API 1st Quarter Update 2012

Wow, what a start to the 2012 year!

Notes from Sandy:


I had the honor of attending the invitation only Barron’s Winners Circle Independent Advisors Summit in Phoenix, AZ last month. Hosted by Barrons Magazine, the elite advisors gathered to promote best practices in the industry and the value of advice to the investing public. Of the 350 advisors, I would estimate 35 women were invited. This reminded me of the early days in 1986 with my broker dealer and I was one of three women in a sea of five hundred male brokers. It is still a male dominated industry but the female ranks are growing.


"Never consider the possibility of failure; as long as you persist you will be successful."  Brian Tracy

My second accolade of the year is to be featured in Financial Planning magazine, April issue. The magazine sent two photographers out to the office and spent roughly six hours doing the entire photo shoot. The magazine likes that I go “against the tide” of mainstream advisors that use all mutual funds. Combine that with the fact I am still swimming competitively in the pool and the ocean, they decided to take photos on the beach next to the Seal Beach pier. They took photos until it was pitch dark. The photo they used was taken with three long exposures. The wind was cold and blowing so hard, they put my goggles on my forehead to keep my hair in place. I would never want to be a model! We will send reprints as soon as we receive them.

To make it a perfect quarter, the Nasdaq was up 18%, Dow up 8.1% and S&P up 12%. My favorite stock, Apple, gained 48% in this quarter. I do expect a market correction fairly soon. These performance numbers are fantastic but not sustainable as the market basically increased straight up. I have trimmed a few positions and await a buying opportunity when it corrects. China is my biggest fear as their real estate property market has peaked, and if they follow our path, they will fall into recession just as we did. A recession in China will have a global impact and will ripple here to our market also.

“No man's life, liberty, or property is safe while the legislature is in session.” Mark Twain (1866)

Ah, yes, it is also a presidential election year. There are several areas of the tax code that will change as a result of the election. Under a second Obama term, tax rates for most of our clients will rise. If there are changes to the long term capital gains rates, we will be evaluating each taxable account and acting to minimize taxes. Since the Republican party candidate is not finalized but it appears Romney will be running as the choice, modifications may be coming to our tax brackets and estate planning. It will be an interesting year ahead, filled with uncertainty over our elections, tax code, European and China concerns.  


Notes from Carol:

The current bull market just celebrated its 3rd birthday. It has experienced more 5% corrections in the first three years than any bull market of the past. Each of these corrections was a wild ride. One of the toughest tactics in a volatile bull market is to sit back and stay on course. As Sandy mentioned we have made some allocation changes and will likely make more ahead. Our focus has been on domestic stocks and bonds and that will continue. International stocks have had a strong 1st quarter but headline risk is still strong and any news (good or bad) leads to major moves.

One of my responsibilities is to make sure Asset Planning is in compliance with SEC regulations. Last year, Asset Planning was required to rewrite and send out the entire Advisor Disclosure form to all of our existing and new clients. This year we are only required to send you a one page update that details any material changes for the past year. The Annual Update and Privacy Policy are enclosed.

FYI - In case you haven’t heard, the U.S. government just released records from the 1940 Census. I am fascinated by this information. I will now be able to go on-line and learn much more about my family (see if the stories I heard were true) and share it with my children. The web site is http://1940census.archives.gov. Access to the records is free and open to anyone online, but it is not yet searchable by name. You need to know the county or city where they lived. The name search is coming. There was so much interest that the web site could not handle all the traffic and is being upgraded to handle all the demand.

Tax season is almost over! You still have time to make 2011 IRA contributions. Please send them to us by April 10 so that we can get it posted to your account by April 15.


Notes from Erin:

This quarter was particularly exciting for me as I completed the final requirement to become a CERTIFIED FINANCIAL PLANNER™. To become a CFP®, one must hold a bachelor’s degree, complete a comprehensive financial planning coursework from a board approved program, pass a 2 day examination, have 3 years of direct personal financial planning experience, and undergo a background check. Maintaining the CFP® designation requires 30 hours of continuing education every two years, along with adhering to the board’s ethical & professional standards.

An additional bit of news is the Home Affordable Refinance Program (HARP) was expanded this month in an effort to allow more people to refinance into lower rates. The program’s aim is to help people that are current on their mortgage payments but can’t refinance due to negative equity. More information about HARP 2.0 & can be found at http://www.fhfa.gov/ . If you are looking to refinance & believe you might qualify, please be advised that lenders may have additional requirements on top on HARP 2.0 for refinancing. This means if you if you are denied at one place, make sure you clarify if you are being denied by the lender or the program. If it is just a company requirement that is left unmet, you should try other lenders. We have a couple of mortgage brokers we trust if anyone would like a referral.

API 4th Quarter Update 2011

Goodbye 2011 and Hello 2012

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary. Steve Jobs

Notes from Sandy:

It was quite a year of big stories for 2011. Osama bin Laden, Muammar Gaddafi, Steve Jobs, Kim Jong-il, all leaders of a different nature, are gone. We had global events with the earthquake and tsunami in Japan and the Royal wedding in England. The United States of America lost its triple A credit rating and Occupy Wall Street grew across the globe as the 99% expressed their displeasure with greed, big banks and Wall Street in general. I witnessed Occupy Irvine which reminded me more of a soccer event with nice pop-ups, organized bake sales with a bounce house and games for kids. It even had signs in the street announcing a “quiet zone” ahead. No chanting, just signs resting next to people sunning in chairs.

After a very volatile and bumpy ride, the Dow ended the year up 5.5% while the S&P 500 finished flat and the NASDAQ was down 1.8%. As the news on Spain, Greece, Italy, Portugal and France kept the averages moving, it was a wild swing from positive 8% in April and negative 17% from those highs by October. China finished down 21.7%, France down 17.3%, Germany down 15% and Canada down 11%. Gold hit an all-time high at $1,778 per ounce and finished the year at $1,566. We also begin 2012 with the dollar equal to 1.2958 Euros after hitting a high of 1.4882 in May, 2011.

I see some positive changes ahead in 2012. I think real estate is beginning to slowly rebound as buyers are jumping through hoops to qualify to buy properties. I think mortgage rates will remain low throughout 2012. As unemployment numbers start to decline, the glut of properties in foreclosure should also decline. I see foreclosures and short sales being worked out so it appears the banks are moving faster on these sales.

Our charity golf event raised over $10,000 for Breast Cancer Angels thanks to our clients, sponsors and friends donating to the event. It was a beautiful sunny day and everything was perfect. Asset Planning also supported the Seal Beach Victims fund for the families that lost loved ones in the horrible Salon Meritage shooting.

Have you set your goals for the New Year? Unless you know where you are going, you won’t know when you get there. I am still working on my goals for 2012 but I plan on many ocean swims this coming year. Nikki is playing water polo and swimming for Los Alamitos High School and I love attending the games and cheering.

Notes from Carol:

Europe and the Stock Market

The stock market is hungry for reasons to go up. That was shown in the last two months. With any news or comments which can be interpreted as positive, the market reacts strongly to the upside. The positive moves

toward the end of November and December had largely to do with announcements regarding the debt crisis in Europe which were in the direction of a solution. The market reacted favorably. But, does this mean we are out

of the woods and on our way to a permanent solution in Europe? Maybe. It will take additional follow through on the part of the central banks to solve the immediate issues and provide some assurance that the crisis can avoid catastrophic levels. The economic data in the U.S. has been relatively upbeat lately. Retail sales for Black Friday exceeded expectations, with the average shopper spending 9.3 percent more, and total spending coming in at a record $52.4 billion. The numbers show the American consumer, the driving force behind our economy, still has the capacity to spend.

Our portfolios have become a bit more defensive without taking us out of the game for the positive moves.

Roth IRA:

One of the best ways to get young people to save and think about their future is to help them set-up a Roth IRA. As long as they have earned income, they can open a Roth. For example, my daughter made $2,000 working at a retail store. I opened the Roth for her and I gifted the money to start the account. She is very excited about the account, especially when I showed her how much her money will compound over the next 50 years. A Roth IRA is made with after-tax contributions and earnings are tax-free for withdrawals made after age 59 ½.

You can gift up to $13,000 to any number of people without facing gift tax consequences.

Realized Losses and Gains for 2011

We will be mailing out the 2011 realized Capital Gains and Loss reports by the first week of February. This will have the cost basis and net proceeds for any sales. It will also have the capital gains and dividends paid for the year. You will need this in addition to the 1099s that you will receive from Schwab or TD Ameritrade to give to your tax preparer.

Notes from Erin:

Changes for retirement contributions beginning in 2012:

401k, 403b, & 457 maximum employee contributions increase to $17,000 per year. The catch up contribution, for those ages 50 and above, remains at $5,500 per year.

IRA contributions remain unchanged at $5,000 plus $1,000 catch up per year for those above age 50.

Adjusted Gross Income (AGI) phase outs increase for those that can deduct IRA contributions and still participate in a qualified retirement plan (QRP). All Fliers (except Married filing Separately) that don't participate in a QRP can deduct IRA contributions from their taxes regardless of AGI. Those participating in a QRP can only deduct IRA contributions if AGI is under $58,000 for Single Filers and $92,000 for Married Filing Joint. Partial deductions are allowed for Fliers with AGI between $58,000-68,000(Single) and $92,000-110,000 (MFJ). For an IRA contributor who is not covered by a QRP but his or her spouse is, the deduction is phased out between $173,000-183,000 (MFJ). Remember if you make a deductible IRA contribution, always keep track of your basis by filing an 8606 with your tax return.

You can make a full Roth IRA contribution if your AGI is under $110,000 (Single) or $173,000 (MFJ). Partial contributions are allowed for fliers with AGI between $110,000-$125,000 (Single) and $173,000-$183,000 (MFJ).

Please send your SEP, Roth and Traditional IRA contributions for your accounts to API by Monday April 9, 2012.

Wishing you a Happy, Healthy and Prosperous New Year! Sandy, Carol, and Erin J

API 3rd Quarter Update 2011


Nowhere to run- nowhere to hide

Last week, stocks dropped and the Dow is -4.71%, year to date while the S&P is -8.98%, year to date, in what was the worst one-week performance since October 2008. The S&P is the top 500 stocks and our portfolios have dividend paying stocks and bonds paying interest to create cash flow and yield so we are not 100% correlated to the S&P. We report on it since it is a widely followed gauge of the market but our returns are not consistent with an all stock portfolio.

Volatility seems likely to stay as the movement of the market swings several hundred points intraday. We have a government showdown date in November for the deficit spending plan to try and correct what the politicians could not pull together in August. They put the S&P rating of the United States in jeopardy with a downgrade.

It has been difficult to hang on to the roller coaster. Everything is not as bad as it seems.  The current Greece crisis is taking the attention away from good news from corporations with good balance sheets, improved earnings and stronger than expected manufacturing and construction spending activity in the U.S. We are focused on the end of the year and into 2012.

Greece and the European debt crisis continue to drag on but they seem to be making progress toward a decision on a structured Greece default. The European Union bailout will be costly, just as the United States bailout was, but it is the best option for the Euro.  How does it affect the U.S.? 27% of U.S. exports of our goods and services in 2010 went to European buyers.

Operation Twist

It is official Federal Reserve news that the yield on savings and CDs will continue to be near zero until mid 2013. They have pledged that rates will remain low for the next two years in the hope that the housing market will get a boost from buyers able to afford a low mortgage rate.  I don’t think the housing market will show a meaningful recovery for five more years and it will again be a “lost decade” for real estate.  Many are trying to hang on to homes that are underwater by waiting it out or renting out homes they could not sell. This has forced many into the role of accidental landlord.

Commodities have finally had their correction: Gold, oil, silver, and other metals fell in the first week of September and were overdue for a serious correction. Oil is currently at $77 a barrel and gold trades at $1,622. The dollar has strengthened against the Euro to 1.3199.

Sandy update - My long training is over

I finished the year of long training (bike rides from Huntington Beach to Corona and back each Saturday) and races.  Nikki is playing water polo and swimming for Los Alamitos High School so I am looking forward to seeing her games and swim meets.  Nikki and I swam together in the Seal Beach Rough Water one mile swim in July- our first ocean race together. She now has more respect for ocean over pool swimmers!  I was also the swim course race director of a local half ironman triathlon in Orange County- the inaugural year. The swim took place in Salt Creek beach in Dana Point and I enjoyed swimming there on practice swims without the kelp beds and giant squid!

Debit Card Fees

Last week, Bank of America announced that they will be charging a $5 per month debit card fee.  Use your card once, to buy something like a $1 bottle of water and you will be charged the fee. The fee is only on purchases, not on ATM cash withdrawals.  Those fees (if any) are not changing.  Wells Fargo and Chase will eventually implement similar programs.  Pay attention to what your financial institution sends you in the mail.  The workaround?  Use a credit card instead of a debit card, as long as you pay it off each month.  Also, use a credit card that has a benefit like travel mileage, cash back, etc.  The other option is to explore other financial institutions like credit unions or other banks that still offer free services.

Asset Planning Charity Golf Tournament

On October 22nd, we are holding our 2nd annual Gail Moreno Golf Tournament to help raise money for the Breast Cancer Angels charity.  You should have received your invitation via email or mail, if not and you are interested in playing please call or email us, there are a few spaces left.  This year we will be having a helicopter ball drop. If you don’t play golf, but still want to be involved, we are having a bucket of numbered golf balls dropped from a helicopter onto the golf course, immediately prior to the tournament.  Each golf ball is assigned to someone who has paid $10.  The golf ball that lands on the mark, or closest to mark will win the recipient $300. All of the rest of the money raised will go directly to Breast Cancer Angels. You do not need to be present to win,... but it’ll be fun to watch.  You can contact us if you would like to reserve a ball.

We are thankful to our wonderful sponsors who have donated money or gifts.  Eagle sponsors ($1,000+) are TD Ameritrade and Ian D. Brodie, MD, Inc;  Food Sponsor is Principal funds; Birdie Sponsors ($500+) are Payden & Rygel, Wasatch Funds, Ariel Investments, Stan Hartford-Estate Attorney, Pamela Ivy White-Long Term Care Insurance specialist and Parnassus Funds; Par Sponsors ($100+) American Century Investments, Charles Schwab, Natixis Global Associates, TFS Capital, Blue Skies LLC and Atrium Dentistry.

You can find more information at www.gailmorenomemorial.com.

Stay healthy and enjoy the fall holidays!

Sandy, Carol and Erin 


API 2nd Quarter Update 2011

The Dog days of summer are here!

Notes from Sandy:

My holiday weekend was full of biking, ocean swimming and golf so I am out enjoying the summer- I hope all of you are too.  I am facing my big race on July 30- a 1.2 mile swim and 56 mile hilly bike ride in Santa Rosa. My long bike rides and long hours of training are coming to an end- then back to golf!

We upgraded to new powerful contact software and I would love to have a picture of you in your file. Please send a jpg file via email or we will take a photo of you the next time we see you in the office.

Debt Ceiling and the S&P

I expect some market volatility over the next month until we resolve our debt ceiling and solidify our rating. Before we can meet the August 2nd deadline, we must endure the Democrats verses Republicans in the blame game and posturing of each party. As we grow closer to the deadline, the market may react in a more volatile manner.  Standard and Poor’s, the credit rating agency, stated they will drop the credit rating of the United States from AAA to D if the debt payments are not made in time- due August 4th. July is also corporate earnings season, when a company can exceed their estimates and the stock will decline for no other reason than a higher expectation. The market does not always trade on rational estimates, fundamentals, cash flow projections and PE ratios. It could be a bumpy third quarter.

We are all faced with a series of great opportunities brilliantly disguised as impossible situations.    Charles R. Swindoll

Notes from Carol:

I just returned from a vacation to Walt Disney World in Florida.  The place was bustling – no sign of a down economy.  The only thing I did notice was there weren’t as many foreigners, especially Europeans.  I used to come to Wald Disney World on business trips when I worked for Disney and there were always many Europeans.  I think they are facing the new reality of the recent austerity government cuts that are now in place in most of the euro countries.

Social Security Statements

Since 1999, the Social Security Administration office has automatically mailed you an annual Social Security projected benefit statement.  In an effort to save money, these statements will no longer be mailed, at least from April 2011 through September 2011. In October 2011, they will resume mailing annual statements, but only to those who are age 60 or older.  This is estimated to save the government $30 million dollars.

You can still access your benefit statement on-line.  You can get a personalized estimate of your future benefits at www.ssa.gov/estimator or you can request the information over the phone or in person at a social security office.

New ADV Part II requirements

I had mentioned in the last newsletter that we were revising our annual disclosure brochure (ADV part 2) to meet the new requirements of the Dodd-Frank Wall Street Reform Act.  One of the requirements is that we have to deliver it to you via mail or email.  You will find a copy of the ADV part 2 in this mailing.  From now on, we will only send you the material changes on an annual basis.  You can always request a complete copy at any time and you can always find information about our firm on the SEC’s website at: www.adviserinfo.sec.gov.

Save the Date - Gail Moreno Memorial Golf Tournament

Asset Planning will be hosting the 2nd annual Gail Moreno Golf Tournament to help raise money for the Breast Cancer Angels charity.  The tentative date for this event is Saturday, October 22.  We will be sending you more information as plans are finalized.  Please mark this on your calendar!

Notes from Erin:

Large mortgages will be harder to get

Come September 30th, the government sponsored entities Fannie Mae, FHA, and Freddie Mac will no longer finance conforming mortgages up to $729,750 in L.A. and Orange County.  Prior to the credit crisis, the conforming limit was $417,000. However, in 2008, in effort to slow the real estate decline in high cost areas, a stimulus bill allowed the government sponsored entities to finance loans up to $729,750. The temporary measure is set to expire and the new limit will be $625,500 beginning October 1st, 2011.

The market is already beginning to react to this impending deadline as major banks such as Bank of America and Chase have already halted funding mortgages over $625,500. The banks that are still doing new loans and refinancing up to $729,750 will probably follow Bank of America and Chase’s lead very shortly.  Private enterprise will likely fill the void of the government backed mortgage market; but almost certainly at higher rates and with stricter underwriting standards.  Another thing to consider is the effect the changes will have on the housing market.  Homes in the $800,000 plus market could see sharper declines depending on how difficult and or expensive it will be to get loans above $625,500.


Have a wonderful and relaxing summer!

Sandy, Carol, and Erin

API 1st Quarter Update 2011

Notes from Sandy

LA Times Money Makeover

I just completed another Money Makeover for the LA Times and it was published on Sunday, April 3. This was not a person drowning in debt, but instead was a 4th grade teacher who owns five properties with no mortgages, and has 1.6 million in net worth by the age of 44. I would call David an extreme saver who is consumed with amassing his fortune and retiring by the age of 50 or 55. He will not join friends or family for a meal out in a restaurant. Instead, he will eat off the dollar menu at a fast food restaurant prior to dinner and then join his friends and order an iced tea. He will never go to the movies; he sees no reason to spend the money. He bought his five condos for cash and really wants to buy 10 more if prices continue to decline.  While I would like to see more balance in his spending and saving, it was refreshing to find a makeover client with no debt. He certainly is an example of being able to cut all excess out of his life to achieve his goals. I would applaud clients cutting back in some areas until all credit card debt is gone and their saving for retirement is more secure. I do however, want clients to have more balance in their life and I did say there was more to life than money.  So, instead of putting your next vacation or large purchase on a credit card, is there an area in your expenses that you can cut back on and save the money first?

“Our life is not determined by what happens to us but by how we react to what happens; not by what life brings us, but by the attitude we bring to life.  A positive attitude causes a change reaction of positive thoughts, events and outcomes.  It is a catalyst, a spark that creates extraordinary results." Anonymous


My heart aches over the horrible disaster in Japan following the earthquake and tsunami. While only 4% of Japan was affected by the damage, the area did account for 5-6% of their GDP. The radioactive water leaking into the ocean may bring a new round of problems to the area, the sea life and hinder more efforts in the area until the leaks can be stopped. While the stock market did sell off on the news, it has rebounded to higher levels than before the quake. We are closely monitoring the progress of the area and any impact it may have on our stocks or mutual fund holdings.

“Optimism is the one quality more associated with success and happiness than any other.” Brian Tracy

Summer is around the corner

Aside from my normal local triathlons and ocean swim races, I will be returning to Santa Rosa to do the Aquabike race in July. Swimming 1.2 miles and biking 56 miles through the winding vineyards and hills somehow seems normal now. I will be riding around the Palos Verdes Peninsula on the Diabetes Tour Ride for a Cure on May 1. I look forward to hearing about your vacation and summer trips when I see you.

Notes from Carol:

Inflation – the next bubble?

Over the past 85 years the average annualized inflation rate has been 3%.  The last few years have seen a lower than average inflation rate; 1.5% for 2010. Even though we are all paying more for gas and groceries, the Fed isn’t overly concerned about inflation – just yet.  But there will be increased pressure for the Fed to tighten monetary policy.  Our goal is to generate enough growth in your portfolios to stay ahead of the increases in the cost of living.  This is done by maintaining diversification in your portfolio holdings.  Stocks and equity mutual funds have a distinct advantage over other asset classes in producing long-term growth.  That said it is also very important to hold bonds in the portfolio.  Bonds offer greater return potential than cash and greater stability than stocks, which is important if you have a short-term financial goal.  Commodity exposure is also a way to counter inflation.  We use mutual funds and/or ETFs to expose your portfolio to commodities.

New ADV Part II requirements

One of the new regulations in the Dodd-Frank Wall Street Reform Act passed last year required all Registered Investment Advisors to update their brochure disclosure form (ADV part 2).  This was a 2 page general disclosure form that you were given and signed when you became clients.  The new form is required to be written in “plain English” so that the client (consumer) understands how the advisor operates and is compensated. While the way we operate has not changed, the new disclosure form is now 15 pages.  We will be sending you this via email or mail within the next 2 months.

Notes from Erin:

Earthquake Insurance

With Japan’s earthquake fresh in our minds, we should be motivated to think about the impact an earthquake could have on our individual financial situations. We often get asked if ‘earthquake insurance is worth it?’  It’s not a clear cut answer. As a general rule of thumb if you can’t afford the premiums, I would advise against stretching your budget if you have very little equity, assets, and or inexpensive belongings. However, if you are in the reverse position, earthquake insurance might make sense.  Currently, in California there are two types of insurance providers. The main difference is in the scope of the coverage offered and the size of assets an insurer has saved for possible claims. Coverage obtained through a private insurer backed by the California Earthquake Authority (CEA) offers lower cost lower coverage insurance but their ability to cover substantial claims is great. Companies not backed by the CEA tend to offer policies with less exclusions and higher coverage amounts; however you run the risk that your insurer might not be able to pay your entire claim in the event losses exceed their reserves.  It’s important when shopping for insurance to have the agent go through the entire policy with you and understand exactly what you are getting for your money. There is a wealth of information to be found on www.earthquakeauthority.com including free online quotes for earthquake coverage. We recommended, at a minimum, reviewing quotes and policies from one CEA insurer and one independent insurer.