 
| December 24, 2008 – Merry Christmas & Happy Hanukah | As 2008 ends…upon reflection…this has been a remarkable year for me.
I know that this has been a difficult year for all of us who are investors. While much can be explained, most of us could not have fathomed that financial engineering could be so destructive to wealth creation. Even the institutions that were supposed to protect us were unaware of the perils. As a result, our faith and trust in the "financial system" has been impaired. Fortunately, the US is rich with not only financial resources, but with a resourceful citizenry that will continue to create wealth and opportunities for all - long into the future. This fact has been demonstrated many times in our history….and is the best evidence that the years to come will offer many opportunities. I know my belief is contrary to all of the disclosures in the prospectus you receive. Keep in mind that disclosures are written by folks who are supposed to protect us. This is my last "Margaret's Musing" for 2008. The rest of the Starner family will soon be arriving for the holidays and our townhouse will be packed with 6 adults and 4 grandchildren through New Year's Day. Likely I will be too busy cooking and stepping over toys to do more writing. Scott, Katie and Bruce will be minding the store!! One of my favorite themes is from "The Road less Traveled." Basically, "if you accept the fact that life is difficult, then everything else is a piece of cake." It is the season to be jolly and of good will. I wish all of you a happy holiday wherever you are. And I look forward to 2009 with cautious optimism and faith. | November 21, 2008 – Thanksgiving Week 2008 - Giving Thanks | Thanksgiving is the time to give thanks and be thankful. Fortunately, being thankful is simple and easy. I can hear you say ... "not so easy given the losses in the market both here and globally." Yet, every day our lives are enriched by events and things we take for granted. To name a few for me, I give thanks;
I want to wish you all a happy and healthy Thanksgiving ... I hope that each and every one of you are as thankful this holiday season as I am. Enoy your friends, your family, and Thanksgiving Day. | October 31, 2008 – Happy Halloween! | Dear Clients & Friends, This week, Scott, Bruce, and I attended an event at the University of Miami entitled "All’s Fair: Love, War, and Politics" hosted by James Carville and Mary Matalin. As you might imagine, Carville and Matalin were funny, informative, and in total disagreement on most issues (for example, Matalin on the presidential race: "Very competitive…will go down to the wire. Carville: "McCain is done, stick a fork in him.). Though their disagreements were amusing, the focus of the evening really was the issues upon which they agreed. Specifically, they discussed that they chose their friends not by what side of the aisle they were on, but rather by their core values... that the world has "good guys" and "bad guys" and that the good guys know "how to play the game right." Specifically, they spoke about their shared disdain for political operatives who "jump ship" or “play the blame game” when their campaign is down in the polls. These are the bad guys. Conversely, the good guys stick by their core convictions and remain loyal to the people and causes that are truly important to them. Speaking directly to the many college students, Carville and Matalin– first, applauded them for being so involved in this year’s political process and second, challenged them to stay involved in the causes they believed in – regardless of the election’s outcome – because "losing doesn’t make you a loser…but giving up does." They closed by discussing that they have always learned more from their losses than their victories. Certainly, I think most money managers would agree. Though the context is different, The Starner Group also believes in "playing the game right." Of course, for us, this means creating a long-term financial plan consistent with your goals and maintaining it vigilantly. Certainly, these have been trying times to focus on the long-term. On the other hand, recent market volatility has shown us just how difficult it is to time the market. Specifically:
Over the course of the next few weeks, we will be contacting many of you to "harvest" tax losses. These tax losses can be used to offset any realized/future gains and distributions in your portfolios, hence reducing your future tax bills. We recognize that future gains may be difficult to envision at this time, but historically, the market has produced its best returns coming out of bear markets. Though past performance is not an indication of future results, we continue to be optimistic over the long-term. Lastly, please check the “News” section of our website for some interesting links, including a new audio message from Raymond James CEO Tom James and a series of panel discussions that I participated in for Forbes. We’ll continue to update this section with relevant news in the weeks to come. As always, please feel free to contact us with any and all financial questions and of course…Happy Halloween! Sincerely, | October 15, 2008 – The Wild Ride Continues... | Much has happened in the financial world over the past few days - similar to the Olympics in Beijing, we are seeing new records. So, even though you are likely exhausted from reading and hearing about the financial markets, I wanted to highlight a few of these records, as well as some other items of interest: New RecordsDownside... Upside... Two Measuring Sticks of Market Fear: keep an eye on the VIX and Credit Spreads VIX... For perspective, on October 10th 2007, the VIX closed at 16.67. Credit Spread... For perspective, last week, the spread between treasuries and "A" rated corporate bonds was over 5%. In October '07, this spread was approximately 2%. A Quick Look at the Details:A detailed summary of The Government Rescue Plan (from the New York Times):CLICK HEREOther PerspectivesGiven my frequent musings during this turbulent time, you are likely familiar with my perspective on the markets by now. I thought you also might be interested in a few additional perspectives as well...
Opinions expressed are those of (Margaret C. Starner, CFP®) and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. | September 30, 2008 – The Bill Didn't Pass...Back to Basics | I received many calls yesterday after congress did not pass Paulson's Plan. The market quickly plunged – a scary and angry response to Congress's vote. The VIX (measure of volatility in the market) hit close to an all-time high. Historically, this has occurred at times of "maximum fear." Today the market is more positive - perhaps an indication that there is optimism some kind of recovery bill will be crafted and passed eventually. The credit market needs to have confidence and trust restored... something only the US government can do at this time. As for all the calls. Even my nephew called last night. He was worried about his mutual funds and his ability to buy a home in a year or two. This is the nephew who graduated from Stanford, who spent years working at Goldman Sachs and is now training to be a doctor. He wasn't sure how to think. We recognize that many of you are probably getting quite tired of hearing our mantra of "investing for the long term"... especially when the market drops 7+% in one day after dropping for most of the year. However, that is exactly what successful investing is about... sticking to an approach. Even if you are retiring in 3 years, 4 years, or 10 years, the rules of successful investing are all about sticking to the basics:
As always, please don't hesitate to contact us with any questions. | September 24, 2008 – Conversation with the media | As you might imagine this is the time when I am bombarded with many questions and calls from many including the media. I would like to share with you one that I answered and one that I wrote to give you a flavor of what I am thinking:
What conditions should the government impose on bailed out banks to protect the American taxpayer? Further, what should tax payers get in return for rescuing Wall Street? My response which was posted on Forbes website: First and foremost, I hope this is not a bailout but a recovery plan for restoring trust and confidence in the capital markets. There is a significant part of the economy that is thriving and functioning. The longer a recovery plan is delayed, the greater the damage to the health of the overall economy. My belief is that too many "add ons" may complicate the Plan and thus impede the goal of restoring trust and confidence. The simpler the Plan…the better. A lot of fine print will only impede "trust and confidence" in the Fed's efforts. Taxpayers should be concerned that the Fed does not over-pay for toxic paper. To some degree this can be avoided by a sound purchasing strategy. For example, the Fed could agree to pay only 50% of assumed value. Then share back with the selling firm any proceeds that exceed the 50% price. Dear Public Editor: For what it is worth I would be a lot happier if the NYTimes headlines read "recovery plan" instead of a "bailout" Reply: My Response: Why I would call TARP (Troubled Asset Relief Program) a Recovery Plan and not a Bailout. Dictionary Definitions: Bailout: a rescue from financial distress Recover: to bring back to normal position or condition I think TARP is a recovery plan for two reasons: One: in the simplest sense, many of these assets will "recover" - not to full price of course, but to prices higher than exist in the market today. Unfortunately, due to rating/capital requirements and the sheer size of the risk, no one is willing to purchase them. As a result, their values keep falling. The only institution with the balance sheet to hold all of these assets while they "recover" (partially) is the United States. Secondly, and more importantly, by taking these items off the balance sheets of the financial institutions, our financial system can "recover" and resume some semblance of normal operations. A "bailout" implies that this is being done to save these financial institutions. I believe that this plan is not about saving institutions - it's about saving the entire system. If Bernanke and Paulson thought that they could let these institutions fail without causing a depression, they surely would. That's why they let Lehman go. However, the fallout from Lehman's failure (money markets "breaking the buck," AIG, Goldman, etc. heading towards insolvency) showed them that this scenario will rapidly turn into a chain of falling dominoes - housing values will continue to plummet, the freefall in equities will accelerate, banks will stop lending to consumers and to each other, etc. The only way to stop the chain is to "take away the dominoes" altogether. So, that's what Paulson and Bernanke did. Opinions expressed are those of (Margaret C. Starner, CFP) and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. | September 18, 2008 – Restoring Faith and Confidence | To put it mildly, I repeat the saying, "we certainly live in interesting times". Over the course of 72 hours, we have seen the failure of Lehman Brothers, the buyout of "Mother" Merrill Lynch, and the bailout of AIG. Just a week earlier, we saw the bailout of Fannie Mae and Freddie Mac. The Fed has committed around $300 Billion. Though I can't say I'm happy about the 500 and 400 point declines of this week (sandwiching a 100 point "up day"), given the stunning reconfiguration of the Wall Street landscape, I'm certainly not surprised. Certainly, I suspect much of this market action can be attributed to massive short selling ahead of the change in short selling rules that goes into effect today. Over the past few days, we've called and fielded calls from many of you…some of you have expressed consternation about the government's recent actions - specifically the AIG bailout - and the pros and cons of using taxpayer money in this fashion. As you might imagine, I have an opinion on the subject…. We are in a crisis. Make no doubt about it. Have we been through crises before? Yes. Do I believe we will get through this one? Absolutely. That being said, our financial system is under tremendous pressure and the cracks are beginning to show. The AIG bailout was an unprecedented action to address those cracks, and to try to stop them from spreading any farther than they already have. Though we've never seen the government bailout an insurer before, nearly every severe crisis in our history has been accompanied by unprecedented government action. On the largest scale, the New Deal in the 1930s was instrumental to bringing our country out of depression. More recently, on October 20th, 1987, the day immediately after the stock market crash, the Fed acted swiftly and decisively, adding liquidity to the market, and dramatically liberalizing the rules that governed the lending of securities from their portfolio. Though each unprecedented action has been different on its face, all have shared the same goal - to restore faith and trust in the system. Certainly, the problems that face many financial firms today are of their own making - greed and unnecessary risk-taking pushed aside good judgment and conservatism. However, those poor decisions have already been made. Dwelling on them will not solve the problems facing our economy. I can draw a parallel to the recent events in Galveston, where Hurricane Ike has ravaged the island, making it dangerous and unlivable. Some Galveston residents chose to ignore the evacuation warning and were stranded. No one would dispute that these residents made a poor, potentially fatal decision. Yet, brave rescue crews have risked their own lives to save them nonetheless. Today, we are suffering from a financial hurricane and the recent bailouts are the rescue mission. The Starner Group's utmost intent is to be in touch and accessible to you whenever you need us. If you have any questions or would like to discuss anything in more detail - Please don't hesitate to call or e-mail. | July 22, 2008 – Another Celebration | July, 2008 is the 25th anniversary of our parent company, Raymond James Financial (RJF) going public. And today, despite the fact that the financial sector has been truly struggling, RJF proudly announced positive and growing earnings for the last quarter. I just returned from our Raymond James & Associates annual sales development conference which was held in Boca Raton, FL – and I am happy to report that although Raymond James has changed in many ways since our public offering in 1983, our values are still the same. I attended my first conference in Boca in 1981 with Lise, Dana, and Roger…in other words my entire family. At the time, Raymond James was very small and still a privately held company... primarily by the James family and a few employees. Bob James was CEO and his son, Tom James, was the President. Tom was accompanied by his wife and sons too. In fact, everyone brought their kids. Tom and Bob always promoted Raymond James as a family oriented firm in those days…and even though we're no longer small, we’re still family-oriented. Today, my division, Raymond James Associates, has almost 1200 advisors…and at Boca this year 440 advisors along with 765 family members attended. I still have loads of fun watching all the families manage work and play. The day begins at 7 AM with breakfast in a giant ballroom…attended mostly by the advisors who then have to scurry to meetings. Later in the morning, the place fills up with family members – from new born babies to the college set. During that first breakfast, the kids all get to know each other and by lunch they’re best of friends... forming their own “network” as members of the Raymond James family. Even more importantly, they get to know and meet (at a young age) the company that employs one of their parents. For 27 years, every summer, I have seen these young ones grow up…and I still follow their young adult lives with annual updates from their proud parents. This year, my grandson, Cole attended with his parents, Lise and Bruce... another generation of youth. Lise, who attended as a teen-ager, was now in a new role as a wife of an employee – as Bruce is now in his second year as a member of The Starner Group. Cole loved playing with all his new friends…especially Jesse and Dylan, Scott Weingarden’s two sons. As I’m sure you can tell, I was extremely proud to have my grandson be part of the RJ family. So now you know a bit more about Raymond James commitment to family values and preserving what is truly important. That commitment is also how the firm has avoided the financial write-downs taken by many financial firms. Even in these trying times for the financial services industry, Raymond James continues to be a firm of growth and financial strength. Unlike many of its peers, the firm has not participated in the periodic “layoffs” that plague the industry. Of course, I can recall many times when that commitment made RJ seem out of step with the industry – as other firms employed more and more leverage to produce great returns. In the early 70’s, when Tom first became president of the firm, he learned first hand the perils of excess leverage. Specifically, he expanded too quickly and almost lost the firm as a result. That lesson has kept the firm focused on a healthy reserve and relatively low debt. After the public offering, the firm has primarily been financed from current earnings. The stock’s performance over the years has proven the value of this conservative approach. Since going public, the value of one share has grown from $0.68 (after splits) in 1983 to $ 29+ today which is more than 16% compounded rate of return for 25 years – not including dividends. I can’t help but compare the financial behaviors of many of Raymond James’ peers with the behaviors of today’s consumer. As I read the NY Times and Miami Herald this morning, I saw multiple articles about personal debts and the easy credit that people used to acquire that debt. Another article spoke about how one misfortune (illness or loss of job) can become a tipping point toward bankruptcy. Thankfully, the young have time to regain their financial footing and profit from this type of experience. However, I have met many older retirees who may have retired too early or spend beyond the capacity of their assets. Too many didn’t realize how much easier it is to achieve financial security by working a few extra years. Just recently I met with a retired couple (both age 65) who will run out of money in 10-12 years if they continue their current spending. They were unwilling to change or adjust their life style. The couple had a nice asset base that could support them in comfort though not with lots of luxuries. My question to them was whether they would prefer the luxury of never running out of money (i.e. financial security) or the illusion of a life of luxury for the next few years. They felt they were not extravagant and were entitled to the life they now led. Their response reminded me of David Brook’s columns in the New York Times. He has written frequently about the shift in our culture from thrift to debt and the deteriorating norms in the US. I recommend you go to www.nytimes.com and look for David Brook’s columns on June 10 and July 22, 2008. I hope this musing finds you all well and that you are enjoying your summer. As always, please don’t hesitate to contact us with any and all of your financial questions. | July 15, 2008 – Fannie Mae, Freddie Mac and IndyMac Bank Troubles Daze Investors | Dear Clients & Friends, Fear that the nation’s largest mortgage agencies could fail set against a backdrop of the failure of Pasadena, California-based IndyMac Bancorp roiled financial markets Monday. After an early surge, the Dow Jones Industrial Average (an unmanaged index of 30 widely held stocks) finished the day down 45.35 points. This occurred in the face of a Sunday announcement that a federal government guarantee would provide the mortgage giants with the liquidity they need for normal operation, a move designed to relieve investor concern. The failure of IndyMac Bank – the third-largest financial institution in U.S. history to fail and the largest in two decades – wasn’t a surprise to some. It’s main business was built on mortgages made to borrowers with poor credit records, and when the secondary market for these subprime mortgages dried up, so did the bank’s money supply. As a regulated bank, depositor accounts worth up to $100,000 (and IRA accounts up to $250,000) are insured by the Federal Deposit Insurance Corporation (FDIC, an independent agency established by Congress in 1933), which began running IndyMac Federal Bank Monday morning. Accounts at Raymond James Bank, are similarly insured by the FDIC. The troubles at Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), which together hold or back more than $5 trillion in mortgage debt – about half the nation’s total – were much different. Together, they are saddled with very little subprime mortgage debt, but as mortgage holders defaulted over the past year, their reserve cash dwindled. They have been forced to raise new cash during these tough economic times. Originally government-created agencies, they are now owned by shareholders. Their shares have plunged in value over the past week as worries mounted. Analysts, including Raymond James’ Chief Investment Strategist Jeff Saut, say the system will hold together and cannot be allowed to fail because the global implications of a U.S. failure of this magnitude would be enormous. Rather than a real financial meltdown, the Fannie Mae/Freddie Mac saga may be more a crisis of confidence. In the midst of all this concern, you may wonder about the financial protection of your own investments handled through Raymond James. Each account custodied by Raymond James & Associates is protected for the net equity of the client’s securities and cash positions. Raymond James & Associates is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $100,000 for claims for cash). An explanatory brochure is available upon request or at www.sipc.org or by calling 202-371-8300. We then provide additional protection (excess SIPC) through Customer Asset Protection Company, a licensed Vermont insurer rated A+ by Standard & Poor’s. Account protection applies when a SIPC-member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against market fluctuations. Accounts held at Raymond James Bank, as noted above, are insured by the FDIC. Everyone will be paying attention to the market this week to gauge its considered reaction to the federal guarantees for the mortgage agencies and concerns that other banks could fail. This is certainly a trying time to be an investor, but, historically, such times have been favorable to those who diversified their holdings and set their course for the far horizon. If you have questions or concerns, please don’t hesitate to call me. Sincerely,  Margaret C. Starner, CFP Senior Vice President, Financial Planning Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are affiliated with Raymond James Bank, member FDIC, a federally chartered savings bank. Unless otherwise specified, products purchased from or held at affiliated Raymond James Financial, Inc. companies are not insured by the FDIC, are not deposits or other obligations of Raymond James Bank, are not guaranteed by Raymond James Bank, and are subject to investment risks, including possible loss of the principal invested. Products, terms and conditions subject to change. Subject to standard credit criteria. Property insurance required. Flood insurance may be required.  | July 4, 2008 – Happy July 4th! | The headlines are not too reassuring these past few months;
Will there be much to celebrate come July 4th??? Headlines say fewer people will be taking the usual long holiday weekend vacation with gas so high. Indeed, 2008 has been a roller coaster ride ... not a typical election year market. GM stock is at a 34 year low. Rocketing oil prices has made what was once a mild market correction a much more serious market correction. And as is often the case in periods of pessimism, companies with earnings and good businesses are seeing their stock price plummet too. I don't want to sound "Pollyannaish" or not concerned, BUT ... there will always be market cycles. Let me be clear, the downsides never feel good ... yet at the same time I am confident about long term continuing global growth. Dramatic growth has created enormous wealth for developing counties. And we have shared in some of that growth. Growth has also caused problems that will require adjustments - one of these problems is the demand for oil and many commodities. Soaring costs are causing disruptions globally. In time, the troubles will create their own solutions and eventually a recovering economy. Different sectors will benefit. It is likely we will see less outsourcing as cost of shipping continues to soar. The rising food prices are already encouraging farmers to plant more, thus greater supply will result in lower cost - certainly, in the short term, portion control is probably good for our weight! Of course, the wild card in this entire equation is OIL. Each of us can collectively do something about the supply of oil ... both by developing habits of conservation and pushing for an intelligent energy policy for the country. Already higher oil prices are making alternative sources of energy very attractive. I just returned from a long trip to Italy. There, we saw "smart" cars and electric cars everywhere. The cities have electrical outlets as well as free parking to encourage use of electric cars. Again innovation and solutions will generate investing opportunities. So again ... what are we going to celebrate this July 4th? As we call money manager after money manager ... they are all rubbing their hands with glee at the good opportunities they currently see in the market place. They all tell us, that we will be rewarded by these pickings in due time ... as is always the case in investing, patience is key. Certainly, some of you may have noticed that Warren Buffett is on a buying spree. Though none of us has $35+ billion in cash to spend, we should always remember Mr. Buffet's most famous quote "Be fearful when others are greedy and greedy when others are fearful." Our energy analyst, Marshall Adkins, says natural gas supply is growing and he expects natural gas price to be lower and lower. Importantly, July 4th is about remembering how fortunate we are to live in a free country and independent country. Despite the headlines of losses, the US is a prosperous and vibrant country that constantly provides unexpected opportunities. And as most of you know, July 4th is a very special day for me.
I am sure you will be with friends and families this special national holiday ... and that is something worth celebrating. As always, please do not hesitate to contact us with any of your financial questions ... whether they are specific to you or about the markets in general. | June 10, 2008 – Graduation ... Memories ... Milestones | My nephew Brent will be graduating from high school today. Brent is the oldest son of my late brother, Randy, and the family is so proud of what a nice young man he has grown to be. Randy is beaming somewhere, I am sure. I ponder what words of wisdom will make a difference. Brent is going to be a business entrepreneur major ... whatever that is. I remind him that his grandfather was an entrepreneur and never went to college. I was inspired my first day of college by the President's speech at freshman orientation. I knew instantly why I was attending college. He said, "We are not here to help you get a job, nor get a career, we are here today so you can learn to think ... that is what you will take from Stanford when you leave." For many of us, college is a wonderful time of life ... to still be in a protected environment, to learn to think, be independent, and to enjoy and interact with one's own age group. I had a ball in college ... little did I know how much the world would change. Learning how to think was just as important as my degree in economics in navigating through my career and raising our family. So Brent, my advice is don't worry about being an entrepreneur. Instead, I repeat the message of my college President, and with this you will surely succeed wherever life takes you. Other memories ... last week was the 40th anniversary of RFK's assassination. I will never forget that moment. I was living in California, watching the primary election returns while feeding my youngest daughter, Dana, barely three months old at the time. As the assassination news broke, I could not believe this was happening again ... earlier in the year Martin Luther King was also assassinated in Memphis ... not far from my home town. 1968 was a turbulent year for this country. A major milestone ... this past week we saw the democratic nomination be determined between a black man and a woman. 40 years ago ... that didn't seem possible. In 2008, exactly 40 years later, the memories of both Martin Luther King and RFK have been well served. Milestone ... Friday, the 6th, oil hit an all time high of $139 barrel. Remains to be seen, how much speculation is. Pricing is finally forcing us to rethink how we use our cars. Walking more is healthy. And for me another milestone. I again have been recognized in this week's Barron's magazine as one of the top 100 Women Financial Advisors in America. I thank all of my clients and friends for this wonderful recognition. I hope the start of summer finds you all well. As always, please don't hesitate to contact us with any financial questions. | May 8, 2008 – PART 2 - THE 4% FINANCIAL CRISIS? | Last week, we talked about the average returns of residential housing over the past 20 years. Today, I want to discuss how an asset that returns 4% annually became responsible for one of the larger financial crises in recent history. This housing crisis is rooted in numerous factors. Coming out of the tech bubble, investors were looking for "safe" investments. What could be safer than real estate? After all, as the old adage goes, "God ain't making more land." As more people bought, the system began to feed itself. Mortgage brokers, working on high commissions, began to push adjustable loans with low teaser rates - opening up the market to more buyers who could never afford their payments once rates adjusted upwards. At the same time, existing home owners began to draw down their home equity, sometimes refinancing multiple times in the same year and using the proceeds for big ticket purchases, or simply to support their lifestyles. Of course, borrowers and mortgage brokers alone can't cause a bubble. Lenders are needed to provide funds for all those purchasers and refinances. Unfortunately, many lenders were all too happy to participate in the housing frenzy. The reasons why were explained in detail by fund manager Chris Davis: "Lenders did not mind making these loans for two reasons. First, they could repackage them and sell them in the secondary market. Second, even if the borrower could not repay the loan. , rising home prices would allow the home to be refinanced or sold at a profit to some other buyer who was likely to finance it the same way. The result was a sort of Ponzi scheme requiring constant refinancings, constantly rising prices and more and more unsuitable buyers." As the "Ponzi scheme" began to unravel, indirect participants - specifically those who purchased the repackaged mortgages - began to suffer as well. Many of these securities are owned by firms that are required to "mark" their investments to market. In other words, the value for their holdings must be stated at current market values. Hence, even if a mortgage is current, the holder may be forced to price it as if it were delinquent. Davis writes: "Although some of these paper losses will not become real cash losses, they are treated the same for accounting purposes. The resulting charges forced many financial institutions to raise capital, largely from cash-rich foreign investors, at depressed prices." So, that's how a 4% investment can create a global financial crisis. So, what does this mean for investors? More than a few of our clients have approached us in recent months, asking if this is the time to start 'dipping toes" into real estate. Certainly, if you are looking to purchase a new home -and you think you've found that perfect place -- now is as good a time as any. At the Starner Group of Raymond James & Associates, we have always believed that your primary residence, or even a second home, should not be looked at the same way as other investments. A home is where you live, and as such, the "returns" must be measured in more than dollars and cents. For those looking to 'invest" in real estate, we have always been strong proponents of Real Estate Investment Trusts (REITs), which provide opportunities for income, capital appreciation, and exposure to real estate without the labor-intensiveness that comes with being a landlord. Certainly, the chart from last week's blog poses a strong argument for REIT's (nearly 12% annual returns over the past 20 years…though of course, past returns are no indication of future performance). I hope this blog finds you all well. As always, please don't hesitate to contact us if you'd like to discuss the housing market or any of the other information in this blog in more detail. REITs are financial vehicles that pool investors' capital to purchase or finance real estate. REITs may concentrate their investments in specific geographic areas or in specific properties types, i.e., hotels, shopping malls, residential complexes and office buildings. The value of the REITs and the ability of the REITs to distribute income may be adversely affected by several factors, including rising interest rates, changes in the national, state and local economic climate and real-estate conditions, perceptions of prospective tenants of the safety, convenience and attractiveness of the properties, the ability of the owner to provide adequate management, maintenance and insurance, the cost of complying with the Americans with Disabilities Act, increased competition from new properties, the impact of present or future environmental legislation and compliance with environmental laws, changes in real estate taxes and other operating expenses, adverse changes in governmental rule and fiscal policies, adverse changes in zoning laws, and other factors beyond the control of the issuers of the REITs. REITs involve risks such as refinancing, economic conditions in the real estate industry, changes in property values and dependency on real estate management. | May 1, 2008 – THE TRUE VALUE OF A HOME….EXPERIENCE VS. INVESTMENT | As an asset class, real estate provides potential for growth and growing income. Most people's exposure to real estate is owning their home - and over time, the home becomes a large percentage of the average American's net worth. However, for most Americans, their home is more than just an investment - it's an experience - a place to raise their family or spend their retirement years. Still, we have come to expect to sell our home for more than we paid for it. The question is how much more? Take a moment to examine the charts below, especially the chart on the right, which illustrates the 20 year growth rates for various asset classes.  I'd like to draw your attention to the bar labeled "homes," which shows that over the past 20 years, homes have returned an average of 4%. Hard to believe that millions of housing speculators (many now in foreclosure) leveraged themselves to the hilt to chase 4%, isn't it? Of course, they weren't really chasing 4%...they were chasing the unrealistic, outsized returns experienced in certain markets during the past six years…much the same way their predecessors chased unrealistic, outsized returns during the tech mania of the late 90's. The speculators claimed this time "was different" - and in some ways, it was. After all, conventional wisdom has always told us that owning a home is a winning proposition. But the speculators weren't buying a home, at least not in the traditional sense. A home is a place where people live -- financed on realistic terms, with manageable payments, paid off over an extended period of time. The speculators were buying houses - sometimes three or four at a time, financed on unrealistic terms, with payments that would become unmanageable if prices stopped rising at meteoric rates. This, as we all know, is exactly what happened. Certainly, the tragedy of the story is those buyers who didn't know they were speculating - those who tried to buy a home and got in over their heads, either from exotic mortgage products or other factors. But, that is a story for another day. Today, I want to write a bit more about my own experience with housing speculators. Earlier this week, I received a call from a colleague who lives in Northern California. The call began with "I have a potential business opportunity for you." Now I must digress slightly to say that anytime someone opens a conversation with that phrase, my first instinct is to run for the exits as quickly as possible. This was no exception. The "opportunity" was one of her clients. Specifically, a very nice, 60-year old woman, who until early last year, had a million dollars of equity in her California home. What happened to that equity? She refinanced it away, using the proceeds as down payments on 10 (yes 10!!!) homes in the Fort Myers, FL area. Today, the woman is essentially broke, contemplating bankruptcy (hence, my "opportunity" - bankruptcy counseling), and probably will lose her home. Now, I don't recount this story to make light of this woman's plight, but rather because stories like these can be found in every bubble throughout history. I still have fresh memories of the "day traders" who margined every cent they owned to purchase internet stocks, the junk bond "experts" who lost their shirts in the 80's, and the S&L kings that crushed the Bank of New England in the early 90's. In fact, I recently read an old Spanish proverb that aptly describes all of these bubbles: "What wise men do in the beginning fools do in the end." Anyone who has owned a home for some time and chose not to refinance recklessly (i.e., been "wise") likely has more equity now than five years ago, despite the real estate crash. Certainly, this is not the case for those who loaded up on residential real estate in late 2006/early 2007, often by taking on excessive debt, buying multiple homes, etc. (i.e., "fools"). Of course, a third class of people exists - those who purchased a home recently, with a mortgage that was within their means, but now find themselves "underwater." To some extent, these people are just plain unlucky. But remember, a home is more than an investment…it's an experience. And so my advice is to enjoy that experience…because eventually, your home will appreciate. How much? No one knows for sure, but I'd venture 4% annually may be in the ballpark. Next week, expect to receive part two of this blog - where we'll discuss how an asset that returns 4% annually became responsible for one of the larger financial crises in recent memory. Past performance does not guarantee future results. There is no assurance these trends will continue. | April 11, 2008 | A week ago I said farewell to my sister, Mary, one of my very best friends. At her funeral, the chapel was overflowing with many family members, friends, and work colleagues. Mary was known for her smile, good nature, and an ability to do most things very well, and her fried chicken. She was a rare talent. Mary was diagnosed with lung cancer, bronchial Alveolar carcinoma, about 3 years ago. And her prospects were not great. Due to a miracle drug she did have 2 great years by taking Tarceva. Then the cancer slowly began to win the battle. We took advantage of her time. I flew to CA often and we had many family events. Plus we chatted almost daily. She even flew to Miami to celebrate my 25th year with Raymond James. During her illness we never discussed funeral plans. I thought we had time. Last summer the cancer spread to her brain…and her ability to articulate her feelings and thoughts were limited. She could still enjoy and laugh at stories and gatherings…she just couldn’t share her thoughts. I had never considered such a possibility. So many thoughts and ideas were locked in what was a very bright mind. I was in NYC when my brother-in-law called and said “she has less than 48 hours”. I flew to CA immediately. No plans had been made for the funeral. Fortunately, our entire family was at Mary’s bedside when she died. And we all stayed to help plan and prepare her farewell. This leads me to an important planning item. As a financial planner, we work on solutions for our clients’ goals and aspirations. While we work on many, many estate plans, I have never worked with a client on preparing for their funeral. What songs would you want, who should speak, etc. Mary’s funeral was about as perfect as could be…and it took an army of relatives. We assumed this was the party Mary would want. It was certainly the party we wanted and maybe that is ok. Just in case - maybe you want to start a file of favorite pictures, list of songs you love, things you want to say, things you want remembered. Do this while you can…it will make it so much easier for your family to know they are carrying out what you want…they can still add what they want too. Finally, thanks to the many of you who sent cards, called, and extended your heart felt sympathies. All was very comforting. Margaret | March 20, 2008 – Welcome to Spring and a nice story... | Visa IPO - huge success and the small role of the Starner Group This week, The New York Stock Exchange launched the largest Initial Public Offering (IPO) in its nearly 200 year history…and whether or not you realized it, chances are that all of you were involved…at least indirectly involved, since the IPO was for Visa, the largest credit card transaction company. The history-making IPO raised over $19.9 billion dollars. Though that's an eye-popping number, this IPO was also special to The Starner Group for another reason. As many of you know, I am a long-time supporter of Teach for America (TFA), a non-profit that recruits recent high-achieving college graduates to serve two-year terms as teachers in some of the nation's most teacher shortage schools. My association with TFA goes back many years. My oldest daughter was roommates with TFA founder Wendy Kopp during the organization's founding years. Soon thereafter, my younger daughter met her future husband when both were employees at Teach for America's corporate headquarters. During those early years, TFA was constantly struggling for donations to fund operations. Often times, these donations would come in the form of stock, which TFA then had to sell incurring hefty commissions. My daughter and I arranged for TFA to become a charitable client of Raymond James, and to sell all of their stock at cost. Over the past 15 years we have witnessed many stock gifts to TFA. But nothing like the mysterious phone call we received a few weeks ago! The call came from someone at the NYSE representing an anonymous donor. She asked if we could have a Raymond James representative on the floor to execute the first ever trade of a company that was having its IPO in a few weeks. The anonymous donor wanted to gift enough money for TFA to buy the first 1000 shares that traded! As I'm sure you may have guessed by now, the IPO was for Visa. The donor was none other than Visa's CEO, Joseph Saunders, whose daughter is a TFA corps member in New York City. On the day of the IPO, Mr. Saunders brought his daughter's entire class to the floor of the Exchange to join him as he rang the opening bell. Soon thereafter, a Raymond James trader purchased the first 1000 shares of Visa for TFA. CNBC covered the entire event. I must say that it was amazing to watch history unfold…and to know that we played our own little part in it too! | February 7, 2008 – Happy Year of the Rat!! | Today marks the beginning of the Chinese New Year which is the biggest holiday of the year for the Chinese, Vietnamese, Koreans and for many others in the Far East. The Japanese are among those in the Far East who observe the western calendar and not the Chinese calendar. This is a time of festivities in these Asian communities. There will be lots of food, noisy fireworks and family gatherings galore to celebrate the beginning of the New Year. My children and grandchildren will be eager today to get their "red envelopes" filled with money. The celebration lasts 15 days so families will eat together with various friends and relatives many times during the next couple of weeks. I recall being in Vietnam during Chinese New Years a few years ago ... and every where I saw kumquat trees and all kinds of oranges along with the red streamers and gaudy gold decorations, and fireworks to scare off the evil spirits. What does the Rat Year Mean? First, for most of you, I would prefer to call this the year of the Mouse ... which seems much nicer and cuter. But I will defer to the translations of the Rat. The Rat is the first sign in the Chinese Zodiac. Chinese astrologers predict that the Year of the Rat is a good year to begin a new job, get married, launch a product, or make a fresh start. Ventures begun during the year may not yield fast returns, but opportunities will come for people who are well prepared and resourceful. The best way to succeed is to be patient, let things develop slowly, and make the most of every opening. The Year of the Rat will be favorable to people born in the;
Businesses expected to perform well this year are related to health and high-tech industries, mining and hotels. January 2008 started off pretty rocky for investors in the US and around the globe. It is always interesting to me that the message from the Chinese zodiac always come in such a timely manner. The year of the Rat is predicted to be rocky…but the year also rewards those who prepare and are patient. According to these soothsayers, this is not the year for unnecessary risk and yet is still a good year to begin opportunities. The important words are preparation and patience. If you want to join the celebration, I suggest you get some red envelopes, fill them with coins or a few dollars and pass them to all the young children in your family and of friends. Also remember the elderly with a red envelope. Your grandmother, grandfather or elderly aunt will likely have a nice smile. Gong Hay Fat Choy is how the Chinese say "happy new year" and is translated as "good health and wealth". The Starner Group wish all of you - Gong Hay Fat Choy. | January 25, 2008 – Lots of ????? | The market has dropped around 10%!!! Many friends and clients have called us recently with these questions (and many more???). While we don't have all the answers, here are our thoughts: Where is all the money? In recent weeks, the credit crunch started by sub-prime lending and the collapsing housing market has spread to all areas of financing. Some of you may be asking "What is a credit crunch?" Essentially, a credit crunch is when financial institutions are unwilling to lend money at reasonable rates because they have reduced confidence in borrower's ability to repay. In this case, the borrowers are not only individuals, but also corporations and other financial institutions. Important to know that many corporations are flush with cash. They are just wary about using it in this environment. Is this crisis almost over? The Fed took a dramatic step by reducing short term rates by ¾ points before their scheduled Jan 30 meeting. Certainly this will help those with good credit and equity in their homes to refinance at lower rates. The rate cut should also provide some relief to the banking and credit markets. Recent market action indicated that the markets have sped up the corrective process and are pushing for some solutions to occur quickly. As demonstrated by the unscheduled rate cut, the markets got the Fed's attention and the Fed responded. The proposed stimulus package by Congress includes a temporary provision for increasing conforming loans to $729,740 from $417,000 as well as raising the limits for which FHA and FNMA can insure. This will broaden who can refinance to lower rates and what can be insured. This will likely do more than the tax rebates. We recognize that many of you are very concerned about the recent volatility – what it means for US and Global markets and your portfolios. At times like this, it is important to remember that volatility – even significant volatility – is a normal part of the markets. Looking ahead, we anticipate continued market volatility as investors consider whether efforts to ease credit will prove successful. What are the Starner Group doing with portfolios? Good question. As advisors, we trust, that a diversified portfolio of equities will survive through many storms of turbulence. Clearly, the current credit crunch is one of those storms. So, what do we do when storms occur? Three steps:
Simultaneously to the three above steps, we analyze our investment selections to identify better opportunities that may materialize when the storm subsides and moves on. Other than that? We wait patiently. We encourage investors to remain focused on the long term, both on their long-term goals and the long term factors that have fueled the growth of the global economy so far. Having invested through turbulent periods in the past, we remain confident in our time-tested discipline. Still, even after all my Musings and discussions, we have those who wish we could time the market. I wish I could too. Yes, you read about the ones who did and heard from your friends who did. But history has shown us that market timing and emotional investing are not the paths to wealth over time. Specifically related to market timing, we recently read an interesting article written by John Bogle, founder of Vanguard. He compiled the returns of the S&P 500 from 1950 through 2007, a period comprising over 14,000 trading days.
That's why we at the Starner Group don't spend too much time wishing. We prefer to stick with the tried and true practices of successful long term investing. I hope this musing finds all of you well. As always, please do not hesitate to call us with any questions you might have. Reminder: go to www. Starnergroup.com for the latest market commentary from RJA's strategists and economic outlook. Diversification does not ensure a profit or protect against a loss. Investments are subject to market risk includinz possible loss of principal. Past performance does not guarantee future results. | October 30, 2007 – Trick or Treat… | Halloween is upon us…and so far the season has been more trick than treat. Recently, we've been deluged with the fires in California, tropical storms/hurricanes threatening South Florida, oil prices heading to $100, and the plummeting dollar, not to mention continuing news of gargantuan losses in the sub prime lending arena from big banking centers that should have seen the "trick" coming. Bill Gross, famous bond manager at Pimco, refers to the dangers of the "shadow banking system". Where are the "treats"? Well, despite the volatility, equities in general are performing well. Dividends continue to be increasing at a number of firms, volatility are giving value managers buying opportunities. Jobs are still plentiful and most people who own homes are not in danger of losing them. In the early days of August, all assets classes seemed to be adversely impacted by the sub prime disclosures. However, in short order, this proved not to be the case and the benefits of diversified portfolios became apparent yet again. During times like this, the challenge is to not be "tricked" by all the noise and chatter on CNBC news. That's not to say that it's not normal to be somewhat "spooked" by the noise, as long as you aren't panicked into short term moves. Unfortunately, once panic dominates thinking, one is likely to make disastrous decisions. So how do we survive what appears to be a tsunami of bad news? After all, even the best companies cannot escape all bad news. The real question is "can they survive it and thrive over the long term?" A similar question can be asked about our portfolios – are they structured for the long-term and to withstand bad news that will most certainly occur? After all, it is a near certainty that some component of your portfolio will not test well during turbulent times…which is why diversification is so key to risk management. We visited our grandson and granddaughter in Dallas this past weekend. While there, we attended a pumpkin festival in beautiful autumn weather. The kids are all excited about their costumes and the treats they will rake in. In Miami we are much more concerned that the latest tropical storm, Noel, will mar the children's fun of going door to door looking for their goodies. Such is the delight of having children. They are our future and our hope. Likewise I have enormous faith in the long term growth of our economy. The ability of mankind to adjust to adversity and needs never ceases to amaze me. Our little kids and grandchildren certainly reinforce this faith. My best wishes to all of you for a few more treats this Halloween and beyond. Margaret | October 16, 2007 | I confess the first thing I do every morning is make my coffee and open up the NY Times. This morning instead of the coffee, the announcement of the Nobel Prize winners for Economics jolted my memories. The memory jolt came as I was reading about the three economists who just won the Nobel Prize for their work in mechanism design theory. Interestingly, two of the three trained under Nobel Prize winner Kenneth Arrow, whom I also trained under during my honors study at Stanford. Now, I do not for one nanosecond put myself in the league as these esteemed Nobel prize winning professors. However, as I read the article, I recalled my own studies of mechanism design theory and I realized that perhaps I'd taken for granted the impact that Professor Arrow's teachings have had on our work at The Starner Group. I couldn't hope to explain how the three professors used the mechanism design theory to win the Nobel Prize. However, I can provide an explanation of the theory's basic tenets. Mechanism design is about achieving outcomes. The first step is to determine a desired outcome. Then, the goal of mechanism design is to determine how this outcome can be achieved with minimum costs to other objectives, taking into account potential obstacles, as well as staying aligned with goals and values. Designing a financial plan is a modest form of mechanism design theory. We start with the client's goals, where the client is now, and what opportunity and constraints exist for achieving the goals. Next, we quantify family values, lifestyle, and time horizon. We use all of this information to create a plan, which is the roadmap to achieving goals, or as mechanism design would say, an outcome. Outcomes are the driving force behind everything we do. Over the years, many prospective clients have come through our doors immediately asking about how to invest and what returns to expect. Our response is always the same – we have no idea!!!! At least until we get to know you. After all, someone whose goals can be easily achieved within their current lifestyle is entirely different than someone pursuing a "stretch" outcome. Since this is the case, we never work with a new client until we have a thorough understanding of their goals…and even though that's not exactly Nobel Prize winning stuff; I still think Professor Arrow would be proud. | Wednesday, 10 October 2007 – Scott Weingarden's Day | Today, Scott celebrates his 10 year anniversary with Raymond James. We haven't had a chance yet to celebrate his contribution to you, our clients and friends, and most of all to me, the founder of the Starner Group. After 10 years, I can't imagine the Starner Group without Scott. His love for the practice is expressed in his daily commitment to being here for every phone call, question, and service request. His quest for knowledge is part of who he is. All of you know of his good-nature, patience, and willingness to explain something until it can be understood by all. I didn't want today to pass without expressing my "thank you" to Scott. To sum it all up, I decided to share a letter that Scott received today from Tom James, CEO of Raymond James. Dear Scott: Congratulations on celebrating your 10-year anniversary in October with Raymond James and our Coral Gables office. It gives me great pleasure to acknowledge your achievement of this important career milestone. Since training with us, you have prospered as an outstanding producer within the very successfully Starner Group. You are to be commended as one of the early pioneers of team development within RJ&A. You hold a juris doctorate and are a member of the Florida Bar, as well as a CFP with membership in the FPA. Margaret Starner shared with me that you are on the verge of earning your CIMA – well done! Your service as a Young President of the Mt. Sinai Medical Center Foundation is an excellent representation of one of our core tenets, that of giving back to the community. We are fortunate to have you as a member of the Raymond James family. I know that Margaret, Frank Amigo and Ira Federer join me in thanking you for your contributions to the Coral Gables branch and to the firm as a whole. I look forward to a long and profitable future association. Sincerely, Thomas A. James
| Wednesday, 4 JULY 2007 | As many of you know July 4th is a big celebration day in my family. As a reminder and for new comers to my Musings, on July 4th, I
For many years in Shelby, Mississippi, my dad hosted a July 4th barbecue. Each Independence day, a crowd gathered at my parent’s home off Hwy 61 to play mahjong, socialize, and eat my dad’s famous barbeque. In the evening there were fireworks galore. This became a local and family tradition, especially the barbeque and my dad’s sauce. This year I will be celebrating with my family, eating barbeque with my dad’s sauce and watching the fireworks from Micaela’s hilltop home near LA.. a long way from Hwy 61. This July the Starner Group family will be ...
Bruce is Micaela’s father and my daughter’s husband ... I guess it’s easier to say Bruce is my son-in-law. Bruce had been many years with Accenture as a consultant in Change Management, with a focus in financial services. Scott and I decided to retain Bruce to observe our practice. In February after spending 3 weeks shadowing the Starner Group, Bruce presented to us and Frank Amigo, our branch manager, his report. Along with the recommendations, he asked to join our practice. Bruce was always fascinated with financial planning and had actually begun studying to be a CFP. I guess it is a natural to move from managing change in corporations to managing change in personal lives. This is so similar to my background of transferring corporate long range planning concepts to individual families. In May, Bruce officially joined the Starner Group. In June, he quickly and successfully passed his Series 7 exam for Securities. In July and August he will be in the RJ Sales training program along with Vanessa. While he will soon finish the educational component for getting his CFP, he will need to complete the requirement of 3 years of experience. Bruce grew up in Maine. Education was from University of Chicago and Executive MBA from Kellogg (Northwestern). He spent 10 years as a consultant with Accenture and 2 years with Sitaro, a technology marketing firm. Best of all he is father of my two grandchildren, Micaela and Cole. Yes, he lives on the hilltop (same as Micaela) near LA. Fortunately, consultants at Accenture are accustomed to a life of travel. After some experimenting and achieving Platinum level on American Airlines (disclaimer.my son-in-law, Kenji, is head of Investor Relations at AAL) , Bruce flies to Miami from LA every week arriving 5:30 a.m. on Monday and leaves Thursday night at 8:30. He chats with his family every night via web cam ... technology is amazing. Bruce’s experience, talent, enthusiasm, and drive have already made a difference to the Starner Group’s practice. Bruce is not only a bright young man ... he is lots of fun and sees humor everywhere. He has a loud booming voice and with his large feet ... makes his presence known. Another interesting fact ... his paternal grandfather lives in Miami too. He knows Parrot Jungle from his childhood! Scott loves having another “guy” to scout investment ideas and strategies as well as discussing sports and the latest movies. I am very excited to have someone with extensive experience in observing and developing strategies to meet the challenges of a rapidly changing world. Our clients, like his corporate clients, want to successfully navigate the changing financial world to educate their kids, retire without financial worries, to afford health care, and leave a legacy for their families. Bruce is going to help us figure all that out for you! And introducing a new voice on the phone – Katie Schwartz, our new Service Associate. Katie grew up in Miami, recently graduated from Wake Forest, and plans to also get an advanced degree at FIU in Latin American studies while working. Already she has mastered organizing the paper/data base in our office and is now working on improving our every day working processes so we all can better serve you. Happy July 4th!!
| Monday, 25 JUNE 2007 | All Roads lead to China ... even Thomas the Train ... China certainly has been in the news a lot recently ... and not necessarily for the best reasons. Of course, we’ve all heard the ongoing complaints about outsourcing and China’s refusal to decouple the Yuan from the dollar. But now, we’ve also discovered contaminated dog food, tainted drugs, and, much to my grandsons’ dismay, lead paint in Thomas Trains. Speaking of Thomas, I’ve had a lot of challenging conversations in my life, but I still don’t envy anyone who has to explain to their three or five-year old why he can’t play with “James” and the “Merry Musical Caboose” anymore. On the subject of China, as many of you know, I traveled there as a tourist last month. We were taking our son-in-law and some friends for their first visit and as such, we focused mainly on the historical sites, and of course, scooping up some bargains. My first trip to mainland China was in 1981. In 1981 we traveled as guests of the Chinese airlines. Pan Am, for whom Roger worked, had just been awarded the first route between the US and China. The mayor of Shanghai was our host in Shanghai and our lodging was the old French embassy which had been converted into a hotel. There were two currencies: one for foreign visitors (which we called “funny money”), and one for residents of China. As foreigners, we could shop anywhere with our “funny money”. The locals, however, were not allowed to have any “funny money” and the local currency could not purchase goods in places like the Friendship stores, hotels, and other places deemed off limits to locals. Bicycles were the main mode of transportation in town. Cars were few. In fact at night, the bus driver would drive with only his parking lights, using his headlights only on the rare occasion that another vehicle was approaching. We would get up very early in the mornings to see all the people buying their breakfast from vendors on the street, practicing Tai Chi, and buying fresh food to prepare for dinner. After 7 a.m. or so, the vendors were gone ... everyone was going to work. Often walking down the street, strangers would slip a letter into our hands with the hope you would mail it for them when we returned back to the US. There was still much residual fear from the Cultural Revolution when neighbors, friends, and families spied and turned on each other, and many worried that these times would return. All the airline engineers/managers we met during our visit had spent time in prison, some for 15-20 years, either for speaking English, being educated, or some other vague reasons. I recall asking them how they remembered their English so well after so many years. One told me that most of them practiced quietly everyday ... it kept them alive and mentally alert. I was curious as to why some spoke with English accents and others like Americans. They told me it depended upon which missionary school they attended ... English or American. [MS1][MS2] Our guides were careful that we didn’t mingle or talk with the locals. In Beijing my daughters and I became attached to our guide, a lovely young lady who was quite bright, informed, and articulate. In the afternoons she would often have tea with us. She was saddened by the horrors of the Cultural Revolution and delighted that Madam Mao was punished. However she was just as horrified that our daughter, Lise, delighted in the opulence of the Forbidden City. As a courtesy, despite the rules, she allowed us to explore the city on our own. Each time, she gave us handwritten cards with instructions in Chinese to show to the taxi driver or store owners. We were careful to obey her about when to return to the group. Now, China has changed just as dramatically as everything you read ... .except that the guides still try to control what you hear and see. Beijing is now a beautiful city preparing for the Olympics and Shanghai has been transformed into a “happening” place with fabulous restaurants, night spots, and shopping. The many bicycles are gone. The boulevards are now wide and teeming with cars. There is much hustle and bustle. Foreigners are no longer the only tourists. Now, droves of Chinese travelers explore the sights right beside them. While poverty, a lack of standardized sanitation, and tough working conditions still exist in China ... it’s basically a country of happy smiling people. Being of Chinese descent, I am aware that the Chinese are pragmatic about life. On my flight home, I sat next to a Chinese businessman from Hong Kong, who was head of a big company in Shanghai. China, while they have lots of workers, still lacks top management talent. I had read that many big companies, especially hotel chains and retail chains, had recruited talent from Hong Kong, Singapore, Korea, etc. to run companies in China. This gentleman said he is being paid a Hong Kong salary and perks. His income tax rate in China is 65% which is also paid by his company. That means he lives very well in Shanghai. He felt that within 10 years, the local Chinese would learn quickly and begin to replace the foreign talent in order to manage and run their companies themselves. I was curious as to what he thought about the conflict between freedom and Communism. First, he said, make no mistake ... Communism is alive in the leadership of China. China is not Hong Kong or Singapore. However, the workers are not even 10 years removed from when most of them were starving. Many of his workers still recall sharing one bowl of rice a day with the entire family. They will gladly accept limits on their freedom to have a full belly, a home, a car, television, a computer, and a future for their children. While they are resigned to some corruption and fraud, this doesn’t mean the workers won’t protest all injustices. They are just as concerned about safe medicine as we are. As an outsider, it is awesome to see such progress in 25 years. I recall 25 years ago, an acquaintance at the World Bank said "have your children learn Chinese, it will be the language of the future.” As I said, the Chinese are pragmatic. They saw what English did for Singapore. Hence, China’s second language is English. Unlike Japan where few signs are in English, many signs in China are both in Chinese and English. Trade, currency, inflation rates, interest rates, affordable goods ... .the road does lead to China. Our future is tied to their future whether we like it or not. A billion people with the drive “to do” and “to be” will have an impact. Still, despite China’s significant economic growth, beautiful buildings, and huge boulevards, many gaps in the country’s development still exist – enough to classify it as an emerging country. However due to their sheer size, when China stumbles, the world will feel it ... and, in my opinion, I am quite confident that stumbles will occur. The advantage China has over other emerging countries is their rich history, belief in education, work ethics, and love of capitalism. Much of their folklore is based upon having a long life with health and prosperity. Even their afterlife is about prosperity. Their rituals are about good luck and bad luck, tricking or influencing fate. However, this doesn’t mean that the US will lose economic world leadership. The sharing arrangement will change. China’s gaps will continue for a long time. The consumer market in China has the potential to grow significantly for both goods and services. The opportunities are vast for everyone. The big obstacle is FEAR. Fear conjures up protectionist policies and limits open dialogue. Many of our economic problems and lack of competitive edge are rooted in policies that we have been reluctant to change. Politically it is easier to blame the foreigners. Make no mistake. If my grandsons quit buying Thomas Trains and we all stop buying drugs from China ... .we will see quick changes in China’s manufacturing processes. Clearly, we are all tied together. Because even though all roads lead to China ... many of them start right here in the United States
| Tuesday, 19 JUNE 2007 | 
HEADLINES!! Some very exciting news! On June 11, Barron's Magazine named me one of America's Top 100 Women Financial Advisors. Specifically, I was number 57. I know many of the women on the list and am honored to be included in their company. Raymond James also received two important pieces of recognition recently. First, Forbes named the firm as one of America's 400 Best Big Companies. On the heels of that award, Business Week named Raymond James Financial as one of the top 25 providers of customer service globally. As someone who's been with the firm 26+ years, it has been exciting to have witnessed our evolution from a tiny Florida brokerage into a nationally-known brand that shares customer service honors with the likes of Fedex, Porsche, and The Four Seasons. That being said, I believe that the Raymond James story is just beginning in so many ways. We're expanding constantly, with new offices opening in states where we've never had a presence before. We continue to add new products and services, all of them with the sole purpose of helping our clients achieve their financial goals. As your advisors, our team's job is to sort through these products to determine which, if any, are suitable for you. Tax News
| Friday, 1 JUNE 2007 | A China experience We just came back from a surface trip to China and I must say that we loved it for numerous reasons. Firstly, first class treatment is affordable. We had fabulous guides who were well-versed in the beauty of the new Beijing, the fascinating sites of the old Beijing, the incredible sceneries of the Yangtze River and the hip shopping districts of Shanghai. Secondly, we loved the pace – fast and exciting -- you don’t have a chance to think because there is always shopping and eating. The guides’ goals are to keep you happy. You are given just enough insights into their daily lives to see that all is well in China, and progress is the country’s most important goal. Perhaps best of all, the guides are remarkably skilled at finding “real” toilets. My first time to mainland China was in 1981 and I had traveled to Hong Kong in 1961. This was my 4th or 5th trip, depending on how one counts. The change is as dramatic as everything you have read. When we arrived, one of my friends said “I am so impressed that the cars are in such good condition. They aren’t rusted, dented…they look so new”. I replied, “That’s because they are new.” Most of these cars didn’t exist 5 years ago. Unlike many of my friends who travel to China, we always seem to end up using their medical system. Thankfully (for us), the Chinese have a rule when it comes to medicine -- guests must be treated as guests. In practice, this means if you are sick and go to ER, you go to the front of the line. In 1981 our 2 daughters and my husband needed medical treatment. All 3 were treated with Chinese medicine/herbs -- by concerned medical professionals with a clear sense of excellence. Almost miraculously, all three got well in record time. As luck would have it, my husband, Roger got sick on this trip as well. We had just begun cruising on the Yangtze River to see the beautiful 3 Gorges and had two days before we would dock. The Chinese acupuncture doctor did the best he could and was extremely attentive. We were fortunate that his office was two doors from our cabin. This time the herbs were not so effective. As soon as we docked, we were met by a young medical intern and a nurse in an ambulance. They soon determined that Roger should go to the hospital. Once inside the ambulance, Roger and I noted that there was nothing medical about it – except for the fact that it could hold a patient on a gurney. Wires were hanging from where the light bulb should be. There were no life support systems. Thankfully, the hospital was only a few blocks away. Our guide followed behind us, with my daughter, her husband, and our friends in tow. At the hospital, our guide translated and helped with decisions, all the while reassuring us that were in the best hospital in the town, which had a 4 million population. I knew she would only tell us good things…but I decided believing her was better for us. Guides in China are trained to provide you with information on “as need” basis and in such vague term you think “bad news” is “good news”. As soon as we arrived, an MD appeared. He and our guide chatted for a long while -- finally the guide told us that because Roger was a foreigner, the MD needed management approval to proceed with treatment. I thought – “oh my gosh, this will take hours.” Surprisingly, the approval came in a matter of minutes and Roger’s treatment began almost immediately! As we waited, an attractive nurse kept popping up at my side with a green pad and pencil. Every time something was done, she showed me the cost written in Chinese. For example, about 10 minutes after arriving at the hospital, she showed me the cost of the ambulance and medical services on the ship. Each time, I would just say “o.k.” We decided that Roger was well enough to travel to Shanghai so we could catch an early plane back to the USA. Before we left, the nurse again showed me the green pad with a total -- the entire bill was around $40, which included the ambulance and ER!! In addition to the money, I tried to give them some chocolate…they said the laws didn’t permit such. So, after many thank you’s we continued our journey. In contrast, the ship doctor asked if we had insurance, charged us over $700 and took the chocolate. His attention was worth it. Once back in Miami, we headed for the ER at the local hospital to continue Roger’s treatment. Despite the fact that we were the only ones in the ER, we waited almost 3 hours before we saw any medical personnel. Even worse, they botched the treatment and we had to return a few hours later, where we found ourselves at the end of a long line. Fortunately, the treatment was done properly this time. Of course, since there was no nurse with a pad, we had no idea if we were charged more for the mistreatment or the good treatment. At that moment, I couldn’t help but remember how nice it felt to be treated as a guest J p.s. Roger is home and doing fine.
| Monday, 18 DECEMBER 2006 | The Week before Christmas and the week of Hannukah. 'Tis the season to be jolly ... Soon you will be getting a holiday card from the Starner Group and we will be wrapping up our year end tax efforts. I spent last night wrapping and wrapping and wrapping. A week from today, Lise and Dana, my 2 daughters, and their families will arrive for the holiday week. My little grandkids call frequently to make sure that I know what to wrap and put under the tree for them. Micaela is very precise; she says at six she is ready for a 120-piece puzzle. As a granny, it's easy to want to give them their entire Christmas list, especially since they're too young to get excited about my gifts to their 529 plans. This year I will give the two older ones the book, "Why Money was Invented". 2006 is turning out to be a better than o.k. year for meeting the financial goals of virtually all of our clients. This was the year that you didn't need hedge funds or anything exotic to do well. The DOW continued to hit new highs and so did Raymond James Financial. Traveling to Europe and buying champagne certainly got more expensive as the dollar continued to fall relative to the Euro. Of course, this helped portfolios with international exposure. My trips in '07 will be to Argentina and China. The Starner Group is proud to announce that both Vanessa and Andy in our group obtained their securities license this Fall, passing what is commonly known as the Series 7 exam. In the spirit of continuing education and competency development, they will both be attending specialized training in our corporate office in 2007. In 2006 I celebrated 25 years with Raymond James and in January '07 will celebrate my 26th. One of my favorite Chinese Proverbs is "Those who say it can't be done should get out of the way of those doing it." While investing and planning has much to do with probabilities, it is the "possibilities" of planning that has made the years so much fun and rewarding for me and my clients. These possibilities are your hopes and wishes. On a long-term basis, planning is about realizing those dreams which we call goals. Looking back, given all the events in the past 25-26 years, I am amazed at the many possibilities which came true. To be honest, I don't always know if the fruition was due to luck or planning. However, time and time again, I see the gifts of planning are preparing for good luck and managing bad luck. We go into '07 with high hopes for continuing prosperity and pray for peace in the world. The latter has been most elusive and the more worrisome. However, as I look forward to seeing my grandkids, I see the possibilities.
| Friday, 1 SEPTEMBER 2006 | Roger and I recently returned from two weeks in Russia, including a river cruise. I loved Russia. In fact, I think everyone should go at some point in their lives. Russia represents the best and worst of concentrated power and wealth. That being said, I don't recommend a river cruise. I just didn't think about how large and sparsely populated Russia is. The towns are few and far apart and I wish I could have used my "cruising time" to meet more people and see more places and things. Of course, there is some good news -- since there was no TV, radio, phones, or computers on the cruise, all I could do was relax, sleep, eat and read. I came back incredibly rested internally. Fortunately, we had five days in St. Petersburg with a private guide before we started cruising. Moscow and St. Petersburg are beautiful and bustling. Prosperity is evident. I found myself awed by the incredible boulevards, palaces, buildings, and art. Truly amazing history, yet tinged with lots of pain and suffering. The tourist in me was very uncomfortable buying anything as corruption is still pretty rampant. In fact, I am positive I overpaid for everything. Whenever I asked the guide if she thought I overpaid, the comment was always, "It is lovely; you will enjoy it." While there is very low unemployment in Moscow, the same can't be said for the rural areas. Many still look back upon the pre Perestroika days with fondness. The Oligarchs have most of the wealth. Still, I want to go back, especially within five years to see how Russia will change. Every time I asked someone how they thought they were doing, the answer was always, "It's getting better." Summer is over and 'tis back to school time. I am proud to share a financial planning story about my oldest granddaughter, Micaela (who was six on July 4th). Micaela will be entering first grade after Labor Day. Her mother took her shopping last week for school supplies. Well, Micaela is a child who wants everything. She admired all the interesting back packs and wanted a new one for her new school year. Her mother reminded her she had three good ones at home. But Micaela persisted in her demands. Finally, her Dad said, "OK. You may get the back pack. We will pay half and you can pay half out of your savings. However, if you wait until next school year, we will buy a new back pack for you." Micaela wanted some time to think. She went home and looked at the back packs she owned. Finally, she responded, "I need my savings for spending money when we go on vacations. My back packs will be fine." Financial planning is about being proactive and is also a process for decision making. Micaela somehow understood the goal for her savings. And she somehow knew with some waiting she would eventually get a new back pack and have spending money for vacation too. So for this Granny, I think her school year is starting with an A+. The Pension Reform legislation was passed and signed recently. I will be writing about the legislation in a future Memo and post it to my Musings. Happy Labor Day weekend. My daughter, Dana and her family will be visiting for the holiday weekend. They have just moved back to Dallas from London.
| Sunday, 1 JULY 2006 | For many summers I have traveled on the Chairman's trip with Tom James, CEO of Raymond James Financial. The Chairman's trip consists of top producers and leaders (with spouses) from all the various divisions of Raymond James. Each morning consists of talks by Tom as well as presentations from others. The rest of the day we tour and enjoy the sights. Most evenings we are back together for dinner. Working and enjoying a week together each year have enabled us to know each other well despite the tremendous growth of RJF in the past 10 years. As you might imagine the size of the trip has grown significantly with the growth of the company. It is not likely I would cross paths with an institutional equity salesman from LA, an institutional fixed income salesman from Memphis nor a telecom Investment Banker in my daily activities. Mixing and mingling with a variety of leaders within the firm as well as the CEO is just as magical as visiting the many places here and abroad. You can only imagine the tremendous access this has provided me within the firm even as it grows. We just returned from this year's trip to Prague and Vienna. It was my first time to Prague and one can never go to Vienna too often. Everyone was crazy with the World Cup. The US was playing the Czech Republic the evening we arrived. The streets were crazy with celebrating spectators as they beat the US handily. Soccer dominates Europe and much of the world beyond our imagination. There is nothing so consuming in the Americas. I could not resist bringing home soccer shirts for gifts. More to my interests was the celebration of Mozart's 250th birthday. Concerts are being held everywhere in his honor ... in churches, school auditoriums, etc. We were able to attend marvelous and intimate concerts both in Prague and Vienna. The performances were more of a treat than all the chocolates!! Some of the major investment themes discussed was health care, energy, real estate, and telecom; as well as strategies to provide income for life. These themes will be incorporated in your coming Reviews and Investment strategies. It seems as if there are few small independent investment firms standing. Raymond James is one of the few. This is also true of mutual fund companies and portfolio management firms. For example of companies presenting to us last week: Pimco is now owned by Allianz; John Hancock Life Insurance is owned by Manulife; and Scudder is now owned by Deutche Bank. And all three of these acquirers are non-US companies. However, Manulife is using the John Hancock name. The distribution of investment opportunities has truly gone global. Raymond James has preferred to be the acquirer and to remain independent. One of the best news we received was hearing that the Miami Heat won the NBA championship by defeating the Dallas Mavericks. There is nothing more 4th of July than rooting for the home team. This is the first championship for Miami Heat and no one deserves congratulation more than Pat Riley who is a great coach. His focus on discipline and motivating a team that drew much skepticism shows that managing talent to be no. 1 is an art as well as hard work. Ahhhh, the 4th of July. Readers of my Musings over the years know that July 4th is also a day for my dad's barbecue sauce. This year is no exception. I will be in LA celebrating my granddaughter, Micaela's 6th birthday who was born on July 4th. While in CA, all of my family will also be convening there to celebrate my mother's 85th birthday. And we always, always have my dad's barbecue. Happy July 4th to you all.
| TUESDAY, 6 JUNE 2006 | I am happy to announce John Andy Szkaradek joining the Starner Group as a Financial Planning Specialist this week. He previously worked in financial planning at US Trust, Price Waterhouse and Ayco in New York. Yami decided to be a stay at home Mom, though she continues to help us out on a limited basis from home. Though we miss her and always will, she is enjoying her decision. Yami was with me for over 12 years. She started as an intern when she was a junior at University of Miami. Her talents were many and her efforts were reflected in much of the work you saw and received. Yami left at the end of February. Roger and I flew London after tax season to visit our daughter, Dana and her family. They live in Virginia Waters, Surrey, about 40 minutes by train from London, and near Windsor Castle. In fact we were there to celebrate the Queen's 80th birthday. Having been to London many times previously, it was lovely to be in the countryside for a week with the grandchildren. We visited their schools, saw beautiful gardens and countryside, ate in local pubs and restaurants that were delightful and not terribly expensive like London. Kailee, our grandson, attends the International School with kids from all over as many parents are in England for their overseas assignments. I met one of the mothers whose family is from India and mentioned I worked for Raymond James. She nodded and smiled as she knew of Raymond James. I was so shocked to hear her father had an account with the Raymond James division in India. Raymond James now has a number of international offices and one of the first opened was in India. "Tis a small world. Or Raymond James is now in the big world. Recently a new tax bill was signed by President Bush extending the 15% dividend and long term capital gain tax rates another two years until 2010. While there is much moaning and groaning about tax benefits are only for the rich, I happen to agree with dividends being taxed at the same rate as capital gains, as it encourages corporations to pay out dividends. Growing dividends is and will be an important source of income in the retirement years. The new tax bill also extended the age limit of the Kiddie Tax from age 14 to 18. And a big surprise was the one time ability to convert any and all IRAs to Roth IRAs in 2010 regardless of income. This will present some interesting estate planning as well as income tax planning opportunities…if this item isn't repealed before 2010. It is likely I will be discussing doing a non-deductible IRA each year until 2010. I had to write this Musing on 6/06/06 for any who may believe in numerology.
| THURSDAY, 23 MARCH 2006 | March madness is here, not only for the NCAA , but also for those of you trying to complete your tax returns. However, judging from the past years, the calls have been more measured this year (both in the tournament and at the office!). I begin March every year by celebrating my two daughters' birthdays and then going to Wharton for a week to attend the Security Industry Institute (SII) where I serve as a trustee. The SII is the premier management education program in the U.S., serving nearly 600 firms in the financial security industry. The classes are taught by top Wharton business professors and leaders in the industry on many, many topics. Additionally we get a dose from the regulators too. One of this year's highlights was a bull 'n bear debate between Jeremy Siegel (the Bull) and Gary Shilling (the Bear). Jeremy, a Wharton professor, is well known for his research and books on investing in stocks for the long run. Gary Shilling, who owns a portfolio management firm, is a columnist for Forbes and written books on his concerns about deflation. Since the real estate bubble has captured the headlines everywhere, both men addressed the real estate housing market immediately. Both Jeremy and Gary agree that there is a slow down in the real estate market and this slow down will impact the stock market since consumer spending represents about 70% of GDP. However they disagreed as to the degree of impact. Jeremy felt the stock market would be impacted for a short time and then resume its growth course. Gary felt that along with the decline in home equity, slow down in consumer spending would also impact China imports, thus creating a world wide downward domino effect for some time. Gary would be buying 30 year bonds. For additional information on this subject, check out the RJA research audio commentary by Paul Puryear, our highly regarded real estate analyst. The SII is a 3 year development and training program. Recently, the program has been enhanced by the introduction of a diversity course for the third year attendees -- "Diversity beyond Gender and Race". The course focuses on the fact that there are now four generations in the workplace for the first time ever. The perception, language, goals and experiences of these 4 generations (preboomers, boomers, Y generation, and the X generation) are quite distinct, which provides numerous occasions for misunderstandings and conflicts. For the most part, these conflicts can be easily avoided when the parties involved have a better understanding of generational differences. This course probably would benefit those of us who are grandparents, in-laws, and parents as well. If you would like information for this course for your firm, please give me a call. That's it for now. Enjoy March Madness...and remember, it only comes around once a year (thank goodness!).
| FRIDAY, 6 JANUARY 2006 – Celebrating my 25th Anniversary| Happy New Year. Today also happens to mark my 25th anniversary with Raymond James. The following is a copy of the letter I sent to all of my colleagues in my Branch ... seems appropriate for the 1st musing of the year. To all in the Coral Gables Branch: For most of you today, Friday is a day before another nice weekend. For me it marks a long 25 years with RJ. Colorful array of exotic flowers arrived from the branch to recognize the day. While saying thanks I will take the opportunity to share with you a bit about what contributed to this prosperous longevity. Normally, I am not the type to get too sentimental. But I found myself thinking about who was still here and who wasn't. I thought about what was hard, scary, and mostly I thought about all the fun and friends I made along the way. For those of you who recently joined, financial planning was my passion and I joined RJ because it was the only firm who recognized the field at the time. I was raised a Southern Baptist and carried that sense of evangelism when it related to my work. Passion for planning led me to meet planners all over the country and that is still a powerful support network for me today. Interestingly that same passion and interest got me appointed as trustee for the Security Industry Institute (SII) board to represent financial planning. The SII opened a whole new world to me at a late stage of my career. And I have concluded the financial planning industry is much more gentle and probably a bit naïve and idealistic. That is a wonderful way to be. Selling financial planning services is still a tough sale. What besides passion and having a strong network contributed to my prosperous longevity? Perhaps watching pennies and waste. I dislike intensely wasting time, paper and supplies. I am also fussy about quality and will do a rewrite 20 times even if it takes hours to write a simple thank-you or a Review. As you might imagine, such an attitude is hard for staff but eventually the quality of work and efficiency makes us all proud of our achievements. In contrast I spend money freely to invest in my professionalism and career. I believe in purchasing the latest technology, software, hiring consultants and flying anywhere to learn what I need to know. I believed investing in my future was the best investment I could make to continuously grow and maintain my skills. I did not depend on the firm to invest in me. My biggest lessons were recognizing that I didn't have to know everything and to be aware of what I didn't know. These are painful lessons. Anyone who has 25 prosperous years will have shared the same lessons. Of course, the world also has changed immensely in 25 years and RJ has fared very well in that change. So my prosperity has been a direct result of being in the right place with the right firm. Finally, and most importantly, I owe a lion's share of my success to my clients. Since my career began, I have actively sought to partner with only the right clients. What does the "right clients" mean? Many things. The right clients listen. They ask questions when they don't understand. They challenge my thinking and are not afraid to disagree with me. They are realistic, never getting too low during down markets or too high during up markets. They know when to save and when to spend. The right clients expect you to put their interests first. And they are loyal. I am both grateful and humbled for each and every client I have partnered with in my 25 years. In summary, for anyone asking, make sure you have the right contacts, the right kind of friends, and that you are lucky enough to have a passion and values that overrides all the mistakes you will make. Maybe that will take care of me for the next few more years.
| THURSDAY, 29 DECEMBER 2005 | Currently, the Starner household is overrun by children, son-in-laws, and grandchildren, half hailing from Los Angeles, the other half from London. To call the environment hectic would be an understatement. The Los Angeles grandkids, jet-lagged from the west, stay awake each night until the wee hours, finally falling asleep right about the time that the London grand-kids, jet-lagged from the east, wake up for the day. Needless to say, Granny and Grandpa are exhausted. Of course, we're also delighted to have our entire family here. My two eldest grandchildren, Kailee and Micaela, are old enough to appreciate Christmas now. As I watched their anticipation build, I am reminded of how magical this time of year is, especially through the eyes of a child. Sharing the season with them is surely the best gift I'll receive this December. Spending time with family has gotten me thinking about other wonderful gifts that money can't buy. There are many – good health, good friends, and good weather (without hurricanes!) to name a few. And then there's freedom, which in many ways is the most wonderful gift of all. As United States citizens, freedom is so ubiquitous that many of us take it for granted. We're free to live where we please, marry whom we choose, and change careers as we see fit. Sadly, many people around the world do not enjoy these same privileges. Of course, America is not perfect. Poverty is very much a reality for millions of Americans. Health care costs are rising nearly unchecked. Many children don't have access to quality education. These problems are complex, and our country's leaders must continue to work together to address them. And if the past 230 years is any indicator of future performance, they will. But in the meantime, I know that there is no place I'd rather be than here – a country where a Chinese immigrant can raise six children and send them all to college. A country where that immigrant's grand children can go on to find success in far-flung places like Los Angeles and London, yet still return to spend the holidays in Miami. A country that truly is the land of the free. Have a wonderful holiday season and Happy New Year!!
| THURSDAY, 8 DECEMBER 2005 | This summer and fall (surprise!!), all of us witnessed the damage and destruction caused by hurricanes Katrina, Rita and Wilma. In Katrina's case, we also saw what many experts called "a grave failure to prepare" for a coming storm they had long called inevitable. As a financial planner, the hurricanes served as a strong reminder to me that many don't place enough emphasis on scenario planning and managing the risks of our personal lives. For example, as a Miami resident, I know that many of us delay important preventative maintenance in order to purchase the "new things" we would like. After all, who wants to replace an old roof that can probably survive another year when the alternative is taking a Mediterranean cruise? Of course, the answer is that no one wants to replace the roof, but many responsible people do it nonetheless, deciding that they're unwilling to bet on a benign hurricane season in order to have a fun experience. The levees breaking in New Orleans is a vivid illustration of the ultimate cost of ignoring or deferring the obvious for too long. In Katrina's aftermath, our leaders face an important American debate -- how can we maintain and improve America's infrastructure to ensure our safety while also enabling a growing economy? As individuals, we face a similar issue -- how can we ensure the long-term safety of our families and loved ones (our "infrastructure") while also enjoying the fruits of our labor? Of course, the answer is to plan carefully, diversify broadly, and take full advantage of the financial tools at our disposal such as insurance. After all, none of us can predict with absolute certainty when, or if, our own personal "levees" might break, but we can all have a plan of action if they do. And if that plan is strong enough, you'll surely have plenty of time for Mediterranean cruises…or any other "new things" you'd like.
| THURSDAY, 1 DECEMBER 2005 | I know that I promised to talk more about the hurricanes in my last musing, but I decided to delay that conversation for a week in favor of telling you about the Security Industry Association annual conference in Boca Raton that Scott and I recently attended. Some major themes from leaders and regulators of the industry were:
Among the well known speakers were:
Gladwell also made another interesting assertion; that experts often cannot immediately explain their conclusions because they can arrive at a decision instantly or instinctively. The implication of this assertion is that the discipline of becoming an expert is critical to the future of our having good decision makers. I wonder if this means that artificial intelligent is more difficult to create than we think? I'll follow up with a few more thoughts on the hurricanes in my next muse. In the interim, have a great week. Margaret P.S. If any of you have thoughts, anecdotes, or feedback about my musings, I'd love to hear from you. Send e-mails to margaret.starner@raymondjames.com.
| Thanksgiving 2005 |
Thanksgiving is upon us, and this year I am thankful for so many things – my 43rd wedding anniversary, which Roger and I celebrated a few days ago; my daughter Lise's 7th wedding anniversary, which she celebrated on November14th; and my niece Jamie's wedding in late October, to name a few. I am also humbled and immensely grateful that my female colleagues named me Raymond James Woman of Distinction for 2005. The Woman of Distinction is a leadership award that recognizes a senior level woman who has made a significant impact on the firm and created opportunities for the women who will follow them. On a more macro level, I'm thankful to have made it through yet another hurricane season. As you all know, Katrina and Wilma devastated the southeastern states this year. Compared to many, we were quite lucky. Both our home and Raymond James' offices avoided major damage (though the Miami branch did close for a few days after each hurricane hit). Thankfully, hurricane season also brought with it a piece of good news – Victoria Katrina Cruz was born on August 30th, a fitting name since she arrived in the aftermath of Hurricane Katrina. Though Yami enjoyed her maternity leave, I know I speak for all of us in the office when I say that we're glad to have her back. Her presence was sorely missed! Speaking of the hurricanes, look for entries during the weeks of December 2nd and December 9th that will draw analogies between preparing for inevitable natural disasters and preparing for the inevitable events of our financial lives, including retirement. But we'll save those heavier conversations for next week, when our tummies are full of turkey, pies, and cranberry sauce and our hearts are full of Thanksgiving memories with our loved ones. In the interim, have a wonderful holiday and please take some time to reflect on all that we have to be thankful for in our lives. Here at the Starner Group, we'll be thankful for all of you, our amazing clients. Have a safe and happy holiday, Margaret
| SUNDAY, 14 AUGUST, 2005 | www.ssa.gov/history/history.html – Provides both a brief and in-depth history of Social Security. www.ssa.gov/history/hfaq.html – Contains a list of Frequently Asked Questions about Social Security. For those of you interested in my musings on Social Security, here are some answers to commonly asked questions: Q. I am 21 – do you really believe I will be able to collect my Social Security income? A. Yes. However, you may not get as much as you paid in and you may have to wait until age 70 to begin collecting. Q. What do you think about privatizing or creating personal accounts in Social Security? A. Privatization won't change the long term funding problems with Social Security. IN fact, I believe it may actually create additional problems. Since this is the case, I'd rather see you focus on creating your own private wealth. Q. What do you think is needed to fix or make Social Security financially secure and not need bailing out in 50 years? A. The easiest fix I can think of is to have a growing economy. That implies high employment at good salaries. We will need policies that focus on education, research and development, and maintaining a strong economic infrastructure. Until next time, I hope all of you are well. Opinions expressed are those of Margaret C. Starner and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.
| MONDAY, 1 AUGUST 2005 |
When I think about youth, I often think about decisions. Young people have a lifetime of decisions in front of them. They'll get some right. They'll get some wrong. As a financial planner, parent and grandparent, my goal is to help the young people in my life (and yours) do more of the former than they do of the latter. With that in mind, I'd like to talk about two young people, Vanessa and Andy, and the recent decisions they've made. Vanessa Colon is our newest employee. Her decision was about career. I suppose this musing is Vanessa's "official" introduction, though I'm sure most of you have heard her voice already. Vanessa began with us as a temp in early February, while waiting to start l |
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