A Good Quarter, a Client Event & a Day Away

Here are this week's items for your attention:

1 - Despite some very disconcerting news in world events, as well as many ups and downs in the financial markets, the first quarter of 2011 was positive for most investors. We will be preparing quarterly reports over the next few days, so clients should be on the lookout for more details.

2 - We already have a healthy number of registrants for our April 28 session on How We Invest Your Money. This clients-only event answers all of our most frequently asked questions, and I think you'll find it to be worth your time. If you haven't registered yet and would like to register for the 2:00pm session, click here. To register for the 5:30pm session, click here. If you know you're not going to make it to either session, click here.

3 - Juliet and I will both be out of the office on Friday, April 8. Tabatha Cantrell, our Event Coordinator, will be here fielding calls and welcoming visitors.

Enjoy your week!

-Andy

Away but Present

I'm out of town for a few days, so this week's email doesn't include the full economic summary. I do have a few items for your consideration, however:

1 - The video of John Maron's excellent investment fraud presentation that I promised does not appear to be in the cards, I'm sorry to say. Between the length of the presentation (about an hour) and the low volume of John's voice, it would probably be a long and difficult video to watch. If you were hoping to see it, please accept my apologies.

2 - Be on the lookout for an email later this week. We have scheduled a special client-only event entitled "How We Manage Your Money" for late April. When you show up for the session, you'll be given a personalized report of your portfolio. Then, using the report, I will guide participants through the process of rebalancing their portfolios. It should be very educational and (hopefully) worthwhile. Stay tuned!

3 - Amid all the seriousness in the world right now, I thought you might enjoy the latest viral video. (In case you don't know what a viral video is, it is a short movie -- often made by an amateur -- that appears somewhere on the Internet and, through viewers passing it on to others, becomes a sensation among millions worldwide.) The 55 second flick below is pure innocent fun.

Back with a full economic report next Monday. In the meantime, have a great week!

~ Andy

Joy in the Midst of Chaos

Last week was a busy one, both locally and across the globe. Here are four items that might be of interest for you:

1 - The stock market reached a year-to-date low on Wednesday, before rebounding on Thursday and Friday. The situations in Japan and Libya (as well as the broader Middle East) have created an abundance of the one thing the markets can't stand: uncertainty. "Uncertainty" in this case can be translated into "fear." The future is, as always, unknowable, and we really don't know how those international events will play out, or how they might affect us. Stay tuned, and hang on.

2 - One cannot help but feel pain and empathy for those innocents suffering in the above-mentioned crises. If you'd like to help, a great place to start is the American Red Cross. Their web address is www.redcross.com.

3 - We had our own mini-disaster at the office last week. A plumbing fixture ran all night Wednesday, and by the time I arrived on Thursday morning, there was a small flood in three rooms on the office side. Servicemaster of Spartanburg promptly cleaned up and dried out the affected areas, so what could have been a serious problem is now just an inconvenience. The damaged flooring will need to be replaced, so we have moved our office operation back into the Depot room temporarily. We should be back to the usual configuration in a few weeks.

4 - Tryon celebrated another Super Saturday this past weekend. This gem of a festival is an annual Spring ritual, and it's all about kids: professional performers give a wide variety of fabulous performances in venues all over town. The place is swarming with kids, and the joy in their eyes is contagious. In addition to my usual volunteer duties, I shot a four-minute video which you can see by clicking the image below. Take a look, and laugh with the kids.

Make it a joyous week!

Corrected 1099s: Whaddya Gonna Do?

They are maddening, but here's why you get them.

 A client called early this morning to inform me that he had received a Corrected Form 1099 from TD Ameritrade over the weekend. This happens just about every year, and it bears a brief explanation.

All financial institutions are required to send their customers a report of all taxable transactions that occurred in the customers' accounts during the previous year. This report is of course the infamous Form 1099. In addition to sending the 1099 to the customer, the institution also sends a copy to the IRS. The IRS can then check its copy against your tax return to make sure you're reporting your taxable income properly.

In the case of brokerage firms such as TD Ameritrade, the 1099 is a consolidated report consisting of information given to the brokerage firm by the various securities held within the account. (A "security" in this case includes stocks, bonds, mutual funds and ETFs, among others.)

Now, consider the case of a mutual fund or ETF (exchange-traded fund). These funds consist of dozens (sometimes hundreds) of stocks, bonds, and/or other securities, each of which must report its own taxable transactions to the fund company. Then, the fund company must report all of the tax information resulting from transactions within the fund.

The result of all this activity is thousands of transactions that must be reported, calculated, and consolidated into a single report that must be submitted to the brokerage firm in time for the firm to create a 1099 for each applicable account and send to its customers no later than the last day of January.

If even one transaction -- even if it is a minor one -- somewhere upstream has been calculated or reported incorrectly, it sets off a chain reaction of corrected report after corrected report, finally culminating in a corrected 1099 arriving in your mailbox.

With all those transactions and deadlines, and zero tolerance for error, it's no wonder that corrected 1099s are a commonplace irritant for taxpayers. It is not uncommon for brokerage clients to receive multiple corrected 1099s in a single year.

What should you do if you receive one of these beauties after filing your tax return? A corrected 1099 changes your taxable income, but it may be by an insignificant or even negligible amount. (The client who called this morning saw only an $11 difference in the original and corrected versions.) Well... I'm not about to tell you to ignore it, but neither will I tell you to go to all the hassle and expense of filing an amended return for a difference of eleven bucks. Look at the difference, consult your accountant or tax professional, and make your own decision.

Putting Things in Perspective: a Galactic View

These are interesting times in which to live. The world is changing around us, and we don't know what it will look like in five to ten years. That thought can be frightening, but it also can be intriguing; it depends on your point of view.

Every once in a while, it behooves us to put things in perspective. This week's video (2 1/2 minutes long), which has been widely seen on the Internet, shows how planets compare to one another (and to stars) in size. As you watch it,  keep in mind the biggest problems you are currently facing. It may make you feel better.

Conference Season

Late January/early February seems to be conference season for many professions, financial planning included. I guess the middle of winter is a good time to get out of town to warmer climes, because that's where such conferences always seem to be held.

From February 2 through 4, Juliet and I attended the TD Ameritrade Institutional National Conference in San Diego. This annual assembly of 2,500 or so  always provides education, enlightenment, and motivation, and this year was no exception. (Below is a brief video I put together from footage I shot using my portable video recorder.)

The very morning after we returned from San Diego, I was off again to Hollywood, Florida for the Inside ETFs Conference. This is an excellent yearly forum for increasing ones depth of knowledge surrounding exchange-traded funds, which we use extensively in client portfolios. Whenever I start to feel a little smart, I remember how scary-smart the presenters at this conference always are, and I am appropriately humbled.

Have an outstanding week!

-Andy

I have had several inquiries from clients and others lately regarding the prospect of an imminent collapse in our economic and financial system. The folks making the inquiries may have read a book or article, or perhaps seen an online video which makes a very cogent and reasonable-sounding argument that the economic sky is falling.
 

Don't believe it. There are many, many analysts, pundits and prognosticators out there who are more than willing to make predictions regarding our collective future. Those predictions run the gamut from black-hole scenarios to a world of goodness and light where everyone is rich and happy. As with most things in life, it is usually wise to avoid the fringes and live somewhere in the middle.

I don't pretend to know the future, but nobody else knows it, either.

This week's video is a somewhat tongue-in-cheek look at a few investment slang terms.
 

Have a wonderful week!