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April 22, 2009
Dear Clients and Colleagues,
Last year a Category Five Hurricane hit everyone’s retirement
savings, whether in a 401k, 403b or IRA. Losses were significant,
even with moderate risk investments, no fancy or unintelligible
derivatives. So how should you respond? Should you bail out or
hunker down?
You should try to look at this as a potentially great buying
opportunity. I know, it’s not easy. But if Best Buy had a 40% off
sale on the dream Plasma TV you want, you’d jump at the chance. If
you were putting in $200 a month in your 401k to buy company stock
at $20 a share, you were buying 10 shares a month. Now at $12 a
share, you are buying 16.67 shares a month. At the end of a year you
would have 200 shares, instead of 120, so if it goes up $2 your
value goes up $400 instead of $240.*
Should you buy more stocks or more bonds? Well, it depends. As you
approach retirement age, you should become more conservative with
your investments, which generally means increasing the percentage of
bonds versus stocks in your portfolio. But you really need to look
at your entire financial situation.
My suggestion would be to let us review your portfolio, even if it
is in a company 401k. What is a good mixture for a 40 year old may
be inappropriate for her 65 year old parents. Also, it is important
to look at other sources of income. If you are lucky enough to have
a company pension, then perhaps you can take a little more risk to
earn a little more return. But in no case should you gamble with
your retirement money. We can help you make sure that you have
enough to pay the rent and buy food when you retire.
If you have any questions or need any help, please contact my
Financial Assistant, Evan Press, at 818.887.9401 or by Email at
evan.press@lpl.com
In fact, if you have any questions about your financial situation,
need advice before you make an investment or a big purchase, or want
help making sure that you can meet your financial goals, please
contact us. Also, if you know someone who could benefit from our
services, please contact us. We would love an introduction. We are a
full-service financial firm, with experts in estate planning, taxes
and investments.
Thank you,
Steve Hornstein
We are a full-service financial firm, with experts in estate
planning, taxes and investments.
Steve H. Hornstein, CPA, Esq., LL.M., CFP™
Hornstein Financial
20335 Ventura Blvd., Suite 203
Woodland Hills, CA 91364
Office: (818) 887-9401
Fax: (818) 887-7173
Toll-free: (888) 280-8100
www.hornsteinfinancial.com
Securities are offered through LPL Financial, Member
FINRA/SIPC
The opinions voiced in this material are for general information
only and are not intended to provide specific advice or
recommendations for any individual. To determine which investments
may be appropriate for you, consult myself or your financial advisor
prior to investing. All performance referenced is historical and is
no guarantee of future results. All indices are unmanaged and cannot
be invested into directly.
This document is for information purposes only and is not intended
to be an offer or solicitation. The past performance of securities
or other investments does not necessarily indicate or predict future
performance.
The information in this document is not intended to provide
individual tax advice. You should consult either your tax advisor or
me for specific guidance. |
