It is better to deserve an honor and not receive it, than to receive one, and not deserve it!! Mark Twain, 1835-1910, American Humorist, Writer


The above quote is dedicated to my beloved Trojans. USC should have been ranked #1 and selected to play in the BCS Sugar Bowl instead of playing in the Rose Bowl against Michigan. USC beat Michigan 28-14 and were voted #1 in the AP poll after the Sugar Bowl.
USC Trojans are National Champions!



Looking back, looking forward

In addition to the Trojans football record, 2003 was a very good year. I am feeling more positive about the economy, productivity, manufacturing and the job market for 2004. The market has slowly and steadily risen over the past year.

The small capitalization companies have performed best, with an average gain of 40%. Mid-cap companies have gained an average of 30%. I believe as the market recovery continues, the large-caps will catch up to the gains of the small and mid caps. The S&P 500 returned 28.7% in 2003; this was the best return since l997. From the October 2002 market bottom, small-caps, as measured by the Russell 2000, continued their outperformance over the S & P 500 ( 73.1% vs. 46.4%) as well as for the one, three, and five year periods. This was the best return for the Russell 2000 since l979.

Interest rates may remain low since we are in a presidential election year. I do not expect interest rates or inflation to raise more than .25 to.50% over the next 6 months.


Ask yourself this daily question: How would the person I want to be do the thing I�m about to do? Jim Cathcart, professional Speaker/Author


Qualified Contribution amounts increased

The 401k, 403b, 457 limits have increased to $13,000 with an additional $3,000 catch up provision for those over age 50. IRA contribution limits remain the same at $3,000 plus $500 for the catch up provision. The estate tax application exclusion increased to $1,500,000.
Lynne Cox

One of my close friends is Lynne Cox, the renowned long distance swimmer and now, finally, an author. Her book is available to the public on January 13 and she is beginning her 13 city book tour this week. The book is Swimming to Antarctica-Tales of a Long-Distance Swimmer. Lynne is in People magazine this week and named one of the top women in the world by Glamour magazine. She recently appeared on David Letterman, 60 Minutes and will be on Ellen January 19th. Oprah is also trying to schedule her.

I began taking ocean swim lessons from Lynne in the early 80�s once I started to compete in triathlons and ocean swims. I traveled to communist Russia (Siberia), Austria, and Germany with her as a team member as she completed swims in the late 80�s. Since I was the money manager (deemed a control position by USSR) for the team of journalists, crew and entourage, I had the privilege of having my home phone tapped by the FBI and CIA for many long months. The book recounts many of her record breaking swims and the reason why she strives to swim for cold water research and to bring nations together. Los Alamitos will declare another Lynne Cox Day and we will be having a local book signing for her in this area. The book is a great read.


Annuities

I am on the warpath over annuity companies. We had several client deaths this past year and have helped client beneficiaries� deal with redeeming annuities. Almost without reservation, I can tell you to never buy an annuity through your bank. Some clients were sold annuities through Washington Mutual and Wells Fargo banks and I have never seen such incompetence in the way the contracts were written.

If annuities are not correctly structured, they can become a living nightmare for the beneficiaries. Most annuities should not have joint owners or the trust named as the beneficiary when the spouse is living. When there is an IRA inside the annuity (always a no-no) the beneficiary structure is important to avoid taxation of benefits. The main problem I have with annuities is that they will not pay out the death benefit. The companies will require a ream of paper documentation, and then not process the claims until multiple letters and phone calls are made. We have found this with five different annuity companies and only two, Pacific Life and Jefferson Pilot, acted promptly and correctly. The worst companies are Jackson National, ING, Safeco, and Sun America.

If you have an annuity, you should have it reviewed for correct title and how the beneficiaries are named. You can make changes while you are living and mistakes can be corrected. Thirty minutes of your time now can save your beneficiaries hours of frustration upon your passing.



Memory Loss

Your mind is your most prized possession, so don�t neglect it. Each of us must decide what kind of brain or memory capability we want and what steps we will take to get to our goal and stay there. There are different types of memory-memory for key ideas and memory for detailed facts. Almost everyone loses the ability to remember all the details as they age. In contrast, with practice, the ability to remember the big picture and key issues can be preserved into late life.

Here are the keys for good memory retention: Treat medical concerns. Memory loss can be a symptom of physical health problems such as diabetes, high blood pressure, thyroid problems and Alzheimer�s disease. Consider depression or any other mental aliment since any kind of mental illness affects cognition, a component of memory. Eat properly. Vitamin deficiencies cause cognitive decline. Folic acid, found in leafy green vegetables, is also vital to good mental functioning. Eat walnuts or almonds daily. Get enough sleep. Socialize. Isolation increases your risk of cognitive decline.

Researchers recently concluded a 21 year study of the elderly. They found participants who read, played board games or cards or played a musical instrument had a reduced risk of developing dementia. Dancing also reduced the risk, but other types of physical activity, like biking, swimming or golf, did not. (Since my golf game involves counting to high numbers when taking penalty shots and counting lost balls, it helps my memory retention!)

A tax expert is anyone who can read five pages of tax law without crying, or ten pages without laughing. Jim Boren, author, Wall Street Journal

Tax time rolls around once again. If you have your taxes prepared by Hood & Burch and would like to see me the same day as your tax appointment, give Lori a call. I can usually meet with you prior to or after the tax appointment.

Goal setting

After a review of my business plan and in order to better serve my clients, I have raised my managed account minimum size to $250,000. Thank you to all of you who have referred friends and relatives to Asset Planning, Inc. We are growing due to your referrals and have found success through service to our clients. This was one of the reasons we were chosen as a top wealth manager by Bloomberg. I greatly appreciate your referrals and the growth of the company.

I have written my goals for 2004, both business and personal, and hope you have done the same. Begin to plot the course of action you will take to meet your goals and visualize how you will obtain the end result.

�Nothing can add more power to your life as much as concentrating all your energies on a limited set of targets. Bend all of your energies to one point, and go directly to that point, looking neither to the right nor to the left.

Success is the result of well directed energy. The sun's rays do not burn until brought to a focus.�


Happy New Year 2004!


Sandra C. Field, CSA, MBA, CFP
Asset Planning, Inc