What a tough year it has been for the American investor. Hopefully, 2009 will offer a much needed fresh start. Recent retirees have been rocked by a 1-2 punch in 2001-2002 and again now in 2008-2009. These losses will be devastating to the retirement of millions of American households. The evolution of the retirement plan from Defined Benefit to a Defined Contribution arrangement has left retirees with a lump sum rollover and a "good luck" wish from their former employers. The retirement plan sponsors must adopt guaranteed lifetime income payout options in the form of immediate annuities to ensure that their retiree assets are not dissipated by stock market girations, bad investment advice (predatory advisors, real estate speculation), and outright financial scams (Madoff, etc.).
The unemployment rate is moving up quickly from 6% to 7% and foreclosures continue to plague the real estate market. The NBER has finally stated the obvious; the US economy is now in a recession that began in December 2007. The new administration certainly has their work cut out for them. The TARP funds are slowly being distributed and the banks, insurance companies, and auto industry are all looking for a handout. A new fiscal stimulus plan is yet to be announced and many Americans are really struggling. I have one suggestion to the new administration....
OFFER A TAX CREDIT OF $10K - $15K TO HOME BUYERS!!!!!!!!!!!
We must clear out the real estate inventory before this economy can get back on a stable footing. If the real estate market continues to fall and credit markets remain frozen, the US economy will head into a prolonged recession or possibly a full blown depression. The US stock market has already decreased -50% this year and the Fed has cut interest rates down to 0% and has committed to keeping rates low (even if that means buying long term bonds). Inflation has moderated with declines in commodity prices and the consumer has finally caught a break with declines in gas prices ($1.50 a gallon due to demand destruction). The flight to safety continues and the 10 year treasury yield is now down to 2.00%. That's lower than it has been since 1953!
See the link below for historical 10-year treasury yields direct from the Federal Reserve:
http://www.federalreserve.gov/releases/h15/data/Monthly/H15_TCMNOM_Y10.txt
The Madoff Securities scandal has only added to the crisis in confidence among investors. My advice is to handle your own investments. You will pay a lot less fees and you will be in control of your own destiny. Investors must get back to fundamentals and take more responsibility for their own future.
I hope that people across America will spend this holiday season focusing on what is really important in life... health, family, and freedom ; )
Merry Christmas & Happy New Year to you and yours!
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