An Independent Perspective December 2008 Happy Holidays from your Lakeside Family! In This Issue A Letter to Our Clients Include Life Insurance in Your Financial Plan Important Information Regarding Long-Term Care Meet Lee Ann Van Curen Meet Kelley Weisenbacher Did You Know . . . ? A Letter to Our Clients By Mark Chamberlain, CEO, Lakeside Wealth Management These have been trying times for investors, as well as historic times in some respects. There are no exact answers or formulas at times like these. The market will stop going down when the sellers are finally overwhelmed by buyers who, we believe acting on reason, see value in the stocks and corporate bonds which have been beaten up. We understand the pain that investors have endured, and believe that responding to the pain with emotional decision making has almost always been a mistake when viewed with the benefit of hindsight. There are dozens of "measuring sticks" one can use to assess the value in an asset class. I won't bore you with great detail other than to say we believe that by any of the measures we find remotely worthwhile or historically reliable, stocks and corporate bonds are cheap and this is probably a great time to be a buyer, not a seller. Several high profile and successful value investors we observed are excited by the long-term prospects for investing in beaten down assets like stocks and high yield bonds. Not the least of these was Warren Buffett, the notable investor and philanthropist who recently submitted his view of the current opportunity to buy stock in U.S. companies to the New York Times on October 17. I encourage all investors to read Mr. Buffett's op-ed piece at the link below. We feel it is truly a great perspective on investing for long term results and ignoring short-term bad news at times like these: http://www.nytimes.com/2008/10/17/opinion/17buffett.html?_r=2&oref+slogin&oref=slogin We appreciate the trust our clients have placed in us and we continue to work hard on your behalf. We have gone through tough times in the past and I'm confident we will do so again in the future. Despite the inevitable volatility and frustration, the returns on common stocks and bonds have outpaced the returns on cash equivalents over time. Most markedly so, following periods like we have just gone through where equities have not reached their normal trend rate of return. I cannot promise you a quick result, or when the good times will begin again, but we will be ready as your advisor to help you participate. As you can see by the historical data, making guess work of when to be "in" the market and when to be "out" has been a risky proposition. Historically, missing even one of the major "up" days has impacted long-term investment returns in a big way. Even recently, we have seen two trading days in excess of 900 points to the upside in the Dow. The risk is . . . we just don't know when they are coming. Source: Yahoo Finance Include Life Insurance in Your Financial Plan By Josh Kozel, Assistant Vice President, Lakeside Wealth Management As an advisor one of the most difficult conversations to have with a client is discussing their financial needs when they die. Life insurance forces both client and advisor to answer some difficult questions surrounding their own mortality. Just like other parts of the planning process, there are different variables that impact how life insurance can be used to meet a client's financial needs: number of dependents, debt structure, business interests and estate planning needs, etc. Every one of these factors contributes to type, amount, and duration of the insurance needed. There are many events in life that give good reason to purchase a new policy: new children, spouse, debt, business succession arrangements, etc. Each of these events have one common thread, they represent a new liability to be protected against potential loss. By taking the time to address the situations with proper risk management you are helping protect your future wealth. Your advisor can assist you in managing through a structured approach including risk assessment and development of different strategies to manage it, including life insurance. If you already own a life insurance policy, you'll want to revisit the situation that prompted you to take out the policy in the first place. By recalculating your insurance needs you may need to add or decrease your coverage to maintain a proper level of risk management. By re-evaluating your policy every 5-10 years you will be able to make sure the current policy addresses your immediate and long-term needs. Life insurance premiums have fallen over the past 10 years. These decreases have been attributed to increased competition in the market place coupled with longer life spans, and increased business efficiencies'. (1) However, the most important reason for revaluating a policy is to make sure the policy's beneficiary is correctly marked. Each year, life insurance policies are being paid to incorrect beneficiaries. This mistake can negate the tax advantages of the life insurance benefit and create more grief in an already tumultuous time. By recognizing life insurance as a part of the financial planning process and incorporating it with your regular advisor reviews. You are taking a proactive stance to prevent potential problems before they exist. For any additional questions please contact your advisor. (1) http://findarticles.com/p/articles/mi_qn4176/is_/ai_n17147200 Important Information Regarding Long-Term Care By Jocelyn Hibshman, Assistant Vice President, Lakeside Wealth Management How do you plan to pay for Long-Term Care? • Medicare is the federal program providing hospital and medical insurance to people aged 65 or older, and to certain ill or disabled persons. Only in certain conditions are benefits available for home health care. Generally, Medicare may pay for up to 100 days of care in a skilled nursing facility per benefit period - 100% for the first 20 days (after a three-day hospital stay, if skilled care is needed). Then, from day 21-100, Medicare requires a co-payment. A Medicare supplement insurance policy can help cover the co-payment, but often once Medicare stops paying for care, the supplement payment ends as well. • Medicaid (in California referred to as Medi-Cal) generally pays for certain health services and nursing home care for those with low incomes and limited resources. Medicaid may also pay for some long-term care services at home and in the community. Medicaid limits your assets and monthly income before you are eligible for benefits, and restricts transferring assets to qualify for Medicaid. Eligibility and covered services vary by state. • Long-term care insurance helps cover the future expenses of long-term care by allowing the purchase of a policy before an individual needs care. What are the levels of care? Long term care can be therapeutic, rehabilitative or personal care delivered at home, in a community-based setting or in a facility. Each level of care differs: • Custodial Care (Personal Care) is for those needing help with activities of daily living (ADLs), and often involves non- medical personnel. An example would be having a helper come into your house to help with bathing, dressing, or eating and other activities of daily living. • Intermediate Care is for those needing occasional nursing and rehabilitative care under the supervision of skilled medical personnel. It is less specialized and less comprehensive than skilled nursing care, but does provide care on an intermittent basis --- the caring for a wound every eight hours, for example. • Skilled Care is for those with medical conditions requiring care by medical professionals, such as a registered nurse or professional therapist. This higher level of care may include physical therapy or supervising the administration of intravenous medication. Long-term care insurance will help pay for Homemaker Services, Personal and Home Health Aides, Adult Day Health Care, Assisted Living Facilities, and Nursing Home Care. Currently in the State of Indiana the average Home Care Services for 44 hours per week of care costs $39,720, or $108.82 per day. The average cost of a nursing home for a semi-private room is $56,119, or $153.75 per day. The cost of long-term care services is likely to increase over time. Based on a 5% annual inflation rate, the cost per year for home health care in 22 years will be $104,573, or $286.50 per day. Long-term care insurance... keeps you living in your home longer takes the burden of care off your children helps protect your assets from a Medicaid spend down pays for quality home care services To discuss the importance of protecting your assets from the expense of long term care, please call your advisor at Lakeside Wealth Management to discuss your personal situation. Sources: http://www.in.gov/fssa/iltcp/pdf/booklet.pdf, http://www.genworth.com/content/genworth/www_genworth_com/web/corporate/en/Genworth_Answers.html Meet Lee Ann Van Curen Lee Ann is a Senior Client Service Professional for our fee-based advisory business. Hometown: Wintersville, OH, currently resides in Portage, IN Marital Status: Married to Don for 19 years Hobbies/Interests: Cooking and gardening Favorite Vacation Spot: Sunset Beach, NC Most Recent Trip: New Orleans, LA Interesting Fact: Lee Ann prides herself on her giant planted pots in the summer time. She nutures the spikes through each winter and has several that are 10 years old and 8 feet tall! Meet Kelley Weisenbacher Kelley is a Senior Client Service Professional for our broker/dealer business. Hometown: Hobart, IN currently resides in Chesterton, IN Marital Status: Married to Marty for 2 years Pets: 2 cats, Kitana and Xena Hobbies/Interests: Theater, crochet, reading Most Recent Book: The Wives of Henry VIII Interesting Fact: Kelley won the Indiana Community Theater League's Best Supporting Actress Award for her role as Portia in Julius Caesar. Did You Know . . .? . . . that the IRS has increased its dollar limitations on retirement contributions? . . . that the IRS has increased its annual gift exclusions? See http://www.irs.gov/ for more information. * *Please consult your tax professional for tax planning advice. Advisory services offered through Lakeside Wealth Management Group, LLC. Securities offered through First Allied Securities, Inc. A Registered Broker / Dealer Member FINRA / SIPC. Lakeside Wealth Management Group, LLC and First Allied Securities, Inc. are not affiliated companies.
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