This is one of my favorite times of the year, green starts showing up not just on Irish and wanna-be Irish folks but also in the natural environment. Here in the Great White North the temperatures have been increasing and snow has been melting. It won’t be long before summer is here! We’re also coming up on April 15, which for many of means taxes (and IRA contributions!). I don’t know about you, but putting April 15 in the rearview gives me a huge sense of relief.

Thoughts on Megatrends and Some Advice

I thought I’d take an opportunity to share some of my thoughts on the major trends happening right now, as well as share some advice on how to benefit from those trends for you personally. We’re in a time of great upheaval and change, and the good news is that wise and prepared investors will be able to profit handsomely no matter what happens as long as they react to the trends correctly. Without further ado:

• Currencies – Right now we’re in the middle of a race to the bottom, as most developed and developing countries are printing dollars to inflate their way out of debt. Usually currencies fluctuate as some gain strength while others weaken, but right now it’s a case of all currencies weakening but some weakening faster than others. Although the US government is printing dollars like it’s going out of style, the dollar remains a reserve currency for the world and will weaken at a slower rate in the short-term. However, longer term I feel your best bet is to increase your exposure directly and indirectly to resource-based, well-managed currencies like the Canadian dollar (CDN$), Australian dollar (AUS$) and Norwegian kroner (NOK).
• Interest Rates - With interest rates at record lows in most of the developed world, the only direction to go is up. This may not be in the near future,  but at some point rates WILL go up. This is bad news for bonds and most income investments, like REITs (Real Estate Investment Trust) and MLPs (Master Limited Partnership). I would suggest exiting all or most bond holdings and being very careful with any income investments going forward.
• Real Estate – Continuing the interest rate theme, I don’t see any upside for real estate for quite a few years, exceptions being long-term primary residence purchases and forced equity plays (fix and flips, etc.). Rising interest rates will mean rising payments, and with unemployment remaining stubbornly low and wages stagnant or decreasing, there are no major forces at work that would result in rising prices. Just because prices are low right now doesn’t mean they can’t drop lower, or stay low for many years.
• Oil & Energy – I really like this sector, but as always you need to be careful where you invest. Energy needs will only increase as the world continues to industrialize and develop, and prices will also benefit from energy’s status as a hard asset. Since oil (and other hard assets) are priced in dollars that are constantly being weakened, prices should continue to rise as the dollar weakens. Other factors include growth in China/India and political instability in major oil producing countries. The plays I like best in this sector include the Canadian oil sands (estimated at two trillion barrels, more than EIGHT times the reserves in Saudi Arabia), developmental deals in the Southeastern US and select alternative plays.
• Food & Agriculture - With global population continuing to rise, major population sources developing (i.e. China and India) and eating more meat (it takes eight pounds of grain to produce one pound of meat), and global farmland decreasing I see prices for food continuing to rise. Food and commodities will also benefit from their status as hard assets and prices rising as the dollar weakens. The easiest ways to invest here are through ETFs (exchange-traded funds) and innovative products like those offered through Everbank (www.everbank.com).
• Precious Metals - You’ll already know I really like this sector, especially silver. Yet another class of hard assets, metals like gold and silver will do well as the dollar and other world currencies weaken. Despite recently reaching new highs, I see a LOT more upside for both gold and silver, as well as some more speculative plays in beaten-up metals like uranium. There are many great ways to expose your portfolio to this trend, among them junk silver as well as junior producers (be VERY careful here as the sector is notorious for shams, very important to have experts to guide you).

If any of the above resonate with you or you’ve been considering making some moves, I’d be happy to weigh in and even help out if that makes sense.

A Grab-Bag of Links

Updates on currencies, silver and the macro picture:

• Fed To Keep Printing – Great article on what will happen as the economy continues to weaken.
• Silver Conspiracy – More on the big bank conspiracy to keep the price of silver low.
• The Great US Collapse – Hopefully these words aren’t prophetic.
• Who Does the US Really Owe? – Surprisingly, the biggest US creditor is not China.
• S&P 500 5% Pullbacks – In light of the last few days, maybe it’s not a sign of further slides

Before I dive into this week’s letter, I want to give you a heads up that big changes are coming for us here at January Financial – I’m very excited. You may have noticed it’s been a few weeks since you got an email from us, and the changes will help to explain why. I’m not quite ready to make the big announcement, but I did want to give you a heads up that it’s coming and ask that you keep your eyes peeled for our next message.

What Does Egypt Have To Do With My Portfolio?

Unless you’ve been clued to MSNBC lately, or happen to follow these things, you know all about the changes in Egypt but probably don’t understand how they’re affecting your portfolio. The world is a small place, and even if you’re only invested in US companies (which I seriously doubt you are) you are more exposed to the world at large than you may even realize. Not only are many large US companies multi-national (meaning they have operations and revenue streams in many different countries), but companies with no overseas exposure will still typically be affected by large, geopolitical events.

One thing that stocks and the markets they make up thrive on is regularity – investors and traders like to know what’s going to happen. Volatility is the enemy for most investors and traders. When you know what to expect from certain stocks and markets, you can plan accordingly and manufacture profits. However, when things start happening that you don’t expect it can really mess with your future and cause serious losses. Which brings us to Egypt – uncertainty there has the effect of increasing uncertainty across the globe because Egypt and the Middle East are integral parts of the world market.

Egypt is a large producer of oil, meaning any disruption there can (and did) increase the price of oil worldwide. Egypt has a large part of its GDP derived from tourism, which obviously suffered in the latest protests, and sinking GDP in Egypt means less trade with their neighbors. There was a very real fear that uprisings in Egypt leading to real change could cause turmoil in other nations in the area, which is indeed happening and increasing uncertainty. All of these are bad things for markets, in that they’re a drag on growth and increase uncertainty for investors.

On the upside, if you’re one of our clients or have been taking our advice you’ve got a good portion of your portfolio invested in hard assets (oil, gold, metals and the companies that produce them) and have benefitted accordingly. In times of uncertainty people like to know they own things they can feel, things that will do well in times of inflation, and hard assets are a great place to be right now.

A Grab-Bag of Links

Foreclosures, debt and a must-read on why the US should be following Egypt’s lead:

• Foreclosure issues – Judge declares MERS invalid, essentially calling into question millions of foreclosures across the country.
• Ballooning US debt – The massive and increasing US budget deficit, and how it could affect the price of bonds.
• Consumer prices rising – Prices will soon be rising on everything from washing machines to cold cuts.
• China is now number 2! – Following continued growth in China and a big dip in Japan, China is now the world’s number 2 economy.
• Bahrain facing protests - “Day of rage” expected after gift of over $2K fails to pacify protesters.
• Should America follow Egypt? – Excellent article on why perhaps the US should follow Egypt’s lead.

What’s the Big Deal with Waiting?

In short – massive amounts of wealth. But we have so many good reasons for procrastinating! Next year I’ll be able to save more money, or I’ll be able to lower my expenses next month, or I should be getting that raise I’ve been waiting for soon and I can save the difference. Whether those things happen or not, the best time to be thinking about your financial future and making plans is today! Actually it was 10 or 20 years ago, but the second best time is today! If this is the only newsletter you actually read, or you actually take action now, it will have been worth all of my effort – procrastination will rob you of more wealth than the worst markets or the most crooked deals.

Here are a couple short illustrations with numbers to show my point, borrowed from the excellent book The Truth About Money by Ric Edelman:

• If you are 20 years old (and I realize very few of us are) and you want $1,000,000 by the time you’re 65, you would need to invest only $13,720 today (assuming no taxes and a 10% appreciation rate). Using those same assumptions, a 50-year-old would need to invest $240,000! Even waiting 10 years, until you’re 30, would mean investing almost three times as much – $35,580.
• Maybe you think that of course 10 years would make a big difference, but what harm could waiting until next year do? If a 30-year-old saved $100 per month until they were 65 and earned 10%, that account would grow to $379,664. Waiting just one year to start would result in an account of $342,539 – a difference of $37,125!

If you’ve been waiting to speak with someone about your finances or investing, please take action today. Whether it’s me or someone like me, a short meeting with a financial advisor will cost you an hour or two of your time but could result in a different of hundreds of thousands of dollars down the road. Don’t wait!

A Grab-Bag of Links

Looking at new problems in housing, scary technology, worries from my worry closet and building an Internet business:

• Second Wave of Housing Bust – As I’ve mentioned before, I think we’re a ways from being out of the woods when it comes to real estate.
• 2010 New Home Sales Lowest in 47 Years – Looks like no one’s interested in buying right now, despite generationally low interest rates.
• GPS in Cameras and Phones – This is actually pretty scary, did you know people can find your exact location from pictures you post?
• Japan’s Debt Downgraded – Very likely a harbinger of more bad news to come regarding sovereign debt.
• Soldiers Losing Homes – Stories like this just cannot be allowed to happen in a civilized society. Ever.
• Internet Independence - Interesting site I ran across with solid, honest advice for those of you looking to start or currently running an online business.

So what’s the big deal with inflation, you may be asking? If your wages and investments are rising at the same rate as prices are increasing, it’s not much of a problem. But if prices for everyday items are rising at a faster rate than your income and/or your investments, then you’re losing ground. You’ve probably heard the term CPI in the news more than once – it stands for Consumer Price Index and is a government statistic aimed at tracking what the rate of inflation is. Many times pensions (like Social Security) have increases that are tied to CPI.

Here’s another way to look at it. Let’s say you’re freaked out by the markets right now and have your money in cash (a savings account, or a CD perhaps). Accounts like that are paying around 0.5-1% right now. If inflation is actually in the 2-3% range, then those funds you have safely parked in cash are actually losing money. The $1,000 that you had last year is now $1,010, but due to inflation the same basket of goods you could have bought for $1,000 a year ago now costs you $1,020-1,030.

So what do you do? I want to point out a couple things:

• In an inflationary environment, it’s critical to be invested in “hard” assets – a tangible and physical item or object of worth. What does that mean? Things like metals (gold/silver/etc.), oil, land, precious stones are all hard assets, items that have intrinsic worth that should outpace inflation. Hard assets are NOT things like stocks or bonds, paper assets based on underlying companies or revenue streams.
• It’s important that you keep track of where inflation is headed and compare to your investments. A return of 5% may seem pretty good right now, but if inflation is increasing at a rate of 4% then you’re only making 1% on your money. Worse yet, if your investment returns are less than the rate of inflation, you’re actually losing money! Time to stock up on hard assets.

Now more than ever it’s important for you to be keeping an eye on your portfolio and making sure you’re prepared for inflation. With the Fed continuing to work the printing presses like it’s going out of style, and world currencies in a race to the bottom, don’t let the silent thief of inflation steal your retirement.

A Grab-Bag of Links

Lots of links showing that inflation is starting to rear it’s ugly head, as well as confirmation of my earlier letter regarding state and local government defaults:

• Chowchilla Defaults – This Central California city may be the first of many defaulting on their bonds.
• Riots in Algeria - Rapidly rising food prices (due in part to inflation) are causing locals to riot.
• Tunisia Rioting Too – Again, rapidly rising food prices causing all sorts of unrest and rioting.
• Rising Food Prices – Check out this chart on the cost of a bucket of typical foodstuffs. No doubt on where things are heading.
• Sarkozy Chats with Obama – President Nicolas Sarkozy of France is working with President Obama to help combat price swings and the rising cost of food due to inflation.
• Deepening Divide in America – We have an increasing gap between the haves and have-nots in the US, and a shrinking middle class. Guess which ones inflation hits hardest?
• Not Owning Gold is Insane – Gold is one of the best ways to protect your investments from inflation.
• Iran Trading Oil for Gold – Iran is considering trading oil to India in exchange for gold. The days of US-denominated major hard assets (like oil) may be coming to an end.

…is change, as the old saying goes. Although we’ve seen a lot of change and volatility over the last 3-4 years, my expectation is that this year will bring even more. Far from being past the worst of it, my feeling is that this year will bring more drops in the markets and more economic pain for the nation. Thankfully we don’t have to participate in this Great Recession – I’ll be doing my best to show you how you can survive and even thrive in tough times. Change, be it positive or negative change, brings opportunity.

What’s Coming For 2011?

In a nutshell, my feeling is that we’ll see a little bit of everything this year but that we’ll end up down in the markets. While there are some positive signs and “green shoots”, fundamentally we have a LONG ways to go before the excesses have been worked through and we’re ready for the beginning of a new bull market. Here’s a summary of what’s happening.

Positive

• Economic momentum seems to be positive, with many positive economic reports and steady corporate earnings.
• Interest rates are low, meaning lower mortgage payments for those who qualify and lower borrowing costs for corporations and small businesses with access to capital.
• The third year of a presidential term tends to be very bullish, as DC has all sorts of positive promises and reports.
• Change is in the air in DC and many are hopeful that we’ll begin to see fiscal restraint and an end to massive deficits and spending plans.

Negative

• There is what appears to be a major bond bubble lurking, with interest rates being as low as they can go and borrowing needs increasing. This will affect local and state governments, the federal government, Europe and Japan and eventually all the world.
• Valuations are unusually high, especially for an economy like we’re in, and long-term (secular) bull markets have NEVER started with valuations at this level.
• Overall investor sentiment, especially retail (“dumb” money), is at the far bullish end of the scale. As the saying goes, “Be greedy when others are fearful and fearful when others are greedy”, and right now others are greedier than they’ve been in quite some time. We need to be fearful.
• Charts, graphs and other measures right now are very similar to what they looked like in early 2000, just before the Tech Meltdown, and in late 2007, before the last big crash. I would call that a sign.
• Although the S&P itself is rising, the number of stocks within the S&P 500 making new highs are declining. This means there are fewer and fewer strong stocks causing the increases.

My expectation is that we’ll continue to see some momentum and positive news driving the markets higher into the 1st quarter, followed by a general loss of confidence and mounting losses beginning in Q2. This will continue through the end of the year, and I can see getting close to or surpassing the 35% losses we saw in 2008. Now is not the time to be loading up on stocks and bonds and being “long” the market – now is the time to be careful, and if you’re in the market make sure you have stop-losses set. Better yet, make sure you’re working with an advisor who’s keeping a close eye on things and has you prepared for whatever the coming year may bring.

A Grab-Bag of Links

Once again there’s a somewhat long list of links, saved up for you over the last couple weeks. Without further ado:

• John Mauldin – Great letter on market timing and what to expect for 2011.
• Top Ten Reasons for Caution – List from David Rosenberg on why we need to be cautious in 2011.
• Make 2011 Your Best Year Ever – Some pointers from Little Things Matter on how to make 2011 outstanding.
• Bankruptcies Hit 10-Year High – With bankruptcies at an all-time high and over 13% of Americans on food stamps, where is growth going to come from?
• Euro Banks Face New Debt Crisis – Remember Greece and Ireland? Those were the tip of the iceberg.
• World’s Richest Man Getting Into Silver? - Carlos Slim Heliu is the world’s richest man, and he’s getting into silver. You know how I feel about silver right now

There’s been all sorts of good news out lately, and the markets are reacting positively. You know a common theme of mine is that we’re in a long-term bear market, and I don’t expect that trend to end for many years. My feeling is that right now is very much the eye of the hurricane and we’re in for another round of losses and bad news in the near future. I don’t know if that means a big drop in a week, or a month, or even a year but I do believe it’s inevitable. Having said that, I’m not worried – because myself and my clients are prepared no matter what happens. Do you depend on markets increasing for your portfolio to grow? Does that scare you at all? It doesn’t have to.

What’s Worse than the Ballooning Federal Deficit?

By now, most of us know that the federal deficit is increasing fast and at some point we as a nation are going to have to deal with it. As the old saying goes, if something can’t continue on forever it won’t. What has gone under the radar for far too long now are the local and state debt situations. Since the November elections, investors have been selling municipal (local and state government) bonds at an alarming rate, maybe because a Republican House is not going to be as generous with bailouts as their Democrat colleagues were. Felix Rohatyn is the legendary investment banker who helped bring New York City back to life in the 70s, and his thoughts? “It seems to me that crying wolf is probably a good thing to do at this point”.

The main problem seems to be that cities and states are increasing the debt they’re selling in a major way at the same time that buyers are decreasing the amount they consume. States and cities sold more than $55 Billion in new debt in November as individuals decreased their holdings in bond funds by over $5 Billion. Ultimately people realize that state and local governments are going to have a hard time coming up with the funds to make payments on their debt and will either default or require a bailout from the federal government, which itself is in a bad position and since November is somewhat more fiscally conservative. Either way, individual investors will be the ones bearing the brunt of the damage, so many are heading for the exits before that happens.

Here’s the really scary part – most advisors have no clue how the bond markets work and how to manage their clients’ bond holdings. FINRA (the Financial Industry Regulatory Authority, which oversees financial advisors like yours truly) took a random poll of over 28,000 advisors across the country, asking them “If interest rates rise, what will typically happen to bond prices?”. The results:

• 18% – Prices will rise.
• 28% – Prices will fall.
• 5% – Prices will stay the same.
• 10% – There’s no relationship between interest rates and bond prices.
• 37% – Don’t know.
• 2% – Prefer not to say.

Incredibly, only 28% of those polled understand that rising interest rates (and in a time where interest rates are at generational lows, where can they go but up?) are a very bad thing for bonds. There’s a growing concern that we’re heading for a major correction in the bond market, the prospects of which are made even scarier by the fact that most financial professionals don’t understand how interest rates affect bond prices. Now is not the time to hope your advisor understands these things, as that will be a major blow to your bottom line.

Interesting Links

Some links I found interesting over the last week.

• QE2 and the Money Supply – Article explaining inflation and the money supply, how the two are related.
• Doug Casey on Bernanke – I love these weekly Conversations with Casey, don’t always agree but I always have to think about what he says.
• Audit the Fed in 2011 – Contrary to popular opinion, it sounds like Ron Paul will actually be appointed to audit the Fed. This is excellent news.
• #1 Reason to be Scared – Another reason for concern as the VIX, an indicator of volatility, is at historically low levels.
• Numbers Do Not Lie – Great article (and graph) showing why interest rates and commodity prices are poised for huge increases.

I got a lot of very positive response from last week’s letter, including more than a few requests for assistance in year-end tax and investment planning. If you don’t yet have a clear strategy going into 2011, or have been putting it off, I’d highly recommend speaking to your financial professional to schedule some time. Right now is a quiet time for most advisors (yours truly thankfully excluded) when in fact it should be one of the busiest times. You know the saying, an ounce of planning outweighs a pound of scrambling down the road. Or something like that.

Is All Quiet on the Western Front?

The saying “All’s quiet on the western front”, typically meaning a lack of action yet inferring a sense of foreboding, originally came from a book turned into a screenplay called All Quiet on the Western Front. The book and movie detail the extreme stresses experienced by German soldiers during WWI, and the difficulties faced as they returned to civilian life after the war. The German army regularly sent dispatches to headquarters that all was well, regardless of what was actually going on. This strikes me as particularly fitting right now, when our governments and press tell us that all is well and there is little to fear, when in fact black swans (the theory, not the movie) are all too common. To wit:

• Ben Bernanke’s appearance on 60 Minues, in which he makes it clear that not only are they going to continue deployed the $600B in QE2 monies, they expect more will be needed. This money is going to be created out of thin air, which means massive inflation going forward becomes even more certain. There’s a great article below by David Campbell explaining what inflation is and how it steals your savings – well worth the read.
• Despite Congress agreeing to extend the Bush tax cuts and employment benefits, higher taxes are a near certainty and jobs are not being added at a rate even close to keeping up with organic demand, let alone all those laid off over the last few years. With consumer spending being such a massive part of our economy, this does not bode well.
• Major issues exist within the Euro zone, which happens to be one of our largest trading partners and collectively a major player on the world economic stage. The Irish are on the verge of a vote to impose major budget cuts to qualify for World Bank aid, Greece is probably going to need another round of assistance, and at some point Germany is going to get tired of being the only ones supporting the rest of the continent.
• The US and South Korea are running huge war games near the Korean peninsula, right next to a volatile and dangerous North Korea. All it would take is an errant round or a misunderstanding, and North Korea could be raining shells down on 23 million South Koreans (not to mention the nuclear threat).

While this hasn’t been a bad year for stocks and sitting on the sidelines would have meant missing out on a lot of gains, I think it’s more important than ever to be vigilant and prepared. We recommend a strategy where a good portion of your portfolio is “long with protection”, meaning you’re invested in the markets but have protection if/when markets dip again. In a long-term bear market like we’re in, it’s not unusual to see period of decent gains, following by large drops and ultimately ending up at or below where you started. Protection is critical.

Interesting Links

Some links I found interesting over the last week.

• How to Profit from QE2 – Outstanding breakdown on inflation and why it’s a savings stealer, from David Campbell.
• Three Stages of Delusion – Great article from John Mauldin’s Outside the Box.
• Popular Delusions of Crowds – Bit of a theme here, this time from Casey Research.
• Life in Chile – A link to purchase a book on Chile, what many consider to be the best place to set up a second home.
• TBP Gift Guide – Great list from our friend Barry Ritholtz over at The Big Picture.

And so here we are, Thanksgiving in the rear-view and Christmas fast approaching. This is one of the hardest times of the year for me to stay motivated and on course – it’s so easy to look ahead to the Christmas holidays or to push things into next year. This year I’m making a consious effort not to allow myself, mentally or physically, to “push things into next year”. I’m committed to getting things done now, to staying on task and to keeping my eyes on finishing this year strong. It sure is easy to start setting goals for 2011 and planning into next year, but it’s way too early for that…

Rational Optimism

Some of my longer-term readers may recall that I’m a big fan of John Mauldin. Apart from being a very good writer, he’s got a gift for taking complicated financial data and making it easy to understand. John sends a free Outside the Box e-letter every Tuesday, and his most recent one really struck a chord with me. I consider myself a rational optimist – I always try to look on the bright side, while making sure I keep the dark side in consideration and don’t pretend it doesn’t exist. John posted a review and response to a book called The Rational Optimist by Matt Ridley. I’m putting the book on my Christmas list and will follow up, but here are some takeaways from the review (by none other than Bill Gates) and response from Matt:

• Exchange of Goods – Matt makes the point (and Bill agrees) that one of the biggest keys to rising prosperity has been the exchange of goods. Even from caveman days the exchange of goods between different people groups and cultures has made everyone richer. One of the reasons why free trade is something our government really needs to protect!
• Rational Optimism – While there have always been doomsayers and people preaching and expecting the worst, our lives continue to get better and better. Dubious? Would you rather be living in the 17th or 19th centuries than today? Or even 50 years ago? Our lives are SO much easier and more rich than they were even a few years previous.
• Aid to Africa – This is an extremely contentious topic, and one that hits somewhat close to home after spending the first seven years of my life in Zambia and Zimbabwe. I do feel that aid sent in the wrong way or to the wrong people does more harm than good. I’d like to see more aid being put directly into the hands of the poor, responsibly through organziations such as Grameen Bank and FINCA.
• Corporate Innovation – Not surprisingly, Bill and Matt butt heads over whether established corporations innovate. I would tend to lean toward Matt’s viewpoint here, as most life-altering innovations and key new inventions (think electricity, the automobile, Google or even Microsoft Windows) were created not by large established corporations, but by individuals inventors and small companies.

If you’d like to sign up for any of John’s free e-letters, either Thoughts from the Frontline or Outside the Box, you can do so here.

Interesting Links

Some links I found interesting over the last week.

• WikiLeaks – A WikiPedia primer on WikiLeaks, what it’s all about and why you should care. Interesting stuff.
• The Dismal Science – Great post from Barry Ritholtz on some of the issues with economics, and why it’s called the “dismal science”.
• Resilient Markets – Another post from Barry, illustrating why it’s important not just to be short or long in bear and bull markets.
• Sovereign Man – One of my favorite sites detailing the Sovereign Man ideal, in which one is a citizen of the world and not subject to any one country or government.
• Bad to Worse – A very non-optimistic look at coming problems and issues, especially unemployment, in the US.

I must say that Thanksgiving is one of my favorite holidays, definitely top three if not my favorite. Not only is it one of the rare four-day weekend holidays, but it’s an opportunity to remind ourselves of how blessed we are. No matter how rough life is or how bad things may be for you at the moment, I can guarantee you have a ton of things to be thankful for.

One of my favorite traditions we had as a family growing up was going around the table and having everyone come up with two or three things they were grateful for before we dug in to the meal. Which in turn reminds me of one of my favorite quotes on gratitude, from Napoleon Hill – “I ask not, oh divine providence, for more riches, but for more wisdom with which to accept and use wisely the riches I received at birth in the form of the power to control and direct my mind to whatever ends I desire.” I encourage all of you to spend some time thinking of all the things you can be thankful for – you might even consider writing a list and keeping it for review next year.

Year-End Planning

In case you haven’t set aside time to go over year-end planning and preparing for 2011, I’d highly encourage you to do so sooner rather than later. I go through a checklist of sorts early each November, and consider:

• Tax Planning – Do I have everything in place for my 2010 taxes? Keeping in mind that many decisions need to be made and completed before December 31, I try to get started with this early. I meet with my CPA to make sure I’m not missing anything, plan ahead for contributions to various qualified plans, and arrange business cash flows depending on my tax projections for this year and next.
• Business Planning – A lot of this has to do with cash flows and determining whether income and expenses should be booked for 2010 or 2011. For example, if I expect income this year to be greater than next year, I may push some of my receivables into January but book expenses in December. This allows me to shrink my net profits for 2010, and keep my tax bill down.
• Investment Planning – This often goes hand-in-hand with tax and business planning. Not only can various investments be used to minimize your tax bill and increase your business profitability, it’s a good idea to review your portfolio near the end of the year and mine it for tax benefits. Perhaps taking losses before the end of the year is a good idea, or even booking some profits.
• Goal Setting – For the last few years I’ve been making a point of going through a goal-setting processing in December for the following year. I’ve found that it’s made me much more productive and successful, and the exercise itself is really inspirational. Course, the tough part is following through on the plan…

If I can be helpful to you in any of the above or if you have questions I can answer, I’d love to hear from you.

Interesting Links

Your response to my question last week was overwhelmingly in favor of including some writing with a list of links, so here you are – my list of links I found interesting over the last week.

• Casey Research – This is one of a daily newsletter I get, specifically related to silver. This is a very exciting trade we have going right now.
• Giving Back – Here’s an article from a semi-weekly email newsletter I get from Little Things Matter, on the important of giving back.
• Debt Delenda Est – Short letter from Bill Bonner, one of the best investment writers I know. Very pessimistic and “doom and gloom”, but important to follow in my opinion.
• Buy and Hold Still Viable? – Great article from the Big Picture on “buy and hold” and whether it’s still a viable strategy.
• Financial Times – This is a great resource to get input on markets from outside US-centric news sources. Very important viewpoint.
• eMoney – Marketing video for a cool new service we have for our clients. I’m really excited about this.

I must say that Thanksgiving is one of my favorite holidays, definitely top three if not my favorite. Not only is it one of the rare four-day weekend holidays, but it’s an opportunity to remind ourselves of how blessed we are. No matter how rough life is or how bad things may be for you at the moment, I can guarantee you have a ton of things to be thankful for.

One of my favorite traditions we had as a family growing up was going around the table and having everyone come up with two or three things they were grateful for before we dug in to the meal. Which in turn reminds me of one of my favorite quotes on gratitude, from Napoleon Hill – “I ask not, oh divine providence, for more riches, but for more wisdom with which to accept and use wisely the riches I received at birth in the form of the power to control and direct my mind to whatever ends I desire.” I encourage all of you to spend some time thinking of all the things you can be thankful for – you might even consider writing a list and keeping it for review next year.

Year-End Planning

In case you haven’t set aside time to go over year-end planning and preparing for 2011, I’d highly encourage you to do so sooner rather than later. I go through a checklist of sorts early each November, and consider:

• Tax Planning – Do I have everything in place for my 2010 taxes? Keeping in mind that many decisions need to be made and completed before December 31, I try to get started with this early. I meet with my CPA to make sure I’m not missing anything, plan ahead for contributions to various qualified plans, and arrange business cash flows depending on my tax projections for this year and next.
• Business Planning – A lot of this has to do with cash flows and determining whether income and expenses should be booked for 2010 or 2011. For example, if I expect income this year to be greater than next year, I may push some of my receivables into January but book expenses in December. This allows me to shrink my net profits for 2010, and keep my tax bill down.
• Investment Planning – This often goes hand-in-hand with tax and business planning. Not only can various investments be used to minimize your tax bill and increase your business profitability, it’s a good idea to review your portfolio near the end of the year and mine it for tax benefits. Perhaps taking losses before the end of the year is a good idea, or even booking some profits.
• Goal Setting – For the last few years I’ve been making a point of going through a goal-setting processing in December for the following year. I’ve found that it’s made me much more productive and successful, and the exercise itself is really inspirational. Course, the tough part is following through on the plan…

If I can be helpful to you in any of the above or if you have questions I can answer, I’d love to hear from you.

Interesting Links

Your response to my question last week was overwhelmingly in favor of including some writing with a list of links, so here you are – my list of links I found interesting over the last week.

• Casey Research – This is one of a daily newsletter I get, specifically related to silver. This is a very exciting trade we have going right now.
• Giving Back – Here’s an article from a semi-weekly email newsletter I get from Little Things Matter, on the important of giving back.
• Debt Delenda Est – Short letter from Bill Bonner, one of the best investment writers I know. Very pessimistic and “doom and gloom”, but important to follow in my opinion.
• Buy and Hold Still Viable? – Great article from the Big Picture on “buy and hold” and whether it’s still a viable strategy.
• Financial Times – This is a great resource to get input on markets from outside US-centric news sources. Very important viewpoint.

• eMoney – Marketing video for a cool new service we have for our clients. I’m really excited about this.