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Margaret's Musings (2008)

| December 24, 2008 – Merry Christmas & Happy Hanukah |

As 2008 ends…upon reflection…this has been a remarkable year for me.

  • My year ended with a significant recognition of being selected to be in Research magazine's Advisor Hall of Fame. It's an industry periodical not normally seen by most of you. I was nominated by Raymond James and honored and flattered by the many letters of recommendations submitted by management, my peers, and friends. You can read the article about me HERE
  • In early December, I attended the Barron's 2008 Women Winners Circle conference where I was recognized as one of the top 100 Women advisors in America. The recognition was not as significant to me as being able to learn and get to know the best women in the industry. This opportunity to be with the best and brightest and to share information and exchange ideas is a benefit to all of you who are my clients and friends.
  • This past spring, I was elected to chair the board of the John T. Macdonald Foundation, which is a grant-making foundation focused on supporting health initiatives in South Florida. The impressive results of this foundation are an indication of how a little money can have giant impact. Anyone interested can go to the web site HERE
  • My mother continues to enjoy life at 87 and battling cancer on all fronts.
  • The economic turmoil has renewed and confirmed my belief that financial planning is a critical process for staying the course toward long term financial success. The process incorporates having a perspective to manage market cycles and opportunities.
  • I celebrated my 70th (honest to goodness) birthday with all my family on a trip to the Grand Canyon. I wanted my grandchildren to see one of the most beautiful natural wonders with me.
  • " In May, contributions to Teach For America made by, on behalf, of my clients financed 18 middle school students from Shelby, MS on a field trip to Washington, DC. I received emails and photos each day of their 4 day journey. None had ever traveled more than 100 miles from home.. There were a few who had not been more than 25 miles from home. The students were coached for weeks on what to expect and how to behave in a motel, a hotel, in a nice restaurant, on an airplane, etc. The training paid off…in addition to the incredible experience of seeing and doing…the students received numerous compliments for their good behavior along with their smiling faces and enthusiasm. The trip culminated with a dinner at a Moroccan restaurant…the kids all dressed up and ate food they had never seen nor tasted, saw belly dancers and interesting art.

    Just as important were the planning exercises by the TFA teachers along with the students. I was happy to be consulted on aspects of how much spending money to give each student and how to educate them on making decisions about what to buy as souvenirs, gifts to take home, and spending on daily goodies.
  • This year I will make contributions on behalf of my clients to the local food bank. The food bank has been depleted and is desperate.

I know that this has been a difficult year for all of us who are investors. While much can be explained, most of us could not have fathomed that financial engineering could be so destructive to wealth creation. Even the institutions that were supposed to protect us were unaware of the perils. As a result, our faith and trust in the "financial system" has been impaired. Fortunately, the US is rich with not only financial resources, but with a resourceful citizenry that will continue to create wealth and opportunities for all - long into the future. This fact has been demonstrated many times in our history….and is the best evidence that the years to come will offer many opportunities. I know my belief is contrary to all of the disclosures in the prospectus you receive. Keep in mind that disclosures are written by folks who are supposed to protect us.

This is my last "Margaret's Musing" for 2008. The rest of the Starner family will soon be arriving for the holidays and our townhouse will be packed with 6 adults and 4 grandchildren through New Year's Day. Likely I will be too busy cooking and stepping over toys to do more writing. Scott, Katie and Bruce will be minding the store!!

One of my favorite themes is from "The Road less Traveled." Basically, "if you accept the fact that life is difficult, then everything else is a piece of cake."

It is the season to be jolly and of good will. I wish all of you a happy holiday wherever you are. And I look forward to 2009 with cautious optimism and faith.

| November 21, 2008 – Thanksgiving Week 2008 - Giving Thanks |

Thanksgiving is the time to give thanks and be thankful. Fortunately, being thankful is simple and easy. I can hear you say ... "not so easy given the losses in the market both here and globally." Yet, every day our lives are enriched by events and things we take for granted. To name a few for me, I give thanks;

  1. that the election is over and I no longer need to watch all those ads or listen to the jabber, jabber, jabber of the campaign spokespeople,
  2. that Raymond James continues to be profitable while many of its peers are experiencing large losses and write downs,
  3. my nephew Tad and his wife Lia are having a baby girl Thanksgiving week,
  4. I am able to spend Thanksgiving with my mother in San Francisco, where she is currently being treated for cancer at UCSF. While I'm there, I'll also see my aunts, nieces, nephews, sister and friends and hopefully my new grand-niece! Our daughter Dana and family will be there too,
  5. for the fact that we live in the greatest country on earth ... a country of opportunity and prosperity ... a country that has suffered through tough times before ... yet always emerged stronger,
  6. that Roger and I just celebrated our 46th wedding anniversary,
  7. for My four beautiful grandchildren who are happy and healthy,
  8. for my Tivo/DVR so I can watch my TV favorites whenever,
  9. for the continuing relationships with our clients ... some of whom have been with us for nearly three decades ... others who have been with us for three months ... we, The Starner Group are grateful to each and every one of you for entrusting your financial plans and life's goals with us,
  10. that Scott, Bruce, Katie, Starr, Yami, and I are here each day for you,
  11. that we smile naturally everyday, and
  12. that you are loyal or interested enough to read my Musings!

I want to wish you all a happy and healthy Thanksgiving ... I hope that each and every one of you are as thankful this holiday season as I am. Enoy your friends, your family, and Thanksgiving Day.

| October 31, 2008 – Happy Halloween! |

Dear Clients & Friends,

This week, Scott, Bruce, and I attended an event at the University of Miami entitled "All’s Fair: Love, War, and Politics" hosted by James Carville and Mary Matalin. As you might imagine, Carville and Matalin were funny, informative, and in total disagreement on most issues (for example, Matalin on the presidential race: "Very competitive…will go down to the wire. Carville: "McCain is done, stick a fork in him.).

Though their disagreements were amusing, the focus of the evening really was the issues upon which they agreed. Specifically, they discussed that they chose their friends not by what side of the aisle they were on, but rather by their core values... that the world has "good guys" and "bad guys" and that the good guys know "how to play the game right." Specifically, they spoke about their shared disdain for political operatives who "jump ship" or “play the blame game” when their campaign is down in the polls. These are the bad guys. Conversely, the good guys stick by their core convictions and remain loyal to the people and causes that are truly important to them.

Speaking directly to the many college students, Carville and Matalin– first, applauded them for being so involved in this year’s political process and second, challenged them to stay involved in the causes they believed in – regardless of the election’s outcome – because "losing doesn’t make you a loser…but giving up does." They closed by discussing that they have always learned more from their losses than their victories. Certainly, I think most money managers would agree.

Though the context is different, The Starner Group also believes in "playing the game right." Of course, for us, this means creating a long-term financial plan consistent with your goals and maintaining it vigilantly. Certainly, these have been trying times to focus on the long-term. On the other hand, recent market volatility has shown us just how difficult it is to time the market. Specifically:

  • Over the course of the past three days, the Dow Jones Industrial Index is up over 10%.
  • Even more illustrative, the Dow traded in a 300 point range today, eventually ending up nearly 190 points.
  • Clearly, the market is still a bit "spooked," which I suppose is apropos given the time of year. Wonder if the market will give us a Halloween trick or a treat?

Over the course of the next few weeks, we will be contacting many of you to "harvest" tax losses. These tax losses can be used to offset any realized/future gains and distributions in your portfolios, hence reducing your future tax bills. We recognize that future gains may be difficult to envision at this time, but historically, the market has produced its best returns coming out of bear markets. Though past performance is not an indication of future results, we continue to be optimistic over the long-term.

Lastly, please check the “News” section of our website for some interesting links, including a new audio message from Raymond James CEO Tom James and a series of panel discussions that I participated in for Forbes. We’ll continue to update this section with relevant news in the weeks to come.

As always, please feel free to contact us with any and all financial questions and of course…Happy Halloween!

Margaret C. Starner, CFP®

| October 15, 2008 – The Wild Ride Continues... |

Much has happened in the financial world over the past few days - similar to the Olympics in Beijing, we are seeing new records. So, even though you are likely exhausted from reading and hearing about the financial markets, I wanted to highlight a few of these records, as well as some other items of interest:

New Records

Last week was the single largest weekly point decline in DJIA history. In percentage terms, The Dow Jones Industrial Average (DJIA) fell 22% over eight days, culminating last Friday. This has only happened three times before: the market crashes of 1929 and 1987 and May 1940, when the Nazis invaded Western Europe.

The DJIA followed last week's decline with its biggest-ever single-day gain on Monday: 936 points based upon coordinated global efforts to restore trust and confidence in the credit market.

Two Measuring Sticks of Market Fear: keep an eye on the VIX and Credit Spreads

The VIX has traded near all-time highs in recent weeks. For those of you who haven't heard of the VIX, it is an index that tracks expectations of how volatile the market will be over the next 30 days. If the VIX is high, options traders are predicting that volatility will be high. On October 1st, the VIX was at 39. By Friday, October 10th, the VIX climbed as high as 76 during the trading session

For perspective, on October 10th 2007, the VIX closed at 16.67.

Credit Spread...
Credit spreads have also been trading near all-time highs. A credit spread refers to the difference in yield between two securities. In fixed income, spreads are often quoted in relation to treasuries, which are considered to be risk-free. During times of economic turmoil, this spread is typically at its largest, since many investors "flee" to the safety of treasuries.

For perspective, last week, the spread between treasuries and "A" rated corporate bonds was over 5%. In October '07, this spread was approximately 2%.

A Quick Look at the Details:

A detailed summary of The Government Rescue Plan (from the New York Times):CLICK HERE

Other Perspectives

Given my frequent musings during this turbulent time, you are likely familiar with my perspective on the markets by now. I thought you also might be interested in a few additional perspectives as well...

  1. 20 minute video/audio recorded last week by Tom James, Raymond James CEO: CLICK HERE
  2. Recent commentaries by Bill Gross and others of PIMCO, a leading global investment management firm. Pimco has been chosen by the Fed to manage the commercial asset funding facility program under TARP. CLICK HERE
  3. Market Commentaries from Raymond James' strategists: Jeff Saut, Art Hupich, and Scott Brown (always available on my web site): CLICK HERE

Opinions expressed are those of (Margaret C. Starner, CFP®) and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.

| September 30, 2008 – The Bill Didn't Pass...Back to Basics |

I received many calls yesterday after congress did not pass Paulson's Plan. The market quickly plunged – a scary and angry response to Congress's vote. The VIX (measure of volatility in the market) hit close to an all-time high. Historically, this has occurred at times of "maximum fear."

Today the market is more positive - perhaps an indication that there is optimism some kind of recovery bill will be crafted and passed eventually. The credit market needs to have confidence and trust restored... something only the US government can do at this time.

As for all the calls. Even my nephew called last night. He was worried about his mutual funds and his ability to buy a home in a year or two. This is the nephew who graduated from Stanford, who spent years working at Goldman Sachs and is now training to be a doctor. He wasn't sure how to think.

We recognize that many of you are probably getting quite tired of hearing our mantra of "investing for the long term"... especially when the market drops 7+% in one day after dropping for most of the year. However, that is exactly what successful investing is about... sticking to an approach. Even if you are retiring in 3 years, 4 years, or 10 years, the rules of successful investing are all about sticking to the basics:

  • Invest based on your time horizon: Though today's markets are undeniably rocky, history has rewarded long-term investors who have resisted the urge to sell in down markets. Yes, for the past 12 months, the markets are down over 20%, but 12 months isn't every long compared to most of our client's time horizons. Even if you are retiring tomorrow, you likely have at least 20-30 years of time horizon remaining.
  • Know your risk tolerance:If you are having trouble getting to sleep at night or feel the constant urge to sell, then perhaps we need to revisit the aggressiveness of your portfolio and/or modify your goals.
  • Don't overreact to short-term market or economic trends – in other words, try to tune out the "noise" and focus on the industries and long-term trends that are most likely to produce strong results over an extended period of time.
  • Don't leave proven managers for non-fundamental reasons – Proven managers don't forget how to do their jobs overnight. Down markets are often when the best managers reposition their portfolios to take advantage of "cheap" stocks. We are in frequent contact with our managers to ensure they are remaining true to their investing style and strengths.

As always, please don't hesitate to contact us with any questions.

| September 24, 2008 – Conversation with the media |

As you might imagine this is the time when I am bombarded with many questions and calls from many including the media. I would like to share with you one that I answered and one that I wrote to give you a flavor of what I am thinking:

  1. Monday morning, September 22: I received a question from
  2. What conditions should the government impose on bailed out banks to protect the American taxpayer? Further, what should tax payers get in return for rescuing Wall Street?

    My response which was posted on Forbes website:

    First and foremost, I hope this is not a bailout but a recovery plan for restoring trust and confidence in the capital markets. There is a significant part of the economy that is thriving and functioning. The longer a recovery plan is delayed, the greater the damage to the health of the overall economy. My belief is that too many "add ons" may complicate the Plan and thus impede the goal of restoring trust and confidence. The simpler the Plan…the better. A lot of fine print will only impede "trust and confidence" in the Fed's efforts.

    Taxpayers should be concerned that the Fed does not over-pay for toxic paper. To some degree this can be avoided by a sound purchasing strategy. For example, the Fed could agree to pay only 50% of assumed value. Then share back with the selling firm any proceeds that exceed the 50% price.

  3. Tuesday, September 23: I wrote to the Public Editor of NY Times:

Dear Public Editor: For what it is worth I would be a lot happier if the NYTimes headlines read "recovery plan" instead of a "bailout"


Dear Informed Reader,
You are the second person in two days to make this point. Explain to me why the TARP recovery plan isn't a bailout. Seriously. Clark Hoyt (Public Editor).

My Response:

Why I would call TARP (Troubled Asset Relief Program) a Recovery Plan and not a Bailout.

Dictionary Definitions:

Bailout: a rescue from financial distress

Recover: to bring back to normal position or condition recovered himself>

I think TARP is a recovery plan for two reasons:

One: in the simplest sense, many of these assets will "recover" - not to full price of course, but to prices higher than exist in the market today. Unfortunately, due to rating/capital requirements and the sheer size of the risk, no one is willing to purchase them. As a result, their values keep falling. The only institution with the balance sheet to hold all of these assets while they "recover" (partially) is the United States.

Secondly, and more importantly, by taking these items off the balance sheets of the financial institutions, our financial system can "recover" and resume some semblance of normal operations. A "bailout" implies that this is being done to save these financial institutions. I believe that this plan is not about saving institutions - it's about saving the entire system. If Bernanke and Paulson thought that they could let these institutions fail without causing a depression, they surely would. That's why they let Lehman go. However, the fallout from Lehman's failure (money markets "breaking the buck," AIG, Goldman, etc. heading towards insolvency) showed them that this scenario will rapidly turn into a chain of falling dominoes - housing values will continue to plummet, the freefall in equities will accelerate, banks will stop lending to consumers and to each other, etc. The only way to stop the chain is to "take away the dominoes" altogether. So, that's what Paulson and Bernanke did.

Opinions expressed are those of (Margaret C. Starner, CFP) and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.

| September 18, 2008 – Restoring Faith and Confidence |

To put it mildly, I repeat the saying, "we certainly live in interesting times".

Over the course of 72 hours, we have seen the failure of Lehman Brothers, the buyout of "Mother" Merrill Lynch, and the bailout of AIG. Just a week earlier, we saw the bailout of Fannie Mae and Freddie Mac. The Fed has committed around $300 Billion. Though I can't say I'm happy about the 500 and 400 point declines of this week (sandwiching a 100 point "up day"), given the stunning reconfiguration of the Wall Street landscape, I'm certainly not surprised. Certainly, I suspect much of this market action can be attributed to massive short selling ahead of the change in short selling rules that goes into effect today.

Over the past few days, we've called and fielded calls from many of you…some of you have expressed consternation about the government's recent actions - specifically the AIG bailout - and the pros and cons of using taxpayer money in this fashion. As you might imagine, I have an opinion on the subject….

We are in a crisis. Make no doubt about it. Have we been through crises before? Yes. Do I believe we will get through this one? Absolutely. That being said, our financial system is under tremendous pressure and the cracks are beginning to show. The AIG bailout was an unprecedented action to address those cracks, and to try to stop them from spreading any farther than they already have.

Though we've never seen the government bailout an insurer before, nearly every severe crisis in our history has been accompanied by unprecedented government action. On the largest scale, the New Deal in the 1930s was instrumental to bringing our country out of depression. More recently, on October 20th, 1987, the day immediately after the stock market crash, the Fed acted swiftly and decisively, adding liquidity to the market, and dramatically liberalizing the rules that governed the lending of securities from their portfolio.

Though each unprecedented action has been different on its face, all have shared the same goal - to restore faith and trust in the system. Certainly, the problems that face many financial firms today are of their own making - greed and unnecessary risk-taking pushed aside good judgment and conservatism. However, those poor decisions have already been made. Dwelling on them will not solve the problems facing our economy. I can draw a parallel to the recent events in Galveston, where Hurricane Ike has ravaged the island, making it dangerous and unlivable. Some Galveston residents chose to ignore the evacuation warning and were stranded. No one would dispute that these residents made a poor, potentially fatal decision. Yet, brave rescue crews have risked their own lives to save them nonetheless.

Today, we are suffering from a financial hurricane and the recent bailouts are the rescue mission.

The Starner Group's utmost intent is to be in touch and accessible to you whenever you need us. If you have any questions or would like to discuss anything in more detail - Please don't hesitate to call or e-mail.

| July 22, 2008 – Another Celebration |

July, 2008 is the 25th anniversary of our parent company, Raymond James Financial (RJF) going public. And today, despite the fact that the financial sector has been truly struggling, RJF proudly announced positive and growing earnings for the last quarter.

I just returned from our Raymond James & Associates annual sales development conference which was held in Boca Raton, FL – and I am happy to report that although Raymond James has changed in many ways since our public offering in 1983, our values are still the same.

I attended my first conference in Boca in 1981 with Lise, Dana, and Roger…in other words my entire family. At the time, Raymond James was very small and still a privately held company... primarily by the James family and a few employees. Bob James was CEO and his son, Tom James, was the President. Tom was accompanied by his wife and sons too. In fact, everyone brought their kids. Tom and Bob always promoted Raymond James as a family oriented firm in those days…and even though we're no longer small, we’re still family-oriented.

Today, my division, Raymond James Associates, has almost 1200 advisors…and at Boca this year 440 advisors along with 765 family members attended. I still have loads of fun watching all the families manage work and play. The day begins at 7 AM with breakfast in a giant ballroom…attended mostly by the advisors who then have to scurry to meetings. Later in the morning, the place fills up with family members – from new born babies to the college set.

During that first breakfast, the kids all get to know each other and by lunch they’re best of friends... forming their own “network” as members of the Raymond James family. Even more importantly, they get to know and meet (at a young age) the company that employs one of their parents. For 27 years, every summer, I have seen these young ones grow up…and I still follow their young adult lives with annual updates from their proud parents. This year, my grandson, Cole attended with his parents, Lise and Bruce... another generation of youth. Lise, who attended as a teen-ager, was now in a new role as a wife of an employee – as Bruce is now in his second year as a member of The Starner Group. Cole loved playing with all his new friends…especially Jesse and Dylan, Scott Weingarden’s two sons. As I’m sure you can tell, I was extremely proud to have my grandson be part of the RJ family.

So now you know a bit more about Raymond James commitment to family values and preserving what is truly important. That commitment is also how the firm has avoided the financial write-downs taken by many financial firms. Even in these trying times for the financial services industry, Raymond James continues to be a firm of growth and financial strength. Unlike many of its peers, the firm has not participated in the periodic “layoffs” that plague the industry.

Of course, I can recall many times when that commitment made RJ seem out of step with the industry – as other firms employed more and more leverage to produce great returns. In the early 70’s, when Tom first became president of the firm, he learned first hand the perils of excess leverage. Specifically, he expanded too quickly and almost lost the firm as a result. That lesson has kept the firm focused on a healthy reserve and relatively low debt. After the public offering, the firm has primarily been financed from current earnings. The stock’s performance over the years has proven the value of this conservative approach. Since going public, the value of one share has grown from $0.68 (after splits) in 1983 to $ 29+ today which is more than 16% compounded rate of return for 25 years – not including dividends.

I can’t help but compare the financial behaviors of many of Raymond James’ peers with the behaviors of today’s consumer. As I read the NY Times and Miami Herald this morning, I saw multiple articles about personal debts and the easy credit that people used to acquire that debt. Another article spoke about how one misfortune (illness or loss of job) can become a tipping point toward bankruptcy. Thankfully, the young have time to regain their financial footing and profit from this type of experience. However, I have met many older retirees who may have retired too early or spend beyond the capacity of their assets. Too many didn’t realize how much easier it is to achieve financial security by working a few extra years.

Just recently I met with a retired couple (both age 65) who will run out of money in 10-12 years if they continue their current spending. They were unwilling to change or adjust their life style. The couple had a nice asset base that could support them in comfort though not with lots of luxuries. My question to them was whether they would prefer the luxury of never running out of money (i.e. financial security) or the illusion of a life of luxury for the next few years. They felt they were not extravagant and were entitled to the life they now led.

Their response reminded me of David Brook’s columns in the New York Times. He has written frequently about the shift in our culture from thrift to debt and the deteriorating norms in the US. I recommend you go to and look for David Brook’s columns on June 10 and July 22, 2008.

I hope this musing finds you all well and that you are enjoying your summer. As always, please don’t hesitate to contact us with any and all of your financial questions.

| July 15, 2008 – Fannie Mae, Freddie Mac and IndyMac Bank Troubles Daze Investors |

Dear Clients & Friends,

Fear that the nation’s largest mortgage agencies could fail set against a backdrop of  the  failure of Pasadena, California-based IndyMac Bancorp roiled financial markets Monday.

After an early surge, the Dow Jones Industrial Average (an unmanaged index of 30 widely held stocks) finished the day down 45.35 points. This occurred in the face of a Sunday announcement that a federal government guarantee would provide the mortgage giants with the liquidity they need for normal operation, a move designed to relieve investor concern.

The failure of IndyMac Bank – the third-largest financial institution in U.S. history to fail and the largest in two decades – wasn’t a surprise to some. It’s main business was built on mortgages made to borrowers with poor credit records, and when the secondary market for these subprime mortgages dried up, so did the bank’s money supply. As a regulated bank, depositor accounts worth up to $100,000 (and IRA accounts up to $250,000) are insured by the Federal Deposit Insurance Corporation (FDIC, an independent agency established by Congress in 1933), which began running IndyMac Federal Bank Monday morning. Accounts at Raymond James Bank, are similarly insured by the FDIC.

The troubles at Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), which together hold or back more than $5 trillion in mortgage debt – about half the nation’s total – were much different. Together, they are saddled with very little subprime mortgage debt, but as mortgage holders defaulted over the past year, their reserve cash dwindled. They have been forced to raise new cash during these tough economic times. Originally government-created agencies, they are now owned by shareholders. Their shares have plunged in value over the past week as worries mounted.

Analysts, including Raymond James’ Chief Investment Strategist Jeff Saut, say the system will hold together and cannot be allowed to fail because the global implications of a U.S. failure of this magnitude would be enormous. Rather than a real financial meltdown, the Fannie Mae/Freddie Mac saga may be more a crisis of confidence.

In the midst of all this concern, you may wonder about the financial protection of your own investments handled through Raymond James. Each account custodied by Raymond James & Associates is protected for the net equity of the client’s securities and cash positions. Raymond James & Associates is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). An explanatory brochure is available upon request or at or by calling 202-371-8300. We then provide additional protection (excess SIPC) through Lloyd’s, a London-based firm. Account protection applies when a SIPC-member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against market fluctuations. Accounts held at Raymond James Bank, as noted above, are insured by the FDIC.

Everyone will be paying attention to the market this week to gauge its considered reaction to the federal guarantees for the mortgage agencies and concerns that other banks could fail. This is certainly a trying time to be an investor, but, historically, such times have been favorable to those who diversified their holdings and set their course for the far horizon. If you have questions or concerns, please don’t hesitate to call me.


Margaret C. Starner CFP

Margaret C. Starner, CFP

Senior Vice President, Financial Planning

Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are affiliated with Raymond James Bank, member FDIC, a federally chartered savings bank. Unless otherwise specified, products purchased from or held at affiliated Raymond James Financial, Inc. companies are not insured by the FDIC, are not deposits or other obligations of Raymond James Bank, are not guaranteed by Raymond James Bank, and are subject to investment risks, including possible loss of the principal invested. Products, terms and conditions subject to change.  Subject to standard credit criteria. Property insurance required. Flood insurance may be required.

| July 4, 2008 – Happy July 4th! |

The headlines are not too reassuring these past few months;

  • Oil heading to $150 plus per barrel ... maybe $200
  • Floods in the Midwest
  • Higher food prices
  • Droughts and fires in California
  • Stock market continuing to weaken globally
  • Housing prices continuing to weaken
  • Banks continuing to post ever larger losses

Will there be much to celebrate come July 4th??? Headlines say fewer people will be taking the usual long holiday weekend vacation with gas so high.

Indeed, 2008 has been a roller coaster ride ... not a typical election year market. GM stock is at a 34 year low.

Rocketing oil prices has made what was once a mild market correction a much more serious market correction. And as is often the case in periods of pessimism, companies with earnings and good businesses are seeing their stock price plummet too. I don't want to sound "Pollyannaish" or not concerned, BUT ... there will always be market cycles. Let me be clear, the downsides never feel good ... yet at the same time I am confident about long term continuing global growth.

Dramatic growth has created enormous wealth for developing counties. And we have shared in some of that growth. Growth has also caused problems that will require adjustments - one of these problems is the demand for oil and many commodities. Soaring costs are causing disruptions globally.

In time, the troubles will create their own solutions and eventually a recovering economy. Different sectors will benefit. It is likely we will see less outsourcing as cost of shipping continues to soar. The rising food prices are already encouraging farmers to plant more, thus greater supply will result in lower cost - certainly, in the short term, portion control is probably good for our weight!

Of course, the wild card in this entire equation is OIL. Each of us can collectively do something about the supply of oil ... both by developing habits of conservation and pushing for an intelligent energy policy for the country. Already higher oil prices are making alternative sources of energy very attractive.

I just returned from a long trip to Italy. There, we saw "smart" cars and electric cars everywhere. The cities have electrical outlets as well as free parking to encourage use of electric cars.

Again innovation and solutions will generate investing opportunities.

So again ... what are we going to celebrate this July 4th?

As we call money manager after money manager ... they are all rubbing their hands with glee at the good opportunities they currently see in the market place. They all tell us, that we will be rewarded by these pickings in due time ... as is always the case in investing, patience is key. Certainly, some of you may have noticed that Warren Buffett is on a buying spree. Though none of us has $35+ billion in cash to spend, we should always remember Mr. Buffet's most famous quote "Be fearful when others are greedy and greedy when others are fearful."

Our energy analyst, Marshall Adkins, says natural gas supply is growing and he expects natural gas price to be lower and lower.

Importantly, July 4th is about remembering how fortunate we are to live in a free country and independent country. Despite the headlines of losses, the US is a prosperous and vibrant country that constantly provides unexpected opportunities.

And as most of you know, July 4th is a very special day for me.

  • I will be flying to Los Angeles to celebrate my granddaughter Micaela's 8th birthday. She insists on a traditional July 4th celebration with hamburgers, hot dogs, corn on the cob, watermelon, and my dad's famous barbeque ribs. From her home on the hilltop we will see the fireworks. Family and friends are invited. If you are in the Los Angeles area - you are invited. Just bring an appetizer or dessert.
  • My dad, now deceased, was born on July 4th. He was so proud of his birthday. And he always had his famous barbeque birthday party in Mississippi for a huge crowd. Micaela plans to continue that tradition. Maybe not such a huge crowd.
  • Dana, our youngest daughter, and Kenji were married on July 4th, and will be celebrating their 10th wedding anniversary in New York City where they met ... and without my dad's barbeque.

I am sure you will be with friends and families this special national holiday ... and that is something worth celebrating.

As always, please do not hesitate to contact us with any of your financial questions ... whether they are specific to you or about the markets in general.

| June 10, 2008 – Graduation ... Memories ... Milestones |

My nephew Brent will be graduating from high school today. Brent is the oldest son of my late brother, Randy, and the family is so proud of what a nice young man he has grown to be. Randy is beaming somewhere, I am sure.

I ponder what words of wisdom will make a difference. Brent is going to be a business entrepreneur major ... whatever that is. I remind him that his grandfather was an entrepreneur and never went to college.

I was inspired my first day of college by the President's speech at freshman orientation. I knew instantly why I was attending college. He said, "We are not here to help you get a job, nor get a career, we are here today so you can learn to think ... that is what you will take from Stanford when you leave."

For many of us, college is a wonderful time of life ... to still be in a protected environment, to learn to think, be independent, and to enjoy and interact with one's own age group. I had a ball in college ... little did I know how much the world would change. Learning how to think was just as important as my degree in economics in navigating through my career and raising our family.

So Brent, my advice is don't worry about being an entrepreneur. Instead, I repeat the message of my college President, and with this you will surely succeed wherever life takes you.

Other memories ... last week was the 40th anniversary of RFK's assassination. I will never forget that moment. I was living in California, watching the primary election returns while feeding my youngest daughter, Dana, barely three months old at the time. As the assassination news broke, I could not believe this was happening again ... earlier in the year Martin Luther King was also assassinated in Memphis ... not far from my home town. 1968 was a turbulent year for this country.

A major milestone ... this past week we saw the democratic nomination be determined between a black man and a woman. 40 years ago ... that didn't seem possible. In 2008, exactly 40 years later, the memories of both Martin Luther King and RFK have been well served.

Milestone ... Friday, the 6th, oil hit an all time high of $139 barrel. Remains to be seen, how much speculation is. Pricing is finally forcing us to rethink how we use our cars. Walking more is healthy.

And for me another milestone. I again have been recognized in this week's Barron's magazine as one of the top 100 Women Financial Advisors in America. I thank all of my clients and friends for this wonderful recognition.

I hope the start of summer finds you all well. As always, please don't hesitate to contact us with any financial questions.

| May 8, 2008 – PART 2 - THE 4% FINANCIAL CRISIS? |

Last week, we talked about the average returns of residential housing over the past 20 years. Today, I want to discuss how an asset that returns 4% annually became responsible for one of the larger financial crises in recent history.

This housing crisis is rooted in numerous factors. Coming out of the tech bubble, investors were looking for "safe" investments. What could be safer than real estate? After all, as the old adage goes, "God ain't making more land." As more people bought, the system began to feed itself. Mortgage brokers, working on high commissions, began to push adjustable loans with low teaser rates - opening up the market to more buyers who could never afford their payments once rates adjusted upwards. At the same time, existing home owners began to draw down their home equity, sometimes refinancing multiple times in the same year and using the proceeds for big ticket purchases, or simply to support their lifestyles.

Of course, borrowers and mortgage brokers alone can't cause a bubble. Lenders are needed to provide funds for all those purchasers and refinances. Unfortunately, many lenders were all too happy to participate in the housing frenzy. The reasons why were explained in detail by fund manager Chris Davis:

"Lenders did not mind making these loans for two reasons. First, they could repackage them and sell them in the secondary market. Second, even if the borrower could not repay the loan. , rising home prices would allow the home to be refinanced or sold at a profit to some other buyer who was likely to finance it the same way. The result was a sort of Ponzi scheme requiring constant refinancings, constantly rising prices and more and more unsuitable buyers."

As the "Ponzi scheme" began to unravel, indirect participants - specifically those who purchased the repackaged mortgages - began to suffer as well. Many of these securities are owned by firms that are required to "mark" their investments to market. In other words, the value for their holdings must be stated at current market values. Hence, even if a mortgage is current, the holder may be forced to price it as if it were delinquent. Davis writes:

"Although some of these paper losses will not become real cash losses, they are treated the same for accounting purposes. The resulting charges forced many financial institutions to raise capital, largely from cash-rich foreign investors, at depressed prices."

So, that's how a 4% investment can create a global financial crisis. So, what does this mean for investors? More than a few of our clients have approached us in recent months, asking if this is the time to start 'dipping toes" into real estate. Certainly, if you are looking to purchase a new home -and you think you've found that perfect place -- now is as good a time as any. At the Starner Group of Raymond James & Associates, we have always believed that your primary residence, or even a second home, should not be looked at the same way as other investments. A home is where you live, and as such, the "returns" must be measured in more than dollars and cents.

For those looking to 'invest" in real estate, we have always been strong proponents of Real Estate Investment Trusts (REITs), which provide opportunities for income, capital appreciation, and exposure to real estate without the labor-intensiveness that comes with being a landlord. Certainly, the chart from last week's blog poses a strong argument for REIT's (nearly 12% annual returns over the past 20 years…though of course, past returns are no indication of future performance).

I hope this blog finds you all well. As always, please don't hesitate to contact us if you'd like to discuss the housing market or any of the other information in this blog in more detail.

REITs are financial vehicles that pool investors' capital to purchase or finance real estate. REITs may concentrate their investments in specific geographic areas or in specific properties types, i.e., hotels, shopping malls, residential complexes and office buildings. The value of the REITs and the ability of the REITs to distribute income may be adversely affected by several factors, including rising interest rates, changes in the national, state and local economic climate and real-estate conditions, perceptions of prospective tenants of the safety, convenience and attractiveness of the properties, the ability of the owner to provide adequate management, maintenance and insurance, the cost of complying with the Americans with Disabilities Act, increased competition from new properties, the impact of present or future environmental legislation and compliance with environmental laws, changes in real estate taxes and other operating expenses, adverse changes in governmental rule and fiscal policies, adverse changes in zoning laws, and other factors beyond the control of the issuers of the REITs.

REITs involve risks such as refinancing, economic conditions in the real estate industry, changes in property values and dependency on real estate management.


As an asset class, real estate provides potential for growth and growing income. Most people's exposure to real estate is owning their home - and over time, the home becomes a large percentage of the average American's net worth. However, for most Americans, their home is more than just an investment - it's an experience - a place to raise their family or spend their retirement years. Still, we have come to expect to sell our home for more than we paid for it. The question is how much more?

Take a moment to examine the charts below, especially the chart on the right, which illustrates the 20 year growth rates for various asset classes.

I'd like to draw your attention to the bar labeled "homes," which shows that over the past 20 years, homes have returned an average of 4%. Hard to believe that millions of housing speculators (many now in foreclosure) leveraged themselves to the hilt to chase 4%, isn't it?

Of course, they weren't really chasing 4%...they were chasing the unrealistic, outsized returns experienced in certain markets during the past six years…much the same way their predecessors chased unrealistic, outsized returns during the tech mania of the late 90's. The speculators claimed this time "was different" - and in some ways, it was. After all, conventional wisdom has always told us that owning a home is a winning proposition. But the speculators weren't buying a home, at least not in the traditional sense. A home is a place where people live -- financed on realistic terms, with manageable payments, paid off over an extended period of time. The speculators were buying houses - sometimes three or four at a time, financed on unrealistic terms, with payments that would become unmanageable if prices stopped rising at meteoric rates. This, as we all know, is exactly what happened. Certainly, the tragedy of the story is those buyers who didn't know they were speculating - those who tried to buy a home and got in over their heads, either from exotic mortgage products or other factors. But, that is a story for another day. Today, I want to write a bit more about my own experience with housing speculators.

Earlier this week, I received a call from a colleague who lives in Northern California. The call began with "I have a potential business opportunity for you." Now I must digress slightly to say that anytime someone opens a conversation with that phrase, my first instinct is to run for the exits as quickly as possible. This was no exception.

The "opportunity" was one of her clients. Specifically, a very nice, 60-year old woman, who until early last year, had a million dollars of equity in her California home. What happened to that equity? She refinanced it away, using the proceeds as down payments on 10 (yes 10!!!) homes in the Fort Myers, FL area. Today, the woman is essentially broke, contemplating bankruptcy (hence, my "opportunity" - bankruptcy counseling), and probably will lose her home.

Now, I don't recount this story to make light of this woman's plight, but rather because stories like these can be found in every bubble throughout history. I still have fresh memories of the "day traders" who margined every cent they owned to purchase internet stocks, the junk bond "experts" who lost their shirts in the 80's, and the S&L kings that crushed the Bank of New England in the early 90's. In fact, I recently read an old Spanish proverb that aptly describes all of these bubbles:

"What wise men do in the beginning fools do in the end."

Anyone who has owned a home for some time and chose not to refinance recklessly (i.e., been "wise") likely has more equity now than five years ago, despite the real estate crash. Certainly, this is not the case for those who loaded up on residential real estate in late 2006/early 2007, often by taking on excessive debt, buying multiple homes, etc. (i.e., "fools").

Of course, a third class of people exists - those who purchased a home recently, with a mortgage that was within their means, but now find themselves "underwater." To some extent, these people are just plain unlucky. But remember, a home is more than an investment…it's an experience. And so my advice is to enjoy that experience…because eventually, your home will appreciate. How much? No one knows for sure, but I'd venture 4% annually may be in the ballpark.

Next week, expect to receive part two of this blog - where we'll discuss how an asset that returns 4% annually became responsible for one of the larger financial crises in recent memory.

Past performance does not guarantee future results. There is no assurance these trends will continue.

| April 11, 2008 |

A week ago I said farewell to my sister, Mary, one of my very best friends. At her funeral, the chapel was overflowing with many family members, friends, and work colleagues. Mary was known for her smile, good nature, and an ability to do most things very well, and her fried chicken. She was a rare talent.

Mary was diagnosed with lung cancer, bronchial Alveolar carcinoma, about 3 years ago. And her prospects were not great. Due to a miracle drug she did have 2 great years by taking Tarceva. Then the cancer slowly began to win the battle. We took advantage of her time. I flew to CA often and we had many family events. Plus we chatted almost daily. She even flew to Miami to celebrate my 25th year with Raymond James.

During her illness we never discussed funeral plans. I thought we had time. Last summer the cancer spread to her brain…and her ability to articulate her feelings and thoughts were limited. She could still enjoy and laugh at stories and gatherings…she just couldn’t share her thoughts. I had never considered such a possibility. So many thoughts and ideas were locked in what was a very bright mind.

I was in NYC when my brother-in-law called and said “she has less than 48 hours”. I flew to CA immediately. No plans had been made for the funeral. Fortunately, our entire family was at Mary’s bedside when she died. And we all stayed to help plan and prepare her farewell. This leads me to an important planning item.

As a financial planner, we work on solutions for our clients’ goals and aspirations. While we work on many, many estate plans, I have never worked with a client on preparing for their funeral. What songs would you want, who should speak, etc. Mary’s funeral was about as perfect as could be…and it took an army of relatives. We assumed this was the party Mary would want. It was certainly the party we wanted and maybe that is ok.

Just in case - maybe you want to start a file of favorite pictures, list of songs you love, things you want to say, things you want remembered. Do this while you can…it will make it so much easier for your family to know they are carrying out what you want…they can still add what they want too.

Finally, thanks to the many of you who sent cards, called, and extended your heart felt sympathies. All was very comforting.


| March 20, 2008 – Welcome to Spring and a nice story... |

Visa IPO - huge success and the small role of the Starner Group

This week, The New York Stock Exchange launched the largest Initial Public Offering (IPO) in its nearly 200 year history…and whether or not you realized it, chances are that all of you were involved…at least indirectly involved, since the IPO was for Visa, the largest credit card transaction company. The history-making IPO raised over $19.9 billion dollars. Though that's an eye-popping number, this IPO was also special to The Starner Group for another reason.

As many of you know, I am a long-time supporter of Teach for America (TFA), a non-profit that recruits recent high-achieving college graduates to serve two-year terms as teachers in some of the nation's most teacher shortage schools.

My association with TFA goes back many years. My oldest daughter was roommates with TFA founder Wendy Kopp during the organization's founding years. Soon thereafter, my younger daughter met her future husband when both were employees at Teach for America's corporate headquarters. During those early years, TFA was constantly struggling for donations to fund operations. Often times, these donations would come in the form of stock, which TFA then had to sell incurring hefty commissions. My daughter and I arranged for TFA to become a charitable client of Raymond James, and to sell all of their stock at cost.

Over the past 15 years we have witnessed many stock gifts to TFA. But nothing like the mysterious phone call we received a few weeks ago! The call came from someone at the NYSE representing an anonymous donor. She asked if we could have a Raymond James representative on the floor to execute the first ever trade of a company that was having its IPO in a few weeks. The anonymous donor wanted to gift enough money for TFA to buy the first 1000 shares that traded!

As I'm sure you may have guessed by now, the IPO was for Visa. The donor was none other than Visa's CEO, Joseph Saunders, whose daughter is a TFA corps member in New York City. On the day of the IPO, Mr. Saunders brought his daughter's entire class to the floor of the Exchange to join him as he rang the opening bell. Soon thereafter, a Raymond James trader purchased the first 1000 shares of Visa for TFA. CNBC covered the entire event. I must say that it was amazing to watch history unfold…and to know that we played our own little part in it too!

| February 7, 2008 – Happy Year of the Rat!! |

Today marks the beginning of the Chinese New Year which is the biggest holiday of the year for the Chinese, Vietnamese, Koreans and for many others in the Far East. The Japanese are among those in the Far East who observe the western calendar and not the Chinese calendar.

This is a time of festivities in these Asian communities. There will be lots of food, noisy fireworks and family gatherings galore to celebrate the beginning of the New Year. My children and grandchildren will be eager today to get their "red envelopes" filled with money. The celebration lasts 15 days so families will eat together with various friends and relatives many times during the next couple of weeks. I recall being in Vietnam during Chinese New Years a few years ago ... and every where I saw kumquat trees and all kinds of oranges along with the red streamers and gaudy gold decorations, and fireworks to scare off the evil spirits.

What does the Rat Year Mean? First, for most of you, I would prefer to call this the year of the Mouse ... which seems much nicer and cuter. But I will defer to the translations of the Rat.

The Rat is the first sign in the Chinese Zodiac. Chinese astrologers predict that the Year of the Rat is a good year to begin a new job, get married, launch a product, or make a fresh start. Ventures begun during the year may not yield fast returns, but opportunities will come for people who are well prepared and resourceful. The best way to succeed is to be patient, let things develop slowly, and make the most of every opening.

The Year of the Rat will be favorable to people born in the;

  • Year of the Ox (1937, 1949, 1961, 1973, 1985, 1997),
  • Monkey (1932, 1944, 1956, 1968, 1980, 1992) and
  • Dragon (1928, 1940, 1952, 1964, 1976, 1988, 2000).

Businesses expected to perform well this year are related to health and high-tech industries, mining and hotels.

January 2008 started off pretty rocky for investors in the US and around the globe. It is always interesting to me that the message from the Chinese zodiac always come in such a timely manner. The year of the Rat is predicted to be rocky…but the year also rewards those who prepare and are patient. According to these soothsayers, this is not the year for unnecessary risk and yet is still a good year to begin opportunities. The important words are preparation and patience. If you want to join the celebration, I suggest you get some red envelopes, fill them with coins or a few dollars and pass them to all the young children in your family and of friends. Also remember the elderly with a red envelope. Your grandmother, grandfather or elderly aunt will likely have a nice smile. Gong Hay Fat Choy is how the Chinese say "happy new year" and is translated as "good health and wealth". The Starner Group wish all of you - Gong Hay Fat Choy.

| January 25, 2008 – Lots of ????? |

The market has dropped around 10%!!!

Where is all the money???
Is this "crisis" almost over???
What should we be doing???

Many friends and clients have called us recently with these questions (and many more???). While we don't have all the answers, here are our thoughts:

Where is all the money?

In recent weeks, the credit crunch started by sub-prime lending and the collapsing housing market has spread to all areas of financing. Some of you may be asking "What is a credit crunch?" Essentially, a credit crunch is when financial institutions are unwilling to lend money at reasonable rates because they have reduced confidence in borrower's ability to repay. In this case, the borrowers are not only individuals, but also corporations and other financial institutions.

Important to know that many corporations are flush with cash. They are just wary about using it in this environment.

Is this crisis almost over?

The Fed took a dramatic step by reducing short term rates by ¾ points before their scheduled Jan 30 meeting. Certainly this will help those with good credit and equity in their homes to refinance at lower rates. The rate cut should also provide some relief to the banking and credit markets.

Recent market action indicated that the markets have sped up the corrective process and are pushing for some solutions to occur quickly. As demonstrated by the unscheduled rate cut, the markets got the Fed's attention and the Fed responded.

The proposed stimulus package by Congress includes a temporary provision for increasing conforming loans to $729,740 from $417,000 as well as raising the limits for which FHA and FNMA can insure. This will broaden who can refinance to lower rates and what can be insured. This will likely do more than the tax rebates.

We recognize that many of you are very concerned about the recent volatility – what it means for US and Global markets and your portfolios. At times like this, it is important to remember that volatility – even significant volatility – is a normal part of the markets.

Looking ahead, we anticipate continued market volatility as investors consider whether efforts to ease credit will prove successful.

What are the Starner Group doing with portfolios?

Good question. As advisors, we trust, that a diversified portfolio of equities will survive through many storms of turbulence. Clearly, the current credit crunch is one of those storms.

So, what do we do when storms occur? Three steps:

  1. Ensure that the portfolio allocation for each client is appropriate – this is always our number one priority.
  2. Contact the money managers who manage the various segments of our portfolios – to both confirm their strategies and to understand their view of the market and how they plan to play defense or capitalize on opportunities.
  3. Repeat steps 1 and 2 - all the time.

Simultaneously to the three above steps, we analyze our investment selections to identify better opportunities that may materialize when the storm subsides and moves on.

Other than that? We wait patiently. We encourage investors to remain focused on the long term, both on their long-term goals and the long term factors that have fueled the growth of the global economy so far. Having invested through turbulent periods in the past, we remain confident in our time-tested discipline.

Still, even after all my Musings and discussions, we have those who wish we could time the market. I wish I could too. Yes, you read about the ones who did and heard from your friends who did. But history has shown us that market timing and emotional investing are not the paths to wealth over time.

Specifically related to market timing, we recently read an interesting article written by John Bogle, founder of Vanguard. He compiled the returns of the S&P 500 from 1950 through 2007, a period comprising over 14,000 trading days.

  • If an investor had tried to market time over that period and happened to miss the 40 best days of those 14,000+, their returns would be 70% less than the S&P achieved over that same period. In other words, over 57 years, 40 days of trading produced 70% of the S&P 500's returns!

That's why we at the Starner Group don't spend too much time wishing. We prefer to stick with the tried and true practices of successful long term investing.

I hope this musing finds all of you well. As always, please do not hesitate to call us with any questions you might have.

Reminder: go to www. for the latest market commentary from RJA's strategists and economic outlook.

Diversification does not ensure a profit or protect against a loss. Investments are subject to market risk includinz possible loss of principal. Past performance does not guarantee future results.