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The American Investor – Editorial Calendar

A Newsletter for High-Net-Worth Individuals

March 2012

2009 Estate Tax Bill: $21 Billion

Because of the $3.5 million estate tax exemption in effect that year, fewer than 34,000 estate tax returns were filed in 2009. Here’s a graphical look at assets reported as a percentage of gross estates.

Understanding the Appeal of Share Buybacks
Cash-Rich Companies May Prefer to Repurchase Stock

The amount of money devoted to corporate stock buybacks surged throughout 2010 and 2011 as large companies sought ways to spend their cash stockpiles and reward shareholders. This article looks at how corporate buybacks work, why they have become more common in the current economic climate, and what they typically mean for investors.

A Permanent Policy May Provide More Than Life Insurance
Tax Benefits Offer Incentives to Save

More than half of all life insurance assets are owned by the wealthiest 10% of families, which suggests there is often a place for life insurance in the financial strategies of affluent households. Permanent life insurance provides not only a death benefit that may never expire (as long as the premiums are paid) but also a savings or investment component that can be accessed during the policy owner’s lifetime. This article considers some possible benefits of the cash-value component of permanent life insurance.

Preparing to Turn the Corner
Buy-Sell Agreement May Help Ease Transition

What happens to a multiple-owner business when one of them chooses to retire or must leave suddenly for some other reason? Death, disability, divorce, and bankruptcy are just a few of the events that can affect one owner and threaten the future of the business. This article discusses the reasons why it may make sense for small businesses to have a buy-sell agreement in place and describes several basic types of agreements.

February 2012

Accounting for Retirement Assets

Retirement plans account for about 60% of the assets of U.S. households (with $100,000+ to invest). Accompanying chart looks at average holdings in IRAs and 401(k) plans, by net worth.

Understanding the Rise of Exchange-Traded Funds
Flexible ETFs May Offer the Best of Both Worlds

Exchange-traded funds, once a relatively unknown niche, are among the fastest-growing investment vehicles. Total ETF assets exceed $1 trillion and account for about 40% of U.S. equity market trading. ETFs combine the diversification of mutual funds with the liquidity of individual investments, which is one reason why they have gained attention from investors in recent years. This article explains how exchange-traded funds work, their characteristics, and the role they might play in an investor’s portfolio.

Rethinking the Role of Household Debt
Controlling Debt Could Help Improve Retirement Prospects

Many people aspire to pay off their home mortgages before retirement, but the housing situation and a weak economy have taken a toll on the finances of many older Americans. Thirty-nine percent of households aged 60 to 64 had first mortgages in 2010, compared with just 22% in 1994. There are some compelling reasons why pre-retirees might want to consider maximizing their retirement plan contributions and avoid carrying large amounts of debt into retirement.

Lessons from a Perilous Year
Be Prepared to Recover If Disaster Strikes

In retrospect, 2011 was a formidable year for catastrophes, including a devastating tornado and widespread floods in the Midwest, wildfires in the Southwest, and Hurricane Irene’s ravaging of the East Coast. Small businesses can be hit hard when extreme weather or a natural disaster causes damage or forces a temporary closure. This article considers the importance of adequate insurance protection and ways to help reduce uninsured losses.

January 2012

Filling the Employment Gap

Over the last decade, the U.S. population aged 65 and older grew by 15.1%. Meanwhile, the number of Americans aged 65 and older who are still working increased by 58%.

Eyeing Changes in China
Slower Growth Could Potentially Affect the Rest of the World

China’s economy grew 10% to 11% annually over the last decade, and for a time it was largely assumed the world’s second largest economy would continue to expand at lightning speed. But economic weakness in the U.S. and Europe could reduce the demand for Chinese exports. This article considers the risk factors that could tame Chinese GDP growth in the coming years, as well as the potential effect of a worldwide economic slowdown.

Do You Have Enough Disability Coverage?
Group Policy Benefits May Come Up Short

Disability can affect anyone without notice, and a well-paid professional in the midst of a productive career has much to lose if he or she becomes unable to work as a result of a medical problem. Benefits paid from an employer’s group disability plan, workers’ compensation, or Social Security may be helpful for many low- and middle-income workers, but they wouldn’t come close to replacing a six-figure income. An individual disability income insurance policy is one option for broader coverage to help ensure that income, assets, and lifestyle are not at risk from a potential disability.

Retirement Plans for Small Businesses
Safe Harbor 401(k) Plans May Help Owners and Employees Save More

With standard 401(k) plans, the amount a company’s owners can contribute to their own retirement accounts is often restricted by how much other employees contribute to the plan. With the safe harbor option, owners may be able to make larger contributions for themselves in exchange for making tax-deductible contributions or “matches” for employees. This may allow highly compensated business owners to shelter more of their incomes from taxes and build larger retirement portfolios.

December 2011

Individuals Are the Biggest Givers

U.S. charitable contributions exceeded $290 billion in 2010. Individual donors were responsible for 73% of all contributions, but corporate donations and bequests increased significantly over the previous year.

Keeping Past Performance in Perspective
Year-End Results May Reveal Opportunities to Rebalance

Making decisions based on last year’s performance figures doesn’t ensure that asset classes, market segments, or industries that did well will continue to perform as well in the future. Differences in market returns may cause a portfolio to drift away from an investor’s target asset allocation. Rebalancing periodically may help bring the asset mix back in line with an investor’s current financial goals, risk tolerance, and time horizon.

Are Consumers Holding the Keys to a Better Economy?
Why Many Americans May Continue to Cut Spending

Consumer spending still accounts for about 70% of gross domestic product, but some government statistics suggest that consumers may have reduced spending drastically in recent years, especially on discretionary items. This article looks at how high unemployment, household debt, and a general lack of confidence can affect consumers’ ability and willingness to spend.

Retaining MVPs with Executive Bonus Life Insurance
Give Your Best Employees an Incentive to Stay

An economic recovery is likely to bring more job opportunities to top performers, but it could prove costly for businesses to replace productive employees who decide to leave. An executive bonus plan funded with cash-value life insurance can be used to reward and retain an organization’s most valuable employees.

November 2011

More Americans Made It to a Million

The number of households with a net worth of $1 million or more (not including a primary residence) grew 16% in 2009 and 8% in 2010, reaching a total of 8.4 million.

The Financial State of the States
Budget Challenges May Harm the National Economy

Many state and local governments have struggled with lower tax receipts and large budget deficits — during and after the recession. This article offers a closer look at the financial pressures facing the states and how the methods used to address budget shortfalls could ultimately serve as a drag on the national economy.

Facing Market Jitters with a Long-Term Approach
Shunning Stocks Entirely May Also Pose Risks

Despite the rebound of stocks from their 2009 bear market lows, many investors say they’ve lost faith in the stock market. Asset allocation and diversification are important tools to help a portfolio endure market volatility while pursuing investment returns. Having a long-term perspective may help readers avoid making emotionally driven investment decisions that could have lasting consequences.

Help Chart the Future of Your Family Business
Why Succession Planning Really Matters

The transition from one generation to the next is considered to be one of the biggest risks to the survival of a family-owned business. A thoughtful succession strategy not only outlines when and how ownership should be transferred but also takes tax implications, family relationships, and other sensitive issues into account.

October 2011

Boom to Bust and Back Again

American corporations continued their comeback in 2010, with profits surging nearly 46% over the last two years from a cyclical low in 2008.

Variable Annuities and Your Retirement Strategy
Insurance Product Can Help Supplement Savings

An insurance product may appeal to pre-retirees who want to invest more of their current incomes for retirement and defer taxes on market gains — or who would be willing to pay more to potentially limit investment risk. This article describes how a variable annuity enables investors to pursue investment gains with the option to purchase guarantees (for an additional cost) to help protect against the downside risks of investing in the markets.

The Dynamics That Can Drive Inflation
Why Higher Prices May Lie Ahead

High unemployment and slow wage growth seem to have kept consumer spending and core inflation from growing very rapidly in the first half of 2011. However, some experts are worried about the potential for higher prices in America’s future. This article reminds investors to keep the potential risk of inflation in mind, because even modest price increases compounded over time can erode the purchasing power of the assets in their portfolios.

Is Your Business Ready for a Structure Change?
Benefits of LLCs May Appeal to Growing Firms

From time to time, business owners may want to reconsider whether their current business structure is meeting the needs of their companies. For business owners seeking to expand their operations and reduce their exposure to risk, a popular entity has been the limited liability company. This article describes some additional benefits associated with LLCs.