Jersey Benefits Advisors Newsletter Summer 2010

MARKET WATCH

The 4th of July holiday has come and gone as the mercury keeps rising incessantly, baking the East Coast in near record temperatures. I hope you were able to take advantage of the beautiful holiday weather and enjoy an outdoor activity or two. I was lucky enough to spend some time with my family at beach, and enjoyed my granddaughter as she frolicked in the sand and negotiated with the waves. She did quite well, until I managed to allow a rather small wave to splash up and hit her in the face. She didn’t like that very much! It reminded me of how I felt about the stock market’s performance prior to the holiday.

After a decent first quarter in 2010, some of the concerns we spoke about in the last quarter overwhelmed investors as the reality set in that this will not be a normal recovery, much as the recession we recently experienced was not typical. The countries of the European Union experienced their own debt crisis, with Greece being the poster child for fiscal mismanagement. Fear of a debt contagion from Europe undermined investor confidence and led to a major correction in the second quarter. The DJIA closed the quarter at 9,774.02, which leaves it at - 6.27% for the year. The Dow is now 12.8% lower than the April high, while the S&P 500 ended the quarter at 1,030.71 for a - 7.28% performance for the January to June period. The NASDAQ finished the quarter at 2,109.24 for a - 7.05% first half showing.

There are many debates raging about the significance of the second quarter drubbing. With the DJIA off 12.8% and the S&P 500 down over 15% from April, talk of the economy sinking back into recession, the dreaded double dip, has resurfaced. There is also much discussion about the American Recovery and Reinvestment Act of 2009. The huge stimulus bill hasn’t begun to create the jobs promised, as unemployment remains stubbornly high at 9.5% of the workforce. The major expansion of the government into healthcare, as well as the administration’s promise to push through a cap on carbon emissions, in their response to the BP fiasco in the Gulf of Mexico, has left many Americans wary of the Big Government goals of this Congress. In fact it has led Barron’s, in July 5th issue, to call for major losses for the Democrats in November, and an end of the Big Government agenda.

While the effectiveness of government stimulus will be debated ad infinitum, the fact of the matter is something had to be done to stabilize the economy. The promise of it being a “job creation machine for shovel ready projects” created unrealistic expectations. As can be witnessed by this tepid expansion, stimulating an economy as multifaceted as ours is no small endeavor. It takes a great deal of time for the effects of government spending to be felt, and when it is targeted to technologies which are the pet projects of politicians, the effects can be minimal, and can have some unintended consequences.

So, if in fact Barron’s is correct and we wind up with a stalemate in Congress after November and the inability to push through Cap and Trade legislation, we may actually be better off. While the search for alternative and renewable fuels is certainly in our best interest as a country, to deny the role of fossil fuels in our immediate and long term future is tantamount to utter deception. As for the double dip recession, with all of the stimulus thrown at the economy, it seems unlikely. We will probably continue to expand slowly, but unemployment will likely remain uncomfortably high.

ARE YOU TAKING ADVANTAGE OF THIS BUYING OPPORTUNITY?

It seems like the markets have been on a wild, rollercoaster ride lately. Even portfolios with state of the art diversification have gyrated significantly over the last two years. I realize it gets difficult to stay the course, when there is so much opinion and information bombarding you on a daily basis. Yet, more than ever, I believe these volatile times present a wonderful opportunity to systematically add to your portfolio. It is really not enough to just hold onto your investments, because it is equally important to continually purchase shares to take advantage of lower prices when they become available. This trading range will not last forever, and there will be a point when the markets recognize the expansion is for real, and the buying opportunity will be gone.

PRIVACY POLICY & FINANCIAL REFORM

PRIVACY POLICY

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.

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.

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.

We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information at all times.


FINANCIAL REFORM

Legislation may be signed into law this summer, billed as reform of the financial system, to prevent a calamity similar to the 2008 financial crisis. Unfortunately, there is no provision in the legislation about what to do with Fannie Mae and Freddie Mac, the two entities many feel are at the root of the housing crash. While consumer protection is a worthwhile goal and regulations are certainly important in order to reign in those who are corrupt, this particular bill is too little, too late, and fails to recognize the government’s complicit role in the housing bubble. Enjoy your summer!

COMPANY INFORMATION:

Investment Advisory Services offered through:
Jersey Benefits Advisors
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: kaighn@jerseybenefits.com
Http://www.jerseybenefits.com

Securities offered through:
Transamerica Financial Advisors, Inc.
A registered Broker/Dealer
34 Doe Dr.
Woodbine, NJ 0870
800-245-8250
Member FINRA & SIPC

Third Party Administration and Insurance Services offered through:
Jersey Benefits Group, Inc
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: kaighn@jerseybenefits.com
Http://www.jerseybenefits.com/

All opinions expressed in this newsletter are solely those of John Kaighn & Jersey Benefits Advisors, formerly known as Kaighn Financial Services.

What Is Investing?

The concept of investment is actually quite simple: investing means putting your money to work for you. Basically speaking, investing is another way to think about how to make money. Growing up, most of us were taught that you can earn an income only by getting a job and working, and that's exactly what most of us do. There is nothing wrong with this way of thinking, but in order to make more money, we'd have to work more hours. However, there is a limit to the number of hours that can be worked in a day, not to mention the fact that having a great deal of money is no fun if we don't have the leisure time to enjoy it.

You can't clone yourself to increase your working time, so instead, you need to have an extension of yourself - your money - working for you. That way, while you are putting in hours for your employer, working in the garden, sleeping, reading the paper or socializing with friends, your investments can be earning you money. Quite simply, making your money work for you maximizes your earning potential whether or not you receive a raise, decide to work overtime or look for a higher-paying job.

There are many different ways you can go about making an investment. This includes putting money into a money market, stocks, bonds, mutual funds, annuities, ETF's, real estate or starting your own business. Sometimes people refer to these options as "investment vehicles," which is just another way of saying "a way to invest". Each of these vehicles has various pros and cons, depending on who you talk to, but it doesn't matter so much which method you choose for investing your money, the idea is to have your money working for you so it creates wealth. Even though this is a simple idea, it's the most important concept about investing.

What Investing Is Not:

Investing is not gambling. Gambling is putting money at risk by betting on an uncertain outcome with the hope that you might win money. Part of the confusion between investing and gambling, however, may come from the way some people use investment vehicles. For example, it could be argued that buying a stock based on a "hot tip" you heard at the water cooler is essentially the same as placing a bet at a casino.

True investing doesn't happen without some action on your part. An investor does not simply throw his or her money at any random investment; he or she performs thorough analysis and commits capital only when there is a reasonable expectation of profit. Yes, there still are risks, and there are no guarantees, but investing is more than simply hoping Lady Luck is on your side.

Why Bother Investing?

Obviously, everybody wants more money. It's pretty easy to understand that people invest because they want to increase their personal freedom, sense of security and ability to afford the things they want in life. However, investing is becoming more of a necessity. The days when everyone worked the same job for 30 years and then retired to a nice fat pension are gone. For average people, investing is not just a helpful tool, but rather the only way to afford to retire and maintain their present lifestyle.

Whether you live in the U.S., Canada, or pretty much any other country in the industrialized Western World, governments are tightening their belts. Almost without exception, the responsibility of planning for retirement is shifting away from the state and towards the individual. There is much debate about how safe our old-age pension programs will be over the next 20, 30 and 50 years. But why leave it to chance? By planning ahead you can ensure financial stability during your retirement. (For more, see Jersey Benefits Group, Inc.)

John Kaighn

Jersey Benefits Advisors

John Kaighn's Guidance Website

Brokerage Account Features

Many people have accounts with different mutual fund companies, and receive numerous statements, which can be a burden. One way to lessen paperwork is to consolidate assets into a brokerage account. Most major brokerage firms offer a brokerage account, which they may also call an Asset Management Account. Below are some of the features and benefits provided by a Pershing Brokerage Account, offered by Jersey Benefits Advisors, which include:

· Consolidated statement which shows all investments including money market funds, stocks, bonds, mutual funds, unit investment trusts, partnerships, brokered CD’s and annuities

· Daily sweep of idle cash into a money market account

· Available borrowing power for Margin approved accounts

· Procash checking services

· Free ACH transactions from checking to brokerage and from brokerage to checking

· Electronic funds transfer services

· Free dividend reinvestment

· Direct deposit of payroll, social security, pension checks, etc.

· Online access to account information

· Access to numerous mutual funds from different investment companies as well as variable annuities* from many insurance companies

· Systematic investment into mutual funds in order to purchase shares on a monthly, quarterly or annual basis utilizing dollar cost averaging

If you have any questions, feel free to contact me through my websites listed below.

John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit Jersey Benefits Advisors and The Kaighn Report