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October 2008

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Exclusive Webinar

Daniel Peris
Daniel Peris
Federated Strategic Value Portfolio
November 19, 2008
4:00 pm (EST)

Join Gabriel Burczyk, CEO of WrapManager, for a real-time discussion about investor options in today's market with Daniel Peris, Ph.D., CFA, portfolio manager for Federated Strategic Value.
Investment Quiz


1. Record mutual fund redemptions for September 2008 was $47.5 billion. What was the next highest month in mutual fund redemptions?*
a) Jul 2002 $17 billion
b) Oct 1987 $22 billion
c) May 1994 $32 billion
d) Dec 2001 $37 billion

2. In the past 100 years, how many times have stocks declined for two years in a row?**
a) 2 times
b) 3 times
c) 4 times
d) 5 times

Answers: 1. a) Jul 2002 $17 billion
2. c) 4 times. (The Great Depression, World War II, the '70s oil crisis, and the tech bubble. Each time the subsequent rebound was greater than the decline.)

*Source: Morningstar.
**Source: JP Morgan Asset Management 10/20/2008.
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MARKET COMMENTARY

Mutual Funds Racking Up Big Tax Bills in '08 - But Separately Managed Accounts Can Help
By Gabriel F. Burczyk, President & CEO

Gabriel F. Burczyk"The average managed equity fund cost its taxable investors another 2.2 percentage points in taxes." -John C. Bogle, Founder and Former Chairman, Vanguard Group

These days, Wall Street is looking like the financial equivalent of a war zone, with carnage as far as the eye can see. Through October 27, U.S. stocks are down 41.65% year-to-date, according to Morningstar. Large-cap stocks are down 40.38%; mid-cap stocks down 46.11%; and small-cap stocks down 42.53%, Morningstar reports.

The recent market upheaval has triggered the largest wave of monthly net redemptions in the history of the mutual fund industry states Morningstar. No asset class seemed to be immune. They reported the outflows flows for September 2008 ($47.5 billion) and the number exceeded the prior record month, July 2002 ($17.4 billion), almost by 300%. Wow.

MONEY MANAGER SPOTLIGHT
Federated Strategic Value: Let Dividends Pave
the Way

FederatedWondering where to invest in this volatile market? Let dividend payouts be your guide. We believe that dividend increases are a positive indicator of management confidence, and Federated Strategic Value Portfolio pursues substantially higher dividend yields than the broad market average. Federated Strategic Value targets high-yielding market sectors, industries, and companies to deliver a diversified portfolio of dividend income and capital appreciation potential. Over the third quarter, ending September 30, 2008, this portfolio continued to deliver on its objective with its dividend yield of 6.00%. Learn more about Federated Strategic Value during our Exclusive Webinar on November 19th.

Click for Federated's Q3 2008 Market Commentary
Click for an overview of Federated Strategic Value Portfolio
 
*Please follow the link to the full report produced by Federated for complete details and important disclosures. Performance information based on Federated preliminary annualized performance through 09/30/08.
TAX & RETIREMENT
Year-End Tax Planning Checklist

Tax PlanningIn a year that has seen unprecedented market volatility, perhaps the best way to preserve capital is to employ smart tax strategies. Consider the following checklist that may apply to your situation:
  • Harvest capital losses within your accounts to offset taxes on realized gains.
  • Max out your annual contribution to qualified retirement plans.
  • Supplement income by taking qualified dividends, generally taxed at the 15% rate.
  • Use your Required Minimum Distribution (RMD) from a traditional or Roth IRA to make a direct Qualified Charitable Distribution (up to $100,000), excludable from your taxable income.
  • Convert your IRA to a ROTH.
  • Consider purchasing a hybrid automobile from one of the manufacturers (GM, Mazda, Nissan, Ford/Mercury) that have yet to or only recently met mandated sales goals in order to qualify for a full Alternative Motor Vehicle Credit-as much as $3,000.
Call your WrapManager Wealth Advocate to schedule your year end tax planning meeting.
The attached report and information have been prepared or produced by WrapManager, Inc. from sources and data believed to be reliable. Information provided in this report is for educational and illustrative purposes only and should not be construed as individualized investment advice, as an offer to sell, or the solicitation of an offer to buy any security in any states where such an offer or solicitation would be prohibited by regulations. WrapManager, Inc. is not a tax advisory firm. We recommend you contact your tax attorney or CPA prior to utilizing any of the tax-related strategies mentioned or discussed. Returns and experiences will vary for each client. Each client's risk tolerance and investment objectives are unique to them. Past performance may not be indicative of future results. No assumption that future performance of any specific investment or product made reference to directly by WrapManager, Inc., on its Web site and in marketing materials, will be profitable or equal the corresponding indicated performance level(s). If performance numbers are generated gross of fees, a client's return will be reduced by investment advisory fees and any other expenses. Opinions expressed are those of WrapManager, Inc. and are subject to change without notice and are not necessarily those of Prospera Financial Services, Inc., its directors, parent company or its affiliates. Securities offered through Prospera Financial Services and cleared through First Clearing, LLC. Prospera Financial Services - Member FINRA/SIPC.

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