Moneta Group

My wife, Kimberly, and I have been preparing for our first child, due very soon. Like many expectant parents, we handled the basics: painted the baby’s room, bought furniture, shopped for bottles and bibs and visited daycare facilities. However, because as a Moneta Group Family CFO I spend my days thinking about how families consider their long-term financial planning, we’re also spending time thinking about how our new little one will impact our financial future. I’d like to share some of our financial planning with you and offer some tips that parents (and grandparents) may find helpful during this very exciting transition.

On November 3, 2010, the Federal Reserve announced its initiative to purchase approximately $600 billion of government bonds through June of next year. The plan is designed to support the continued recovery of the economy, and is the second stage of ‘Quantitative Easing’ (coined QE2) that the Fed has adopted to facilitate the sluggish economic recovery. As the debate continues as to how effective this policy may be on the overall economy, many clients are wondering what this means to them and what affect, if any, it may have on investment portfolios.

Recently, I met with prospective clients to discuss their financial goals and objectives, as well as the many services Moneta Group could offer them. One of their primary concerns was an emphasis on working with an advisor they could “trust” and who they felt was “competent.” These were simple requirements, I thought. In fact, I wondered why they even needed to be discussed. Clearly, anyone seeking financial advice would have the expectation that the person they are entrusting with their family’s financial future would act only in their best interests.

In the last few years Long Term Care insurance has become a hot topic with many clients as they weigh the advantages and disadvantages of obtaining the coverage. Obviously, there are many factors that influence a client’s decision to include this insurance in their financial plans. One factor that came into play in 2008 for Missouri residents, but has not garnered much attention, is the state’s Long Term Care Partnership Program.

Many of you by now have no doubt heard something about relatively obscure investment vehicles called Credit Default Swaps and their role in the demise of the insurance jaugernaut AIG. In the past, I suspect that few had ever heard of these or, if they had, were not very familiar with them. Admitedly neither was I. To my surprise, I found that this obscure market had grown exponentially over the the past 10-plus years to roughly twice the size of the U.S. stock market. That certainly encourages some questions: What exactly is a Credit Default Swap and how did they become the center of attention in these turbulent financial times?