso-ansi-language: EN;">he
President nixing the Keystone Pipeline XL, the oil and gas industries are still
expanding production.<span style="mso-spacerun: yes;"> </span>As company
earnings are reported and guidance is issued this month, investors will have a
better picture of the health of the economy. <o:p></o:p></span></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Of course
there are more concerns, besides the lack of accommodation by the Fed, which
trouble investors.<span style="mso-spacerun: yes;"> </span>The European
economies are still slowing and recession concerns are very real.<span style="mso-spacerun: yes;"> </span>China, India and Brazil are also hitting some
economic rough spots, due to the problems in Europe.<span style="mso-spacerun: yes;"> </span>Iran continues to thumb its nose at rest of
the world in regard to uranium enrichment, and as a result, even though there
is more than an ample supply of oil floating around the globe, prices have been
rising perilously close to the level where they can seriously disrupt our
economy.<span style="mso-spacerun: yes;"> </span>The main reason prices are this
high is because of the concern that Israel might attack Iran’s nuclear
facilities, and Iran might retaliate by disrupting the flow of oil through the
Straits of Hormuz.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Cautious
optimism is how I am personally approaching this juncture.<span style="mso-spacerun: yes;"> </span>Recently, Iran was cut out of the SWIFT
system, which seriously limits their ability to conduct commerce.<span style="mso-spacerun: yes;"> </span>Slowly but surely,<span style="mso-spacerun: yes;"> </span>our economy is improving.<span style="mso-spacerun: yes;"> </span>Finally, at least some US politicians are
beginning to talk about fixing Social Security, Medicare & Medicaid.<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="language: EN; mso-ansi-language: EN;"><span style="mso-spacerun: yes;"></span></span><span style="language: EN;"><o:p>
<span style="font-family: Perpetua; font-size: 13.5pt; language: EN; line-height: 100%; mso-ansi-language: EN;"><strong>It’s Time To Get Off The Bench And
Into The Game</strong></span></o:p></span></div>
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<span style="language: EN;"><o:p><span style="font-family: Perpetua; font-size: 13.5pt; language: EN; line-height: 100%; mso-ansi-language: EN;"></span><span style="language: EN;"><o:p>
<span style="language: EN; mso-ansi-language: EN;">If you’ve
been sitting on the sidelines with cash to invest, don’t despair after seeing
the first quarter gains and feel like all of a sudden you need to get fully
invested in the market.<span style="mso-spacerun: yes;"> </span>Remember, the
markets rarely go straight up or down.<span style="mso-spacerun: yes;">
</span>While I don’t think we are headed for a pullback similar to last spring,
the markets still face enough headwinds to provide investors ample
opportunities to deploy capital.<o:p></o:p></span></o:p></span></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Volatility
was tame during the first quarter, and there were a minimal number of triple
digit days.<span style="mso-spacerun: yes;"> </span>Considering a 130 point move
in the DJIA represents about 1%, dealing with moves of less that 1% daily helps
investors, who are not particularly fond of roller coaster rides, feel a bit
more confident.<span style="mso-spacerun: yes;"> </span>Contact me to diversify
your holdings and help you invest systematically.</span></div>
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<span style="language: EN;"><o:p><strong>Will the Politicians Finally Face Facts in 2012?</strong></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">In
previous issues of this newsletter, we’ve discussed many of the issues
confronting our nation, and as we prepare for the 2012 election, hopefully, we
will begin to take some positive steps toward getting our fiscal house in
order.<span style="mso-spacerun: yes;"> </span>I referenced above, the fact that
some politicians are beginning to discuss ways to adjust Social Security,
Medicare and Medicaid, the so called “safety net”, in order to preserve these
programs for future generations.<span style="mso-spacerun: yes;"> </span>We
simply can’t get the government’s budget out of deficit, without making
adjustments to our entitlement programs.<span style="mso-spacerun: yes;">
</span>The argument is not whether or not to save these programs, because
neither party, despite all of the demagoguery, wants to scrap them.<span style="mso-spacerun: yes;"> </span>The argument is how do we save them, preserve
benefits for those at or close to retirement age, and adjust benefits and
expectations for those who will rely on these programs in the future.<span style="mso-spacerun: yes;"> </span>This is no small task, and it will entail
major compromises, including budget cuts and tax hikes.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">In the
April 2012 edition of Smart Money, one of the articles discusses the changes in
thinking of people near or in retirement.<span style="mso-spacerun: yes;">
</span>Many of them are holding on to their jobs longer, or if they are
retired, are looking for a second act.<span style="mso-spacerun: yes;">
</span>This is at least partly due to the economic disruption we’ve experienced
since 2008.<span style="mso-spacerun: yes;"> </span>The article goes on to say,
”The decades long retirement is actually a relatively new invention.<span style="mso-spacerun: yes;"> </span>In the early 1900’s nearly 80% of Americans
over the age of 65 had a job.<span style="mso-spacerun: yes;"> </span>Folks
expected to work for as long as they lived, says Dora Costa, an economic
historian at the University of California, Los Angeles, and they’d generally
stop laboring only if they became too ill or frail to keep going.<span style="mso-spacerun: yes;"> </span>The average retirement lasted three years.<span style="mso-spacerun: yes;"> </span>That began to change, of course, with the
introduction of Social Security and private sector pensions, both designed to
free older workers from the need to choose between work and starvation.<span style="mso-spacerun: yes;"> </span>By the latter half of the 20th century,
longer life spans meant people could count on living well past retirement age,
and an evolving financial services industry was pitching products to help
people fund a long retirement.<span style="mso-spacerun: yes;"> </span>The
result, right before everything went to hell, the average retirement lasted 20
years”.<o:p></o:p></span></div>
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<span style="language: EN; mso-ansi-language: EN;">Nobody wants
to go back to the Darwinian past, but as we are witnessing the unraveling of
the European Social Democracies, it is important to realize we don’t have to go
down the same path.<span style="mso-spacerun: yes;"> </span>There needs to be a
balance between the public and private sectors, because without the private
sector, there can be no public sector.<span style="mso-spacerun: yes;">
</span>It all comes down to whether you believe in free market capitalism, or
whether you believe the government is the great job creation machine.</span></div>
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<span style="font-family: Perpetua; font-size: 7.65pt; language: EN; line-height: 100%; mso-ansi-language: EN;"><strong>Company Information</strong></span></div>
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<span style="font-family: Perpetua; font-size: 7.65pt; language: EN; line-height: 100%; mso-ansi-language: EN;"></span><span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">Investment Advisory Services offered through:<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Jersey Benefits Advisors<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">P.O. Box 1406<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Ocean City, N.J.<span style="mso-spacerun: yes;"> </span>08226<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Phone:<span style="mso-spacerun: yes;">
</span>609 827 0194<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Fax:<span style="mso-spacerun: yes;">
</span>609 861 9257<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">email:<span style="mso-spacerun: yes;">
</span>kaighn@jerseybenefits.com<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;"><a href="http://www.jerseybenefits.com/">Http://www.jerseybenefits.com</a></span><span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;"><o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">Securities offered through:<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Transamerica Financial Advisors, Inc.<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">A registered Broker/Dealer<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">570 Carillon Parkway<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">St. Petersburg, FL<span style="mso-spacerun: yes;"> </span>33758-9053<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">800-245-8250<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Member FINRA & SIPC<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">Transamerica Financial Advisors, Inc. is <o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">not affiliated with Jersey Benefits Advi-<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">sors.<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">Third Party Administration and Insurance <o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">Services offered through:<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Jersey Benefits Group, Inc<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">P.O. Box 1406<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Ocean City, N.J.<span style="mso-spacerun: yes;"> </span>08226<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Phone:<span style="mso-spacerun: yes;">
</span>609 827 0194<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Fax:<span style="mso-spacerun: yes;">
</span>609 861 9257<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;">Email: kaighn@jerseybenefits.com<o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; font-style: normal; language: EN; line-height: 100%; mso-ansi-language: EN;"><a href="http://www.jerseybenefits.com/">Http://www.jerseybenefits.com/</a><o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">All opinions expressed in this newsletter are <o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">solely those of John Kaighn & Jersey Benefits <o:p></o:p></span></div>
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<span style="font-family: Perpetua; font-size: 7.3pt; language: EN; line-height: 100%; mso-ansi-language: EN;">Advisors.</span><span style="language: EN;"><o:p></o:p></span></div>
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The S&P 500, the DJIA and the NASDAQ are unmanaged indexes that are widely
used as indicators of Market Trends.<span style="mso-spacerun: yes;">
</span>Past performance does not guarantee future results.<span style="mso-spacerun: yes;"> </span>The performance of these indexes does not
reflect fees and charges associated with investing.<span style="mso-spacerun: yes;"> </span>It is not possible to invest directly in an
index.<o:p></o:p></span></span></span></div>
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Cost Averaging through a systematic savings plan is an excellent way to build
an account without a sizeable initial investment.<span style="mso-spacerun: yes;"> </span>Saving a portion of our pay each month is
very important.<span style="mso-spacerun: yes;"> </span>Company sponsored
pension plans are one method to save and should be used for retirement.<span style="mso-spacerun: yes;"> </span>Other systematic investment accounts, SUCH AS
ROTH IRA’S, TRADITIONAL IRA’S, COVERDELL ACCOUNTS, 529 PLANS, BROKERAGE
ACCOUNTS AND ANNUITIES<span style="mso-spacerun: yes;"> </span>can also be
opened, and debited directly from your checking or savings account. For more
information, just call to set up an appointment. REFERRALS ARE ALWAYS WELCOME.<span style="mso-spacerun: yes;"> </span></span><span style="font-family: Perpetua; font-size: 8pt; language: EN; line-height: 100%; mso-ansi-language: EN; mso-ascii-font-family: Perpetua; mso-cyrillic-font-family: Century; mso-default-font-family: Perpetua; mso-greek-font-family: Century; mso-latin-font-family: Perpetua; mso-latinext-font-family: Century;"><o:p></o:p></span></div>
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<br />John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-12609878215897754652012-03-08T08:27:00.001-05:002012-03-08T08:29:08.113-05:00Stars Can Help Guide College SaversThis article, written by researcher Laura Pavlenko Lutton, from the independent mutual fund rating company <a href="http://morningstar.com/IntroPage.aspx">Morningstar</a>, shines the light on New Jersey's 529 Plan administered by Franklin Templeton Investments. I thought clients invested in this 529 Plan would enjoy reading it.<br />
<br />
By Laura Pavlenko Lutton<br />
<br />
Studying 529 plans’ average Morningstar Rating shows which states have done best.<br />
<br />
College savers in search of a <a href="http://www.jerseybenefits.com/article.php?529-College-Savings-Plan-3">529 plan</a> undoubtedly want high-quality investment choices. One way to stack plans up against one another is to study past risk-adjusted returns over longer time periods.<br />
<br />
The Morningstar Rating, which compares risk-adjusted returns of investments in the same category, is designed to put past performance in context. Mutual funds, as well as 529 investment options, earn 3-star Morningstar Ratings if their risk-adjusted returns are in the middle of the category pack. Similarly, 4-star and 5-star investments have outperformed, while 2-star and 1-star investments have underperformed. The Morningstar Rating is distributed on a bell curve, with the largest subset of funds earning 3 stars.<br />
<br />
Morningstar studied how well 529 plans’ investments have performed historically as measured by the overall Morningstar Rating. Morningstar calculated an asset-weighted average Morningstar Rating for each plan, so within each plan, the largest investment options by asset size carry more weight in the calculation. <br />
<br />
Only five 529 plans had an average asset-weighted Morningstar Rating of 4 stars or higher, indicating that most of those plans’ assets meaningfully outperformed similar peers on a risk-adjusted basis. But more than a third of all 529 plans had competitive performance or better, posting an asset-weighted average Morningstar Rating of 3 stars or higher. Morningstar wasn’t able to execute this calculation on more than a dozen plans because their investment options aren’t yet three years old, the minimum performance period required to receive a Morningstar Rating.<br />
<br />
Topping the list is a New Jersey-based plan, <a href="https://www.franklintempleton.com/retail/app/navigation/views/sec_landingPage.jsf?title=sel529Plan">Franklin Templeton 529 College Savings Plan</a>, with 4.56 stars on average across the plan on an asset weighted basis. This advisor-sold plan is an expanded version of New Jersey’s direct-sold 529 plan, NJBEST 529 College Savings Plan, which averaged 4.06 stars. Performance at these Franklin plans was relatively strong in recent years, though some of that relative success has waned during the recent market volatility. Another top plan was Florida College Investment Plan, which features investment options run by a variety of asset managers.<br />
<br />
Interestingly, several of the top-rated plans include primarily indexed funds, which theoretically should turn in returns near the category average. The Vanguard 529 College Savings Plan, New York’s 529 Program (Direct), and Utah Educational Savings Plan each feature primarily Vanguard indexed investment options and have assetweighted, planwide average Morningstar Ratings of 3.72 stars or higher. These 529 plan investment options are among the industry’s cheapest, which gives them a big leg up on their actively managed competition.<br />
<br />
Plans with higher asset-weighted average Morningstar Ratings should be proud of their past success, but this backward look at performance is no guarantee of future results. What’s more, the peer groups used to determine the 529 investment options’ Morningstar Ratings have some notable quirks.<br />
<br />
For one, 529 category peers often represent a wider range of investment styles than one might see in the similar open-end mutual fund categories. That’s because there are fewer 529 categories, particularly for investments with unusual strategies. For example, there is no stand-alone 529 category for investment options that primarily hold convertible securities or REITs—those options are lumped into diversified equity categories for 529 investment options. By including such outliers in Morningstar’s 529 categories, the peer groups have a broader distribution of returns, which ultimately can impact an investment option’s Morningstar Rating.<br />
<br />
Another factor to consider is the rate of change within 529 plans. Most plans that have underperformed for a time—and therefore may have a lower average Morningstar Rating—either got a face-lift or have been completely rebuilt. The plans may not be able to erase poor past performance from their records, but it also would be unfair to expect a revamped plan to perform similarly going forward. This is the case for plans such as the Bright Start College Savings Plans in Illinois and the Oregon College Savings Plan. Ohio took a different tack when its advisor-sold plan, formerly run by Putnam, had poor performance. It added an entirely new plan run by BlackRock and merged the Putnam run assets (thus erasing Putnam’s record) into the new plan when Putnam’s contract with the state expired.<br />
<br />
Article written by Laura Pavlenko Lutton, who is an editorial director in Morningstar’s fund research group.John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-37705398630788668202012-02-14T09:06:00.001-05:002012-02-14T09:08:37.937-05:00Keynes vs. Hayek Smackdown: Battle Still Rages Between Long-Dead EconomistsBy Joyce Hanson, <a href="http://advisorone.com">AdvisorOne</a><br />
<br />
To many market watchers, the fight of the century wasn’t the “Thrilla in Manila” that pitted heavyweight champs Muhammad Ali and Joe Frazier against each other in 1975.<br />
<br />
No, it was the battle royale that had Cambridge economist John Maynard Keynes opposing Austrian economics professor Friedrich August von Hayek over the course of the Great Depression in the 1930s and on into World War II.<br />
<br />
Though both men have been gone for years, their ideas have taken on a life of their own and currently create animated debate between who got it right, the interventionist Keynes or the laissez-faire Hayek.<br />
<br />
“Keynes was right about market failures, incomplete information and times when we get prices wrong. To forget this is to consign millions to unnecessary harm,” argued Jared Bernstein, executive director of the White House Task Force on the Middle Class and a member of President Obama’s economic team from 2009 to 2011. Obama’s policies put him squarely in the camp of the Keynesians.<br />
<br />
Bernstein made his argument earlier this week at the annual New York conference of the Investment Management Consultants Association (IMCA), which drew 850 attendees at the Marriott Marquis on Times Square.<br />
<br />
His worthy opponent, Russell Roberts, a professor of economics at George Mason University and a research fellow at Stanford University's Hoover Institution, countered that Obama’s interventionist stimulus planners have judged their success over the last few years using the false data of predictive models rather than actual facts.<br />
<br />
“Macroeconomics isn’t a true science, like biology,” said Roberts, echoing Hayek’s own sentiments. “It’s fake science.”<br />
<br />
To underscore the speakers’ points, IMCA screened "Fight of the Century,” a new economics hip-hop music video by John Papola and Russ Roberts of http://EconStories.tv, on the Marriott Marquis’ mainstage. According to the video makers, “Keynes and Hayek never agreed on the answers to these questions and they still don't.”<br />
<br />
So who really won, Keynes or Hayek?<br />
<br />
While Keynes was convinced that government has a duty to boost spending and intervene in markets during economic slowdowns, Hayek was equally sure that only a laissez-faire stance and the market’s invisible hand could help pull a struggling economy out of the hole.<br />
<br />
Maybe the victory was Hayek’s: he won a Nobel prize, after all, and Keynes didn’t.<br />
<br />
“The continuous injection of additional amounts of money at points of the economic system where it creates a temporary demand which must cease when the increase of the quantity of money stops or slows down…draws labour and other resources into employments which can last only so long as the increase of the quantity of money continues at the same rate,” wrote Hayek in his 1974 Nobel lecture. “What this policy has produced is not so much a level of employment that could not have been brought about in other ways, as a distribution of employment which cannot be indefinitely maintained and which after some time can be maintained only by a rate of inflation which would rapidly lead to a disorganisation of all economic activity.”<br />
<br />
But then again, Keynes won the ear of President Franklin D. Roosevelt, who followed the economist’s advice to let the government print money and create jobs until the depressed U.S. economy revived.<br />
<br />
Writing for The Nation in May 1930, Keynes said: “The fact is - a fact not yet recognized by the great public — that we are now in the depths of a very severe international slump, a slump which will take its place in history amongst the most acute ever experienced. It will require not merely passive movements of bank rates to lift us out of a depression of this order, but a very active and determined policy.”<br />
<br />
Keynes, who suffered heart trouble for years, died in 1946 at the age of 63 in Sussex, England. Hayek outlived him by 46 years, dying in Freiburg, Germany at the age of 92 in 1992.John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-40399161021478720062012-01-18T07:58:00.001-05:002012-01-19T08:51:13.872-05:00JERSEY BENEFITS ADVISORS INVESTOR NEWSLETTER WINTER 2012<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZ1gJFzyzUqoJPYjxw_rasTYOG67sSR5VQvDqY10GcoeJWO7xuyULq9YDDBb5ryhm_Dv6FldBcleIAZhSuZs8LKlBRSqBE-W-88zDX87B_tIvH0pfazQN2oISv_MaqW60afqg5ZP0NM5o/s1600/Times+Square.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="320" width="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZ1gJFzyzUqoJPYjxw_rasTYOG67sSR5VQvDqY10GcoeJWO7xuyULq9YDDBb5ryhm_Dv6FldBcleIAZhSuZs8LKlBRSqBE-W-88zDX87B_tIvH0pfazQN2oISv_MaqW60afqg5ZP0NM5o/s320/Times+Square.jpg" /></a></div><br />
<p align="center"><b>HAPPY NEW YEAR</b></p><br />
<b>MARKET WATCH</b><br />
<br />
When planning a vacation most of us book a round trip fare because the goal is to start the vacation from one point, explore wonderful sights, exquisite beaches, historical landmarks, or other such treats, and return home exhausted. The round trip on the S&P 500* this year, while definitely exhausting, was not particularly satisfying when compared to any of the vacations above. Yet a round trip is exactly how you have to define the performance of the S&P 500* for 2011 when comparing the January open of 1,257.64 with the December close of 1257.60 for a statistically insignificant drop of .04 of a point, or essentially, a FLAT performance for the year!<br />
<br />
The rare event of a flat performance for the S&P 500* did not occur without some dramatic point swings and gut wrenching volatility. In fact, the S&P 500* peaked at 1,363.61 on April 29th, and then bottomed out at 1,099.23 on October 3rd. This decline from peak to trough was 19.4% and very close to the 20% decline which defines a bear market. So, in retrospect, I guess we should be thankful for a flat performance.<br />
<br />
The stock market this year has been affected by a litany of investor concerns which we have discussed before. Unemployment stuck near 9% for most of the year, global political unrest, natural disasters and the European sovereign debt crisis have been recurrent themes. Even as the news on the economic front continues to improve in the US, all of the other distractions, particularly the perceived dysfunction of government in the run up to the 2012 elections, weighs on market performance. <br />
<br />
The good news is the government is performing as it was designed by our forefathers, when there is no clear majority which will support either the extreme left or right policies currently being put forth. Recently, George Will noted, “ Nothing that happens this November will bring an apocalypse. America had 43 presidencies before the current one and will have many more than that after the end of this one in 2013 or 2017. Decades hence, it will look like most others, a pebble in the river of American history”. At some point soon, we might even see some actual compromises taking place, such as reforming the tax code, reining in the deficit, and controlling the costs of entitlement programs, like Medicare, Medicaid and Social Security, so they remain viable for future generations.<br />
<br />
Even though the S&P 500* was flat for the year, the Dow Jones Industrial Average (DJIA*) managed to eke out a 5.53% gain closing at 12,217.56 which is an increase of 640 points. On the other hand, the NASDAQ* was down 47.72 points and closed at 2,605.60 which is a 1.80% decline. So, 2011 ends as sort of mixed bag, but 2012 may have some real upside potential if the holiday spending translates into improved earnings.<br />
<br />
As of this writing we are one week into 2012, and the DJIA* increased 1.17% from its 2011 close, the S&P 500* has added 1.61%, while the NASDAQ* gained 2.65%. Positive indices for the first week of trading generally bode well for annual performance. The Bureau of Labor & Statistics also released the December Employment Report which added 200,000 jobs to the economy and brought the unemployment rate down to 8.5%. While this report is very positive, there were 42,000 courier and messenger positions added during the month, which indicates at least some seasonal adjustment will occur in next month’s numbers. I think market volatility and economic improvement will continue in the US in 2012.<br />
<br />
<b>CHANGES FOR PARTICIPANTS IN VARIOUS RETIREMENT PLANS</b><br />
<br />
There are some changes to the limit on the amount of elective deferrals that a plan participant can contribute to a traditional or safe harbor 401(k) plan, 403(b) plan, SARSEP or 457(b) plan. The limit is $16,500 for 2011, and it increases to $17,000 for 2012. Thereafter, cost of living adjustments will be made to the increase in the amount of elective deferrals. Catch up contributions, up to $5500, are allowed for 2011 & 2012.<br />
<br />
The elective deferral limit for a SIMPLE IRA retirement plan is $11,500 for 2011 & 2012. Traditional IRA and ROTH IRA contributions are limited to $5,000 or $6,000 if the individual is 50 or older. If you have any questions, or wish to set up and/or contribute to a retirement plan, please don’t hesitate to contact me.<br />
<br />
<b>ENERGY PRODUCTION HEADS TO MORE STABLE LOCALES</b><br />
<br />
During the 4th quarter of 2011, the United States became a net exporter of energy, something which hasn’t happened in several decades. Without much fanfare, or support from the government, Big Oil has been redrawing the energy map. Rather than searching for oil and other fuels in the Persian Gulf, the desert sands of North Africa, the Niger Delta and the Caspian Sea, there has been a shift towards less exotic locales, as Western energy companies increasingly search for supplies in more stable and economically viable countries.<br />
<br />
The oil sands of Canada, as well as deep water oil off the coasts of Brazil and the US, shale oil in the continental US, and shale gas deposits in the US and Europe are becoming technologically and economically more attractive than energy deposits in countries such as Venezuela and Russia, where the threat of nationalization is more likely. This new way of looking at risk is fundamentally reshaping the way international oil companies are doing business. They can either invest in oil that is easy to produce, but runs the risk of political interference, or they can produce oil and gas in countries which are stable, but have deposits which are more difficult to extract. The latter seems to be the choice most companies are making at the present time.<br />
<br />
The technological advances making this seismic change possible are called horizontal drilling and hydraulic fracturing, or fracking, as it is commonly called. Many communities in the Midwest and Eastern regions of the US are now debating the economic and environmental implications of production in areas such as the Marcellus & Devonian Shales. While the debate rages, many land owners are realizing the economic benefit of owning mineral rights beneath their property.<br />
<br />
North Dakota is one of the newest oil hot spots in the United States. Along with parts of Montana, Saskatchewan, and Manitoba, North Dakota is home to the largest accumulation of oil in North America. This oil deposit is bigger than Louisiana, Texas, California, and Alaska's Arctic National Wildlife Refuge, and it is called the Bakken Formation. While much of the country is suffering from close to 9% unemployment, this region can’t seem to fill oil production jobs fast enough.<br />
<br />
Meanwhile, President Barack Obama and Congress are starting the election year locked in a tussle over a proposed 1,700-mile oil pipeline from Canada to Texas that will force the White House to make a politically risky choice between two key Democratic constituencies, unions and environmentalists. The fate of the Keystone Pipeline XL must be decided by February, as part of the agreement extending the payroll tax cut. This should be a very interesting election year.<br />
<br />
* THE S&P 500, THE DJIA AND THE NASDAQ ARE UNMANAGED INDEXES THAT ARE WIDELY USED AS INDICATORS OF MARKET TRENDS. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE OF THESE INDEXES DOES NOT REFLECT FEES AND CHARGES ASSOCIATED WITH INVESTING. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN AN INDEX.<br />
<br />
DOLLAR COST AVERAGING THROUGH A SYSTEMATIC SAVINGS PLAN IS AN EXCELLENT WAY TO BUILD AN ACCOUNT WITHOUT A SIZEABLE INITIAL INVESTMENT. SAVING A PORTION OF OUR PAY EACH MONTH IS VERY IMPORTANT. COMPANY SPONSORED PENSION PLANS ARE ONE METHOD TO SAVE AND SHOULD BE USED FOR RETIREMENT. OTHER SYSTEMATIC INVESTMENT ACCOUNTS, SUCH AS ROTH IRA’S, TRADITIONAL IRA’S, COVERDELL ACCOUNTS, 529 PLANS, BROKERAGE ACCOUNTS AND ANNUITIES CAN ALSO BE OPENED, AND DEBITED DIRECTLY FROM YOUR CHECKING OR SAVINGS ACCOUNT. FOR MORE INFORMATION, JUST CALL TO SET UP AN APPOINTMENT. REFERRALS ARE ALWAYS WELCOME. <br />
<br />
JOHN H. KAIGHN <br />
<br />
<b>COMPANY INFORMATION:</b><br />
<br />
Investment Advisory Services offered through:<br />
<a href="http://jerseybenefits.com">Jersey Benefits Advisors</a><br />
P.O. Box 1406<br />
Ocean City, N.J. 08226<br />
Phone: 609 827 0194<br />
Fax: 609 861 9257<br />
Email: kaighn@jerseybenefits.com<br />
Http://www.jerseybenefits.com<br />
<br />
Securities offered through:<br />
<a href="http://tfa.transamerica.com">Transamerica Financial Advisors, Inc.</a><br />
A registered Broker/Dealer<br />
570 Carillon Parkway<br />
St. Petersburg, FL 33758-9053<br />
800-245-8250<br />
Member FINRA & SIPC<br />
Transamerica Financial Advisors, Inc. is <br />
not affiliated with Jersey Benefits Advi-<br />
sors.<br />
<br />
Third Party Administration and Insurance <br />
Services offered through:<br />
<a href="http://jersey.life4org.com">Jersey Benefits Group, Inc</a><br />
P.O. Box 1406<br />
Ocean City, N.J. 08226<br />
Phone: 609 827 0194<br />
Fax: 609 861 9257<br />
Email: kaighn@jerseybenefits.com<br />
Http://www.jerseybenefits.com/<br />
<br />
All opinions expressed in this newsletter are <br />
solely those of <a href="http://johnkaighn.com">John Kaighn</a> & <a href="http://jerseybenefits.com">Jersey Benefits Advisors.</a><br />
<br />
LD 42655 - 01/12John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-82594405637958015602011-12-01T07:42:00.000-05:002011-12-01T07:42:23.464-05:00What Clients can Learn from the Four Worst Market Calls EverI came across this article and thought it was in line with my way of thinking in regard to people who hold themselves out to be market gurus. However foolish it may be, there are always those who like to believe they really are above being laid low by changes in the market they didn't anticipate. For those of us with a bit more humility, these examples tend to vindicate our judgement, even though they had terrible consequences for the media proclaimed gurus and their followers.<br />
<br />
This article was written by Dan Richards for Advisor Perspectives on November 15, 2011.<br />
<br />
Bad investment advice can come from many sources, but perhaps none has been worse than what was offered by four experts whose media profile exceeded their investment acumen: Irving Fisher, Joe Granville, Robert Prechter and Henry Blodget. <br />
<br />
Here’s some historical context and practical advice to help clients avoid the trap of listening to the gurus who dominate newspaper headlines.<br />
<br />
<b>Four sad stories</b><br />
<br />
In the 1920’s, Yale’s Irving Fisher was a household name in America and by far its best known economist; his pronouncements regularly made front-page headlines. Three days before the crash of 1929, he famously announced that “stock prices have reached what appears to be a permanently high plateau” – and for months after the crash, maintained that a recovery in stock prices was imminent. <br />
<br />
In 1980 and 1981, Joe Granville’s investment seminars drew packed audiences and his predictions caused major one-day moves in the market. He even predicted that he would win the Nobel Prize in economics and on one occasion literally walked on water, as he made his entrance strolling across a swimming pool that he’d had filled with concrete. <br />
<br />
But according to Hulbert Report that tracks the performance of investment newsletters, from 1980 to 2005 The Granville Letter was dead last among American newsletters, with investors who followed its advice losing 95% of their capital. <br />
<br />
In 1987, Elliott Wave proponent Robert Prechter told clients to sell in advance of “Black Monday.” He’s been dining out on that call ever since, in the process told his readers to stay on the sidelines throughout the record bull market of the 1990s. <br />
<br />
And in 2000, Merrill Lynch tech guru Henry Blodget predicted that tech valuations would continue to climb – and backed up his words by putting his personal net worth on the line, most of which quickly evaporated.<br />
<br />
<b>The media’s agenda is different from yours</b><br />
<br />
Last summer, the New York Times examined why the media consistently provides a platform to financial gurus with extreme, often simplistic (and sometimes simple-minded) views. <br />
<br />
The answer was simple – middle of the road, consensus thinking is boring; it’s much more interesting to have a guest with provocative, unconventional opinions. That’s led to a body of “they never saw a mike they didn’t love” experts in the field of politics and investing, opining on events of the day. Sometimes called media hounds or the less complimentary media whores, these experts can be omnipresent. <br />
<br />
Very few of these media gurus manage meaningful amounts of money; often their biggest asset is their reputation. But that doesn’t prevent clients who watch their interviews from getting worked up and potentially deflected from their plan.<br />
<br />
So if we recognize that most of these experts’ impact on clients is neutral at best and can in fact do significant damage, the question is what to do about it. <br />
<br />
<b>Bringing facts and reason into play</b><br />
<br />
Just telling clients to ignore these gurus won’t typically work – the very fact that they are given a media platform, deserved or not, gives them credibility.<br />
<br />
That’s why I was struck by the reasoned, fact-based approach to this topic in a video by industry veteran and Columbia professor Michael Mauboussin. A repeat winner of Institutional Investor’s All-America research team, he has served as chief US investment strategist at Credit Suisse First Boston and is currently chief investment strategist for Legg Mason Capital Management<br />
<br />
Mauboussin points to research proving that expert predictions do not beat the market, and that there is even a negative correlation between media profile and accuracy – the higher an expert’s media profile, the worse they do. <br />
<br />
This <a href="http://bigthink.com/ideas/20680">video</a> lasts three minutes. For those looking for a more in-depth perspective, here is a 30-minute <a href="http://www.youtube.com/watch?v=UW6T-1g81T0">interview</a> with Mauboussin. <br />
<br />
You could share these videos with clients who ask about views they’ve seen on television – or strike a pre-emptive blow by sending the links to all your clients. While you can’t control what your clients see on television, you can try to influence how they’ll respond. <br />
<br />
--------------------------------------------------------------------------------<br />
<br />
Dan Richards is a top-rated presenter at advisor conferences and an award winning instructor in the MBA program at the University of Toronto, as well as author of Getting Clients Keeping Clients: The Essential Guide for Tomorrow’s Financial Advisor. To learn more about his conference keynotes and workshops, email dan@clientinsights.ca.John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-71380579175886581502011-11-20T09:10:00.005-05:002011-12-05T09:14:36.661-05:00The Desolate Wilderness and This Fair LandI usually write the bulk of the material that appears on my blog, but every now and then I feature other authors who have a flair for great writing. This is a piece that is an annual ritual in a national publication that corresponds with the Thanksgiving Holiday season. It does a nice job of reminding the reader of the reasons to be thankful and to whom we owe that gratitude. I hope you enjoy it<br />
<br />
<b>The Desolate Wilderness</b><br />
<br />
Here beginneth the chronicle of those memorable circumstances of the year 1620,as recorded by Nathaniel Morton, keeper of the records of Plymouth Colony, based on the account of William Bradford, sometime governor thereof:<br />
<br />
So they left that goodly and pleasant city of Leyden, which had been their resting place for above eleven years, but they knew that they were pilgrims and strangers here below, and looked not much on these things, but lifted up their eyes to Heaven, their dearest country, where God hath prepared for them a city (Heb. XI, 16, and therein quieted their spirits. When they came to Delfs-Haven they found the ship and all things ready, and such of their friends as could not come with them followed after them, and sundry came from Amsterdam to see them shipt, and to take their leaves of them. One night was spent with little sleep with' the most, but with friendly entertainment and Christian discourse, and other real expressions of true Christian love.<br />
<br />
The next day they went on board, and their friends with them, where truly doleful was the sight of that sad and mournful parting, to hear what sighs and sobs and prayers did sound amongst them; what tears did gush from every eye, and pithy speeches pierced each other's heart, that sundry of the Dutch strangers that stood on the Key as spectators could not refrain from tears. But the tide (which stays for no man) calling them away, that were thus loath to depart, their Reverend Pastor, falling down on his knees, and they all with him, with watery cheeks commended them with the most fervent prayers unto the Lord and His blessing; and then with mutual embraces and many tearsthey took their I leaves one of another, which proved to be the last leave to many of them.<br />
<br />
Being now passed the vast ocean, and a sea of troubles before them in expectations, they had now no friends to welcome, them, no inns to entertain or refresh them, no houses, or much less towns, to repair unto tb seek for succour; and for the season it was winter, and they that know the winters of the country know them to be sharp and violent, subject to cruel and fierce storms, dangerous to travel to known places, much more to search unknown coasts. Besides, what could they see but a hideous and desolate wilderness, full of wilde beasts and wilde men? and what multitudes of them there were, they then knew not: for which way soever they turned their eyes (save upward to Heaven) they could have but little solace or content in respect of any outward object; for summer being ended, all things stand in appearance with a weatherbeaten face, and the whole country, full of woods and thickets, represented a wild and savage hew. If they looked behind them, there was a mighty ocean which they had passed, and was now as a main bar or gulph to separate them from all the civil parts of the world.<br />
<br />
<b>This Fair Land</b><br />
<br />
Anyone whose labors take him into the far reaches of the country, as ours lately have done, is bound to mark how the years have made the land grow fruitful. This is indeed a big country, a rich country, in a way no array of figures can measure and so in a way past belief of those who have not seen it. Even those who journey through its Northeastern complex, into the Southern lands, across the central plains and to its Western slopes can only glimpse a measure of the bounty of America.<br />
<br />
And a traveler cannot but be struck on his journey by the thought that this country, one day, can be even greater. America, though many know it not, is one of the great underdeveloped countries of the world; what it reaches for exceeds by far what it has grasped. <br />
<br />
So the visitor returns thankful for much of what he has seen, and, in spite of everything, an optimist about what his country might be. Yet the visitor, if he is to make an honest report, must also note the air of unease that<br />
hangs everywhere.<br />
<br />
For the traveler, as travelers have been always, is as much questioned as questioning. And for all the abundance he sees, he finds the questions put to him ask where men may repair for succor from the troubles that beset them. <br />
<br />
His countrymen cannot forget the savage face of war. Too often they have been asked to fight in strange and distant places, for no clear purpose they could see and for no accomplishment they can measure. Their spirits are not quieted by the thought that the good and pleasant bounty' that surrounds them can be destroyed in an instant by a single bomb. Yet they find no escape, for their survival and comfort now depend on unpredictable strangers in far off corners of the globe.<br />
<br />
How can they turn from melancholy when at home they see young arrayed against old, black against white, neighbor against neighbor, so that they stand in peril of social discord. Or not despair when they see that the cities and countryside are in need of repair, yet find themselves threatened by scarcities of the resources that sustain their way of life. Or when, in the face of these challenges, they turn for leadership to men in high places-only to find those men as frail as any others.<br />
<br />
So sometimes the traveler is asked whence will come their succor. What is to preserve their abundance, or even their civility? How can they pass on to their children a nation as strong and free as the one they inherited from their forefathers? How is their country to endure these cruel storms that beset it from without and from within?<br />
<br />
Of course the stranger cannot quiet their spirits. For it is true that everywhere men turn their eyes today much of the world has a truly wild and savage hue. No man, if he be truthful, can say that the specter of war is banished. Nor can he say that when men or communities are put upon their own resources they are sure of solace; nor be sure that men of diverse kinds and diverse views can live peaceably together in a time of troubles.<br />
<br />
But we can all remind ourselves that the richness of this country was not born in the resources of the earth, though they be plentiful, but in the men that took its measure. For that reminder is everywhere in the cities, towns, farms, roads,<br />
factories, homes, hospitals, schools that spread everywhere over that wilderness.<br />
<br />
We can remind ourselves that for all our social discord we yet remain the longest enduring society of free men governing themselves without benefit of kings or dictators. Being so, we are the marvel and the mystery of the world, for that enduring liberty is no less a blessing than the abundance of the earth.<br />
<br />
And we might remind ourselves also, that if those men setting out from Delftshaven had been daunted by the troubles they saw around them, then we could not this autumn be thankful for a fair land.<br />
<br />
These editorials have appeared annually in the <a href="http://wsj.com">Wall Street Journal</a> since 1961.<br />
<br />
<b>HAPPY THANKSGIVING</b><br />
<br />
John H. Kaighn<br />
<br />
<a href="http://jerseybenefits.com">Jersey Benefits Advisors</a>John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-50025946569085580842011-10-13T08:41:00.003-04:002011-10-18T17:01:46.716-04:00JERSEY BENEFITS ADVISORS INVESTOR NEWSLETTER FALL 2011<b>MARKET WATCH</b><br />
<br />
At the risk of sounding like a broken record, when you look back at market performance for the third quarter, you can’t help but realize the litany of investor concerns were quite similar to the worries of the first two quarters of 2011. Unemployment stuck at 9.1%, global unrest, natural disasters and the European sovereign debt crisis, especially in Greece, seemed to be the recurrent themes causing investor angst. Unfortunately, the market indices were unable to mount the end of quarter surge that provided some relief during the first two quarters, and the market indices took a tumble in the third quarter, leaving them teetering near bear market territory.<br />
<br />
Of course, Congress did not disappoint with their political partisanship exhibited during the August debt limit debacle. Their inability to develop a credible solution to the country’s fiscal situation, and the President’s inability to propose anything other than tax increases on the “so called rich” and more spending led to a downgrade by S&P on US debt. Of course, S&P may have had just a slight reason to play gotcha, since their ratings of mortgage backed securities and collateralized debt obligations during the housing boom have been called into question by Congress and the President.<br />
<br />
It looks like we might be stuck in this current range for the markets until the 2012 elections are over unless the super committee, which was born out of the debt limit crisis, can come up with some recommendations for trimming the deficit and getting our fiscal house in order. If they don’t, $1.2 trillion across the board spending cuts will be implemented. The clock is ticking, as their deadline is November 23.<br />
<br />
It gets extremely frustrating when you listen to the rhetoric of our leaders and realize their utter cluelessness at how their inability to compromise affects the markets. They talk about helping main street, yet they fail to realize the markets contain the retirement assets of most of the citizens of this fair land. In his testimony before Congress’s Joint Economic Committee, Ben Bernanke, Chairman of the Federal Reserve, stated, ”Political brinksmanship over the debt ceiling is no way to run a railroad”. Too bad Congress doesn’t get it, regarding the effect of their inaction on market sentiment.<br />
<br />
The Dow Jones Industrial Average* closed the quarter at 10,913.38 down 12% for the quarter and a –5.74% return for the year. The S&P 500* ended the quarter at 1,131.42 a –10.04% year to date return and off 14% for the quarter. Meanwhile, the NASDAQ* finished the quarter at 2,415.40 having fallen 13% for the quarter and –8.95% for the year. As uninspiring as these results are, the market indices have not crossed into bear market territory as we go to print on 10/6/2011. Even though there have been some harrowing events in October, the crashes of 1929 and 1987 come readily to mind, Jeff Hirsch, editor in chief of Wiley’s Stock Trader’s Almanac states, “Going back to 1950, September has had a greater average loss than October”. Furthermore, according to research by Bank of America Merrill Lynch, since 1964 there have been 15 quarters in which the S&P 500 lost 10% or more. After12 of those 15 quarters, the subsequent quarter saw an average rally of 10%. Let’s hope the odds are in our favor going forward, and that there are some adults in the room during the super committee’s debate on deficit reduction.<br />
<br />
If you have any questions or concerns, please don’t hesitate to contact me.<br />
<br />
<b>ARE WE HEADING FOR THE DREADED DOUBLE DIP?</b><br />
<br />
Most economists are not predicting a “double dip recession”, but it is a topic currently being discussed. I have heard odds of anywhere between a 20% chance of it happening, to the point where some people are saying we are already in recession again. If you remember in the past, we discussed an inverted yield curve as a recessionary indicator. At the current time the Fed is attempting to lower long term interest rates and flatten the yield curve, since it now has a positive slope. <br />
<br />
While it is possible for the economy to slip into recession with a positive yield curve, I don’t think we will see a double dip. Businesses will be reporting their earnings in the next few weeks, and it will be positive for the markets. There is just too much doom and gloom, so I’m a contrarian on the double dip.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8daM4RAMZQLtKNlqvIIbIfZtKLMBDCovM_ujPdPg-c9RpS-Z0SY7a2-6LrHmxfnhYw8Zxhm90swtMKfJ3nmy709S0bU5tK-AnVw40cXc6dJSWnK-6gIyUASvkZMmwPrDX32naVmNzDbs/s1600/Graph.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="320" width="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8daM4RAMZQLtKNlqvIIbIfZtKLMBDCovM_ujPdPg-c9RpS-Z0SY7a2-6LrHmxfnhYw8Zxhm90swtMKfJ3nmy709S0bU5tK-AnVw40cXc6dJSWnK-6gIyUASvkZMmwPrDX32naVmNzDbs/s320/Graph.jpg" /></a></div><br />
<b>A Familiar Chart?<br />
Dot Com Bust!<br />
Housing Bust!<br />
Gold?</b><br />
<br />
<b>OPERATION TWIST & NEW ADDITION TO OUR WEBSITE</b> <br />
<br />
<b>OPERATION TWIST</b><br />
<br />
At the September FOMC meeting the Federal Reserved stated the economy was facing headwinds and interest rates would remain low. They also announced Operation Twist, one of the tools at the Feds disposal to put pressure on long term interest rates. This tool was last used in the 1960’s and gets its name from Chubby Checker’s hit of that era, The Twist. Basically, the Fed will be selling short term bonds from the Treasury and replacing them with longer term bonds with maturities between 25 and 30 years.<br />
<br />
The Fed will be competing with individual and sovereign bond buyers, so the objective is to increase the price of longer term bonds, which in turn lowers the yield. Besides lowering long term interest rates, the Fed is also hoping investors will move their assets into higher risk investments. Recently, investors have been fleeing riskier investments for the perceived safety of Treasuries. They have been willing to park their money in an investment with no return, in order to prevent losses. This creates risk too, because bonds purchased at a premium can fall in price and produce a loss.<br />
<br />
<b>ONLINE LIFE INSURANCE</b><br />
<br />
We have partnered with ORG, Inc. to develop and market an online life insurance quotation system that allows individuals to enter their information and receive competitive quotes from major insurance carriers online. In most cases the application can also be completed online. There is also a direct toll free line to speak to a customer service representative, as well as an email link to ask questions or receive assistance with the quotation or application process. The quotes can be obtained from our <a href="http://jerseybenefits.com">Jersey Benefits Group, Inc. Website</a>, or the <a href="http://jersey.life4org.com">Jersey Benefits Life Insurance Website</a>. For people who wish to complete the process of applying for life insurance totally on their own, and like to evaluate numerous quotes independently before applying, this site should satisfy their needs. Quotes are free and no money is exchanged until the individual is approved for the policy quoted.<br />
<br />
Of course, anyone who is interested in talking to an insurance advisor, who will meet with them in the traditional face to face manner, simply needs to contact the company either by telephone or email to set up an appointment. Through the ORG network, we can assist individuals outside the state of NJ to locate insurance professionals who can meet with them face to face. The toll free number to call, outside NJ, is (855) 802-4123 and the email address for those outside NJ is jersey.benefits@life4org.com. Anyone in the state of New Jersey can contact me directly for their insurance needs at (609) 827-0194 or by email Kaighn@JerseyBenefits.com. <br />
<br />
* THE S&P 500, THE DJIA AND THE NASDAQ ARE UNMANAGED INDEXES THAT ARE WIDELY USED AS INDICATORS OF MARKET TRENDS. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE OF THESE INDEXES DOES NOT REFLECT FEES AND CHARGES ASSOCIATED WITH INVESTING. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN AN INDEX.<br />
<br />
DOLLAR COST AVERAGING THROUGH A SYSTEMATIC SAVINGS PLAN IS AN EXCELLENT WAY TO BUILD AN ACCOUNT WITHOUT A SIZEABLE INITIAL INVESTMENT. SAVING A PORTION OF OUR PAY EACH MONTH IS VERY IMPORTANT. COMPANY SPONSORED PENSION PLANS ARE ONE METHOD TO SAVE AND SHOULD BE USED FOR RETIREMENT. OTHER SYSTEMATIC INVESTMENT ACCOUNTS, SUCH AS ROTH IRA’S, TRADITIONAL IRA’S, COVERDELL ACCOUNTS, 529 PLANS, BROKERAGE ACCOUNTS AND ANNUITIES CAN ALSO BE OPENED, AND DEBITED DIRECTLY FROM YOUR CHECKING OR SAVINGS ACCOUNT. FOR MORE INFORMATION, JUST CALL TO SET UP AN APPOINTMENT. REFERRALS ARE ALWAYS WELCOME.<br />
<br />
<b>COMPANY INFORMATION:</b><br />
<br />
Investment Advisory Services offered through:<br />
Jersey Benefits Advisors<br />
P.O. Box 1406<br />
Ocean City, N.J. 08226<br />
Phone: 609 827 0194<br />
Fax: 609 861 9257<br />
Email: kaighn@jerseybenefits.com<br />
Http://www.jerseybenefits.com<br />
<br />
Securities offered through:<br />
Transamerica Financial Advisors, Inc.<br />
A registered Broker/Dealer<br />
570 Carillon Parkway<br />
St. Petersburg, FL 33758-9053<br />
800-245-8250<br />
Member FINRA & SIPC<br />
Transamerica Financial Advisors, Inc. is <br />
not affiliated with Jersey Benefits Advi-<br />
sors.<br />
<br />
Third Party Administration and Insurance <br />
Services offered through:<br />
Jersey Benefits Group, Inc<br />
P.O. Box 1406<br />
Ocean City, N.J. 08226<br />
Phone: 609 827 0194<br />
Fax: 609 861 9257<br />
Email: kaighn@jerseybenefits.com<br />
Http://www.jerseybenefits.com/<br />
<br />
All opinions expressed in this newsletter are <br />
solely those of <a href="http://johnkaighn.com">John Kaighn</a> & <a href="http://jerseybenefits.com">Jersey Benefits Advisors</a>.<br />
<br />
LD41861 - 10/11John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-52028994506524391282011-09-26T09:13:00.002-04:002011-09-26T09:17:33.376-04:00The Monday Morning Quarterback Is Alive and WellTrying to get a handle on the deluge of information constantly bombarding investors on a daily basis is a daunting task, to say the least. This morning I had the distinct pleasure of hearing a sports reporter, who was reporting on <a href="http://www.google.com/url?sa=t&source=web&cd=1&ved=0CC8QqQIwAA&url=http%3A%2F%2Ffifthdown.blogs.nytimes.com%2F2011%2F09%2F26%2Fis-michael-vick-being-treated-unfairly-by-officials%2F&ei=K3OATpjFN4Lr0gHM1eUK&usg=AFQjCNGZXijYxoyv9mbsD_pfEDCVxvx9rw">Michael Vicks'</a> broken hand, launch into a dissertation about how sports serve as a distraction for the "disasterous state of our economy, the horrendous jobs situation and polarized politics". Well, no duh! However, is it appropriate for a sport's announcer to utilize negative and potentially inflammatory language about the economy on a Monday morning?<br />
<br />
Anyway, as the campaign season heats up in earnest, <a href="http://www.google.com/url?sa=t&source=web&cd=1&ved=0CDkQqQIwAA&url=http%3A%2F%2Fcontent.usatoday.com%2Fcommunities%2Ftheoval%2Fpost%2F2011%2F09%2Flady-gaga-attends-obama-fundraiser%2F1%3Fcsp%3D34news&ei=YXOATrS0PKLZ0QGHjc3zDw&usg=AFQjCNHV8WXOlu8ZkczAs7-bbsPkur_9qQ">Obama</a> is already stumping for the 2012 election, while the <a href="http://www.google.com/url?sa=t&source=web&cd=8&ved=0CG8QtwIwBw&url=http%3A%2F%2Fwww.foxnews.com%2Fon-air%2Ffox-news-debates%2Findex.html&ei=QnSATp6QMOTb0QHAqs34Dw&usg=AFQjCNGp-gbLsGhDcJgBU18jfhXzgB2SPg">Republicans </a>continue to try to convince voters to get behind an "electable candidate". The two front runners have written books recently, both of which have remarks towards Social Security which can be utilized by the Democrats to sway voters. Meanwhile, the economy and employment, issues which we are told are priorities of both parties, will not see any significant legislative action for the foreseable future. The reasons being the Democrats hope to paint the Republicans as standing in the way of job growth, by not adopting Obama's new "jobs program", and the Republicans hope to convince voters the blame belongs to Obama for 9% unemployment from "failed stimulus plans" and trillion dollar deficits. Of course, there is the possibility that a lack of any government fiscal intervention might actually allow the economy to limp along and begin to repair itself.<br />
<br />
Thanks to a swift and effective move by the <a href="http://www.google.com/url?sa=t&source=web&cd=6&sqi=2&ved=0CF4QqQIwBQ&url=http%3A%2F%2Fwww.businessweek.com%2Fnews%2F2011-09-24%2Fsnb-says-it-will-defend-franc-cap-with-utmost-determination-.html&ei=0XSATt3pJ4Xr0gHphMn8Dw&usg=AFQjCNHdGkFvM20pjIyVa5p6eFYqWSa4VA">Swiss</a> to intervene in their currency when traders were moving to the Franc as a safe haven due to the rout of the Euro, the dollar has strengthened significantly. <a href="http://www.google.com/url?sa=t&source=web&cd=6&ved=0CHwQqQIwBQ&url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Frobertlenzner%2F2011%2F09%2F25%2Fgold-prices-bound-to-fall-further%2F&ei=cHWATpemG6nh0QGDp4zvDw&usg=AFQjCNH_HPxLZG19TrmUzZuv77iktLn-LQ">Gold</a>, silver and other commodities have taken it on the chin as the dollar has once again become a safe haven for investors worried about worldwide demand slowing. Many emerging markets are in bear market territory as the week begins, and economists are all over the place in handicapping a new recession, or "double dip". Hopefully, the Eurozone will strengthen their political union enough to agree to <a href="http://www.google.com/url?sa=t&source=web&cd=1&sqi=2&ved=0CDAQqQIwAA&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FBT-CO-20110925-703586.html&ei=9nWATp3SA8P30gGL5ZD3Dw&usg=AFQjCNEMquPTNupe6jlT2n8DCxALHMA16A">sell bonds</a>, which will backstop Greece and the rest of the PIIGS. <br />
<br />
On the home front, I can't help but ask when we will finally unleash a credible energy plan utilizing <a href="http://www.google.com/url?sa=t&source=web&cd=12&ved=0CEgQFjABOAo&url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fenergysource%2F2011%2F07%2F25%2Fu-s-energy-independence-so-close-yet-so-far%2F&ei=gniATtSQIbPJ0AGyjYEg&usg=AFQjCNH2OAcbmkBStLDrAE1wXmwJRPJbeA">natural gas</a>, <a href="http://www.google.com/url?sa=t&source=web&cd=15&sqi=2&ved=0CKABEBYwDg&url=http%3A%2F%2Fwww.epa.gov%2Fcleanrgy%2Fenergy-and-you%2Faffect%2Fnuclear.html&ei=qniATt6RA7PE0AHIhNX5Dw&usg=AFQjCNG5z2H4thCR5Unb_4Yhc_LLPEq6mQ">uranium</a> and <a href="http://www.google.com/aclk?sa=L&ai=CClpEKXmATqSMK6uj0AGGxO2cCLD3p-4CyKiTgxOvv9EtCAAQAVD_quWCBmDJ5vKKtKTkD8gBAaoEHU_QB7ThJxAwpYod6hmqCOTGuMCnLavmXnAj4bZHugUTCOP3jMb9uqsCFUO7NAodTAEx_8oFAA&ei=KXmATqO_BcP20gHMgsT5Dw&sig=AOD64_2B77K18s4QO3c-miCYMjsFLpQ_Lg&sqi=2&ved=0CAkQ0Qw&adurl=http://www.AmericasPower.org">coal</a> to put people back to work. We've seen the result of the government trying to pick technologies, as evidenced by Solyndra debacle and it doesn't work. I am not saying abolish the EPA, but I am saying we might be able to postpone some of the drastic steps we need to take to "<a href="http://www.google.com/url?sa=t&source=web&cd=13&sqi=2&ved=0CKgBEBYwDA&url=http%3A%2F%2Fwww.hybridcarblog.com%2Fnew-drilling-us-energy-independence-and-insanity%2F&ei=LXaATqG3IcLY0QGon-DTDw&usg=AFQjCNHYO_d14ltjDHHV7j-2cE9OoUfzsQ">save the planet</a>" until our economy is functioning better and our energy sources are not quite as precarious. While we are at it, we could also evaluate if our response to 9/11, while a complete and utter success, might not have given <a href="http://www.google.com/url?sa=t&source=web&cd=2&sqi=2&ved=0CD0QFjAB&url=http%3A%2F%2Fwww.cfr.org%2Fterrorist-organizations%2Fal-qaeda-k-al-qaida-al-qaida%2Fp9126&ei=rXmATt3kGerk0QG4zMEE&usg=AFQjCNGM0kaQ2owiFPd7-PgH257qiQTzwg">al Qaeda</a> more credit as a threat to the US than they actually turned out to be. Balance is what we need going forward.<br />
<br />
John H. Kaighn<br />
<br />
<a href="http://jerseybenefits.com">Jersey Benefits Advisors </a>John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-74822505077940565002011-09-20T07:57:00.000-04:002011-09-20T07:57:51.541-04:00Looking For a New Banking Relationship? Try EverBank!<a href="https://www.everbankadvisor.com/?LinkID=Navigation&eapID=21082KA421657"><b>Online Banking Through Everbank</b></a><br />
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<br />
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1. EverBank promises to keep the yield on your account in the top 5% of competitive accounts as measured the last Wednesday of each month in Bankrate Monitor, a weekly national survey of large banks and thrifts, surveyed by Bankrate.com. For the Yield Pledge CD, EverBank promises to keep the yield on your account in the top 5% of competitive accounts<br />
as measured each week in Bankrate Monitor. This promise applies at the time of purchase, or when rolling your expiring CD into a new CD with EverBank.<br />
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EverBank is an Equal Housing Lender, Member FDIC.John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-40216070961491995512011-08-30T09:49:00.002-04:002011-09-13T20:29:32.134-04:00August: The Quiet Month?Needless to say, it has been an eventful end of August on the East Coast, with an earthquake, hurricane and tornado warnings. Hurricane Irene came and went and left Cape May County pretty much intact, minus a few cubic yards of beach sand and some toppled trees. I know there was quite a bit of grumbling about the mandatory evacuation being overkill, and I thought that myself at first, but had the eye of the storm been out to sea a bit more or gone up the Delaware Bay, I think I would have been chest high or worse in water in my living room. Had people stayed, and the worst case scenario happened, there might have been some serious injury, especially in the ranks of the tourists who swell our population exponentially at this time of year. You just have to look north and west for evidence. <br />
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Having worked in a school system for a major portion of my life, I equate the purpose and intent of the evacuation with a fire drill. This was the opportunity for the governor and emergency management officials to err on the side of caution and see if the evacuation plans for removing approximately one million people from Cape May County would work. I have to say it did work quite well, even though I know quite a few of the locals, myself included, did remain and the Bull and Bear Tavern was quite packed Friday night. It helped to know I live on just about the highest ground in the county and the area shelter was literally right around the corner!<br />
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Speaking of bulls and bears, the month of August, traditionally a time for vacation, has been full of activity and debate. A 17.9% drop in the S&P 500 took us well beyond a correction and very close to bear market territory. However, there has been a rebound off the low of 1,119.46 to 1,210.08 as we prepare for the Labor Day weekend. The aforementioned natural calamities also added to the show. Of course, the politicians exhibited their expertise by taking the debt ceiling debate down to the wire and generating a debt downgrade. Now the Fed, which just ended its meeting in Jackson Hole, announced it effectively can't do much more with monetary policy and that fiscal policy is the solution to our ills. That leaves things to the "Super Committee" born out of the debt ceiling debate. It looks to be an interesting September.John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.comtag:blogger.com,1999:blog-3346433455730796408.post-87571508651067579632011-08-10T12:22:00.000-04:002011-08-10T12:22:39.737-04:00AFTER THE DOWNGRADEUnimpressed with U.S. deficit reduction plans, S&P delivers on its warning. <br />
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Presented by John H. Kaighn<br />
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<b>Unprecedented and unsettling.</b> Standard & Poor’s issued a historic downgrade of U.S. debt on August 5, sensibly waiting until the market week had concluded to send a shock wave toward global investors. It reduced America’s long-term debt rating – which had been AAA since 1941 – to AA+(1) <br />
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<b>S&P felt Congress did too little too late.</b> The credit rating agency had threatened to lower the boom if Congress passed any deficit reduction plan smaller than $4 trillion in scope. The Budget Control Act of 2011 “falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” an S&P statement noted. It also retained its “negative” credit outlook on the U.S. (2)<br />
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S&P is also skeptical that the federal government can collect more money from taxpayers. Its analysts do not think the Bush-era tax cuts will sunset at the end of 2012 “because the majority of Republicans in Congress continue to resist any measure that would raise revenues.” (2) <br />
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On August 5, S&P sovereign ratings committee chair John Chambers told Fox News that the new AA+ rating could be cut to AA within 6-24 months if the U.S. doesn’t arrange to slash $4 trillion from its deficit in the next decade. The implication: Congress better agree on more cuts by February. (3)<br />
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<b>China’s comments.</b> The world’s largest holder of U.S. debt issued a withering critique of Congress through Xinhua, its official news agency. The state commentary stressed that the U.S. has a “debt addiction” only curable via major cuts to defense spending and entitlement programs. It also said that the option of a “new, stable and secured global reserve currency” should be explored. (4)<br />
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<b>The Treasury’s claim.</b> Friday evening, the Treasury argued that S&P’s analysis contained an accounting error that unnecessarily added $2 trillion to its projection of U.S. debt. S&P admitted the error but stuck with the downgrade. (1)<br />
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<b>So what happens now?</b> The early August global response aside, analysts are divided as to what the short-term impact might be for the American economy. Could it cripple the recovery, or just prove inconvenient to it?<br />
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Demand was big for Treasury notes even before the threatened downgrade and Treasuries still symbolize comparative safety to institutional investors, so an August selloff might be short-lived. If this turns out to be the case, the effect on interest rates might be less significant than feared. <br />
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In the opinion of JP Morgan Chase analysts, Treasury yields could increase by 60-70 basis points as a result of the downgrade, translating to $100 billion in added annual borrowing costs for America. Citing Federal Reserve research, these analysts think that an increase of 50 basis points in Treasury yields (0.5%) could take a 0.4% bite out of U.S. GDP. (2)<br />
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<b>Could the Fed launch QE3*?</b> The possibility exists, particularly if foreign investors ditch dollar assets. The Fed’s Open Market Committee will make an announcement on August 9, and few analysts expect another wave of bond buying – but it is an option. <br />
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<b>When might the U.S. recapture its AAA rating?</b> It might take years for that to happen. S&P has cited political gridlock on Capitol Hill as a major reason for the downgrade, and it doesn’t see that going away in upcoming months. On top of that, the U.S. economy expanded just 1.3% in the first half of 2011 - about half the pace needed to dispel the lingering effects of recession. (5)<br />
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<b>Are mortgage rates going to go north?</b> Maybe; maybe not. Rates on conventional mortgages have a direct relationship with 10-year Treasury yields. Recently, those yields have dramatically fallen, and demand for longer-term Treasury notes has been palpable. Interest rates on auto loans might see a spike, as those rates are pegged to 2-year notes and factors like the LIBOR rate. The hardest hit might come from credit card issuers. Credit card interest rates reflect the prime rate. Credit.com credit card advisor Beverly Blair Harzog told CNNMoney that she believed credit card firms could possibly jack up rates 1-5% as a result of jitters over the downgrade. (6)<br />
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<b>Wall Street might sail through this.</b> Does that sound far-fetched? Look at some historical examples. S&P downgraded Canada’s AAA credit rating in the spring of 1993, yet Canadian stocks gained 15% in 1994 and our northern neighbor had its AAA rating back by 1997. Moody’s Investors Service downgraded Japan in November 1998 and its stock market advanced more than 25% in the next 12 months. Italy, Canada, Ireland, Japan, Belgium and Spain have all suffered S&P downgrades from AAA, and most of these cuts had little sustained impact on government bond yields. (6,7)<br />
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<b>What’s your outlook?</b> You might be considering some major moves in the wake of the S&P decision. Remember that impulsive decisions are often regretted down the line. Confer with the financial professional you trust to determine what you may (and may not) want to do.<br />
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John H. Kaighn may be reached at (609) 827-0194 or kaighn@jerseybenefits.com.<br />
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<a href="http://jerseybenefits.com">Jersey Benefits Group, Inc.</a><br />
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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.<br />
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* Quantitative Easing [round] 3<br />
LD41171-08/11<br />
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Citations.<br />
1 - nytimes.com/2011/08/06/business/us-debt-downgraded-by-sp.html [8/5/11]2 - bloomberg.com/news/2011-08-06/u-s-credit-rating-cut-by-s-p-for-first-time-on-deficit-reduction-accord.html [8/5/11] <br />
3 - foxbusiness.com/markets/2011/08/06/sp-us-faces-further-downgrade-beyond-double/ [8/6/11]<br />
4 - nytimes.com/reuters/2011/08/06/world/asia/news-us-china-sp.htm [8/6/11]<br />
5 - huffingtonpost.com/2011/07/29/gdp-us-q2-second-quarter-expectations_n_913032.html [7/29/11]<br />
6 - money.cnn.com/2011/08/06/pf/sp_rating_money.moneymag/ [8/6/11]<br />
7 - marketwatch.com/story/china-rips-us-on-debt-rating-downgrade-2011-08-06 [8/6/11]<br />
8 - montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [8/6/11]<br />
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John Kaighnhttp://www.blogger.com/profile/14788564688265843294noreply@blogger.com