Asset Planning certainly has news! Joanne is off on maternity leave and her baby boy (Miles) is due July 17. We already miss her. Lori left Asset Planning on June 7 and moved to Texas after the passing of her mother. We wish her well and can not blame her for leaving California. She was able to buy a house outright in Texas and her daughter now has a horse to ride on her own property. Who says there isn�t a real estate bubble in California??

Our great new additions to the staff are Carol Somoano and Margo Lynch. Both Margo and Carol will assist me with financial planning clients. Carol will also develop her own asset management clients and manage money.

Carol received her CFP designation in 2004, in addition to her Personal Financial Planner certificate from UCI. She also has an MBA from Cal State Fullerton. She holds licenses in insurance, real estate and is also a Notary Public. Keep this in mind when you need something notarized- Carol is here to assist you! Carol will focus on comprehensive financial planning and asset management. Carol is also the mother of three children.

Margo has her certificate in Personal Financial Planning from ucla (have to put it in small caps since I am from USC) and has taken the Certified Trust Financial Advisor exam and is awaiting news of passing. She is working on her CFP and will sit for the exam soon. Margo�s focus in on the complexity of trusts and avoiding taxation.

Try a thing you haven't done three times. Once, to get over the fear of doing it. Twice, to learn how to do it. And a third time, to figure out whether you like it or not. ~Virgil Thomson (advice given at age 93)~

TD Waterhouse and Ameritrade announce the intention to merge

TD Ameritrade is the proposed name of the new company. Ameritrade is acquiring 67% of TD Waterhouse. Combined, the two companies will make the third largest brokerage company, behind Charles Schwab and Fidelity. It will become the largest discount brokerage in the US. I see this move in a positive light. Ameritrade did not have a brokerage branch network which TD Waterhouse has. It may take six months or more for the merger to be completed so any changes will not be apparent until then.

Identity Theft

Check your current homeowner insurance policy to see if they are adding coverage for identity theft. Allstate, Fireman�s Fund, AIG, Chubb, Farmers, Metlife and Travelers have all added this coverage. Some companies add it to the homeowner coverage and some sell it as a rider for $25 to $50 per year. The policy will help with the hassle and expense of restoring your good name. It may also pay for legal fees for advice, lost wages, credit reports and loan reapplications when needed.

Summer Travel plans aboard

Check a ship�s sanitation record. The Centers for Disease Control posts cruise ships� scores and date of last inspection at www.cdc.gov/nceh/vsp. You will also find tips to avoiding a stomach illness aboard an ocean liner.

The Yuan and the Dollar

Is there a link between China�s currency and the US housing market? James Berman, JD explains it this way:

China pegs the yuan to the US dollar. The Chinese don�t want to do anything to cut off the source of their massive growth over the last decade-exports. The yuan�s artificial undervaluation boosts their massive export machine. In order to link the yuan to the dollar, Chinas has to hold large dollar-denominated reserves. It has to buy massive amounts of US Treasury bonds. That artificially depresses yields on the 10 year Treasury. That�s why, even though the fed funds rate has been raised, the 10-year yields have had a relatively flat yield curve. Pushing those yields down artificially pushes 15 and 30 year mortgage rates down. They are at 40 year lows, supplying a huge amount of cheap money for people to purchase homes they could never have afforded before.

Someday, China will buy fewer of our bonds. It�s a question of when, not if. When they do, interest rates are going to go up more that most people are predicting, possibly 200 or 300 basis points. 100 basis points is equivalent to 1%.

I think he has an interesting point of view. Many economists are concerned over the amount of US Treasuries the China holds. What to do? Convert your adjustable rate mortgage to a fixed mortgage. 22% of all new mortgages are a form of �interest only� so people can qualify. If interest rates spike, foreclosures will be very high.

�If you think you can�t, you won�t. If you think you can, you might.� Henry Ford

2005 is half over already! Are you making progress on your goals set for this year? I completed the Danskin Triathlon on June 5. It was � mile swim, 14 miles biking and a 3.1 mile run in the hills. I have a few more triathlons and ocean swims scheduled. I am trying to get back to training four days a week. Get outside and enjoy your summer!

One goal for the summer: Write a letter of gratitude to someone who has never been properly thanked. Take the time.


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