11/13/2006

International Investments Still Look Interesting

Hello:

Tomorrow, the Center for Constitutional Rights, and others, are scheduled to file a criminal complaint against former Secretary of Defense Donald Rumsfeld in German Court for allegedly authorizing war crimes in the context of the War on Terror. I believe that this event may negatively impact the preference for the U.S. dollar as the world's reserve currency of choice and possibly decrease the demand for dollars.

Also, the results of last week's election may give the impression that higher taxes and an increased minimum wage, along with a move toward expanding entitlements such as Social Security and/or universal health care are on the domestic horizon. I am not arguing the worthiness of these goals, but one thing is certain: There is no free lunch. As government expenses expand, it could be that the value of the dollar will decline based on the perception of the potential of a weaker economy due to a possible increase in taxes.

Therefore, in general, I am not recommending an across the board decrease in international investments at this time, although, I do evaluate individual investments on a case by case basis.

Do you have donors who take a Required Minimum Distribution (RMD) that they do not really want or need? Now, with the Pension Protection Act, they can consider rolling it directly to the non-profit organization of their choice. Be sure to advise them to seek the counsel of their tax preparer prior to making a decision.

Terri G. Millson, CIMA, CIMC President