Friday, June 22, 2007

www.ask-lynn.com

Ask Lynn

Lynn O'Shaughnessy is moving online after her syndicated column with the Union Tribune was cancelled. You can still read her in BusinessWeek, Kiplingers and a few other magazines, but this is where you'll want to go to get the latest stuff Lynn has been writing.

I encourage you to bookmark her site and visit it as often (or more often) as you do mine!!

Scott Dauenhauer,CFP, MSFP, AIF
www.meridianwealth.com

Thursday, June 21, 2007

Suit alleges misuse of sweep programs - InvestmentNews

Suit alleges misuse of sweep programs - InvestmentNews

A lawsuit against the major brokerage firms has been filed allegeding that they illegally forced clients into lower paying deposit accounts so that the firms could reap billions in extra profits. This is something I've been reporting on for some time, even the so-called "good guys" like Schwab and TDAmeritrade (my custodian) have attempted to implement a similar scheme and it reaks.

Keep an eye out for a letter stating that your money market account is about to go through changes. I've seen yields drop by 80% in some cases.

Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com

Wednesday, June 20, 2007

One of Lynn's Last Columns - Really Good

From magazine hype to financial advisers to retirement goals

Another great article, summarizing some of the most important points Lynn has made over the years. My favorite's are:

"Too many people who portray themselves as financial experts aren't. The threshold to get into this business is too low to cull out the knuckleheads, but you can eliminate many candidates by rejecting any adviser who isn't a true fiduciary. Working with a fiduciary – someone who is required to put your interests first – is so important that I'd urge you to avoid any financial adviser who won't acknowledge a fiduciary duty to you in writing."

"I've had plenty of conversations with financial journalists who acknowledge that they invest their own money in low-cost index mutual funds, as do I."


Read the whole article at the link above.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com

Time Flies When You're Unprepared




Another great article by Ben Stein on how to Stay Rich.....

When I first moved to Los Angeles 31 years ago, I had a number of rich friends. They were good to me. They took me to dinners at elegant bistros, threw parties for me in their Beverly Hills homes, and gave me lavish gifts for my birthday. They were fine people.

Today, some of them are still rich. They still have lavish homes in Beverly Hills, they usually also have homes in Malibu or out in the desert or both, and they travel the world and have servants.

Many of them, however, are broke or nearly broke. They're not happy. They worry constantly. They live smaller, more cramped lives


Click above link to read the rest of the article

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com

U.S. home prices fall for first time since 1991



By Rex Nutting, MarketWatch
Last Update: 12:51 PM ET May 29, 2007

WASHINGTON (MarketWatch) -- U.S. home prices dropped 1.4% in the first quarter compared with a year earlier, the first year-over-year decline in national home prices since 1991, according to the S&P/Case-Shiller index released Tuesday.
A year ago, home prices were rising at an 11.5% pace. Prices have been falling for the past three quarters.

The Case-Shiller indexes cover three geographical areas. The national index is released quarterly, while the 10-city and 20-city indexes are released each month.
The 10-city Case-Shiller price index fell 1.9% year-on-year through March, while the 20-city index dropped 1.4%. The 10-city index has fallen nine months in a row, while the 20-city index has fallen for eight straight months.

All three Case-Shiller indexes show continued deterioration in home prices. Prices were falling or rising slower in most U.S. cities.

The national decline "is reaffirmation of the pullback in the U.S. residential real estate market," said Robert Shiller, chief economist for MacroMarkets LLC, and co-inventor of the index.

"This fall is consistent with the ongoing trend that has developed over the past year," wrote Goldman Sachs economists, who said they believe the Case-Shiller index is the best gauge of home values. "We remain comfortable with our forecast of house prices falling by 5% over 2007."

Falling home prices have squeezed many borrowers who have been able to extract equity from their homes or refinance their loan to avoid a sudden increase in mortgage payments as their adjustable-rate loan reset.

As a result of falling prices, foreclosures are rising nationally, especially in regions with a weak economy, such as the Midwest, and in the bubble regions of Southern California, Florida, Nevada and Arizona.

Thirteen of 20 cities in the Case-Shiller index have seen falling prices in the past year, led by Detroit (down 8.4%) and San Diego (down 6%). Home prices rose 10% in Seattle, 7.4% in Charlotte, N.C., and 7% in Portland, Ore.
Prices in Phoenix and Las Vegas, Nev., have fallen the furthest from their peak. After growing at a 49.3% pace in September 2005, home prices in Phoenix are now down 3% year-on-year. In Las Vegas, price gains went from 53.2% in September 2004 to negative 1.6% in March 2007.

Among other major cities tracked by the index, home prices are down 4.9% in Boston, down 4.8% in Washington, down 3% in Tampa, Fla., down 2.4% in Cleveland, and down 2.3% in San Francisco. Prices fell 2% in Denver, 1.9% in Minneapolis, 1.4% in Los Angeles and 1.1% in New York.

In addition to the price gains in Seattle, Charlotte and Portland, prices rose 2% in Atlanta, 1.6% in Dallas, 1.3% in Chicago and 1% in Miami.

The Case-Shiller index is considered a superior gauge of home prices compared to the median sales-price data released by the Commerce Department or National Association of Realtors, because it tracks multiple sales on the same property and is therefore not influenced by a different mix of homes sold in a period.

Unlike the price index produced by the Office of Federal Housing Enterprise Oversight, the Case-Shiller index does not include refinancings. And, also unlike the OFHEO index, it includes homes with mortgages larger than the conforming limit of $417,000.

The OFHEO index for the first quarter will be released on Thursday. Through the fourth quarter, home price gains had slowed to 5.9% year-on-year from 13.3% a year earlier. The OFHEO purchase-only index (which excludes refinancings) had risen 4.1% year-over-year.

Lehman Bros. economists said their forecast for a 0.5% gain in the first-quarter OFHEO price index remains on track. That would put the year-over-year gain at 4%.

Rex Nutting is Washington bureau chief of MarketWatch.


Real Estate is cyclical - it will go up and down, not always up (like I've heard over and over again during this last bull market). In the long term real estate will rise, but by how much we don't know....and we don't know when or where.

The good news is that we might finally be getting to a market where buying real estate as a long term investment might be a good idea again.

Scott Dauenhauer, CFP, MSFP, AIF

www.meridianwealth.com

Protecting your value as foreclosures rise

From MarketWatch Article:

Gary Kent has more foreclosed properties to sell than ever before during his 23 years in the real estate business.

The San Diego-based realty agent currently represents about 100 homes for sale, 85 of which are foreclosures. A year ago, Kent represented about 20 homes for sale with only a couple of foreclosures among them."I feel sorry for the people who lost their homes, but I'm probably going to have to best year I've ever had," Kent said.

While all those foreclosed homes mean opportunity for Kent, they spell trouble for homeowners in the neighborhoods in which they are located. In addition to the potential for dragging down the values of surrounding homes as lenders try to unload, vacant foreclosures also present an inviting target for vandals and squatters.

"When there are a lot of foreclosures in a neighborhood that will put downward pressure on other homes. The banks will try to get foreclosures off their balance sheet as fast as they can, and they will be aggressive at pricing them," said Celia Chen, director of housing economics at Moody's Economy.com.


Click on the above link to read the rest of the article....the real estate market has changed considerably and probably will get worse before it gets better (it will get better though.....just don't know when).

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com

The Consequences of Asia Rising: Jeremy Siegal

Is Asia something to be feared? Does the rise of the East mean the decline of the West? Jeremy Siegal, Wharton Professor answers these questions for us. The short answer is no, the rise of Asia will not cause our demise, quite the opposite.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com

Subprime Meltdown Primer

Five years ago nobody knew what "subprime" meant - now it is a buzzword for overeager lenders who got caught lending to less than creditworthy consumers during a falling housing market (but I thought real estate could never go down???).

If you still don't really know what the whole mess surrounding "subprime lending" really means and how it might affect you then I encourage you to spend a little time with the Mortgage Professor, Jack Guttentag. I've provided links to his series on the subprime mess, as follows:

Subprime Crisis Part I, The Causes of Default

Subprime Crisis Part II, The Lender Role

Subprime Crisis Part III, State of the Market

Subprime Crisis Part IV, What Should the Government Do?


Subprime Crisis Part V, Can the Market Be Replaced?


We can thank Yahoo:Finance for providing Jack to us free of charge.

By the way, this stuff was all predicted well in advance, but nothing happened because Real Estate was still going up, now that it is steady or falling and short term rates are higher (not to mention tougher credit standards), this all starts falling apart. Easy to predict, difficult to predict when.

Scott Dauenhauer, CFP, MSFP, AIF

Wednesday, June 06, 2007

When does it pay to take Social Security benefits early?

When does it pay to take Social Security benefits early? | csmonitor.com

Another article on when to take Social Security benefits. If you're close to retirement you should be reading this kind of stuff and talking to your advisor about it.

Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com

10 reasons brokers don’t like index funds

FundAdvice.com - Paul Merriman: 10 reasons brokers don’t like index funds

Paul Merriman at Fundadvice.com gives a great top ten list on why brokers hate index funds! If you're buying funds from a broker, you should really think twice.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238

Obituary/Reflection

With all the sadness and trauma going on in the world at the moment, it is worth reflecting on the death of a very important person, which almost went unnoticed.

Larry LaPrise, the man who wrote "The Hokey Pokey", died peacefully at the age of 93. The most traumatic part for his family was getting him into the coffin. They put his left leg in. And then the trouble started.

Shut up. You know it's funny. Now send it on to someone else and make them smile.


Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com