rdickinson's blog

As you look for safety in today’s uncertain times, you might be wondering if your bank is safe. In my opinion you can trust most all of our local banks, but it might be a good idea to check for yourself.

The markets have been very volatile lately.  No, actually they have been down right ugly.  Fear and panic is ruling the day.  It is understandable and even anticipated that you may be worried or anxious during these times.  The financial markets have been beaten down by continuing bad news and the S&P 500 is down approximately 20% for the year.  Fortunately, I feel many of my accounts have done substantially better than this, but this is of little consolation at the moment.

Fannie and Freddie Problems, Your Home, Oil and Gold - What's Going On?

Shame on advisors who were telling people to never pay off their house but instead to invest the money! As the stock market has run through some rough spots, the money invested in your home has remained safe and sound. Yes, home values have fallen in some parts of the country, but this is primarily a reversal of recent years of hyper price inflation. All in all, home values have maintained their value, especially here in the Midwest.

Key Changes in the Housing Act

Filling up my pickup used to take $40, now my wallet is deflated by $75. I hear the same cash sucking sound when my wife fills up her vehicle. Granted we don’t drive the most fuel efficient vehicles, but our monthly budget for gas has gone up at least $200. Ouch! That’s not pocket change, and Americans on a fixed budget or those who are already living beyond their abilities, are going to feel the pinch.

Rates Are Going Down - What Should Savers Do? Savers are in a pinch. Now, the situation looks to get even uglier.

The Federal Reserve has cut interest rates 1 1/4% so far in 2008. CD rates at local banks have fallen below 4%. You might want to check the rate on your savings account; many are as low as 1%. As the economy continues to slow, you will see even lower rates by this summer. Inflation in 2007 was 4.1%. After you pay taxes on the interest you earn, and after your loss of purchasing power from inflation, you are losing money hand-over-fist.

The Check's in the Mail

Below you will find the details of the recently enacted tax rebate checks.As you can see from this summary, even the simplest of ideas can end up being complex.

Near Term Forces:

Politics:
It appears obvious to me that this country is ready to try a different course of action in 2008.    The Democrats are focused on reversing the tax cuts that the Bush administration helped put into place. 

This isn’t a good way to start the year.  The typical stock market pattern is a positive market in January.  You may have heard of the January effect where stocks start rising in the middle of December (called a Santa Claus Rally) and continue through January.   The year 2008, so far, has been dramatically different, and shows why market timers get burned sooner or later.

Avoiding the Fixed-Income Squeeze

We have all seen those sad letters. Yes, those letters to the editor where a senior citizen is complaining that their property taxes are going up a few percent and they are extremely worried that they can no longer afford their own home. The home where they raised three children. Where they experienced many fond memories of birthdays, graduations and family reunions. Where there are tiny handprints in the cement under the basketball pole.