The Motley Fool has some wonderful articles on the basics of investing.  Here is an excerpt:

1. Doing nothing. There is no guarantee that the market will go up the first day, month, or even year that you invest in it. But there is one guarantee: Doing nothing at all will not provide for a comfortable retirement.
2. Starting late. Postponing your investing career is second only to not investing at all on the list of investment sins. You already know that the earlier you start the better off you are. (Take another look at the compound return example we gave above.) If you’re already past those formative twenties (you don’t look a day over 32 to us), we’ll reword this first pitfall to read: “Not starting now.”
3. Investing before paying down credit card debt. If you have money in yoursavings account and you have revolving debt on your credit card, pay it off. Many credit cards have an annual interest rate of 15% or more. Let’s say you have $5,000 to invest, but you also have $5,000 debt on your credit cards with an average annual interest rateof 18%. It doesn’t take an astrophysicist to figure out that you’re going to have to get an 18% return after you pay taxes just to break even on that $5,000. Pay the debt off first, then think about investing.
4. Investing for the short term. Only invest money for the short term that you’re actually going to need in the short term. Invest money in the stock market that you won’t need for at least three years, and preferably five years or longer. If you’ll need your cash next year for a down payment on a house or for the family Caribbean cruise, use one of the shorter term and safer havens for your cash, such as money market funds or CDs.
5. Turning down free money. You’d never turn down a dollar if it was offered with no strings attached. That’s what you’re doing if your company offers a 401(k) or similarretirement savings plan with an employer match and you’re not participating. Take advantage of all tax-advantaged, employer-matched savings programs.
6. Playing it safe. If you’re young, most of your investing dollars should be in the stock market. You have enough time to weather any dips in the market and to reap the rewards of long-term gains. Although you may want to transition into bonds later in life as you depend on your investments for income, stocks should make up a large portion of the portfolio of every investor.
7. Playing it scary. Not every investment is for everyone. Even if you’re a daredevil, you shouldn’t pour all of your money into something that could end up going down the drain.
8. Viewing collectibles or lottery tickets as investments. If old comic books, Barbie dolls, and abandoned exercise equipment could be used to fund retirements, do you think the stock market would exist? Probably not. Don’t make the mistake of thinking your jewelry, those Beanie Babies, or the lottery will provide for you in your latter years.
9. Trading in and out of the market. We believe the best approach to investing is the long-term one. Pick your investments well and you’ll reap greater rewards over thelong term than you had ever dreamed possible. Trade in and out of the market and you’ll be saddled with fees that chip away at your returns, and you’ll potentially miss out on gains that long-term investors enjoy with much less effort.

Click here to read the full article.

Unfortunately the media knows exactly how to influence our behavior as investors and it can be more harmful than helpful.  When the market gets volatile, the media tends to multiply that effect by making generalized statements that mislead you to thinking people are heading for the hills.  They may allude to the effect that people are stock piling their cash when truth be told, the vast majority of investors are sitting tight during the volatility.  They do this in hopes of triggering a herd-mentality.  We think there is safety in numbers so investors want to follow the herd and change course of action, when truly, this is not what should be taking place.

Uncertain times call for investors to scramble and read into third-party expert theories.  I like to remember this saying from Lauren Templeton, “Successful investing relies on rational decision-making, which in many instances requires delayed gratification.”  Always remember, keep your head in the game and do not buy into all the hype the financial media is drumming up.

Cameron Huddleston, Contributing Editor, Kiplinger.com has writtein a very fun and intuitve article on the best and worse buys of May.  Check it out!

If you are one of the millions that receive a sizable tax refund every year, why not use the extra money to help out your personal balance sheet.  Here are some ideas for your refund that will be more beneficial than just spending it on whatever…

1. Use the cash to pay down your debt.  Reduce any high-interest credit card debt you may have, or pay down the principal on your mortgage.
2. Contribute to an IRA or a 529 plan for your children.
3. Want to have a vacation, set aside some of your refund for just that.  Setting up a separate account helps for just that.  You could even do this for your holiday shopping!
4. Have some smaller home improvements you want to make, use some of this money to do just that.
5. Have a stock you want to invest a little in, open up a brokerage account and do just that!
6. Do a check on your emergency fund to make sure there is enough in there in case you get laid off or hurt.
7. Maybe it’s time for some additional life insurance?

These and may more tips are available at kiplinger.com

Our very own Mike Harter will be hosting the Ask the Financial Planner show on the CMU Public Broadcasting channel on March 29th at 7:30 p.m.

If you would like to participate by asking questions, you can do so the following ways:

1. 1.  Call in and speak to our phone volunteers from 7:30pm-8pm during our live program toll-free at 1-800-727-9268

2. Email the producer, Courtney Brooks, before the show at brook2c@cmich.edu

3. Tweet the production crew at @WCMU_AskThe

Visit http://www.wcmu.org/tv/askthe.html for more information!

If you are planning on giving all or part of your required minimum distribution from your IRA to a charity this year, you may want to hold off until toward the end of the year as Congress has not reauthorized the law that allows this tax break.  The law that allows people over 70 1/2 to make a tax free transfer of up to $100,000 directly from their IRA to a charity has not been passed for 2012, but Congress typically does not reauthorize tax breaks until toward the end of the year.

If this is something you are interested in, please be aware that the money must be transferred directly from the IRA to the charity.  If you take the cash out now, you will have to add those monies to your gross income.  Keeping it out of your adjusted gross income will help many people stay below the income limit for other tax breaks and avoid the Medicare high-income surcharge. 

For more information about RMD’s see Rules for Required IRA Distributions.

Kiplinger.com

Kiplinger.com has a terrific article on how to chose the right financial planner.  It is so very important to be working with someone you are comfortable with and that you are confident they understand you and your needs. 

Click here to read the article.

Call us today for any financial planning or investment management needs, we are here for you!

Written by: Michael E. Harter, CPA/PFS, CFP®

Making consistent money in the financial markets has been challenging to say the least since the 2008 meltdown.

Interest rates returns continue to plummet as rates remain at historical lows in an effort to revive the economy.    New money from maturing CD’s and bonds are met with nearly non-existent returns.    The stock market looks to build momentum as companies are showing stronger balance sheets, amble cash and leaner cost structures.   However events such as the European debt crisis and our own debt ceiling showdown this past summer keep pushing the markets down.    Now the gas prices have taken center stage to wear down consumer confidence.

Instead of becoming outraged about current events, we accept what is given to us and say “Well at least I did not lose any money”?     Since when did we become so passive or accepting of mediocrity?

We should be engaged in dialogue with policy makers and regulators to get out of the way and stop putting in gimmicks and artificial barriers that prolong the natural process.    We have fiddled with the fundamentals of our capitalistic systems to the point that they can not operate properly and efficiently.    Sure, maybe the intentions had merit, but the unintended consequences need to be examined as in many cases they outweigh the short term benefits.

Too many cooks spoil the broth!  

What say you?

Effective January 1, 2012, Michigan requires Schwab to withhold state income tax on certain qualified pension and retirement distributions unless the participant is eligible to and elects out of withholding. As a result, beginning on March 19, 2012, Schwab will begin to withhold the mandatory 4.35% from all retirement distributions if the proper forms are not received from eligible clients.

On February 15, 2012, all impacted clients with an active tax withholding election and/or an active standing instruction on their account where the state taxes are zero or below 4.35% will be mailed notification from Schwab by letter of the Michigan state tax requirement. Instructions will be included on how to update tax withholding information. 

Additionally any payment(s) received as of January 1, 2012 may have the 4.35% withheld.

Please contact us if you receive these documents from Charles Schwab and you have questions or would like assistance in filling out the forms.

 A fresh new year is a great time to up your contributions to a retirement plan.  Some limitations have changed for 2012 and it is important for everyone that wants to do the maximum contributions to up their contributions in order to do just that.  Contact us today if you have any questions on your limits or your current retirement plan options.

• 401(k), 403 (b), most 457 plans and the federal government’s Thrift Savings Plan have increased to $17,000 from $16,500
• Catch-up contributions for those aged 50 and over for the above mentioned plans remains at $5,500
• Simple IRA Plan contribution limit remains at $11,500 and the catch-up contribution limit for Simple IRA Plans remain at $2,500
• The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $58,000 and $68,000, up from $56,000 and $66,000 in 2011.  For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $92,000 to $112,000, up from $90,000 to $110,000.  For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $173,000 and $183,000, up from $169,000 and $179,000.
• The AGI phase-out range for taxpayers making contributions to a Roth IRA is $173,000 to $183,000 for married couples filing jointly, up from $169,000 to $179,000 in 2011.  For singles and heads of household, the income phase-out range is $110,000 to $125,000, up from $107,000 to $122,000.  For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.

For complete information,click here to go to irs.gov