We desire to continue building your trust in this low trust environment!

We at Values First Advisors do not take trust lightly.  We believe it should be the cornerstone of every relationship: with God, your spouse, family, friends, and business relationships.

In today's low-trust environment, we are making every effort to continue building loyalty and trust with you. It is one of our top internal goals at VFA.

I wanted to share with you an article from one of our partners, Dan Celia.  He is the host of the national radio show "Financial Issues" which is broadcast to over 300 radio stations on the Bott Radio Network and American Family Radio.

Are there too many hands in the cookie jar?

There are five major problems with tax-deferred plans at work:

1st Problem: Limited Choices.

For most, this provides two challenges: the limited ability to screen your investments for moral or social issues important to you and the limited ability to find the best investment vehicles (place to get the highest potential return).

The market has rebounded...is it poised to keep rising?

Remember when people were getting out of stocks? In the last quarter of 2008 and the first quarter of 2009, some people made the decision to move money into forms of investment with low or no stock market correlation. The recession was going full blast; the Dow was falling. But recessions are temporary, and markets improve.

The recent recovery wowed even the most jaded market analysts. From the March 9, 2009 market lows to the end of the year, the S&P 500 shot up 64.83%, the DJIA gained 59.28%, the NASDAQ 78.87% and the Russell 2000 82.19%. The CBOE VIX, the so-called fear index, dropped 56.14% in that stretch.

Was March 9, 2009 the point of capitulation? Have you heard of that term? It references a point of “surrender” or maximum exodus from stocks to CDs and Treasuries in a bear market. The theory goes that when that point of capitulation is reached, a measured, rational market recovery will begin leading to either a cyclical bull market or (fingers crossed) a new long-term bull market.

The rebound off the March 9 lows wasn’t measured, it was phenomenal. On August 6, 2009, the head of Goldman Sachs’ investment policy committee declared that “the new bull market has begun.” On CNBC, Abby Joseph Cohen shared her belief that the S&P 500 would finish 2009 in the 1,050-1,100 range, up from a March 9 trough of 666.79. It exceeded her expectations, ending the year at 1,115.10.

Will stocks keep advancing in 2010? There’s an old phrase people like to cite: past performance is no indication of future success. That disclaimer aside, many analysts think that the stock market will realize at least moderate gains in 2010. The mood is certainly more optimistic and the economy seems to be improving.

Will investors be patient? Good question. In late 2008, you had people swearing off stocks. In 2009, some of those same people changed their mind and ran back to stocks. If 2010 brings a correction, will these investors ditch stocks again? History suggests that these short-term shifts may be damaging.

DALBAR, that goldmine of investment research, looked at the behavior of the average mutual fund investor over a 20-year period ending December 31, 2007. The 20-year survey found that while the broad stock market (S&P 500) returned an average of 11.82% over those 20 years, the average mutual fund investor bailed out at times, missed out on great market days, and only realized an average return of 4.48%. This is a really compelling argument for patience and sustained investment. In late 2008, both Warren Buffett and John Bogle made the case that investors should stay in the market, as some major values were available as a result of the downturn.

How are you invested these days? We’ve seen a lot of change in the last three years, and many people have really changed up their portfolios. How about yours? Is your asset allocation still appropriate for your long-term objectives? You might want to talk to a qualified financial advisor today to review where you are at and how you might position yourself for the years ahead.

Want to take action or have your personal questions answered?

Give Values First Advisors a call today at 877-832-3847.

Things you might want to consider doing in 2010.

Okay. It’s that time of year – to plan 2010.Do you want to start the year off on the right foot?  Here are some possibilities:

Control non-mortgage debt. Experian says the average American carries about $17,000 in debt unrelated to home loans. Too much of this is simply credit card debt. So how about paying down, paying off and maybe getting rid of some cards?¹

How much financial ground can you lose to plastic? Well, if you have a credit card with a $17,000 balance and 10% APR and you pay $200 monthly on it, it will take you 12 years to pay it off.

You may have so-called “good debts” as a consequence of your business or your professional career. Yet ultimately, debt is debt. You can certainly plan to build wealth and control debt at the same time, and why not plan to do both?

Faith-based investing is an idea whose time has come. 2009 has seen an increase in interest among the Christian community in putting their money where their values are. This increase in popularity is due, in part to a couple of wonderful ministries, Dan Celia’s Financial Issues and Bob Lotich’s Christian Personal Finance, and their efforts to spread the word about the importance of financial stewardship. The increased need for values based investing has seen the launch of a new Exchange Traded fund as well.

December 21, 2009

The Bush tax cuts are set to expire – and other big changes are poised to occur.

Do you see a warning light flashing? Americans with high net worth and high incomes are preparing for the likelihood of higher taxes in 2011 and subsequent years. High earners are almost certainly going to take the hit if the EGTRRA and JGTRRA cuts fade away at the end of 2010. Here’s a summary of what’s happening – and a look at what might happen. There are some developments you will want to remember, and some tax breaks you might very well want to exploit.

December 16, 2009

It’s the end of the year, what’s a morally conscious investor to do?

In 2009, for many investors there is good news and bad news.  The good news is you may have made a ton of money in the stock market recovery.  The bad news is you may have to pay some taxes on your gains.  What can you do to cut your tax bill?  Here are some year-end moves to help reduce your taxes.  Please keep in mind, I am not a CPA and you should seek the help of a qualified tax advisor before making any changes.

Last Minute Moves

With Obama and his spend happy Democrats at the helm, one thing is almost certain, taxes will go up next year!  This means that year-end tax planning for 2009 is more important now than ever! First things first:  you will need to get a good estimate of your tax bracket for 2009 and 2010.  Here is a resource to help you out:   2009 Click Here 2010 Click Here . Once you have a good idea on your tax situation you will want to consider some maneuvers to help your situation some.

Here are seven tax moves you can make before 2009 comes to a close:

1. Consider maximizing your pretax contributions to your IRA. For an IRA, you can contribute $5,000 or $6,000 if you are age 50 or older.
2. Consider a Roth conversion (converting a traditional IRA to a Roth IRA). Don't qualify in 2009? Just wait a month! The $100,000 gross income limit on conversions will be lifted next year. If your income is less than $100,000, you many want to consider doing a partial conversion if your tax bracket is going to be higher in 2010.
3. On your taxable accounts, consider taking some short-term gains. Normally I recommend holding securities for a year or longer to get the lower capital gains rate. But wiht all of the volatility in 2007, 2008, and 2009, chances are you have some winners and loswers. Profits on securities held for less than a year are treated as ordinary income (up to 35% in 2009). You can use net short-term losses to offset net-short term gains and avoid having to pay taxes on some of your winners.
4. On your taxable accounts, consider taking long-term gains. Securities that have been held greater than a year can also be paired  (winners and losers). If you have current long-term gains, chances are high that the favorable 15% capital gains rate that is currently in effect will go away.
5. Consider taking some losses now. Losses offset gains dollar for dollar. You can use up to $3,000 of net losses towared your 2009 ordinary income. Any additional losses can be carried into 2010 and possibly beyond.
6. Consider purchasing a vehicle. Doing so before the end of 2009 could carry some tax benefits. You can deduct the state and local sales and excise taxes on new cars. light trucks, motor homes, and motorcycles bought within 2009. Taxes paid on the first $49,500 of the cost qualify without any limitation on the number of vehicles you can buy.
7. Consider year-end business purchases. Business owners with self-employment income can purchase up to $250,000 worth of business equipment and take a full tax deduction in 2009. To qualify, the equipment must be in service by year-end.

These are just a sample of the many tax moves you can do in 2009. Time is runnin out! Call your tax advisor today to see if any of these may be of advantage to you. Chances are there is always a move or two waiting for you to save some money on your taxes.

Lost when it comes to investing?

Give Values First Advisros a call today 1-877-832-3847.

December 15, 2009

Dollar cost averaging offers you a to invest consistently and a chance to exploit some great buys.

Are you investing inconsistently … or not at all? Inconsistent investment can sabotage your retirement savings efforts. There’s a way to avoid that problem: a strategy called Dollar Cost Averaging.

By investing equal dollar amounts on a regular monthly basis, you can plan to build wealth in a way you can afford today.

DCA to the rescue. Many people think they can’t afford to invest – their budgets won’t allow them to do so. DCA makes it easier. Arranging a monthly salary deferral of even $100 into your 401(k), for example, can help you plan to build wealth in a tax-advantaged way.

Remember, you won’t retire on the dollars you put aside today for retirement; you’ll retire on the assets accumulated from those early dollars as a result of investment and compounding. Most retirement accounts feature tax-deferred contributions and tax-deferred growth – why should you wait to take consistent advantage of that?

Look at it this way: you can't make retroactive contributions to a 401(k), so each dollar you didn’t contribute last year is an opportunity you've lost forever. Not to mention the opportunity for tax-deferred growth of those assets.

That’s one compelling reason to adopt the DCA approach.

Additionally, DCA ensures a constant flow of new money into the retirement account. That factor alone may help you exploit current market conditions.

The DCA strategy is designed to lower cost per share. When you practice Dollar Cost Averaging, you buy more shares when prices are low and fewer shares when prices are high. So with time, you end up with a lower overall cost for shares purchased.

In last year’s market downturn, there were some great buys – quality companies whose share prices had fallen to amazing lows. Through DCA, investors had a way to exploit this buying opportunity and pick up more shares. For example, on February 20, 2009, you could have picked up 107 shares of General Electric for $1,000. A year earlier, the same $1K would have bought you 29 shares.

In the downturn, the DCA strategy by no means guaranteed a great return in the future – but it did offer investors a chance to position their assets for the market rebound. And boy, has the market rebounded!

Speaking of market downturns and rebounds, Ibbotson Associates did some research and found that a hypothetical investor who would have invested $100 a month in Wall Street for 30 years starting in September 1929 would have seen that total investment of $36,000 grow into a $411,000 nest egg by September 1959. Yes, the crash of 1929 was an extraordinary circumstance – but didn’t the Great Recession feel pretty extraordinary to you? This is a good argument for DCA for the long-run stock market investor.

The DCA strategy makes sense for many. Right now, many Americans would be hard-pressed to come up with a lump sum of say, $4,000 or $10,000 to invest. DCA allows people to contribute equivalent amounts toward retirement savings a little at a time.

The really great thing about it is how “automatic” it all is. By arranging, say, regular salary deferrals into a employer-sponsored retirement plan or regular monthly contributions to an IRA, you can go out and live your life and simply get that quarterly statement showing your ongoing contributions to the account. It is “off your plate” but never neglected.

Are you saving for the future using a Dollar Cost Averaging method? Talk to a financial advisor today and see how convenient it can be for you.

December 11, 2009

Should you and your family set one up?

Do you want to create a lasting legacy?

Richard Lewis came into my office looking to find the best way to give $20,000 of an inheritance he had just received to his favor­ite causes. He wanted to maximize his gift and also receive some tax benefits. I helped him set up his very own donor-advised fund that he named “The Lewis Lasting Legacy Account.”

December 9, 2009

When it comes to your investments, do you have the patience to reap long-term rewards?

“But it looks so good!” When you hear about a new stock becoming available, are you enticed by its promise? Do you suddenly feel compelled to run right out and buy shares? Let’s say you DON’T buy shares, and then the stock doubles after the initial public offering. Do you run out and buy it THEN? Do you sell shares of a loser in favor of this new stock that’s hot?