2008: A Year to Forget...or to Remember

The fourth quarter of 2008 witnessed the most dramatic loss in equity investment values in any quarter in history. While much lower volatility and a respectable price recovery seems to have begun in December, October and November returns were so weak that, combined with September’s significant losses, the year as a whole produced the worst annual performance in the many decades since the era of the Great Depression in the early 1930s.

For what consolation it may offer, to have suffered through this current era of dramatic loss will very likely mark a “once in a long life-time event.” And, to have survived will likely steel one’s endurance for lesser future threats…or permanently re-adjust one’s actual tolerance for risk. In any event, it seems unlikely to us that you, or even your children, or, perhaps, even your living grandchildren will ever have to face a greater threat to investment values than what you’ve just experienced. continue story

The Perfect Opportunity before the Perfect Storm: Tax Law Changes and Low Interest Rates Demand Current Estate Planning Attention

For more than eight years, certain congressional Republicans have pushed unsuccessfully for complete repeal of the estate tax. While current law provides that the unified credit equivalent (the amount each person can transfer estate tax-free) increases to $3,500,000 in 2009 and is unlimited in 2010, in 2011 the credit returns to 2001 levels, or $1,000,000. The estate tax rate for amounts over the credit, which is currently 45% (and effectively zero in 2010), also reverts to 55% in 2011. President-elect Obama has proposed fixing the credit at $3,500,000 and the tax rate at 45%. Although any future legislation is speculative, it is widely expected that changes will occur in 2009 and that Congress won’t allow the one-year unlimited credit in 2010 to occur. Therefore, we can and should expect estate tax law changes in 2009 and possibly in the first few months of the Obama administration. read more

Roadmap to the Future

Last September, we began an in-depth study into the history of financial crises and bear markets. The context then was not yet dire (Lehman had yet to fall), and we reminded ourselves, and our clients, that market timing is only reliable when viewed after the fact.

Our primary goal was to understand the sign posts along the road to recovery and how, if at all, we should position client portfolios differently. We use the term “sign post” to make the important, but subtle, distinction between a futile goal of predicting the future (especially the timing of the market bottom) and the realistic goal of understanding what the future will look like as it is unfolding.    read more

Investing in Our Future: Our Clients and Our People

2008 was a remarkable and challenging year for our industry to say the least, and it was especially challenging for the people of our firm. In addition to proactively addressing the client service issues and opportunities that were created by the worst stock market decline since the Great Depression, we were also in the middle of making a significant investment of human and financial capital in our collective future. We took a fresh look toward improving virtually every aspect of our business so we can continue to provide highest quality client service for the very long term future. read more