rdickinson's blog

With the recent financial crisis gold is getting a lot of attention.  I’m starting to hear a lot more radio ads promoting the tremendous benefits to gold. These ads will cherry pick a favorable period of time to show how much more gold has made than stocks. 

I recently traveled to San Diego for Schwab’s annual conference. The time and expense to go were beneficial because I felt it was important to understand the direction and nature of our new economy.

I am pleased to announce that recently Dickinson Investment Advisors won the annual Daily Nonpareil’s 2009 Readers Choice Award as the community’s favorite financial planning company.  I am also pleased to announce that Dickinson & Clark CPAs won the Readers Choice award, for the second year, as the community’s favorite CPA firm.

As the owner of Dickinson Investment Advisors and a co-owner of  Dickinson & Clark, CPAs it gives me a great deal of pride and satisfaction to have our dedication to outstanding customer service recognized.

The Wall Street Journal reported on August 12, 2009 that the national average yield on six month Certificates of Deposits (CD’s) was ¾ of 1% and the yield on two year CD’s was 1.48%.

Here are a few of the reasons I have uncovered for these dismal rates of return:

•    With the banking crisis of 2008, the insurance rates that banks pay to the FDIC have skyrocketed (up to ten fold).

The market has rallied to the point that it is now up to where I didn’t want it to get down to!

Seriously, the markets have improved impressively the past few weeks, and most of us feel a sense of relief. The problems created by the financial mess will take some time to work through, but the market meltdown in February was overdone. Fear will always swing the pendulum too far, so the recent recovery is normal. I don’t anticipate that we will make all our money back quickly. We will have to earn our way back to prosperity.

I have been receiving calls from clients asking if they should stop putting money into their retirement accounts at work. I invest monthly into my own 401(k). If you believe the market is going down and will never come back, then yes you should stop. If you believe we will eventually recover, even if it is a long time, then you should continue to invest. Remember you want to buy low and sell high. Don’t let your emotions get the best of you.

You are not responsible for your actions. That’s the message our government is sending. The American system is built on the law of “survival of the fittest” (with healthy compassion for those less fortunate). We create wealth from innovation that is inspired by the ability to get ahead. Now we are creating a system based on survival of the least competent. If you fail, don’t worry, big government will take care of you.

The Worker, Retiree and Employer Recovery Act of 2008 (the 2008 Recovery Act) contains a tax law change that will give older taxpayers some much needed financial flexibility as they struggle to manage their finances during this difficult economic time.

It certainly has been a strange and interesting year. With all the stress on the economy many investors have simply run for the sidelines creating a bubble in ultra-safe Treasury investments and cash. As we have so painfully learned, all bubbles eventually crash and before they do there are bargains aplenty in non-bubble investments. Here is a list of bargain investments:

For the Conservative Investor: