June 2011 - NorthStar Capital Advisors

Got retirement plans? Your spouse may disagree

A recent survey by Fidelity shows that wives and husband don’t share retirement-planning duties nor agree on the plan:

Only 41% of couples surveyed handle retirement investment decisions together.
Only 17% of couples say either spouse is prepared to assume sole responsibility of their retirement finances.
Although women are more likely to outlive their husbands, only 35% of wives say they are completely confident in their ability to take over the finances. 72% of husbands feel they can.
33% of couples say they don’t agree or don’t know where they plan to retire.
62% of couples nearing retirement don’t agree on the age at which to stop working
47% of couples nearing retirement don’t agree on whether they will continue to work in retirement.

Here’s what you should do and know:

Both husbands and wives should know where critical documents are kept
Both need to know what to do if their spouse is no longer able to assist with financial decision-making
Both should have an understanding of the family’s finances, savings, and investment goals.
Both should become active in financial planning and meeting with the family’s financial and investment advisors.
Both husbands and wives should talk about retirement and finances more often together for better agreement and mutual understanding.

Weekly Review ~ Friday, June 25, 2011

A plan to deal with the Greek debt situation led stocks upward on Monday to a healthy gain. On Tuesday, the Dow rose over 100 points on continued optimism over Greek debt relief, while the market awaited the upcoming Fed meeting. The major indexes were unable to keep mid-day gains on Wednesday when Fed Chair Bernanke failed to say something unexpectedly positive in his post-meeting address. On Thursday, the Dow dropped precipitously in the morning, but managed to finish with only a moderate loss as investors reacted negatively to a plan by the International Energy Agency to release more oil onto the global market. Friday ended the week with yet another loss as concern over Italian banks weighed on investors’ minds more than an upward revision in the first quarter GDP to 1.9% growth encouraged investors.

The Dow finished down for the seventh time in eight weeks.
[table id=16 /]

6 Investing Mistakes To Avoid

Roger Wohlner is a fee-only financial advisor and one of our favorite financial bloggers. He wrote an article this week for U.S. News and World Report focusing on 6 mistakes to avoid in investing:

Inability to take a loss and move on.
Not selling winners.
Not setting price targets.
Trying to time the market.
Worrying too much about taxes.
Not paying attention to your investments.

Roger concludes, “If you are uncomfortable reviewing your investments, it may make sense for you hire a financial professional to take an independent look at your portfolio.”

Learn more in Roger’s article:

6 Investing Mistakes To Avoid – Yahoo! Financehttp://finance.yahoo.comInability to take a loss and move on. Psychologically, it’s difficult for investors to sell an investment with a loss. Often they prefer to wait until the investment at least gets back to a break-even level. However, that may never happen or may take a long time to do so. The best approach is to…

“for me, for you, for later” — First Steps to Spending, Sharing, and Saving

Seasame Street is helping parents teach kids about value with a new program to help kids develop good financial habits:

Each time your young child sees you spend money or use the ATM, she is building an understanding of what money is. You can guide that understanding with simple activities about making good choices; what has value; and spending, sharing, and saving. Over time you’ll see that, through everyday conversations and fun, you can help your child grow up to make good financial decisions.

View the multimedia program at SeasameStreet.org:

for me, for you, for later | SEASAME STREET| seasamestreet.orghttp://www.seasamestreet.orgFor Me, for You, for Later: First Steps to Spending, Sharing, and Saving, is a bilingual multimedia program created to help families share experiences in developing financial basics that will impact their children now and in the future.

Weekly Review ~ Friday, June 17, 2011

On Monday, a couple of high profile buyouts failed to propel stocks past the unchanged level, as concerns over the health of the economy continue. The market finally delivered the long-awaited snapback from oversold levels on Tuesday with the Dow logging its largest gain in a month. Those gains were erased on Wednesday following rioting in Greece due to the frustration over the Mediterranean country’s economic woes. Greek debt fear abated somewhat on Thursday, as the Dow and S&P 500 made modest gains, but the NASDAQ slid once again. On Friday stocks managed moderate gains despite no clearcut solution to Greek debt.

The Dow and the S&P 500 broke their six week losing streak, although just barely.
[table id=15 /]

Staying the course pays off for investors

Time heals financial wounds: Holding stocks for 20 years can turn bad returns to good

Historical data compiled by Oppenheimer show that stocks have not suffered an average annualized loss in a 20-year holding period (measured in rolling monthly periods) since 1950.
“Historical evidence suggests that longer investment horizons typically produce better results,” says Oppenheimer’s chief investment strategist Brian Belski.
“The lesson here is: Chill, stay invested, stay disciplined and be diversified,” Belski said.
Much of individual investors’ lagging performance is blamed on psychological factors. More often than not, they buy high and sell low rather than the classic winning strategy of buy low and sell high. Put another way, they sell the dips, rather than buy the dips.
“Fear,” Harvey said, often prompts investors to bail out of stocks after prices have fallen far and the worst of the decline is over. They make matters worse “by delaying getting back in” early enough to participate in the eventual recovery.
A key reason why investors who stay the course end up doing well is the fact that stocks go up roughly two-thirds of the time.

Read more in this article:

Staying the course pays off for investors | FLORIDA TODAY | floridatoday.comhttp://www.floridatoday.comThe long term used to mean three-, five- or 10-year holding periods for stock investors looking to wring out risk and boost their odds of making money. Then came the 2000s, dubbed the Lost Decade, when the U.S. stock market posted negative returns in a decade for the first time since the 1930s.

Retirement Plans Make Comeback, With Limits

Companies are resuming 401(k) matching contributions — but some are changing how the match works by:

Making the match discretionary and linking them to profitability.
Matching a worker’s higher contribution rate at 50% rather than a lower contribution rate at 100%.
Capping the match at a certain level, such as $500.

Read more in this Wall Street Journal article:

Firms Begin to Reinstate Suspended 401(k) Matches – WSJ.comhttp://online.wsj.comMany U.S. companies that during the recession cut 401(k) matching contributions—one of the most valuable employee benefits—are beginning to restore them.

Weekly Review ~ Friday, June 10, 2011

Troubles for the market continued on Monday with a sizeable loss on renewed concern over the slowing economy, as the S&P 500 dipped below 1300 for the first time since late March. On Tuesday stocks dropped for a fifth consecutive day after a late-day plunge ensued following Fed Chair Bernanke remarks outlining a slower-than-expected economic recovery. The major indexes dropped for a sixth consecutive day on Wednesday, with the S&P 500 hitting its longest losing streak since early 2009. Stocks finally had a winning day on Thursday, the first of the month of June, as investors were pleased that that the US trade deficit shrank unexpectedly in April. The bounce was short-lived, as stocks plummetted again on Friday, with the Dow breaking below the 12000 mark for the first time since mid-March.

Stocks fells for the sixth straight week, as economic woes persist[table id=14 /]

How to protect your 401(k) if you leave your job

If you quit, get laid off or retire, you’ve got 4 options for your 401(k) savings:

Leave the money with the your ex-employer
Move it to your new employer’s plan (if that company allows it)
Roll it to an individual retirement account (IRA)
Cash out

Each choice comes with potentially negative consequences for your savings. Learn more in this article:

How to protect your 401(k) if you leave your job http://www.marketwatch.com/story/what-to-do-with-your-401k-if-you-leave-your-job-2011-06-01You thought the hardest part about saving for retirement was figuring out the best place to invest your money? Here’s another head-scratcher: what to do with your 401(k) when you leave your job.

Weekly Market Review ~ Friday, June 3, 2011

It was a shortened trading week due to Monday’s holiday for Memorial Day. Stocks jumped Tuesday on optimism that another Greek debt crisis would be averted thanks to help from European nations. Both the Dow and S&P 500 surged more than 1%. However, May was the worst month for the Dow since last August of last year. The market fell very hard on Wednesday driven by renewed economic worries. The Dow, S&P 500 and Nasdaq all fell more than 2%. Weak employment, production, and other data suggest the economic recovery may be sputtering. Stocks continue to drift down Thursday. The markets mitigated their losses Friday with the broad market gaining approximately 1%.

Stocks fells for the fifth straight week, the longest decline for the Dow since July 2004.
[table id=13 /]