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Minert Financial Presents Year-End Financial Update IMPORTANT: If you have not already done so, residential resales were down 23% and 21% from please call/email to setup the MONTH for your levels 12 months before, while RealtyTrac reported Annual Planning Review. foreclosures up 94% from a year ago.2,3 New home sales fell 9% in November, to a pace not seen since 2008 Retirement Plan Limits & 1995.4 Reminders. This is the time to make sure you are contributing the maximum the IRS allows to your In November, the Federal Reserve forecast that the retirement plans. Please let us know if you need to economy would grow only 1.6-2.6% in 2008. America increase your monthly automatic contributions to had enjoyed 4.9% growth in 3Q 2007 (revised upward meet the 2008 limits, as this will not happen from 3.9% in December) and 3.8% growth in 2Q 2007.5 automatically. We are happy to check for you to let Economists anticipated 4Q 2007 GDP of 1.5% or you know if you have contributed the maximum and/or assist you with changing the monthly lower, and former Fed chairman Alan Greenspan saw automatic investment. The deadline for IRA & Roth the chances of recession “clearly rising.”6 The dollar IRA contributions is April 15. The deadline for Simple weakened and commodities prices rose, and even with IRAs is the tax filine deadline, including extensions. If the Fed cutting interest rates, hints of increasing you have any questions whatsoever, please call and inflation and diminishing manufacturing surfaced. make an appointment to speak with us. Domestic economic health. It was not just a New Limits for 2008. IRA & Roth IRA: Maximum possibility, it was a certainty: America was in its contribution increases to $5,000 from $4,000 per person (Roth-IRA phases out at $10k - $116k single or biggest financial quandary in a decade. The credit $159k - $169k joint). Additional over 50 amount stays crisis that started with subprime mortgages had at $1,000. IRA Deductibility: Single – phase out rippled out through the entire banking system and begins over $53k AGI. Joint - phase out begins over was now a drag factor on the economy at large. (We $85k AGI. Roth IRA Conversion Limit: Before 2010 – learned from the Commerce Department that net AGI < $100k. 2010 and Later: Unlimited AGI. Simple exports had added 0.9% to U.S. economic growth in IRA: Employee contribution limit stays at $10,500. the third quarter, the biggest such influence since Additional over 50 amount stays at $5,000. 401k, 403b, & 457 Plans: Employee contribution limit stays 1980 – a sign that other economies were partly bailing at $15,000. Additional over 50 amount stays at out ours.)7 $5,000. Defined Contribution Plan Limits: Increased from $45,000 to $46,000. Annual compensation limit The Fed’s fall snapshot revised expectations increased from $225,000 to $230,000. Self-employed downward. While the Labor Department reported & Business Owners: It is always good for us to review 166,000 new jobs for October (double economists’ your plan to determine if you still have the best plan to expectations)8, Federal Reserve data showed the pace fit your needs each year. We can change this mid-year. of manufacturing slowing 0.4% for the month. 9 The For example, if you currently have a SEP, a Simple Commerce Department reported just a 0.2% rise in IRA may be better depending on the situation. consumer spending for October, while construction Quote for 4th quarter 2007. “Never go to spending fell 0.8%.10 In November, inflation went up excess, but let moderation be your guide.” – Cicero 3.2%, the biggest monthly jump since 1973, fueled by a 34.8% jump in gasoline prices; the Consumer Price 4th quarter in brief. It was a quarter that Index was up 0.8%, one-third higher than what many investors (and homeowners) would like to economists had forecast.11 The weak dollar lingered to forget. The Dow Jones Industrial Average had its new lows. worst fourth quarter since 1987.1 It dropped 367 points on October 19, and despite its best two-day rally And through it all, the American consumer persisted. in five years in late November, it concluded the year at Consumer spending somehow rose by 1.1% in 13,264.82 – 900 points below the October 9 record November, the best monthly increase since fall 2005.12 close of 14,164.53. For October, new home sales and The Conference Board reported a rise in its consumer confidence index to 88.6 for December, up from 87.8 in Of course, the other big news was the ECB acting in November.13 tandem with the Federal Reserve to pump money into the banking systems of, respectively, the EU countries % Change 4Q 2007 2007 and the U.S. Banking giants also turned abroad to soothe liquidity problems. In December, China S&P 500 -0.38 +3.53 Investment Corp. notably bought nearly a 10% stake in Morgan Stanley for $5 billion, and Citigroup Inc., Source: CNNMoney.com, USAToday.com, 12/31/07 UBS AG and Bear Stearns Cos. turned to sources in *Without dividends Singapore, Abu Dhabi and China for capital replenishments.20 Global economic health. The question became, would the American economy hold up or fall Housing & interest rates. Was it the worst into recession? Would other economies consequently housing market in 12 years? Or 20 years? How about suffer? Major Asian economies (excepting Japan) 34 years? It depended on the statistic, but one thing enjoyed strong growth in the quarter, only mildly was certain in the fourth quarter: the housing slump affected by U.S. woes. The Asian Development Bank had not bottomed out. estimated that China’s economy grew 11.4% in 2007, and Southeast Asia economies 6.3%15 … but GDP data Here was the lone positive statistic: the Commerce released late in the 4Q showed the economies of Department reported that new home sales went up Singapore and Korea weakening.16 1.7% in October. (But even so, they were still 23.5% below October 2006 levels.)2 In Europe, many economies were slowing. European retail sales fell in October, November, and December, And now, the negatives. RealtyTrac noted that and business confidence in the region’s #1 economy – October foreclosures were up 94% from October of Germany – fell to the lowest level in almost two years 2006,2 and the Mortgage Bankers Association in December.17 Rising credit costs pinched European announced the highest foreclosure rate it has recorded economies, as did the rising value of the euro, which in its history in December: 0.78% of U.S. homeowners made European exports less attractive to Americans. somewhere in foreclosure in 3Q 2007.26 The Federal Reserve determined that home equity levels were at World financial markets. It wasn’t the record lows in the third quarter. 27 New home sales hit greatest quarter for global indexes. Signs of trouble a 12-year low in November.28 emerged: financial stocks on a key MSCI Asia index Mortgage rates necessarily descended. By mid- fell 1.4% in the 4Q, the first negative quarter for such December, average rates on the four popular FRMs and stocks since 1Q 2005.18 European stock indexes ARMs had all dropped below 6%. Rates climbed slightly declined across the quarter; England’s Dow Jones over the rest of the month.29 Stoxx 600 Index actually declined for the year, losing 0.1% for 2007.19 Please feel free to forward this article to family, friends, or colleagues. If you would like us to add them to the list, please call our office at (602) 522-2234 or email us firstname.lastname@example.org and we will contact them and ask for their permission to be added. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the "NYSE") and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. Citations. 1 biz.yahoo.com/ap/071231/wall_street.html 2 cbsnews.com/stories/2007/11/29/business/realestate/main3553208.shtml 3 latimes.com/business/la-fi-homes29nov29,1,1048529.story?coll=la-headlines-business 4 biz.yahoo.com/ap/071228/economy.html 5 marketwatch.com/.../gdp-revised-up-49-third/story.aspx?guid=%7BA3B91208-8075-4F75-ACE9-AE9BCFBA7AFF%7D 6 usatoday.com/money/economy/2007-12-14-greenspan-recession_N.htm 7 usatoday.com/money/economy/2007-12-09-global-economy_N.htm 8 nytimes.com/2007/11/02/business/02cnd-econ.html 9 biz.yahoo.com/ap/071116/economy.html 10 biz.yahoo.com/ap/071130/economy.html 11 cbsnews.com/stories/2007/12/13/business/main3615758.shtml 12 bloomberg.com/apps/news?pid=20601103&sid=a0qntj1p7izI&refer=news 13 usatoday.com/money/economy/2007-12-27-durables-nov_N.htm 6 articles.moneycentral.msn.com/Investing/Dispatch/071221markets.aspx7D 15 dailytimes.com.pk/default.asp?page=2007%5C12%5C19%5Cstory_19-12-2007_pg5_34 16 iht.com/articles/2008/01/02/business/mart.php 17 bloomberg.com/apps/news?pid=20601085&sid=a0Uc8uqDzlvc&refer=Europe 18 bloomberg.com/apps/news?pid=20601080&sid=a0dzfdY.4XiI&refer=asia 19 bloomberg.com/apps/news?pid=20601100&sid=aQMXJ1tTsqls&refer=germany 20 bloomberg.com/apps/news?pid=20601089&sid=aGhGwGK1wTpk&refer=china 21 bloomberg.com/apps/news?pid=20601012&sid=aV81_JpFUMOg&refer=commodities 22 bloomberg.com/apps/news?pid=20601012&refer=commodities&sid=a45OtCQkjhHI 23 bloomberg.com/apps/news?pid=20601012&sid=ahBvdfbuV.7U&refer=commodities 24 bloomberg.com/apps/news?pid=20601086&sid=aH4YlaCJk7R8&refer=news 25 thecommodityinvestor.com/ 26 www.cbsnews.com/stories/2007/12/06/business/realestate/main3583433.shtml 27 foxbusiness.com/markets/economy/article/federal-reserve-home-equity-falls-record-low-3q_396855_3.html 28 biz.yahoo.com/ap/071228/economy.html 29 usatoday.com/money/economy/housing/2007-12-13-mortgage-rates_N.htm Registered Principal, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member NASD/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor. Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member NASD/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor. Minert Financial and Cambridge Investment Research, Inc. are not affiliated.
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