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Money Manager Monthly |
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July 2009 |
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MARKET COMMENTARY
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Creative Path: Converting to a Roth IRA
By Gabriel F. Burczyk, President & CEO
 You may not hear many Wall Street types talk about it, but there's more - much more - to investing than just stocks, bonds and real estate. Tax and estate planning laws have plenty of wealth-creating fire power, too, if you know where to look.
Exhibit "A" in this month's commentary is the Roth IRA. On January 1, 2010, approximately $1.4 trillion worth of U.S. retirement assets, from roughly 13 million investors, will be eligible to be converted to a Roth IRA.
Historically, only investors with an adjusted gross income of under $100,000 were allowed to convert their regular IRAs or their 401k plans to a Roth IRA.
But a time-release capsule in the form of the 2005 Tax Increase Prevention and Reconciliation Act (TIPRA) that triggers next January enables affluent investors to get in on the Roth Conversion train, too. The big advantage? TIPRA eliminates the $100,000 threshold, so now investors of all income levels can benefit from a Roth IRA.
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MONEY MANAGER COMMENTARY
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Is The Worst Over?
 Calamos Advisors LLC
"As we have noted, we believe that even in this challenging time, there are opportunities for long-term investors. Broadly speaking, we continue to favor growth over value. Growth stocks are, for the most part, priced below sustainable growth and offer better balance sheets and cash flows than value stocks."
Click here for full Market Review & Outlook, July 2009
 The Roosevelt Investment Group
"It is important to note that much of the spending associated with the administration's fiscal stimulus program has yet to flow through to the economy and hence may still provide a significant boost to equities. We continue to be impressed at the cost-cutting measures taken by many corporations to right-size their expense structures as they adjust to a slower growth regime."
Click here for complete Investment Outlook, June 30, 2009
 Wentworth, Hauser and Violich
"The downturn in the United States and global economies is moderating, suggesting that the recessionary environment of the past year and a half will run its course by the end of the year and a return to growth will occur in 2010...A rebound in corporate profits led by improved productivity bodes well for the longer-term outlook for the equity markets."
Click here for full Review & Outlook, Summer 2009
 Wells Fargo Advisors
"The dramatic gains since the March lows have left the market susceptible to a near-term correction. Hence, we are cautious in the near term, but looking to increase equity exposure on a pullback. We continue to favor cyclical sectors such as industrials and consumer discretionary and look to add to our small and mid-capitalization equity exposure. Based on current valuations we would suggest that investors lean into stocks to a larger degree."
Click here for complete 2009 Midyear Outlook
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FINANCIAL TIDBITS
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Follow Conventional Wisdom, Not Herd Mentality
Conventional investment wisdom tells us to buy when prices are low, and sell when prices are high. But the typical investor seldom follows this age-old edict. Instead, when prices rise, they buy to take advantage of rising performance. When prices start to fall, investors typically sell to avoid subsequent loss, as the chart below illustrates.
Click chart to enlarge or print
Source: Investment Company Institute and Yahoo Finance, as of March 31, 2009.
By defying this herd mentality and following conventional wisdom, you are likely to fare much better. Buy shares of strong companies with a long track record of weathering economic downturns whenever their prices drop - think of it as getting a great deal on a high-quality product. Then, when share prices rise again, sell to the masses and take your profits. This is the way money is meant to be made in the stock market. |
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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. © 2009 WrapManager, Inc. (800) 541-7774 |
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