Tuesday, January 12, 2010

Wednesdays with Lou

Safety at last

Even though Dominic has been mobile for awhile the baby proofing on our main level is finally now complete. We have been using a baby gate to block Dominic off from the kitchen until I got the cabinet locks on. Well I did it Monday night and allowed Dominic to make a mess of the cupboards as I quickly put the locks on he was rapidly destroying everything he could grab. He had no interest in the cupboards I was locking because he was too busy focusing on the mess he was making. As I got down to the last two cupboards he started to realize his fun was soon over. He was trying to open the now locked cabinets and had a very confused expression. He quickly turned his attention to me as I was putting the last cabinet lock in place. He tried his best but I was able to fend him off to get it installed. After they were all locked he tried to open a couple, failed, grabbed my hand and walked me out of the kitchen as if to say, "Dad, this isn't fun anymore let's do something else."

Tax Time

With Tax season approaching I may be taking time off from Wednesdays with Lou here and there over the next several months. I have been growing a successful tax practice over the last 4 years doing returns in my spare time which is generally very late at night or here and there on the weekends. I have been very fortunate to meet new people through this avenue and continue to grow professionally and am looking forward to a grueling but rewarding several months. As always my goal for this year will be to continue to provide excellent client service, timely turn around of returns, and most importantly to sacrifice as little family time as possible and still be successful and exceed client expectations.


Let me preface this next section by saying I am not an investment advisor and by no means am giving financial advice in any way. Part of my regular job in running employee benefit plans is to monitor and administer a Pension Fund. There is no surprise by now the market was exceptionally horrendous the last half of 2008 through the first quarter of 2009. The Official duration of this downturn was 10/2007 through 03/2009 (17 months). This wasn't the longest stretch but was one of the more significant in terms of market loss (minus 57% - 3rd highest historically). As predicted when you have significant periods of market failure like we endured the market will bounce back with a bang. Although it hasn't been a full year since then the market is at 60% return which would rank 2nd for returns in a 1 year period.

The market today was at 10,627 and has been slowly climbing. The question is have we hit the ceiling for now or can we expect another huge drop off. Even though the stock market is unpredictable an indicator that the market has potential to grow is the amount of money sitting in cash (on the sidelines). In March 2009, the end of the downtown, cash levels were at a record high of nearly 50%. This meant people were investing in money market cash (no risk) versus equity investments (company stock). With equity prices dropping investors tried to avoid significant asset loss by investing in cash to preserve assets. Since March of 2009 the cash levels have been dropping which indicates investors are willing to take more risk and in this case the risk is reaping huge gains. Despite these huge gains there is still a significant amount of investments still in cash representing about 32%. To put that in perspective the historical cash levels are at about 16% so there is still a lot of money on the side lines. Over time that money is going to slowly creep back into the equity sector and investments will continue to boom. If you're not in the equity market you missed out on some big opportunities but it looks like there is still money to be made throughout 2010. Also, don't forget about the giant stimulus bill. There is approximately 440 billion from that bill that still needs to be absorbed into the economy.

Return of TV Shows

Just a quick note that I'm pumped for Biggest Loser and Survivor's new seasons. Also, the return of House and The Office.