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Romary E-Thoughts:

February 2012
Love/Hate Relationship - Politics

Throughout this presidential year you will read continually from us regarding historic perspective on the stock market in an election year.

Yep, I love politics. Yes, I hate politics. Some of you witnessed my obsession with the Iowa Caucus (what an amazing circus that is) and the beginning of primary season.

The first thing that comes to mind is that an incumbent president has not been reelected with an unemployment rate higher than 7.25% since Franklin Roosevelt’s victory for his second term. We are currently in excess of 8%. So, historically, President Obama has an uphill climb.

Wall Street always gives a new administration a 6-8 month “honeymoon” period of grace—let’s see what the new president can do.

At this point, Wall Street (and your investments) is awaiting a challenger to clearly identify a full recovery and job creation vision.

In the spring of 1972, Congress declared a change in election rules. In the wake of Vietnam, the voting age was lowered to 18. A group of voter registration folks arrive early in the morning at South Side High School. I skipped a senior literature class that morning to be first in line to sign up to vote in the upcoming presidential election.

My love affair with politics continues!

January 2012
Building a Moat Around Your Money

The leading edge of the largest generation in history turned 65 last year. This demographic tidal wave will reshape not only the traditional concepts of retirement but the investment vehicles needed to sustain longer life expectancies.

Longevity “insurance” is the term referring to a long-term deferred annuity that begins paying annual dividends when you reach an advanced age. The concept of an annuity goes back 500+ years to the birth of global shipping and protecting cargo.

Today’s annuities protect you, the most important “cargo.” They are designed to provide guarantees in the form of “floor” interest rates plus income for life, if needed.

In the age of insecurity, annuities provide a moat around your other saving vehicles. It acts as a sound solution for those seeking the attributes of guaranteed income similar to the pensions that our parents once relied on.

So, consider another brick in the wall of your moat----vanilla, slightly boring annuities, offering income for life.

December 2011
Head-Snapping Volatility

Yep, it is true; the head-banging volatility we have been experiencing in the stock market suggests a marketplace that is not healthy.

This much volatility is not “normal.” Since 2000, the Dow has moved an average of 0.87% a day, up or down. Since the start of August, the average move has been in excess of twice that, 1.80%.

Financial markets become more volatile in periods of stress: European debt, Greek debt, U. S. recession, double dip property values in areas of the U.S., not to mention high unemployment with no end in sight.

So…what to do? Pay off your personal debt, cars and credit cards, build up savings, and diversify your retirement accounts. Think “boring” and sleep better at night. Remember 10% returns on your investments? Boring means comfort at 4-6% per year.

Stay tuned and beware of the pendulum—can be wonderfully profitable OR knock you over!! We are here to assist! E-mail anytime.

November 2011
Fearful Words

During the recent stock market volatility, the word “bear market” has been discussed by the media. Truth is, the term “bear market” has been in flux for a century. Investors who rely on labels to guide their decisions are clinging to conventions with no real meaning.

There is no such thing as an “official bear market.” A rough consensus defines it as a 20% decline from a closing high to a closing low.

The term “bear,” for someone who profits when stocks fall, dates to the 1700s. “To sell the bear’s skin before one has caught the bear” was an early description of a short seller.

Be aware that words have different meanings over time and economic space.

The key is diversification!

October 2011
Book Review & Thoughts

Greetings to all enjoying the beauty of fall colors!
 
This month I recommend an interesting book: The Man of Numbers, Fibonacci's Arithmetic Revolution by Keith Devlin.
 
I hear some folks say, "I do not have a head for numbers." However, we certainly have a head full of figures. Try to imagine a day without numbers-no alarm clock, no time, no date, no TV, no stock market reports.
 
This small, beautifully written book is filled with the early life of Leonardo of Pisa (better known today as Fibonacci) and the calculations of trade in 1200. The "Fibonacci sequence" is a specialized sequence of numbers, commonly found in codes. The DaVinci Code referred to this practice.
 
Read how early tradesmen and women kept track of sales and revenue.
 
Do you know where the word bank originates? The Latin term is banca. In early 1200 roaming financiers laid out their coins on wooden benches or banks-thus they were called "bankers." These bankers loaned money, and the leaders called meetings which met around a large boarded table-thus "board of directors."
 
Get a copy from the library, purchase a copy, or download "The Man of Numbers."
 
A walk through history-never a disappointment!
 
Many blessings to you and yours.

September 2011
Making Retirement Decisions... or Not: Be Prepared for Surprises

Can you find the category that best matches you or can you find the category of choice?

• Snoozers, who don't think about future risk at all.
• Active Resisters, who "choose to snooze" or choose to ignore information regarding risk.
• Immobilized Worriers, who understand future risks but whose worry prevents action.
• Oversleepers, who are late in thinking and planning and may regard decisions window as "come and gone."
• Wood Knockers, who think about the unexpected but rely on hope, choosing optimism.
• Plan B-ers, who hold onto a contingency plan as protection against trouble ahead.
• Realists, who use the lessons of past experience to think about the future.
• Stewers and Brewers, who take a while to make decisions. Stewers fuss and fret; brewers play with ideas and strategies.
• Compromisers, who think about both today and tomorrow and balance current needs against future risk.
• Preemptive Planners, who strive to preempt future risks or at least consequences.

(Source: Journal of Financial Service Professionals, May 2010.)

It's never too late to plan!!

August 2011
Live Long and Prosper

Yes, I admit that I can still move my fingers quickly to the Vulcan greeting displayed by Mr. Spock from Star Trek. As this economic climb from deep recession begins to feel like ascending Mount Everest, I have pondered the slogan "live long and prosper." Below are a few tips for avoiding longevity risk:

Time-band usage: Do not play it so safe with assets you envision using in 20 or 30 years.

Longevity Insurance: AKA, Annuities. A very popular tool providing income streams in retirement. They come in different sizes and shapes for risk tolerance. Two in five Americans own an annuity to provide retirement income.

Planning for Health Care: Because we have no clear idea how this will look in the future, create a bucket of money for premiums, out-of-pocket expenses, and cost of potential exchange programs.

Silver Lining: Did you know that the final health care costs for someone who dies at 100 are typically about one-third of the costs for someone who dies at 67? People who live long tend to be healthier and more likely to die from a problem quickly.

Live very, very long and prosper.

July 2011
Etch a Sketch vs. iPad

Yes, it is true-- 100 million people have purchased an iPad since production began in early 2010.

Do you remember the Etch A Sketch? Guess what...you can still purchase one!! Ohio Art began production of this device 51 years ago. It is a bundle of creativity with 7.5 inch screen, 2 inch thickness, $12 cost, and 150 million sold in 51 years. Oh, and it can be operated vertically or horizontally.

The new iPad has a 9.5 inch screen with <.5 inch thickness, between $500-1,200 cost, and 10 million sold in 16 months. Oh, and it can be operated vertically or horizontally!

Ohio Art, started in 1908 by Henry Winzeler in Archbold, Ohio, was a reflection of the owner's lifelong interest in art. Metal lithography is still core to their business which sells Etch A Sketch to kids and adults in 50 countries.

Apple enters the tech scene three decades ago as the brain child of Steve Jobs and several others who envisioned numbers as "art." Today, I have in the office my iPhone and iPad...with fond memories of my Etch A Sketch.

So what will our children/grandchildren say about the iPhone and iPad? Will they think our technology antiquated or quaint? Most likely!

Life is art-paint with bold colors!

June 2011
The Ups (and Downs) of Picking Stocks

Have you tried the Tribute blend at Starbucks? It is new and roasted to celebrate the 40th anniversary of Starbucks, the dream company of Howard Schultz. Also, to celebrate the 40th, Schultz released the new book, Onward: How Starbucks Fought For Its Life Without Losing Its Soul. This is a very good read and tells the trials of a growing company.

I have owned Starbucks stock off and on for 30 years. It is a company with plenty of hills and valleys. Schultz describes a particular low point when breakfast sandwiches were introduced and the first choice cheese was so strong it overpowered the smell of coffee in the store. They were nimble enough to adjust quickly (a Gouda is less potent than a cheddar!)

When looking for stocks to purchase, buy what you know. Look in your medicine chest, pantry, garage, and where you spend your hard-earned dollars. Never buy a stock you can't pronounce or do not know what they sell or produce. This is why Amazon and Apple are so popular.

So, do you know how my favorite hangout, Starbucks, got its name? You have to go back to the Herman Melville classic, Moby Dick. The java drinker and first mate on the ship "Pequod" was known as a steady and loyal companion to Captain Ahab-his name... Starbuck.

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Romary Financial Services Scholarship 2012

“Education is a social process…Education is growth…Education is not a preparation for life; education is life itself.” — John Dewey.

We could not agree more. That is exactly the reason why we are very pleased to announce the annual Romary Financial Services Scholarship.

We believe education is a part of life that should never be taken for granted. The opportunity for each of us to explore our capabilities and learn more about this world and ourselves is perhaps the best gift we have been given. Education truly is an opportunity of a lifetime.

The Romary Financial Services Scholarship offers a $2,500 gift awarded to a high school senior who is committed to earning his or her college degree or comparable trade school certification in any field.

The scholarship winner will be notified by March 15, 2012, and will be expected to attend a dinner celebration to accept the award.