A Great Opportunity to Still Refinance or Buy Your Ideal Home for Retirement

It seems this year is really flying by at a rapid pace, which means that we must all be having a lot of fun! I sincerely hope you are enjoying good health, success in your endeavors and peace of mind in your life. I am the luckiest advisor anywhere because I have the nicest clients ever!

Just a few brief comments on the last month’s record-breaking rise in interest rates. As you know, we have all been enjoying the opportunity of multiple refinances on the way down to the historic low mortgage rates of late, and I have been preaching the importance of refinancing and getting all the money possible at these levels. 

Well, in one fell swoop of the tongue, Bernanke managed to virtually torpedo the bond market and cause interest rates to rise more in one week than in any other in mortgage history. We experienced a full one percent rise in rates in a week’s time, followed by a ¼% improvement temporarily. This reduced the amount that can be financed by the same payment to most buyers by $50,000, and put a cool hold on the super-hot real estate market of the prior 12 months in San Diego and elsewhere. The multiple bids on a home within hours or days of its listing, and the willingness to substantially overpay on the asking prices just to get the home, slowed way down and virtually disappeared. That does not mean that housing and appreciation is dead, just considerably reduced and stabilized again.  

Lest anyone feel too badly, we must remember that these current mortgage rates in the low to middle 4% range are still historically low, and present a great opportunity to still refinance or buy your ideal home for retirement before the rates rise more and inflation truly kicks in, which it ultimately must and will, in my opinion.

The broad financial markets and the 2^nd Quarter were not particularly good ones. Fortunately, we had a banner 1^st Quarter, and a good July to date to offset it, putting us still in good shape year-to-date. We must count our financial blessings overall and enjoy this current strong market while it lasts. To be sure, it has lasted longer than I thought it might before a correction of substance, though we did have a pullback since I last expressed my concerns. 

Once again, true diversification, temperance and balance are the rules of the day at Heritage and have proven our best defense in times of challenge and have still allowed for excellent long-term results overall for our conservative client base.

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional. 

On Borrowed Time at these All-time Market Highs

My greatest hope is that the younger generations have been taught and thereby have learned what made this great country of ours great. I fear their general ease and prosperity and the attack on the fundamental moral values and founding constitutional principals they have had to endure in the classrooms might become a real challenge for them and our country in the future. May we all do everything we can to teach our children and grandchildren the basics of right and wrong, and the enduring  principals of goodness and morality, and be examples of the same in our daily living and in the way we participate and vote to keep our freedoms and the greatness of this country intact. I am still very grateful for all we enjoy and am hopeful for our future, and realize that we cannot change the world directly, but we can enjoy the wonders and our loved ones around us and do whatever is in our power to make a positive difference in our own lives and the sphere of influence we each enjoy.

I have truly enjoyed the high level of success in the financial markets and accounts we have all experienced lately. If only this trend were permanent life would be very easy and prosperity would be easy. Sometimes we get to enjoy these above-average results without stress and market worries, and sometimes we have to work very hard to protect capital and returns from financial and market challenges in order to protect and achieve positive returns. Because we never know for sure when the markets will shift and to what degree of severity, we have continued to implement our tried and proven methodology of broad asset allocation, true diversification, best of class managers, and re-balancing as we move along. Even volatility and temporary declines can be useful and productive overall with these tools and strategies being in place. I have felt for a time lately that we are on borrowed time at these all-time market highs, and am glad we have installed “safe zones” and non-correlated alternatives in our holdings. Patience and perspective will again be needed in the future as markets shift and times become turbulent as they do at different stages of the market cycles. The important thing is to work to achieve a steady and calm mind of contentment and work in harmony to meet whatever challenges come with hope, resolve and consistent efforts to improve our financial picture at every juncture.

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional.

Nobody Knows the Future...

Happy April to each of you! It is definitely a beautiful time of the year, isn’t it?

I will only briefly comment on the state of things as I see them in my homemade and non-technical language. Bottom line, the stock market is near all-time historic highs, interest rates at all-time historical lows, domestic debt has never been higher, Europe is gasping for air, Korea is playing a dangerous game of saber-rattling with scary implications, and in spite of it all, the world keeps on ticking and the markets seem to largely ignore the realities of the day.

 

I personally think we must be very cautious at this time, financially speaking, and rely upon safe money zones and broad diversification in portfolios to soften the eventual and inevitable decline that is to come. If we knew for sure when it will hit in earnest, and how significant it will be, we could be perfect in our decisions and avoid all damage. However, as you know and as we continually confess, absolutely nobody (not even the brightest geniuses and wealthiest people in the world) knows the future nor when things will do what they do in the market - because the market always fools most of the people most of the time, and has a mind of its own. Hence, our philosophy at Heritage of using safe zones, ultra diversification, alternative asset classes and moderation in all things, is in full effect and has shown to be the only effective long-term medicine that works consistently.

I appreciate my clients' confidence, loyalty and business year after year and pledge my continued untiring efforts to help them protect their finances from undue risk, work to reduce the tax burdens they face, and help grow their asset base and increase their income as needed for retirement. It is a tall order and one I take seriously, but feel it is a calling and passion to help wherever I can to make the journey more secure and enjoyable. Though I can and do help others who are younger, the people I focus on serving are primarily high-income earners with big tax issues or those who have been serious investors or inheritors of substantial money who need to protect and grow their wealth seriously towards retirement.

 

I recently hosted my annual dinner for my new Heritage clients who joined the Heritage Family in 2012, which was a great success! I look forward to including new referrals this year.

 

May you be blessed with good health, good relationships, prosperity and continuing peace of mind as you work to keep enjoying the journey!

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional.

Welcome to the New Year!

Happy New Year and welcome to 2013!!

Time surely does fly when you’re having fun, doesn’t it? It seems like I was just recently wishing a Happy 2012, but somehow a full year has come and gone already. It has been an interesting year at that, full of many changes on the business and economic fronts. I will take the liberty to mention a few of the highlights.

I sincerely hope you are enjoying good health, peace of mind and prosperity in your personal life, and that you have weathered any storms and challenges that you were called to endure last year. There is nothing as constant as change in life, and the better we become at adapting to whatever comes the more contentment and joy we find.

On the family front, my youngest son, Ryan, got married to his beautiful bride Kara in April. He recently finished his accounting degree from BYU and returned to San Diego to seek full-time employment here, much to my joy. My second son, Jordan, and his wife, Jessica, had a darling little girl, Esther, in May, making me a grandpa four times over now. I am a lucky and a blessed dad, grandpa and husband indeed!

On the economic front, if you have kept up with my newsletters and the non-stop media, you won't need much commentary. We went from the certainty of the largest income and estate tax increases in many decades ,which was to start on January 1, to status quo for most Americans - with the exception of a couple stealth tax increases that affect everyone. Unfortunately, the “fiscal cliff” issue failed to produce any real reform or significant progress in addressing the problem in the first place, which is too much spending and an unwillingness to pay the price to live within the means and address the huge debt load that has been amassed. We now get to go through the drama again, and maybe even deeper as we approach the debt limit and the fight to increase it instead of reducing spending. This will go right up to the very end again with everyone biting their nails, and with threats of default, loss of credit and international scorn all being used in the game.

 

However, as always ,we will again come through it and hopefully with some real meaningful fiscal reform and discipline too. We are Americans, and we do, when all is said and done, make it through thick and thin to survive just about anything. I hope that the voice of the majority, who have common sense and a desire for freedom, do not stay silent and let the vocal minority and government factions prevail. May we always do our part to keep this great county great and free and remember the source of all our blessings.

I hope you will continue to assist us in our gentle growth initiative within the Heritage Family, as we endeavor to focus our time to provide the high-level service and expertise you have desired and hopefully enjoyed so far. I would much rather spend my time with you and yours than in any other way.

Have a prosperous January and 2013!

This is a personal blog and is for informational purposes only.  This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional.

True Diversification, Balance, and Hard Work

This last month has been a whirlwind of emotions: excitement, anticipation, disappointment and relief. I hope you are healthy and happy, and like me, somewhat relieved to at least know what to plan for in the future again.  Since I try to not wax political, and to address the issues that result one way or the other, I will simply tell you 1) I’m glad the election is over, with its barrage of advertisements, constant noise, and negativity 2) I’m sad that entitlements and expensive propositions won the day and that taxes will be increasing significantly for all of us, and 3) As a country, we have a lot of challenging times ahead of us. Lest you think I have given up hope, I have not and am convinced that we must get to work and make sure that our elected officials know that we expect hard work, cooperation and results, now that the hoopla is over. The fiscal crisis is looming in the near horizon. I think there is a slim possibility that some actions might be proposed and taken to reduce its full impact that will hit us in 2013, but that most of the real decisions and work will take well into next year to complete. (This time they need to finally create a budget and address the issues for real, and not just apply short-term financial bandaids, postponing the hard decisions until the next crisis.)

Between now and the end of the year, I will post additional up-to-date summaries of financial and tax ideas for your digestion and benefit. Suffice it to say that those who are the “rich” amongst us will be paying heavily federally and more now for California income taxes. Not a happy comment, but true nevertheless. This means that effective tax planning and strategic retirement cash flow planning are more important than ever. Additionally, the market has already responded to this reality with a significant decline in values, losing over 3% of its value in two days after the elections. True diversification, balance and hard work are required to protect capital at this time. Always remember the simple saying, “this too shall pass” when times are tough, and bask in the good and happy times when you are privileged to have them. Life is a combination of peaks and valleys, and the secret is to be temperate, calm and learn to enjoy the journey regardless of the altitude!

There is a lot going on this time of year, not to mention the most important thing this month, which is Thanksgiving. When I start feeling a little down about the economy, taxes, politicians or market corrections, I simply give thanks and think about the most important things in life, which are family, friends, clients and all important relationships, good health, my belief in a Creator who has it all in hand, and hope for a better future. We are truly blessed to be here, in spite of the challenges we face. Living here still beats by a long ways anywhere else, in my humble opinion. I am very grateful for my clients' friendship, kindness, loyalty, trust, and business that allows me to keep serving and helping others with everything financial and retirement oriented.

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional.

Tax Planning for Changes Starting January 2013

It’s officially Fall now and, frankly, I’m ready for some cooler weather. However, we still enjoy some pretty terrific and beautiful conditions here in sunny San Diego, so I am grateful to be in such a favorable and enjoyable place!  I am particularly grateful to have such wonderful and kind clients. That is what makes what I do so rewarding and meaningful, and I truly appreciate their confidence, friendship and business.

A lot of very important tax law changes are coming in January 2013 that will, unfortunately, cost most of us a lot of additional tax dollars. These changes make tax planning particularly important now, as we end the year and start the new one. This presidential election represents an important turning point for our country which will impact our finances and freedoms for decades to come. Whatever happens will give more certainty and the ability to make more specific plans to combat higher taxes and inflation. I am actually anxious for it to conclude and to get on with effective planning.

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional.