9/05
Don't Get Caught Up in Real Estate Frenzy
Dick Palm of Edward Jones, Prescott Valley
If you've owned your home for a while, you know that it's probably worth a lot more than what you paid for it. In fact, over the past five years, U.S. residential property has increased in value by almost 50 percent, according to the Federal Deposit Insurance Corp. That's a pretty impressive appreciation - but it doesn't mean that real estate is a "can't miss" investment.
Of course, you wouldn't be alone in thinking that now is a great time to become a "person of property." Some 23 percent of all homes purchased in 2004 were for investment, and a further 13 percent were vacation homes, according to surveys done by the National Association of Realtors. And the number of chapters of the National Real Estate Investors Association jumped from 44 in 2002 to 170 in 2005.
Clearly, real estate investing is hot. Over the past few years, the combination of low interest rates and high demand for housing has pushed prices up, up and away. But how long can they continue to soar?
Not for much longer, according to some experts. Yale economist Robert Shiller, in his book Irrational Exuberance, writes that the real estate "bubble" may soon burst, and he supports his claim by showing that median home prices are now six to nine times greater than median income in some areas of the country. He also shows that U.S. home prices, when adjusted for inflation, have not constantly risen in value.
And there's certainly historical precedent for housing prices to fall quickly and sharply. Many areas of the country have experienced "boom and bust" cycles in their housing markets.
Does this mean you should avoid real estate entirely as an investment possibility? No. But before you sign on the dotted line, keep these two rules in mind:
Don't expect huge returns - From the start of 1980 to the end of 2004, home sales prices increased 247 percent - which looks pretty good, until you see that, over the same period, the S&P 500 rose more than 1,000 percent. In other words, don't anticipate that real estate is going to constantly beat out your other investments, because it probably won't happen. Do keep in mind that past performance is not a guarantee of future results.
Don't "leverage" yourself too heavily - With interest rates still so low, it can be tempting to buy more and more property, if you've got at least enough cash for down payments. But it's never a good idea to go heavily into debt for any type of investment.
Consider REITs
If you're going to invest in real estate, you may want to look at real estate investment trusts (REITs), which provide diversification by property type and location. You can purchase REITS in appropriate amounts, without borrowing, and they offer greater liquidity than individual properties Also, most REITs provide attractive current income, which can prove valuable should real estate prices decline or remain stagnant for a long period of time.
But whether you buy REITs or other types of real estate, don't go overboard. As a general rule, you should probably have no more than 5 percent to 10 percent of your portfolio in real estate. By sticking to that level, you can help avoid a lot of problems - and you won't get drenched if a "bubble" pops.
Information provided by Dick Palm, of Edward Jones in Prescott Valley. For more information call 775-2445.
(9/04)
Savvy Business Owners Beat the Odds with Business Credit
Three out of five businesses fail during the first five years according to the Small Business Administration and Dun & Bradstreet. Whether you've just started a business, or have been in business for some time, experts agree that developing a business credit profile and separating your personal from business credit can help you beat the odds.
One of the biggest advantages of creating a good corporate credit profile is saving money. By obtaining a favorable credit score, business owners can actually lower the interest they pay on loans and leases. As a result of freeing up liquid capital, business owners can also take advantage of prepayment discounts with vendors, add employees, and build up inventory.
According to Bonnie Simon, Director of Sales for Corporate Credibility, "A downside of utilizing personal credit for a business is that your personal credit can become tied up and even negatively affected. For example, a landscaper I spoke with recently received a government contract. Since he had no corporate credit, although he had just incorporated, he had to utilize his personal credit to purchase three new trucks for the business. When he applied for a mortgage for his new home, much to his dismay, he discovered that he could not get the interest rate he had originally qualified for because the three new trucks were now on his personal credit report.
“Another issue to consider is let's say, your business goes out of business. Without corporate credit, you would still be legally and personally responsible for any business expenditures even after the company goes belly up," she explains.
There are companies such as Corporate Credibility that specialize in assisting new corporations in establishing corporate credit and can even short cut the credit building process from the average 3-5 year time span to 6-9 months. Business expenditures can be purchased via this credit building process and lenders and funders report to Dun & Bradstreet (an important step in building a corporate credit profile).
Do you know the answers to these important questions?
• What rights does a business owner have if there is incorrect information on their credit report?
• How do I obtain a business credit score?
• What do business lenders look at in order to extend business credit?
• Where can I find companies that grant credit?
• Which companies report to the business credit bureaus?
• What credit card companies do not require personal guarantees?
For the answers to these questions and more information, Contact:
Brad R. Bonnett, BRB Funding Inc.
dba Simple Solutions Credit Consulting
www.HavePerfectCredit.com
brad@haveperfectcredit.com
928-925-2596.
Brad R. Bonnett is a Certified Credit Specialist with Simple Solutions and a Certified Credit Report Reviewer for FACTA by the ICFA. Information taken from an article by: Celia Sue Hecht Corporate Credibility, LLC.
How Accurate is the Information in Your Credit Report?
(From August, 2004 Issue)
“The most valuable thing we have is our good name. The most common reflection of our reputation as a trustworthy consumer is our credit report. Unfortunately, the information contained in our credit reports, which are bought and sold daily to nearly anyone who requests and pays for them, does not always tell a true story.
Credit bureaus collect and compile information about consumer creditworthiness from banks and other creditors and from public record sources such as lawsuits, bankruptcy filings, tax liens and legal judgments. The three major credit bureaus-Experian, Equifax, and Trans Union- maintain files on nearly 90 percent of all American adults. Those files are routinely sold to credit grantors, landlords, employers, insurance companies, and many others interested in the credit record of a consumer, often without the consumer's knowledge or permission.
Several studies since the early 1990s have documented sloppy credit bureau practices that lead to mistakes on credit reports-for which consumers pay the price. Consumers with serious errors in their credit reports can be denied credit, home loans, apartment rentals, auto insurance, or even medical coverage and the right to open a bank account or use a debit card. Consumers with serious errors in their reports who do obtain credit or a loan may have to pay higher interest rates because the mistakes falsely place them in the sub-prime, high-cost lending pool.
We asked adults in 30 states to order their credit reports and complete a survey on the reports' accuracy. Key findings include:
- Twenty-five percent (25%) of the credit reports surveyed contained serious errors that could result in the denial of credit, such as false delinquencies or accounts that did not belong to the consumer;
- Fifty-four percent (54%) of the credit reports contained personal demographic information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect;
- Twenty-two percent (22%) of the credit reports listed the same mortgage or loan twice;
- Almost eight percent (8%) of the credit reports were missing major credit, loan, mortgage, or other consumer accounts that demonstrate the creditworthiness of the consumer;
- Thirty percent (30%) of the credit reports contained credit accounts that had been closed by the consumer but remained listed as open;
- Altogether, 79% of the credit reports surveyed contained either serious errors or other mistakes of some kind.
Professional credit report reviews, conducted by a qualified and trained professionals known as 'Certified Credit Report Reviewers' help consumers avoid credit problems before they make application for credit or a mortgage. Credit report reviews used to be something that was done when a consumer discovered a mistake or activity resembling identity theft, after they were denied credit.
Soon, when the nations consumers begin accessing their "free credit reports" under the new FACTA law, the credit report reviews will become essential because millions of consumers may begin to access their free credit reports, however, they may not be able to read the report or understand the symbols and summaries. A professionally trained credit report reviewer can identify inaccuracies, omissions, and also point out suspicious activity, in addition to pointing out items in a report that may negatively affect a credit score.
Brad R. Bonnett, Executive Director of Marketing of Simple Solutions Credit Consulting, Inc. recently completed an educational study program on the new Fair and Accurate Credit Transactions Act (FACTA), and after successfully completing as examination was certified as a Credit Report Reviewer for FACTA by the non-profit Institute of Consumer Financial Education (ICFE). The Institute focuses on helping consumers become better spenders, regular savers and wise users of credit.
If you need help understanding your credit report, or need help with your credit rating, please contact me.
Brad R. Bonnett is a Certified Credit Specialist with Simple Solutions and a Certified Credit Report Reviewer for FACTA by the ICFA.Brad can be reached at brad@HavePerfectCredit.com or call 928-925-2596.Investing
San Diego, CA. Have you received a letter from ChoicePoint, a specialty consumer reporting organization that compiles and sells vast amounts of records, many of a highly confidential and sensitive nature, about millions of Americans? If you do, the letter will tell you and about 150,000 other consumers that you are one of their choicest, however unfortunate, record holders, because some of your most personal and private information was purchased from ChoicePoint by identity thieves, who duped them in the credentialing process.
Notification letters are being prepared by ChoicePoint, Inc., for mailing to some 35,000 Californians and an additional 110,000 recipients in other states. Some consumer advocates worry that there is potentially an additional unknown multitude, maybe hundreds of thousands, still to be determined across the country who have been victimized and don't know it yet.
If you are among the thousands of ChoicePoint victims or receive a similar letter, will you know what to do? Who will you turn to for advice and help?
“Consumers across the nation can expect to be bombarded with offers to sign up for credit monitoring services, identity theft prevention services, identity theft insurance, or other programs and services of limited value by companies aimed solely at profiting from the situation. Don't get scammed again,” warned Paul Richard, RFC, executive director of the award winning Institute of Consumer Financial Education (ICFE) based in San Diego, CA.
“It's very upsetting and a seemingly insurmountable challenge for unsuspecting consumers to suddenly learn their most personal and private information may have been sent out to crooks, especially by a company, ChoicePoint, that many didn't even know existed,” Richard noted. "ChoicePoint began as a subsidiary of Equifax in 1997, one of the big three credit reporting agencies. ChoicePoint has about 19 billion public records in its database including DMV, license and deed transfers, military records, names, addresses and social security numbers." he continued.
ChoicePoint has also announced they are providing free credit-monitoring services to those 145,000 individuals it deems to be at-risk. Expensive credit monitoring services that don't even monitor specialty report companies like ChoicePoint aren't very useful. Most only monitor a single credit bureau anyhow. The monitoring service also does not address the task ahead for victims.
Identity theft insurance is not really insurance, because as the ChoicePoint incident clearly points out it is virtually impossible to prevent or insure against this crime. In this case identity theft insurance, available on some homeowner policies, may help victims recover some of the expense involved in clearing their good name, but it will certainly not reduce the time and hassle. Any companies who offer identity theft prevention and assistance services have already indicated the ChoicePoint incident would be considered a “pre-existing condition”, so signing up for their services now would be of little, if any, value to the at-risk consumer.
The ICFE has alerted its nationwide network consisting of hundreds of Certified Credit Report Reviewers and Identity Theft Prevention Specialists on how to assist consumers in prevention and help the potential victims of the ChoicePoint breach. They are trained in mitigating the serious damage that can and does occur in cases of identity theft.
The ICFE is also introducing its credit report reviewers and ID prevention specialists to a revolutionary software program called CasePlanner™, now available through and also utilized by the ICFE under a special arrangement with Global Fraud Solutions, LLC, an international leader in identity theft solutions. CasePlanner™ is a patent-pending identity theft risk reduction and fraud resolution software package designed to address the needs of both concerned consumers and victims of identity theft.
“The proverbial tangled web of deception is uniquely manifested in each case of identity theft. The gargantuan effort required to undo it is enough for 75 percent of the victims to throw up their hands in disgust and give up, until CasePlanner™,” said Richard. “First, there are no monthly fees. Second, it is so comprehensive that users who are victims are assured of a faster, more complete identity and credit recovery. And third, concerned consumers who want to guard against identity theft and prevent it from happening as much as possible will find CasePlanner™ to be an enormous advantage,” said Richard, commenting on the ease of using the program.
There are many web sites that can help consumers understand the process of documenting and reporting their identity theft case. But it is still the victim's responsibility to discover how that information should be reported, to document their case for each organization they are working with, and then follow up with each of those organizations until the case has been closed. Working with a professionally trained and qualified individual is critical in identity theft cases.
CasePlanner™ provides many powerful tools in the fight against identity theft:
1) An awareness and prevention guide to help educate consumers how thieves gain their information and how to avoid being victimized;
2) An encrypted personal account registry where consumers can store their personal information enabling a rapid and decisive response in the event these accounts are ever compromised;
3) An ID inventory to document and record identification and financial instruments contained in their wallet, purse, vehicle glove box, etc; and
4) An exclusive resolution case file system that walks consumers step-by-step through the process of documenting, reporting, and resolving their identity theft case if they are ever victimized.
For more information about Credit Report Reviewers and Identity Theft Prevention Specialists, please visit www.icfe.info. Contact Brad R. Bonnett, of BRB Credit Soultions, email address: brbonnett@cableone.net or call 928-925-2596
"WHAT IF I OUTLIVE MY RETIREMENT SAVINGS?"
Submitted By: Robert Frisby and Jeffrey Wasson
Branch Name: Morgan Stanley, Prescott, AZ
Phone Number: 928 442-0243, 888 795-4565
Email Accounts: robert.frisby@morganstanley.com or
jeffrey.wasson@morganstanley.com
Almost every working person in America is, in some way, planning for retirement. Most of us are aware that traditional sources of retirement income, such as Social Security or an employer-sponsored pension, probably will not fully fund our retirement as they did for past generations. More and more it is up to us to prepare financially for our retirement years. As we build our personal retirement assets, we generally estimate our needs based on the cost of our expected or desired retirement lifestyle, the current outlook for inflation, what we can currently afford to save and our estimated life expectancy.
This seems reasonable, but what if one or more of these factors prove to be other than anticipated and the money doesn't last? People are living longer today, and it's especially necessary to plan for the possibility of a longer life span. What if you run out of retirement savings at age 85 and live 10 or 20 more years?
Annuitization May Help
Ensuring that retirement savings last long enough is where annuitization comes in. Annuitization, available through insurance contracts called annuities, guarantees the annuity owner income payments for a pre-defined period of time, typically ranging from as short as five years to as long as the lifetime of the owner and his or her spouse. Additionally, many financial advisers consider this an excellent method of building future income because annuities are tax-advantaged investments-that is, their assets grow on a tax-deferred basis during what is called the initial "accumulation phase."
How does an investor fund annuitization? First, assets are invested and built up for a number of years in an annuity, during the accumulation phase. As a hypothetical example, a man who is currently 55 years old places assets into an annuity to begin the accumulation phase. When he turns 75, he will decide for how long he wishes to receive payments and "annuitize" his annuity contract. Thus, he will begin his "income phase" of the contract and start receiving a check every month. If he elects a lifetime payout, he will receive checks for the rest of his life, regardless of how long he lives.
How assets build during the accumulation phase depends on which annuity you purchase.
There are many types of annuities from which to choose. Some annuities (fixed annuities) guarantee a fixed rate of return, while others (variable annuities) offer professionally managed portfolios that usually invest in the stock market. Most variable annuities provide a range of features and benefits, including provisions for your heirs in the event of your death. (Variable annuities are sold by prospectus only. Read the prospectus carefully before investing.)
All offer the advantage of tax deferral on investment earnings which, over the long term, can represent a significant increase in value over investments with earnings subject to annual taxes. As with other investments, diversifying assets can provide a desirable mix of liquidity, stability, lifetime income and opportunity for growth. It is best to talk with an investment professional to learn what choices might suit your individual circumstances.
In the end, one of the greatest advantages of annuitization is that you do not have to know in advance how long you will require income. Therefore, you can rest a little easier knowing that you'll have at least one source of ongoing income throughout your retirement years.
For More Information
Although today's variable annuities offer investors significant freedom and flexibility, they aren't right for everyone. If you'd like to learn more about how variable annuities may help solidify your financial future, please call Bob or Jeff at 928-442-0243 or stop by Morgan Stanley Office 118 E. Carleton St., Prescott, AZ.
This article does not constitute tax or legal advice. Consult your tax or legal advisor before making any tax- or legally-related investment decisions. This article is published for general informational purposes only and is not an offer or solicitation to sell or buy any securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your individual circumstances and objectives.
Variable annuities are long-term investment vehicles designed for retirement purposes and are subject to market fluctuation, investment risk, and possible loss of principal.
Variable annuities are offered by prospectus only. The prospectus contains complete details on features, benefits, risks and expenses. Read the prospectus carefully prior to investing.
"Variable Annuities May Help Solidify Your Financial Future-Part I"
Submitted By: Robert Frisby and Jeffrey Wasson
Branch Name: Morgan Stanley, Prescott, AZ
Phone Number: 928 442-0243, 888 795-4565
Email Accounts: robert.frisby@morganstanley.com or
jeffrey.wasson@morganstanley.com
More and more Americans are expressing concern over their long-term financial future-especially in terms of being able to enjoy a comfortable retirement. Traditional company-sponsored pension benefits are becoming increasingly rare and Congress talks repeatedly about "fixing" Social Security. As a result, many Americans have begun to assume a greater degree of responsibility for their own retirement funding. But, without a carefully thought out and comprehensive retirement plan, few of us will likely be able to realize our retirement dreams.
What Are Variable Annuities?
After you have fully funded all available qualified plans, one possible method of saving for your retirement is by purchasing a variable annuity-a type of investment that combines the advantages of professional money management with tax-deferral and death benefits. Variable annuities, which have evolved in direct response to the increasing "privatization" of retirement funding, offer two important guarantees. Annuity owners receive a guaranteed income when they annuitize their contract, while beneficiaries may receive a guaranteed death benefit upon the death of the owner (if death occurs before annuitization). These guarantees are based on the claims-paying ability of the issuing insurance company.
How Do They Work?
In buying a variable annuity, your money is allocated among a number of professionally-managed investment portfolios (structured similar to mutual funds). Among the choices usually offered by variable annuities are money market portfolios, fixed-income portfolios, equity portfolios and guaranteed fixed-rate accounts. The allocation process is similar to that used in 401(k) plans and your rate of return will depend on the market performance of the portfolios you've chosen. (These portfolios are sometimes referred to as your underlying investments or subaccounts.) Remember, however, that the value of your portfolios may rise or fall and that any amounts you contribute to a variable annuity are subject to market risks, including the possible loss of principal.
If you regularly contribute the maximum to your existing retirement plan(s), are interested in reducing your current investment income tax bill and are concerned that you may outlive your long-term savings, then variable annuities may be right for you. This two-part article will briefly discuss some of the major benefits available to purchasers of tax-deferred variable annuities.
Freedom of Choice
As the owner of a variable annuity, your freedom to choose from among different portfolios can help you to better balance your investment objectives, personal circumstances and risk tolerance. In addition, you'll be able to switch your assets from one portfolio to another at any time without tax consequences. And that can be extremely helpful whenever your investment objectives or personal circumstances change. Finally, variable annuities guarantee1 your principal in the event you die before you annuitize the contract-a feature known as the guaranteed death benefit. Some annuity contracts may also allow you to choose an "enhanced" death benefit that can increase the value of the death benefit (usually for an additional fee).
Unlimited Contributions
Although Social Security and company-sponsored pension payments may be sufficient to cover your basic retirement living expenses, they probably won't be enough to allow you to realize all of your retirement dreams. Other popular retirement plans, such as IRAs and 401(k)s, limit the amount of money you can contribute each year to your retirement plan. But, as long as the funds you're investing are non-qualified (post-tax), your variable annuity will permit unlimited contributions. You can also continue to invest in your account even if you have no earned income or are not working-options that may not be available with other types of long-term savings plans. So, even if you've started your retirement fund comparatively late in life, a variable annuity may help you make up for lost time.
Inflation Protection
Variable annuities also offer possible protection against the effects of inflation. Although past performance is no guarantee of future results, returns from stock market investments have historically outpaced inflation over the long term, which can help maintain the purchasing power of your assets.
Especially for younger retirement savers, the important question isn't "What can my dollars buy today?" but "What will those same dollars be able to buy in 20 or 30 years?" Depending on your personal needs and circumstances, as well as on a number of outside factors, what seems to be a substantial financial cushion today may prove less than adequate tomorrow. When estimating how much you'll need to achieve your retirement goals, be sure to consider the likely impact of inflation on your projected nest egg.
For More Information
Although today's variable annuities offer investors significant freedom and flexibility, they aren't right for everyone. If you'd like to learn more about how variable annuities can help solidify your financial future, please contact Bob or Jeff at 928-442-0243 or stop by 118 E. Carleton St., Prescott, AZ.
This article does not constitute tax or legal advice. Consult your tax or legal advisor before making any tax- or legally-related investment decisions. This article is published for general informational purposes only and is not an offer or solicitation to sell or buy any securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your individual circumstances and objectives.
Variable annuities are long-term investment vehicles designed for retirement purposes and are subject to market fluctuation, investment risk, and possible loss of principal.
Variable annuities are offered by prospectus only. The prospectus contains complete details on features, benefits, risks, fees and expenses. Read the prospectus carefully prior to investing.
1All guarantees are based on the claims paying ability of the issuing insurance company
(11/04)
What is Identity Theft?
Identity theft happens when someone wrongly assumes another person's name and identity for fraudulent financial purposes. According to the FBI, identity theft is one of the fastest growing crimes in the United States. Studies show that nearly 1 in 5 households in the U.S. have been a victim of identity theft. The identity thief steals vital data about the victim, including social security number or credit card numbers, date and place of birth, etc. Once the thief has enough information they can then acquire credit cards in your name, open bank accounts using your money, get drivers licenses and even get married in your name. They can also get arrested in your name!
Worst of all is you probably won't even know that credit identity theft has occurred until sometimes many months later. While federal credit fraud laws protect you, it can still take months to restore your credit rating, and it will also cost you some money. Credit card companies that become aware that they have wrongly extended credit to the thief in your name must obtain the money from the identity thief, or as is more often the case, eat the losses. The three credit reporting agencies: Equifax 888-909-7304; Experian 888-397-3742; and Trans Union 800-888-4213 will usually issue, free of charge, a credit report to anyone who has been a victim of credit identity theft. It is important to protect yourself before you become a victim. If you see any unfamiliar credit card accounts, or a history of applications for credit accounts listed that you never made, there is a good chance that someone is using your name for their own gain.
Top 10 Causes of Credit Fraud and Identity Theft
1) Theft of employer or other multi person records.
2) Domestic/elder abuse.
3) Credit Card skimming.
4) Lost or stolen purse or wallet.
5) Improper disposal of credit card receipts and statements.
6) Database intrusions (credit card account numbers).
7) Mail theft.
8) A dishonest employee.
9) Eavesdropping.
10) Misrepresentation to obtain personal information,
often over the phone.
Top 10 Tips to Help Prevent Credit Fraud and Identity Theft
1) Properly discard/shred documents (credit card statements and receipts).
2) Guard personal information- do not put your Social Security # on checks.
3) Always remember to get your credit cards and receipts after transactions.
4) Limit the number of credit cards you carry in you're wallet or purse.
5) If you don't receive your billing statement, notify the company immediately.
6) Don't ever give out your credit card number over the phone, unless you initiate the call and know who you are talking to.
7) Carefully review your credit card statements.
8) Regularly review your credit report (at least every 6 months).
9) Memorize your PIN numbers, do not write them on the cards.
10) Question any suspicious activity.
If you have any questions or concerns, or need help with your credit rating, please contact me directly:
Brad R. Bonnett, BRB Funding Inc.
Dba. Simple Solutions Credit Consulting
928-925-2596
www.HavePerfectCredit.com
brad@haveperfectcredit.com
(10/04)
Special Report: How to Build Your Business Credit Profile
Why you should ALWAYS separate your Personal Credit from your Business Credit.
Having credit established for a business is key to success. Throughout the history of a company, the need for credit will most likely arise. Establishing a business's credit should be started before the company needs it. No financial institution wants to lend money to a business in need of cash flow. The business can start out using the owners or officers personal credit to gain credit approvals under the business name. But as the business continues to grow it should begin to establish its own credit history and credit profile in order to take on business credit of its own. This is vitally important regardless of whether the business is an LLC, or an S or C- Corporation.
What are the two Principal Reasons Business Owners should try NOT to use their Personal Guarantee on Corporate Credit?
When officers and owners use their own personal credit profiles to obtain credit for the business, they risk lowering their own personal scores, if for no other reason than throwing off the debt to income ratio. There are two reasons that business owners should try not to use their personal guarantee on business credit. First, the individual signer is fully liable if the business cannot make the payments, and secondly, the credit obtained for the business can adversely affect that persons personal credit score. As I mentioned in one of my previous articles your score is based on a variety of factors, including available credit, amounts of that available credit being used, how the payments are being made (on time?) and much more.
If the owner or officer has a poor credit rating, this will greatly impact the ability of the business to operate effectively. By utilizing a Corporate Credit Builder Program you can create a clean slate for you and your business. This process allows you to create a positive credit history for your business, regardless of your personal credit history.
Obtaining credit for a business is a process and must be established over time. The older the business the more options the business will have to build corporate credit and obtain loans and leases without the use of personal guarantees. It is not easy to do this yet it is not impossible. The first step is to start building your corporate credit profile today.
An affective Corporate Credit Builder Process can compress the normal 3-4 years of Building Corporate Credit down to ONLY 6-9 months!
BRB Funding Inc., working in conjunction with Corporate Credibility, LLC, can provide your business with the next logical step in separating you from your business. Our Corporate Credit Builder Program can compress the normal 3-4 years of building corporate credit down to 6-9 months. We will assist you in establishing a clean credit profile and business score. The goal is to establish a credit score of 75 or better (comparable to a 700 or better personal score). A credit score is built by having lines of credit, credit accounts and trade references that report to the business credit bureaus. For most businesses it is very difficult to find a business willing to grant credit with no personal guarantee or without any previous corporate credit history. If you have your own trade references we will work with them to build the score. However, most businesses need additional trade references that will grant corporate credit and report to the credit agencies. Part of the Corporate Credit Builders Program is providing you with a list of businesses that will grant credit to your corporation solely based on your business credit information. These companies are all willing to report payment experiences to the business credit bureaus. These companies' grant credit to you based on your business credit profile and without a personal guarantee or need for personal credit checks. These companies are willing to issue the credit because their clients are not considered "high risk". The reason they are not "high risk" is because of the owner's commitment to building their corporate business credit in a credit building program.
A little know fact is that corporate credit is not governed by the same Fair Credit Reporting Act as a personal credit profile is. Therefore, if your corporation is red flagged for any reason, there is no legal recourses to remove that flag from you file. The only solution is to re-incorporate and start the process again.
I will have more on this all important topic in the next issues.
If you have any questions or concerns regarding you Personal or Corporate Credit please contact me directly:
Brad R. Bonnett, BRB Funding Inc.
Dba. Simple Solutions Credit Consulting
928-925-2596
www.HavePerfectCredit.com
brad@haveperfectcredit.com
(12/04)
FREE Credit Reports for Consumers Begins December 1st in the West!
Here is the news many of you have been waiting for, about how to access your FREE credit Reports. With the passing of the FACTA act earlier this year The Federal Trade Commission has established a special telephone number, a web site, and a mail to address for consumers to use in requesting the free reports.
Credit reporting agencies WILL NOT HONOR a request for the free reports if consumers contact the directly. ALL REQUESTS for free credit reports MUST go thru the special web site, the special 800 toll free phone number, or the special mailing address.
If you have been following my recent articles, you will recall I have talked about the recent amendment to the Federal Fair Credit Reporting Act (FCRA). This is the Fair and Accurate Credit Transactions Act (FACTA) which requires each of the nationwide consumer reporting agencies to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA/FACTA promotes the accuracy and privacy of the information in the files of the nation's consumer reporting companies.
A credit report contains information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. There are three nationwide consumer reporting companies-Equifax, Experian, and Transunion.
Consumers in the Western States will be the first to be able to order their free reports under the federal law beginning December 1st, 2004. The law will be phased in during a 9 month period, rolling form the west to the east. Beginning September 1, 2005 free reports will be accessible to all Americans, regardless of where they live.
To order your free report:
The three nationwide consumer reporting companies have set up one central web site, a toll free telephone number, and a mailing address through which you can order your free report. To order, go to www.annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta GA. 30348-5281.
Do not contact the three nationwide consumer reporting companies individually. You may only obtain you free reports thru the means listed above. You may order reports from each of the three nationwide consumer reporting companies at the same time or you can order from only one or two of them. You may do this only once every 12 months.
The information you will need to provide to get you free report is:
Your Name, Address, Social Security Number, and Date of Birth. To maintain the security of the file each reporting company may ask you for some information that only you would know, like the amount of your monthly mortgage payment. Each company may ask you for different information because the information each one has in you file may come from different sources.
Caution: www.annualcreditreport.com is the ONLY authorized source for your free credit report from the three nationwide consumer reporting companies. This site and the three credit reporting companies will not send you an e-mail asking for your personal information. If you get an e-mail or see a pop-up ad claiming its from www.annualcreditreport.com or any of the three nationwide consumer reporting companies, do not reply or click on any link in the message!- It's probably a scam. Forward any of these ads or claims to the FTC's database of deceptive spam at spam@uce.gov
.
The reports generated by each of the three credit reporting companies is different. They don't make these necessarily east to read, and they periodically change the format, making them more confusing. If you have any questions or need help reading or understanding just what these report say, please feel free to contact me directly:
Brad R. Bonnett, BRB Funding Inc.
Dba. Simple Solutions Credit Consulting
928-925-2596 (cell)
www.HavePerfectCredit.com
brad@haveperfectcredit.com
Five 2005 Resolution Solutions For Your Finances
Simple, immediate steps to improve your finances all year long
San Diego, CA Many people welcome in the new year with a burst of new found energy to do things differently. A lot of this gets focused on personal finances. Resolutions are aplenty, however they often come with what some folks would call the “but firsts.” You want to save some money, “but first” pay off credit cards. The “but firsts” become disincentives to change anything at all.
ICFE has five resolution solutions for 2005. There are no “but firsts.” All may be activated and energized the moment they are read. All are simple, proven and effective ways to do things differently with personal finances. They are called resolution solutions because they will help those who use them keep more of their income or the money they make and do more with what they keep.
1) Resolve to become a comparison spender. There are two forms of overspending. There is the borrow and spend crowd, however they come in second to the biggest group of over-spenders in America, because an estimated 60-65 percent of all consumers pay too much for things. Comparison spending will put a quick stop to that financially detrimental practice.
Example: A popular gift item for Christmas 2004 was the hand-held kitchen appliances called “Gizmos” from Black and Decker. When first advertised, they were at retail $29.95. Within a week they were being advertised in a major drug store chain flyer for $24.95. The best buy, however was for $19.88 at two other discount retailers. Comparison spending on this item saves $10.
2) Resolve to become a regular saver. “When it comes to saving money, most people will simply stop at nothing.” In other words they never seem to get started. That's the way it often is for other new year resolutions too. A regular saver is one who saves a portion of all income received. Becoming a regular saver is quick, simple, something most people can and should do everyday. Start right now by taking a dollar bill and all of your pocket change and set it aside. Do this every day, even on the weekends. It will average $50 a month. An extra incentive to save a little more is to take all the folding money with your initials on the serial number, and save those $1, $5, $10, $20, $50 and $100 bills.
3) Resolve to extend the value of your income. Get more bang for your bucks no matter if they are invested, being spent on entertainment or real estate or yourself. Part of becoming a regular saver is looking for ways to save money in every part of your life.
Example: 30 cents of every take-home dollar is spent on household and grocery items. The best and most immediate way to extend the value of household and grocery spending dollar is to employ the use of coupons, rebates and special sales. Now many folks will bellyache they don't have time to clip coupons. Time is money so, if it takes 15 minutes to clip coupons out of the Sunday paper and grocery flyers in the mailbox and you save ten percent or $10 on a hundred dollar tab, that is equal to $40 per hour.
4) Resolve to increase your net worth. Increasing net worth is done by accumulating money and other assets (as opposed to piling up the debts). Also, by having assets grow and appreciate in value and paying down indebtedness. Consumers are building up or tearing down their net worth with every financial decision and things they do. So for 2005, keep building your net worth up and stay off the deconstruction crew.
5) Resolve to get your free credit files. One of the best gifts to consumers in 2004 from Congress was the ability to get free credit reports annually from the three major credit reporting agencies. By September 2005 all US residents will be eligible. Go to website www.annualcreditreport.com, call 877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form may be printed from www.ftc.gov/credit. If you need help figuring out what all the stuff on the credit report means, contact an ICFE Certified Credit Report Reviewer.
Written by:
Paul Richard, RFC (Registered Financial Consultant)
Executive Director Institute of Consumer Financial Education (ICFE)
PO Box 34070, San Diego, CA 92163-4070
619-239-1401
Email reply: icfe@cox.net
Submitted by: Brad R. Bonnett, BRB Funding Inc.
dba Simple Solutions Credit Consulting
928-925-2596 (cell)
www.HavePerfectCredit.com
email: brad@haveperfectcredit.com
"Variable Annuities May Help Solidify Your Financial Future-Part II"
Submitted By: Robert Frisby and Jeffrey Wasson
Branch Name: 118 E. Carleton St., Prescott, AZ 86303
Phone Number: 928 442-0243, 888 795-4565
Email Accounts: robert.frisby@morganstanley.com or
jeffrey.wasson@morganstanley.com
More and more Americans are expressing concern over their long-term financial future-especially in terms of being able to enjoy a comfortable retirement. Traditional company-sponsored pension benefits are becoming increasingly rare and Congress talks repeatedly about "fixing" Social Security. As a result, many Americans have begun to assume a greater degree of responsibility for their own retirement funding. But, without a carefully thought out and comprehensive retirement plan, few of us will likely be able to realize our retirement dreams.
What Are Variable Annuities?
After you have fully funded all available qualified plans, one possible method of saving for your retirement is by purchasing a variable annuity-a type of investment that combines the advantages of professional money management with tax-deferral and death benefits. Variable annuities, which have evolved in direct response to the increasing "privatization" of retirement funding, offer two important guarantees. Annuity owners receive a guaranteed income when they annuitize their contract, while beneficiaries may receive a guaranteed death benefit upon the death of the owner (if death occurs before annuitization). These guarantees are based on the claims-paying ability of the issuing insurance company.
How Do They Work?
In buying a variable annuity, your money is allocated among a number of professionally managed investment portfolios (structured similar to mutual funds). Among the choices usually offered by variable annuities are money market portfolios, fixed-income portfolios, equity portfolios and guaranteed fixed-rate accounts. The allocation process is similar to that used in 401(k) plans and your rate of return will depend on the market performance of the portfolios you've chosen. (These portfolios are sometimes referred to as your underlying investments or subaccounts.) Remember, however, that the value of your portfolios may rise or fall and that any amounts you contribute to a variable annuity are subject to market risks, including the possible loss of principal.
If you regularly contribute the maximum to your existing retirement plan(s), are interested in reducing your current investment income tax bill and are concerned that you may outlive your long-term savings, then variable annuities may be right for you. This two-part article will briefly discuss some of the major benefits available to purchasers of tax-deferred variable annuities.
Lower Tax Bills
Lower tax bills are another advantage enjoyed by many variable annuity owners. Because annual earnings from a variable annuity compound tax-deferred, no income taxes will be due on these amounts until you begin withdrawing money from your account. As a result, it may be possible over time to accumulate significantly more assets through a variable annuity than through taxable investments that earn similar rates of return. Of course, any withdrawal of earnings from a variable annuity is taxable as ordinary income. And, if you begin these withdrawals prior to age 59 ½, a 10% federal tax penalty may also be applied.
Withdrawal Flexibility
Given that average American life expectancies continue to rise, your retirement savings may have to last longer than your original estimate. Fortunately, a variable annuity allows you to choose the withdrawal option that's best for you-either a single lump sum payment or, if you "annuitize," a steady guaranteed income stream for the rest of your life.
Many other retirement plans require you to start withdrawing income by a certain date, regardless of your personal needs at that time. IRAs, for example, mandate that your withdrawals begin in the year following the year in which you turn 70. But, with a variable annuity, you can postpone any withdrawals of non-qualified funds until age 85-and in some cases even later.
Improved Inheritance Options
Just as a variable annuity provides you with income during your life, it'll also pay benefits to your beneficiaries after your death. Most variable annuity holders are free to choose the death benefit that best suits their inheritance wishes. Some choose the basic guaranteed death benefit, which guarantees that, upon the death of the contract owner, his or her designated beneficiaries will receive the greater of the current market value of the annuity or the value of your original annuity contributions (adjusted for withdrawals).
Other contract holders find that an enhanced death benefit better suits their needs. Usually offered for an additional charge, an enhanced death benefit may guarantee that your beneficiaries will receive, for example, the highest anniversary value your contract has attained or your original contributions compounded by 5% per year. Regardless of which death benefit you choose, your beneficiaries are assured of receiving at least the value of your original contribution. Note, however, that the actual payment of any guaranteed death benefit will depend on the claims-paying ability of the company that issues your annuity.
For More Information
Although today's variable annuities offer investors significant freedom and flexibility, they aren't right for everyone. If you'd like to learn more about how variable annuities may help solidify your financial future, please call Bob or Jeff at 928-442-0243 or stop by Morgan Stanley Office 118 E. Carleton St., Prescott, AZ.
This article does not constitute tax or legal advice. Consult your tax or legal advisor before making any tax- or legally-related investment decisions. This article is published for general informational purposes only and is not an offer or solicitation to sell or buy any securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your individual circumstances and objectives.
Variable annuities are long-term investment vehicles designed for retirement purposes and are subject to market fluctuation, investment risk, and possible loss of principal.
Variable annuities are offered by prospectus only. The prospectus contains complete details on features, benefits, risks and expenses. Read the prospectus carefully prior to investing
For Immediate Release:
San Diego, CA -- February 23rd, 2005
ICFE Certified Credit Report Reviewers and Identity Theft Prevention Specialists Trained And Ready To Assist Potential Victims Of Identity Theft As A Result Of Recently Revealed ChoicePoint Information Breach.
“Coping with Market Volatility”
Submitted By: Robert Frisby and Jeffrey Wasson
Branch Name: 118 E. Carleton St., Prescott, AZ 86303
Phone Number: 928 442-0243, 888 795-4565
Email Accounts: robert.frisby@morganstanley.com or
jeffrey.wasson@morganstanley.com
Periods of increased stock market volatility, when securities prices tend to sharply rise or fall within a relatively short period of time, make many investors understandably uncertain. Whether you are currently "in the market" or are considering entering, you've probably been wondering: "What's the best course of investment action to take during periods of unsettled market activity?"
Don't Overreact
It's somewhat of a cliché to say that two emotions - fear and greed - are the driving forces behind a good deal of stock market activity. During a bull market, as share prices rise, some investors develop a false sense of confidence regarding future price levels and believe that nothing short of catastrophe will stop the continuing upward trend. In their zeal, they erroneously project their short-term gains into an uncertain and long-term future
On the other side of this coin lies the disappointment that may set in whenever market values start to drop within a relatively short period. During these bear markets, some investors overreact and begin imagining a loss of their nest eggs due to lower share prices. They may even begin selling their holdings in the fear that prices may fall even further.
It's important, however, for individual investors to view market volatility in its proper perspective. Swings in stock market prices, even those lasting a few months or years, generally should not be allowed to disrupt your long-term investment strategy. Why? It's simple. Historically speaking, long-term investing has tended to smooth out many of the fits and starts that can cause investors so much short-term discomfort.
Focus on Long-Term Objectives
Setting a middle course, one that avoids both bullish euphoria and bearish despair, can help individual investors keep their long-term financial objectives in sight. A focus on long-term objectives also helps avoid the temptation of trying to predict what the financial markets will do tomorrow, next week or next month. Long-term investors realize that even investment professionals cannot always accurately predict short-term market movements.
Adopting a long-term investment philosophy also helps guard against over-reacting to business stories that appear in the newspapers or other media. Regardless of whether such news is generally thought to be "good" or "bad," always consult with a Financial Advisor to evaluate the potential impact of these developments on your overall investment plan.
Review Your Strategy Periodically
Reviewing your financial strategy at least yearly is yet another way of helping you cope with market volatility. As you review, make sure your investment plan takes into account your age and investment timeline, as well as your financial resources and tolerance for risk.
At least for the foreseeable future, occasional spells of stock market volatility are probably unavoidable. However, following a long-term financial plan can help you to weather the storm.
For More Information
If you would like to learn more, please call Bob or Jeff at 928-442-0243 or stop by Morgan Stanley Office 118 E. Carleton St., Prescott, AZ.
This article does not constitute tax or legal advice. Consult your tax or legal advisors before making any tax- or legally-related investment decisions. This article is published for general informational purposes and is not an offer or solicitation to sell or buy any securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your circumstances and objectives.
5/05
"Investing for Income?
Consider Long-Term Dividend Paying Stocks"
Submitted By: Robert Frisby and Jeffrey Wasson
Branch Name: 118 E. Carleton St., Prescott, AZ 86303
Phone Number: 928 442-0243, 888 795-4565
Email Accounts: robert.frisby@morganstanley.com or
jeffrey.wasson@morganstanley.com
Q. I am more interested in investing for income over the long term rather than in participating in the daily ups and downs of the stock market. What would be a good investment strategy for me?
A. One choice for income seekers may be quality, long-term dividend-paying stocks. Many "name brand" companies have not only paid dividends consistently since the early 1900s; in some cases, they have also steadily raised their dividends
Q. What makes these stocks attractive to long-term investors?
A. Consistent dividend growth stocks may be attractive for long-term investors who can hold the stocks as dividend payments rise. Although the stocks' current yields may not seem competitive at first, growth in dividend payments can significantly increase the yield on an original investment.
Q. Why is dividend growth so important?
A. An investor seeking income could purchase conservative fixed-income investments, such as Treasury bonds. In fact, every well-balanced portfolio should contain such investments. However, without the power of dividend growth, inflation will take its bite, and these investors may end up losing ground to inflation over time.
Q. What should I look for in a quality stock?
A. Consider three factors that can help limit your risk and keep your income growing when you are looking for income among stocks:
1. A low payout ratio gives the dividend room to grow. The payout ratio is the percentage of a company's earnings per share (EPS) paid out as dividends in the current year. The lower the ratio, the more room for potentially boosting the dividend. Remember, for a leading company to retain its leadership position, it will have to channel a good portion of its earnings toward growth. Thus, payout ratios may be lower for these stocks than they are for electric utilities or other companies in slow-growth industries.
2. Capital appreciation potential can enhance returns. Regardless of whether or not they receive a dividend, most investors buy a stock hoping its share price will rise. Consider how the value of your investment would increase if, in addition to annual dividend increases, the company's stock price also rose, for example, in line with the S&P 500 average.
3. Dividend payment history can provide clues about the future. Although past performance does not guarantee future results, a company with an unbroken record of paying dividends for 30-plus years would seem to be reliable for income. A history of growth in the dividend is equally important.
However you choose your income stocks, the key is holding them for the long term, which means that daily and monthly price swings may not be as important. Remember that time in the market, not timing the market, is most important to investment success.
If you would like to learn more, please call Bob or Jeff at 928-442-0243 or stop by Morgan Stanley Office 118 E. Carleton St., Prescott, AZ
.
This article is published for general informational purposes and is not an offer or solicitation to sell or buy securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your specific circumstances and objectives.
6/05
“Structuring Your Stock Portfolio by Sector”
Submitted By: Robert Frisby and Jeffrey Wasson
Branch Name: 118 E. Carleton St., Prescott, AZ 86303
Phone Number: 928 442-0243, 888 795-4565
Email Accounts: robert.frisby@morganstanley.com or
jeffrey.wasson@morganstanley.com
Investors hear a lot about portfolio diversification, and there are a number of ways to diversify. When it comes to stocks, one way to help ensure adequate diversification is to include stocks from several different market sectors in your portfolio.
An economic sector is made up of industries that have certain characteristics in common. The industries in a given sector tend to react similarly to trends in the overall economy. Good or bad news affecting a major stock in one industry may trickle through to stocks in other industries in the same sector. Thus, by including stocks from more than one sector in your portfolio, you may be able to lessen the effect on your investments from potential losses in any one segment.
Here are some of the key stock market sectors and types of industries within each sector.
Consumer Discretionary: Autos/auto components, household durables, leisure equipment / products, restaurants, textiles/apparel, hotels, media, retailing.
Consumer Staples: Food/drug retailing, beverages, food products, tobacco, household / personal products.
Energy: Energy equipment/services, oil, gas.
Financials: Diversified financials, insurance, real estate.
Healthcare: Healthcare equipment/supplies, healthcare providers/services, biotechnology, pharmaceuticals.
Industrials: Aerospace / defense, construction/engineering, electrical equipment, conglomerates, machinery, airlines/air freight, railroads, transportation infrastructure.
Information Technology: Software, Internet, technology consulting/services, communications equipment, computers/peripherals, electronic equipment/instruments, office electronics, semiconductor equipment/products.
Materials: Chemicals, construction materials, containers/packaging, metals/mining, paper/forest products.
Telecommunication Services: Diversified wireless telecommunication services.
Utilities: Electric, gas, water utilities.
In seeking to diversify the equity portion of your portfolio, you may wish to consider reducing stocks from sectors in which you are overweighted and adding stocks in areas where you lack exposure. Of course, certain sectors can be featured more prominently in your portfolio, based on current market trends, economic conditions and your own financial goals.
Ask your Financial Advisor how trends in the stock market and the economy may affect your investments and how you can best take advantage of those trends. Be sure to keep your own financial objectives at the forefront of your decision-making. Although representation from each sector may enhance diversification, other concerns, such as the need for income or a short-term investment time horizon, may dictate a different sector structure for your own portfolio.
If you would like to learn more, please call Bob or Jeff at 928-442-0243 or stop by Morgan Stanley Office 118 E. Carleton St., Prescott, AZ.
This article is published for general informational purposes and is not an offer or solicitation to sell or buy securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your specific circumstances and objectives.
8/05
Changing Jobs or Retiring? Consider IRA Rollover
Dick Palm, of Edward Jones
(928) 775-2445
In the near future, are you going to change jobs or retire? If so, then you'll have a lot of things to think about. And one of the most important considerations is what to do with the money you've accumulated in your former employer's 401(k) plan.
What are your choices? First, of course, you could always cash out your 401(k), but if you do, you'll only receive 80 percent of the total, because your employer is required to send the other 20 percent to the IRS, to be applied to your taxes. Also, if you're under 59 1/2 when you take the lump sum, you may have to pay a 10 percent penalty tax. However, if you really need the money - possibly to start your own business - then your retirement plan may be your biggest source of available cash. But once you've used it, it's gone, and you'll have to start rebuilding your retirement savings from other sources.
You may be able to move your 401(k) money to your new employer's plan, if the plan allows it. Or, you may even be able to keep your money in your former employer's plan. You won't be able to make any additional contributions, but, if you particularly like your investment options and how the plan is administered, this option may make sense.
Your other choice is to roll over all or part of the taxable portion of your 401(k) - pre-tax contributions, employer contributions, all earnings - into a new or existing IRA. You can roll your plan into a "traditional" IRA. (You can't directly transfer 401(k) funds into a Roth IRA. You can convert your traditional IRA to a Roth later on, but you'll have to pay taxes on the conversion.)
By rolling your retirement plan over to a traditional IRA, you can build up the value of your existing account, and you can continue making contributions. With the new tax legislation of 2001, you have the flexibility of moving your traditional IRA into your a future company retirement plan if the plan allows for it.
By rolling your company plan into an IRA, you'll get some key advantages. First, you'll avoid all immediate taxes and penalties. Second, you'll continue to benefit from tax deferral. And third, IRAs offer you a wide variety of investment options. You can fund your IRA with stocks, mutual funds, bonds, government securities. By contrast, even a good 401(k) plan may have only a dozen or so investment funds to choose from.
Be aware, though, that if you do roll over your 401(k) distribution into a traditional IRA, you will lose the ability to take out a loan from this funding source. You may have found that borrowing from your 401(k) is preferable to other forms of loans. That's because, when you repay a 401(k), you are essentially paying yourself back, with interest.
Before making any moves with your 401(k), see your tax adviser. Your 401(k) may be the largest single source of money you ever have available - so make sure you take good care of it.
Information provided by Dick Palm, of Edward Jones in Prescott Valley. For more information call 775-2445.
7/05
Stock Analysis: Two Basics
Submitted By: Robert Frisby and Jeffrey Wasson
Branch Name: 118 E. Carleton St., Prescott, AZ 86303
Phone Number: 928 442-0243, 888 795-4565
Email Accounts: robert.frisby@morganstanley.com or
jeffrey.wasson@morganstanley.com
When professional security analysts evaluate a stock, they usually focus on a number of considerations, two of which are fundamentals and underlying valuation. You may wish to take into account these evaluation methods when considering a stock for your portfolio. You can find the information you need from annual or quarterly company earnings reports, from reading the newspapers or by asking your financial advisor for more information.
Fundamentals include the outlook for the company and for its industry. In looking at a company's fundamentals, some of the criteria you will want to consider are:
Earnings growth history and outlook
Strengths in products or services versus the competition
Management's track record
Industry conditions in general
The company's balance sheet (cash and debt levels)
Valuation refers to the market price of the company's stock in relation to its fundamentals. Even if you locate a company with solid fundamentals and a bright outlook for the future, the stock may not be attractive if it is “too expensive.”
How do you determine whether or not a stock is too expensive? One common measure of valuation is the price/earnings ratio (P/E). This tells you how much investors are willing to pay for each dollar the company earns. The P/E is the price of the stock divided by its earnings per share. If a hypothetical stock's P/E ratio is 15, it means that for every $1 in earnings, investors are paying $15.
The significance of these ratios is determined by comparing them to those of the stock market in general or of comparable companies. For high-growth stocks, the P/E is often measured against the projected earnings growth rate. In such a case, a company with hypothetical earnings growth potential of 30% per year might have a P/E ratio of 30 times earnings or more. When this ratio falls below that of the market or a peer company, a stock may be attractive for purchase. On the other hand, sometimes there are reasons for a stock's P/E ratio to be depressed, such as deteriorating company fundamentals.
Fundamentals and valuation are just two of a number of considerations on which professional analysts focus. You can use these two basics to help identify stocks that may be suitable for your portfolio. Your financial advisor can tell you more.
If you would like to learn more, please call Bob or Jeff at 928-442-0243 or stop by Morgan Stanley Office 118 E. Carleton St., Prescott, AZ.
This article is published for general informational purposes and is not an offer or solicitation to sell or buy securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your specific circumstances and objectives.
Bad Check Problems?
Having problems with people giving you bad checks that you can not collect on? Your not alone! Administered by the Yavapai County Attorney’s Office, at no cost to you, is a Bad Check Program. For more information call (928) 771-3490. They are located at 255 E. Gurly Street, in Prescott (corner of Gurly and Marina). You can also find out more information and download forms from their website at: http://co.yavapai.az.us/departments/Aty/AtyBadCheck.asp .
Click on advertisers in blue to be redirected to their website or email account, right from here. Use these links at your own risk.
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© 2004 Lonesome Valley Newsletter, LLC. All Rights Reserved.
DEC 2005
Last update - Dec. 22, 2005. Newsletter comes up around the middle of each month. Please check back for December’s website updates within the next few days. To view things submitted after the current month’s printed version, go to the Updates tab on left. If this page doesn’t display properly, click here as to why.
