10/16/2006

Time to be Morris, not Garfield

Hello:

The Dow Jones Industrial Average is rising to record heights. This is extremely exciting news, however, we do not see other major indices, such as the S&P 500 and the NASDAQ, rising to record heights, and that gives one pause for thought. Even the most basic investment guides recommend looking for confirmation of market activity by a number of indices, not just one.

With overall earnings coming in as expected, and will oil prices relatively low, there comes the urge to dive into increased equity allocations which brings to mind Garfield, the cartoon cat, diving into a pan of lasagna at every opportunity. However, with Chairman Bernanke's speech coming later this week, and with a U.S. mid-term election coming in three weeks, perhaps it would be better to emulate Morris the Cat, and be finicky and selective about investments in the near term. If we look before we leap, we will be more likely to land on our feet.

According to the Pension Protection Act of 2006 (PPA), After-tax dollars in a 403(b) annuity may be rolled over into a qualified retirement plan. Please be sure to consult your tax advisor before moving funds into or out of a retirement plan.

Terri G. Millson, CIMA, CIMC President