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Margaret's Musings (2006)




| Monday, 18 DECEMBER 2006 |

The Week before Christmas and the week of Hannukah.

'Tis the season to be jolly ... Soon you will be getting a holiday card from the Starner Group and we will be wrapping up our year end tax efforts.

I spent last night wrapping and wrapping and wrapping. A week from today, Lise and Dana, my 2 daughters, and their families will arrive for the holiday week. My little grandkids call frequently to make sure that I know what to wrap and put under the tree for them. Micaela is very precise; she says at six she is ready for a 120-piece puzzle. As a granny, it's easy to want to give them their entire Christmas list, especially since they're too young to get excited about my gifts to their 529 plans. This year I will give the two older ones the book, "Why Money was Invented".

2006 is turning out to be a better than o.k. year for meeting the financial goals of virtually all of our clients. This was the year that you didn't need hedge funds or anything exotic to do well. The DOW continued to hit new highs and so did Raymond James Financial. Traveling to Europe and buying champagne certainly got more expensive as the dollar continued to fall relative to the Euro. Of course, this helped portfolios with international exposure. My trips in '07 will be to Argentina and China.

The Starner Group is proud to announce that both Vanessa and Andy in our group obtained their securities license this Fall, passing what is commonly known as the Series 7 exam. In the spirit of continuing education and competency development, they will both be attending specialized training in our corporate office in 2007.

In 2006 I celebrated 25 years with Raymond James and in January '07 will celebrate my 26th.

One of my favorite Chinese Proverbs is "Those who say it can't be done should get out of the way of those doing it." While investing and planning has much to do with probabilities, it is the "possibilities" of planning that has made the years so much fun and rewarding for me and my clients.

These possibilities are your hopes and wishes. On a long-term basis, planning is about realizing those dreams which we call goals. Looking back, given all the events in the past 25-26 years, I am amazed at the many possibilities which came true. To be honest, I don't always know if the fruition was due to luck or planning. However, time and time again, I see the gifts of planning are preparing for good luck and managing bad luck.

We go into '07 with high hopes for continuing prosperity and pray for peace in the world. The latter has been most elusive and the more worrisome. However, as I look forward to seeing my grandkids, I see the possibilities.

 


 

| Friday, 1 SEPTEMBER 2006 |

Roger and I recently returned from two weeks in Russia, including a river cruise. I loved Russia. In fact, I think everyone should go at some point in their lives. Russia represents the best and worst of concentrated power and wealth. That being said, I don't recommend a river cruise. I just didn't think about how large and sparsely populated Russia is. The towns are few and far apart and I wish I could have used my "cruising time" to meet more people and see more places and things. Of course, there is some good news -- since there was no TV, radio, phones, or computers on the cruise, all I could do was relax, sleep, eat and read. I came back incredibly rested internally.

Fortunately, we had five days in St. Petersburg with a private guide before we started cruising. Moscow and St. Petersburg are beautiful and bustling. Prosperity is evident. I found myself awed by the incredible boulevards, palaces, buildings, and art. Truly amazing history, yet tinged with lots of pain and suffering.

The tourist in me was very uncomfortable buying anything as corruption is still pretty rampant. In fact, I am positive I overpaid for everything. Whenever I asked the guide if she thought I overpaid, the comment was always, "It is lovely; you will enjoy it."

While there is very low unemployment in Moscow, the same can't be said for the rural areas. Many still look back upon the pre Perestroika days with fondness. The Oligarchs have most of the wealth. Still, I want to go back, especially within five years to see how Russia will change. Every time I asked someone how they thought they were doing, the answer was always, "It's getting better."

Summer is over and 'tis back to school time. I am proud to share a financial planning story about my oldest granddaughter, Micaela (who was six on July 4th).

Micaela will be entering first grade after Labor Day. Her mother took her shopping last week for school supplies. Well, Micaela is a child who wants everything. She admired all the interesting back packs and wanted a new one for her new school year. Her mother reminded her she had three good ones at home. But Micaela persisted in her demands. Finally, her Dad said, "OK. You may get the back pack. We will pay half and you can pay half out of your savings. However, if you wait until next school year, we will buy a new back pack for you." Micaela wanted some time to think. She went home and looked at the back packs she owned. Finally, she responded, "I need my savings for spending money when we go on vacations. My back packs will be fine."

Financial planning is about being proactive and is also a process for decision making. Micaela somehow understood the goal for her savings. And she somehow knew with some waiting she would eventually get a new back pack and have spending money for vacation too. So for this Granny, I think her school year is starting with an A+.

The Pension Reform legislation was passed and signed recently. I will be writing about the legislation in a future Memo and post it to my Musings.

Happy Labor Day weekend. My daughter, Dana and her family will be visiting for the holiday weekend. They have just moved back to Dallas from London.

 


 

| Sunday, 1 JULY 2006 |

For many summers I have traveled on the Chairman's trip with Tom James, CEO of Raymond James Financial. The Chairman's trip consists of top producers and leaders (with spouses) from all the various divisions of Raymond James. Each morning consists of talks by Tom as well as presentations from others. The rest of the day we tour and enjoy the sights. Most evenings we are back together for dinner. Working and enjoying a week together each year have enabled us to know each other well despite the tremendous growth of RJF in the past 10 years. As you might imagine the size of the trip has grown significantly with the growth of the company. It is not likely I would cross paths with an institutional equity salesman from LA, an institutional fixed income salesman from Memphis nor a telecom Investment Banker in my daily activities. Mixing and mingling with a variety of leaders within the firm as well as the CEO is just as magical as visiting the many places here and abroad. You can only imagine the tremendous access this has provided me within the firm even as it grows.

We just returned from this year's trip to Prague and Vienna. It was my first time to Prague and one can never go to Vienna too often. Everyone was crazy with the World Cup. The US was playing the Czech Republic the evening we arrived. The streets were crazy with celebrating spectators as they beat the US handily. Soccer dominates Europe and much of the world beyond our imagination. There is nothing so consuming in the Americas. I could not resist bringing home soccer shirts for gifts.

More to my interests was the celebration of Mozart's 250th birthday. Concerts are being held everywhere in his honor ... in churches, school auditoriums, etc. We were able to attend marvelous and intimate concerts both in Prague and Vienna. The performances were more of a treat than all the chocolates!!

Some of the major investment themes discussed was health care, energy, real estate, and telecom; as well as strategies to provide income for life. These themes will be incorporated in your coming Reviews and Investment strategies.

It seems as if there are few small independent investment firms standing. Raymond James is one of the few. This is also true of mutual fund companies and portfolio management firms. For example of companies presenting to us last week: Pimco is now owned by Allianz; John Hancock Life Insurance is owned by Manulife; and Scudder is now owned by Deutche Bank. And all three of these acquirers are non-US companies. However, Manulife is using the John Hancock name. The distribution of investment opportunities has truly gone global. Raymond James has preferred to be the acquirer and to remain independent.

One of the best news we received was hearing that the Miami Heat won the NBA championship by defeating the Dallas Mavericks. There is nothing more 4th of July than rooting for the home team. This is the first championship for Miami Heat and no one deserves congratulation more than Pat Riley who is a great coach. His focus on discipline and motivating a team that drew much skepticism shows that managing talent to be no. 1 is an art as well as hard work.

Ahhhh, the 4th of July. Readers of my Musings over the years know that July 4th is also a day for my dad's barbecue sauce. This year is no exception. I will be in LA celebrating my granddaughter, Micaela's 6th birthday who was born on July 4th. While in CA, all of my family will also be convening there to celebrate my mother's 85th birthday. And we always, always have my dad's barbecue.

Happy July 4th to you all.

 


 

| TUESDAY, 6 JUNE 2006 |

I am happy to announce John Andy Szkaradek joining the Starner Group as a Financial Planning Specialist this week. He previously worked in financial planning at US Trust, Price Waterhouse and Ayco in New York.

Yami decided to be a stay at home Mom, though she continues to help us out on a limited basis from home. Though we miss her and always will, she is enjoying her decision. Yami was with me for over 12 years. She started as an intern when she was a junior at University of Miami. Her talents were many and her efforts were reflected in much of the work you saw and received. Yami left at the end of February.

Roger and I flew London after tax season to visit our daughter, Dana and her family. They live in Virginia Waters, Surrey, about 40 minutes by train from London, and near Windsor Castle. In fact we were there to celebrate the Queen's 80th birthday. Having been to London many times previously, it was lovely to be in the countryside for a week with the grandchildren. We visited their schools, saw beautiful gardens and countryside, ate in local pubs and restaurants that were delightful and not terribly expensive like London.

Kailee, our grandson, attends the International School with kids from all over as many parents are in England for their overseas assignments. I met one of the mothers whose family is from India and mentioned I worked for Raymond James. She nodded and smiled as she knew of Raymond James. I was so shocked to hear her father had an account with the Raymond James division in India. Raymond James now has a number of international offices and one of the first opened was in India. "Tis a small world. Or Raymond James is now in the big world.

Recently a new tax bill was signed by President Bush extending the 15% dividend and long term capital gain tax rates another two years until 2010. While there is much moaning and groaning about tax benefits are only for the rich, I happen to agree with dividends being taxed at the same rate as capital gains, as it encourages corporations to pay out dividends. Growing dividends is and will be an important source of income in the retirement years.

The new tax bill also extended the age limit of the Kiddie Tax from age 14 to 18. And a big surprise was the one time ability to convert any and all IRAs to Roth IRAs in 2010 regardless of income. This will present some interesting estate planning as well as income tax planning opportunities…if this item isn't repealed before 2010. It is likely I will be discussing doing a non-deductible IRA each year until 2010.

I had to write this Musing on 6/06/06 for any who may believe in numerology.

 


 

| THURSDAY, 23 MARCH 2006 |

March madness is here, not only for the NCAA , but also for those of you trying to complete your tax returns. However, judging from the past years, the calls have been more measured this year (both in the tournament and at the office!).

I begin March every year by celebrating my two daughters' birthdays and then going to Wharton for a week to attend the Security Industry Institute (SII) where I serve as a trustee. The SII is the premier management education program in the U.S., serving nearly 600 firms in the financial security industry. The classes are taught by top Wharton business professors and leaders in the industry on many, many topics. Additionally we get a dose from the regulators too.

One of this year's highlights was a bull 'n bear debate between Jeremy Siegel (the Bull) and Gary Shilling (the Bear). Jeremy, a Wharton professor, is well known for his research and books on investing in stocks for the long run. Gary Shilling, who owns a portfolio management firm, is a columnist for Forbes and written books on his concerns about deflation. Since the real estate bubble has captured the headlines everywhere, both men addressed the real estate housing market immediately.

Both Jeremy and Gary agree that there is a slow down in the real estate market and this slow down will impact the stock market since consumer spending represents about 70% of GDP. However they disagreed as to the degree of impact. Jeremy felt the stock market would be impacted for a short time and then resume its growth course. Gary felt that along with the decline in home equity, slow down in consumer spending would also impact China imports, thus creating a world wide downward domino effect for some time. Gary would be buying 30 year bonds.

For additional information on this subject, check out the RJA research audio commentary by Paul Puryear, our highly regarded real estate analyst.

The SII is a 3 year development and training program. Recently, the program has been enhanced by the introduction of a diversity course for the third year attendees -- "Diversity beyond Gender and Race". The course focuses on the fact that there are now four generations in the workplace for the first time ever. The perception, language, goals and experiences of these 4 generations (preboomers, boomers, Y generation, and the X generation) are quite distinct, which provides numerous occasions for misunderstandings and conflicts. For the most part, these conflicts can be easily avoided when the parties involved have a better understanding of generational differences. This course probably would benefit those of us who are grandparents, in-laws, and parents as well. If you would like information for this course for your firm, please give me a call.

That's it for now. Enjoy March Madness...and remember, it only comes around once a year (thank goodness!).

 


 

| FRIDAY, 6 JANUARY 2006 – Celebrating my 25th Anniversary|

Happy New Year. Today also happens to mark my 25th anniversary with Raymond James. The following is a copy of the letter I sent to all of my colleagues in my Branch ... seems appropriate for the 1st musing of the year.

To all in the Coral Gables Branch:

For most of you today, Friday is a day before another nice weekend. For me it marks a long 25 years with RJ. Colorful array of exotic flowers arrived from the branch to recognize the day. While saying thanks I will take the opportunity to share with you a bit about what contributed to this prosperous longevity.

Normally, I am not the type to get too sentimental. But I found myself thinking about who was still here and who wasn't. I thought about what was hard, scary, and mostly I thought about all the fun and friends I made along the way. For those of you who recently joined, financial planning was my passion and I joined RJ because it was the only firm who recognized the field at the time. I was raised a Southern Baptist and carried that sense of evangelism when it related to my work.

Passion for planning led me to meet planners all over the country and that is still a powerful support network for me today. Interestingly that same passion and interest got me appointed as trustee for the Security Industry Institute (SII) board to represent financial planning. The SII opened a whole new world to me at a late stage of my career. And I have concluded the financial planning industry is much more gentle and probably a bit naïve and idealistic. That is a wonderful way to be. Selling financial planning services is still a tough sale.

What besides passion and having a strong network contributed to my prosperous longevity? Perhaps watching pennies and waste. I dislike intensely wasting time, paper and supplies. I am also fussy about quality and will do a rewrite 20 times even if it takes hours to write a simple thank-you or a Review. As you might imagine, such an attitude is hard for staff but eventually the quality of work and efficiency makes us all proud of our achievements.

In contrast I spend money freely to invest in my professionalism and career. I believe in purchasing the latest technology, software, hiring consultants and flying anywhere to learn what I need to know. I believed investing in my future was the best investment I could make to continuously grow and maintain my skills. I did not depend on the firm to invest in me.

My biggest lessons were recognizing that I didn't have to know everything and to be aware of what I didn't know. These are painful lessons. Anyone who has 25 prosperous years will have shared the same lessons.

Of course, the world also has changed immensely in 25 years and RJ has fared very well in that change. So my prosperity has been a direct result of being in the right place with the right firm.

Finally, and most importantly, I owe a lion's share of my success to my clients. Since my career began, I have actively sought to partner with only the right clients. What does the "right clients" mean? Many things. The right clients listen. They ask questions when they don't understand. They challenge my thinking and are not afraid to disagree with me. They are realistic, never getting too low during down markets or too high during up markets. They know when to save and when to spend. The right clients expect you to put their interests first. And they are loyal. I am both grateful and humbled for each and every client I have partnered with in my 25 years.

In summary, for anyone asking, make sure you have the right contacts, the right kind of friends, and that you are lucky enough to have a passion and values that overrides all the mistakes you will make. Maybe that will take care of me for the next few more years.