Many investors have concerns about the potential inflationary impact of the government’s current fiscal and monetary policy.  Although expansion of the money supply can often lead to inflation pressures, comments from Federal Reserve officials and a review of the broad measures and drivers of inflation indicate that another potential (and possibly bigger) risk in the near and intermediate term is deflation. Let’s begin by defining the terms used to describe the behavior of prices and also pointing out that the United States has experienced all of these environments at various times in its history:

• Inflation: an increase in the overall price level over a period of time
• Deflation: the opposite, a decline in the price level
  • Deflation typically occurs with economic downturns. The two severe periods of deflation occurred during the depression eras of the 1890s and 1930s.  We also experienced a short deflationary period at the heart of ...

Recently a member of our Client Advisory Board suggested that we inform you about some of the pitfalls and problems of medical insurance coverage while traveling abroad. As travel season has arrived, we hope this is useful information. These sites provide more information: http://travel.state.gov/travel/cis_pa_tw/cis/cis_1470.html

http://travel.state.gov/travel/tips/brochures/brochures_1215.html

Insurance, Medicare & Medicaid, Medical Evacuation
U.S. medical insurance is generally not accepted outside the U.S., nor do Social Security Medicare programs provide coverage for hospital or medical costs abroad. Obtaining medical treatment and hospital care abroad can be expensive, and medical evacuation to the U.S. can cost more than $50,000. 

Short-term travel policy
If your insurance policy does not cover you abroad, consider purchasing a short-term policy that does. There are health insurance policies designed specifically to cover travel.  Many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas including emergency services such as medical evacuations. Some of the ...

Does Greece Matter?
In a word, yes. But perhaps not exactly the way many investors believe—and fear. From a global perspective, the Gross Domestic Product (GDP) of Greece, at approximately $341 billion, is relatively small, thirty-fourth in the world. California’s GDP (approximately $1.85 trillion) would place it in the top 10 in the world. Investors fear that austerity measures in Greece (and other stressed countries in the Euro zone), will extend the recession in Europe, hurting revenues and earnings of multinational, U.S. based equities. As an indicator of other stressed European economies (Spain for example) Greece does suggest a basis for increased concern.

Recovery Implications
At recent April highs, equities were seemingly priced for a V-shaped recovery, with consistent, relatively strong GDP growth and earnings. The recent correction in stocks is an acknowledgment that global risks remain. However, it should be noted that from the March 9, 2009 low to ...

The financial world is not static, and at Moneta we constantly challenge the status quo. The Investment Department shares our firm’s commitment to be passionate about what we do, to act only in our clients’ best interests and to deliver ‘Raving Fan’ service. That involves an ongoing process of research, due diligence, analysis and exploration of new investment opportunities.

This Voice of Moneta shares with you some of the strategies we are currently challenging and some exciting investment projects that are under consideration.  These initiatives are consistent with Moneta Group’s commitment to managing risk and preserving wealth—the ‘stay rich’ business, not the ‘get rich’ business. Here is a glimpse of a few of the current projects being evaluated by the Investment Department and Committee (a 10-person team of Moneta principals, members of the Investment Department and three outside, unaffiliated investment experts).

Emerging Market Allocation
The Investment Committee recently approved a ...

The Registered Investment Advisor (RIA) community—firms offering the kind of independent financial advice Moneta Group provides—have been working to protect the interests of clients by ensuring that regulatory reform designed to ‘level the playing field’ does so by making the ‘fiduciary standard’ rather than the ‘suitability standard’ the one to which all those giving financial advice must adhere. Currently, the suitability standard applies to the broker/dealer community, requiring only that financial advice be ‘suitable’ for a client. Our core value of acting only in our clients’ best interests means that we have a legal—and fiduciary—responsibility to put our clients’ interests ahead of our own and we are committed to preserving that standard. We want to make certain our clients and those considering selecting an advisor understand the difference between these two standards.

We in the financial planning community believe that a "fiduciary standard" is the very best framework for ...

We always say ‘good enough is never good enough’ at Moneta Group and that is why we continually search for outstanding talent to enhance every service offering provided by your Family CFO team. We recently added Rich McDonald, a fixed income analyst to our already strong investment department.

Moneta Family CFOs have always viewed fixed income as the ‘firewall’ of client portfolios.  A well-diversified, high quality, short to intermediate-term maturity fixed income portfolio, when blended with equities and other alternative asset classes, has historically provided the dual benefit of providing current cash flow and dampening volatility. Never was the wisdom of this strategy more apparent and more necessary than in the market conditions we experienced from late 2007 to early 2009.

Many segments of the debt market have rebounded, but deep and permanent changes have resulted from the credit crisis. The upside is that these changes have made it possible ...

Will Rogers said, “The only difference between death and taxes is that death doesn't get worse every time Congress meets.” Unfortunately, when it comes to estate tax legislation, both may have gotten worse.

As you may remember, the 2002 estate tax legislation repealed the estate tax beginning January 1, 2010, but only for one year. Beginning January 1, 2011, the new law expires and the “old” law, which imposed an estate tax of up to 55 percent on estates greater than $1,000,000, is back in effect. Most people expected Congress to act before the end of 2009, reversing the one year of repeal. That has not happened. Although this may sound like good news, it can be a trap for the unprepared.  
 

Those at the biggest risk for unintended consequences include:

v  Spouses with a plan that divides assets among the surviving spouse and children ...

We are conscious of the generosity of our Moneta Group family—both employees and clients. We want to make all of you aware that the Senate and House have unanimously approved a bill which allows contributions made to Haiti disaster relief to be deducted from 2009 tax returns. A brief summary of the provisions:

• Taxpayers can claim a deduction on their 2009 tax return for Haiti disaster relief contributions made after January 11, 2010 and before March 1, 2010.
• Taxpayers must itemize to claim the deduction.
• Donations must be monetary (‘in-kind’ gifts of clothing, food or marketable securities do not qualify).
• Donations must be to U.S. based charitable organizations that are assisting in Haiti relief efforts. 

A link to a CCH Tax Briefing (Commerce Clearing House) which includes a more complete explanation is below.

Haiti Earthquake Relief Supplement.pdf

How can someone steal your identity?  All that is needed is your social security number, birth date, and address. With this information, criminals can apply for credit and begin running up debts—in your name. According to information compiled by Javelin Strategy & Research, identity theft affected nearly 10 million American adults in 2009, causing anguish, financial loss and general distrust of those around us.  Adding insult to injury, a large percentage of these thefts are perpetrated by someone close to us—family members or coworkers. Some forms of identity theft are very sophisticated, while others are carried out by opportunists with only a little technical know-how.

Examples of some frauds and tips for avoiding them:

Dumpster Diving:  Criminals steal mail or thrown-away items including confidential information, utility bills, account statements and credit card solicitations. Shred all mail; receive account statements online; sign up for online banking; opt-out of some ...

As 2009 draws to a close, we also conclude the first year of our Voice of Moneta communications to clients and friends of Moneta Group. We sent 23 messages to you during 2009, via the flash email system or by traditional mail, as some of you prefer.

Sincere thanks to the many clients who took the time to respond to these messages. Your feedback and comments have been important in helping identify topics of concern and interest to you, and we wanted you to know how appreciative we are of your contributions.

We intend to continue sending the Voice of Moneta on a monthly basis. We hope you find these communications interesting, useful and of value. Please continue to respond with your comments and suggestions, either through the Voice of Moneta system, to our Communications Director, Nancy Powers (npowers@monetagroup.com 314-244-3340) or to your Principal teams.

Everyone ...