Ameriprise Financial Services, Inc.

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Name:	Ameriprise Financial Services, Inc. [learn more] [website]
Address:	84 Park Ave Suite G-103C Flemington, NJ 08822
Contact:	Harvey C. Ameriprise Financial Services, Inc. 84 Park Ave Suite G-103C Flemington, New Jersey, 08822 USA 908 788 2999
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Our practice focuses on providing financial advice and planning for individuals and their families, as well as any businesses they might own, using a well-honed, in-depth, comprehensive process. It is our professional philosophy that we not discuss investments and investment strategies until such time as we fully understand the people involved, their goals and values and their full financial picture. Ameriprise Financial Services, Inc. Member FINRA and SIPC.
Services:	education planning investment advice retirement planning small business planning tax planning
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Business Services - Financial Services, Finance - Financial Planning Consultants, Finance - Investment Services & Advisors, Finance - Retirement & Estate Planning

Quarterly Reception

Aug 16 @ 5:00pm Click Here For More Details

SAVE THE DATE

AUGUST 16, 2010

5:30-7:30pm

lite hors d'oeuvres

Mangia Bene, Route 202, Flemington

Social Security speaker...know what you deserve

Philly's #1 Personal Injury Attorney.....know what you deserve

guests allowed.

RSVP ASAP at (908) 788-2999

Posted: 2010-07-27 11:03:48 | Permalink

Press Release - Advisor Receives PTD Award

For Immediate Release

Contact: Shawn M. Kada. Associate Financial Advisor,

908-788-2999

HARVEY C. SACKS RECEIVES PROTECT THE DREAM AWARD

FLEMINGTON, NJ AND NEW HOPE, SOLEBURY TWP.PA. - July 28, 2010 - Harvey C. Sacks, JD, Senior Financial Advisor recently received the 2010 Protect the Dream award from RiverSource Life Insurance Company. The award recognizes Ameriprise financial advisors who have reached outstanding benchmarks for helping clients protect their dreams by implementing life and disability income insurance policies.

As a financial advisor, he works to help clients plan for their financial goals for a lifetime - through a personal long-term financial planning relationship. In addition to life and disability income insurance, he is knowledgeable on a variety of topics and strategies including retirement, tax and estate planning, and asset management.

Sacks' offices are located in Flemington, NJ and Solebury Twp, New Hope, PA.

Sacks can be reached at 908-788-2999 or 215-230-9198

or via http://www.ameripriseadvisors.com/harvey.c.sacks

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Life Insurance Company and in New York, by RiverSource Life Insurance Co. of New York, Albany, New York. These companies are affiliated with Ameriprise Financial Services, Inc. Only RiverSource Life Insurance Co. of New York is authorized to sell insurance and annuities in New York.

Ameriprise Financial, Inc., is a diversified financial services company serving the comprehensive financial planning needs of the mass affluent and affluent. For more information, visit ameriprise.com.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.

Posted: 2010-07-27 11:00:11 | Permalink

Leaving a Meaningful Legacy

What are you leaving behind? This is a question that all too many of us fail to address adequately before it's too late. It's not just a question about money, but about the entire legacy that you want to pass on to future generations - those in your family and even society as a whole.

When mapping out your legacy plan, there are many things to think about: your current assets and debts, tax implications, income, expenses, and the list goes on. While it might seem like a lot to sort through-especially once you tack on the emotional aspect of planning for your own end of life-the reward of proper planning is knowing you've done all you can to enhance the well being of your beneficiaries. Here are a few issues to consider:

Taxes

The federal estate tax has been eliminated for individuals who pass away in 2010 (barring action from Congress to reverse the situation), but this is just a temporary change to the law. The estate tax is scheduled to reappear by 2011, possibly affecting estates as small as $1 million (compared to the previous law with a $3.5 million tax exemption level). Even now, estate and inheritance taxes may still affect many on a state level.

In addition, beneficiaries may not escape income taxes. Those who inherit a traditional IRA, for example, will have to pay applicable income tax on distributions. An alternative is to convert a traditional IRA to a Roth IRA (which will require one to pay income tax currently), which can allow beneficiaries to enjoy tax-free distributions for years to come.

Managing the estate

Will anybody manage your money with the care and conviction that you practice today? Not likely, unless you make your wishes clear. A will allows you to specify who will administer your estate, and how your property will be distributed. If you have minor children, a will can also identify to whom their guardianship will be transferred. Be sure to put a comprehensive will in place and revisit it on a routine basis, or whenever major life events occur.

Depending on your situation, you may also want to consider setting up a trust or other type of ownership arrangement to provide some structure to the management and disposition of assets.

Careful planning is all the more crucial for small business owners who need to determine the future of their company, including who will take charge and the financial implications of business succession. If your firm provides products or services that others have come to rely on, it is important to plan ahead to maintain normal business activity in your absence.

Protection

Keeping assets protected from potential creditors or the impact of future lawsuits is another important aspect of legacy planning. In some states IRAs, annuities and insurance can be useful tools to help minimize the potential exposure. This is an issue regardless of the size of the estate but should only be done in consultation with your legal advisor.

Organization

One of the greatest gifts you can leave behind is a set of well-organized records. Good documentation of all assets and debts, where everything important can be found and key contact names will go a long way toward the proper disposition of your estate. You can also leave a letter, separate from a formal will, outlining specific wishes regarding matters like organ donations or the conduct of your funeral, as well as how specific items you own should be distributed to others-but the rules on this vary state to state.

Seek the advice of tax, legal and financial advisors to protect and ensure the legacy you've been working to build.

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Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor

3220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

An Ameriprise Financial Franchise. Ameriprise Financial Services, Inc. offers financial advisory services, investments, insurance and annuity products. RiverSource® and Columbia ManagementSM products are offered by affiliates of Ameriprise Financial Services, Inc., Member FINRA and SIPC.

File #101346

Posted: 2010-07-07 13:19:55 | Permalink

Retirement Planning in Stages

If you are closing in on retirement, planning for the day you leave the workforce is probably at the top of your mind. But retirement planning is critical at any age. It's never too early to begin putting a retirement savings strategy in place.

One way to look at retirement planning is that it comes in stages - starting early when you are far from retirement (at least 10-20 or more years away), continuing in the pre-retirement years (less than ten years from the big day) and finally, a strategy to carry you from the time you begin retirement through the rest of your life.

Categorizing retirement in this way can make this long-term goal more relevant in terms of your current financial situation. For those who are younger, approaching retirement in stages may make you more motivated to take action. Here are suggestions on how to plan for retirement based on the amount of time you have left to save and invest for your ultimate financial goal:

Stage 1 - Retirement is 10-20 or more years away

Don't be fooled by the timeframe - even if retirement is 30 or 40 years away, you should think about putting a savings plan in place. If you are employed and a workplace retirement plan is available to you, it makes sense to start saving there. This is especially true if your employer makes matching contributions. Many younger people qualify, from an income standpoint, to make Roth IRA contributions as well.

From an investment perspective, take a long-term view. You should be in a position to ride out short-term market swings and maintain at least a moderately aggressive mix of investments in your retirement portfolio, seeking the greatest long-term return. The biggest advantage you have in your favor is time. The longer you can let your money work for you, the greater the opportunity to accumulate notable wealth from the dollars you've saved.

Stage 2 - The decade leading up to retirement

For many people, the final years before retirement are the peak income earning years. This also may be the time when financial commitments for goals such as paying for a child's education are behind you. It is important to make large contributions to your retirement savings plans - through work, into an IRA or using other vehicles such as tax-deferred annuities. The emphasis now is to do all you can to prepare for the day when you will need to depend on your retirement savings to meet your lifestyle goals.

Note that those who are 50 or older are allowed to make what are referred to as "catch-up" contributions - additional sums above standard contribution limits that exist for workplace savings plans or IRAs. Take advantage of this special opportunity to maximize your savings.

Make sure you are prepared for unexpected events by having appropriate levels of insurance in place. Start thinking seriously about what age you plan to retire, and how other sources of income, such as Social Security or a company pension, will be affected by the timing of your retirement.

Stage 3 - Starting retirement

As you enter retirement, a lot of changes may occur. You need to determine how to generate current income from your existing savings while still trying to keep your money growing to meet your needs well into the future, when the cost of living is likely to be higher. You want to protect your assets from market volatility, but still be an active investor.

There are a number of other key issues to deal with as retirement begins, including:

• Applying for Social Security - the longer you delay taking Social Security (up to age 70), the larger your monthly benefit will be.

• Applying for Medicare - you need to do this when you reach age 65, whether or not you are taking Social Security. Also, to help cover expenses not paid for by Medicare, you will need a supplemental insurance policy.

• Determining other sources of income - you need to arrange for payments from a company retirement plan, and determine how you will draw income from your own savings, if you need to.

• Managing taxes - you want to take steps to help reduce the tax impact on any sources of income you receive.

Looking at retirement planning at three different stages of life can make it easier for you to keep a focus on achieving your ultimate financial goal. Consult a financial advisor to make sure you're taking the right steps at the right time.

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Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor

3220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

Ameriprise Financial does not provide tax or legal advice. Consult your tax advisor or attorney.

File #101342

Posted: 2010-07-07 13:17:41 | Permalink

When to Take Social Security: Early, Late, or Right on Time

Now that the Baby Boomers have begun reaching retirement age, many of them are reinventing what a typical retirement looks like. Some retire early to focus on interests outside of work. Others are 'ramping down' their careers, opting for part-time employment. Some retire early; others retire late. But one key decision - when to claim Social Security benefits - is looming for everyone in this age group. And that choice is as complicated and varied as the individuals making it.

Social Security? Yes, if you're a member of the Boomer generation, there will almost certainly be Social Security benefits for you when you retire, despite talk of deficits and underfunding. How robust will those benefits be when you begin to take them? No one knows for sure. But if you are approaching 62 years of age, it is worth exploring the possible scenarios, as the options are many, and there are pros and cons to each. But first, you need to know some basic facts about how the government treats retirement age.

Your 'full retirement age,' as defined by the Social Security Administration (SSA), varies depending on when you were born. For example, if you were born in 1937 or earlier, your full retirement age is 65 - the age at which you receive full Social Security benefits. You can retire as early as age 62, but your monthly retirement benefit will be permanently reduced.

On the other hand, you can choose to delay your benefit and retire as late as age 70, which will increase your monthly retirement benefits.

Generally, the sooner you begin taking Social Security benefits, the less you will receive each month. For most people who are in good health, it makes sense to wait as long as possible before you take your benefits (as long as it is before you turn 70). But your own health is just one of many factors you need to consider before making your retirement decision. Here are some things to think about when deciding when to take Social Security.

How long will you live?

OK, no one really knows the answer to this, but it's worth thinking about probabilities. Do you have a chronic illness that could affect your life expectancy? If so, you may want to retire and take benefits early. On the other side of the coin…does your family have a history of longevity? If your parents lived into their 80s or 90s and you believe that you will as well, you might consider waiting to start your benefits until full retirement age or later. Delaying your retirement can increase your monthly Social Security benefits.

Are you married?

Here is where the decision can get complex. You need to take your spouse's age and health status into account before deciding when to take benefits. Many couples time their retirement to maximize the monthly benefit by exercising what's commonly known as the 62/70 split. Put simply, the lower-earning spouse files early at age 62 based on his or her own Social Security benefit. The higher-earning spouse files at his or her full retirement age and suspends benefits until age 70. This improves the spouse's benefit and allows the higher-earner to improve his or her own benefit when they begin drawing later.

Do you plan to work while receiving benefits?

If you take Social Security benefits before your normal retirement age, continuing to work may lead to reduced benefits. Once you reach the annual income limit ($14,160 in 2010), benefits are reduced by $1 for every $2 you earn above the limit. Then, when you hit your normal retirement age, the formula changes to $1 benefit reduction for every $3 earned beyond a higher limit ($37,680 in 2010). Another thing to consider is that depending on your modified adjusted gross income (MAGI), Social Security benefits can become subject to income tax.

Many people who continue to work choose to postpone taking Social Security benefits until they reach normal retirement age or later. However, you need to decide which scenario is best for you. Seek the advice of a professional who specializes in retirement planning to make sure you are maximizing your benefits.

For most Americans, Social Security is just one piece of their retirement plan. But being smart about when you start drawing benefits can make your retirement more comfortable and allow you to enjoy the lifestyle you've worked to secure.

Timing is everything. Especially when it comes to Social Security benefits.

[The Social Security Administration's Web site (www.ssa.gov) has resources to help you determine when it makes sense for you to start taking benefits. Many financial advisors and tax professionals are well-versed in the complexities of Social Security and can help you make an informed decision that works best for you and your spouse.]

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Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor

3220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

File # 101345

(6/10)

Posted: 2010-07-07 13:16:19 | Permalink

The Case for Stocks

Right now, it seems many retail investors are still too nervous to put their money to work in equities. Instead, they are staying on the sidelines, either keeping their cash in savings accounts or settling for the low yields of U.S. Treasuries. But safety may have a price, and eventually, if inflation comes around, the yields on Treasuries and other fixed income investments like corporate bonds might not be able to keep up. That's when investors are often forced to consider whether their risk tolerance should increase, and they begin to turn to stocks. But don't jump in too fast. Make sure you understand what you are buying.

Small-cap stocks, those with market values up to $2 billion, might appear very attractive to the novice investor. They have made a remarkable run since the market bottomed in March 2009. But small-cap stocks by nature are often lower quality, higher risk, and less understood. So, they might not be the best choice for someone who is just trying to only slightly increase exposure to risk.

Mid-cap stocks, those with market values between $2 billion and $10 billion, typically offer more stability than small-caps, while historically providing higher growth potential than large caps. For those who believe that mergers and acquisitions will increase as the economy improves, mid-caps could be worthy of a look as larger companies buy smaller companies to grow their businesses.

Large-cap stocks-those with market values above $10 billion-are typically household names that the average retail investor knows. As the economy improves, and cash flows increase, these companies look to put their profits to work, many times by increasing dividend payments or buying back shares - both of which can benefit shareholders.

To be sure, stocks can go even lower from here, but history has shown that longer-term investors can benefit from buying equities when pessimism prevails. This could be a good time to increase your exposure to high-quality stocks, if your risk tolerance can bear it. But stock selection and diversification are critical. So, if you are not confident in your ability to select 20 or 30 individual equities with strong balance sheets and good cash flows, perhaps you should consider a mutual fund and allow the experts do the work for you. Consider speaking to an advisor about which investments might be appropriate for you.

Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor 3

220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

This column is for informational purposes only. The information may not be suitable for every situation and should not be relied on without the advice of your tax, legal and/or financial advisors. Neither Ameriprise Financial nor its financial advisors provide tax or legal advice. Consult with qualified tax and legal advisors about your tax and legal situation. This column was prepared by Ameriprise Financial.

Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involved investment risks including possible loss of principal and fluctuation in value.

Investments in small- and mid-capitalization companies often involve greater risks and potential volatility than investments in larger, more established companies.

Diversification helps you spread risk throughout your portfolio, so investments that do poorly may be balanced by others that do relatively better. Diversification does not assure a profit and does not protect against loss in declining markets.

File # 101341

6/10

Posted: 2010-07-07 13:15:27 | Permalink

Vacation home foreclosures

Have you dreamed of owning a lake home, a cabin in the woods or a mountain retreat? Those who have weathered the recent recession and remain fiscally sound may be in a position to benefit from the current vacation home real estate market.

In certain parts of the country, an oversaturation of real estate and a shortage of qualified buyers have resulted in lower median prices on vacation homes. Some areas have also seen a wave of foreclosures and short-sales.

Many foreclosure properties are due to individuals finding themselves underwater with ballooning mortgage payments. There also are a fair number of properties available that were held by developers unable to sell vacation homes on spec. As a result, in some areas you can find price-reduced vacation homes at the higher end of the spectrum along with a variety of modest cabins and lake homes.

Keep in mind, there are risks associated with buying a foreclosure property. Don't be surprised to find broken windows or appliances or worse, since maintenance often falls to the wayside when a homeowner is unable to make payments. Be prepared to put additional money into repairs. If you aren't handy yourself, you may want to enlist someone who is when you tour properties, to help you evaluate potential repair costs.

When you're ready, consult a reputable realtor in your area to learn about available foreclosure properties in your area. If you prefer to do the legwork yourself, explore web and print resources for current lists of foreclosures, which become public when they are filed in your state. Some savvy buyers are contacting banks directly to express interest in purchasing a foreclosure property while bypassing the more lengthy purchasing process. Purchasing a bank-owned property tends to be less risky because you can be confident the property has been vacated and is available.

Do think carefully before you venture into second homeownership. The recent downturn showed how important it is to stay within your means and be prepared for unexpected changes in your earning capacity or the performance of your investments. Therefore, before you take on an additional financial responsibility, you need to be confident of your ability to make a second mortgage payment. That means you must have a strong credit rating, a solid bank account and a steady income source. Visit your banker and get preapproval for a second mortgage so you can act quickly if a desirable property becomes available.

An experienced financial advisor can help you evaluate your financial health and determine if you can afford a second home and stay on track with your long-term goals. Make an appointment today and then take advantage of the opportunities that are out there to realize your dreams.

Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor

3220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

File #102101

Posted: 2010-07-06 16:29:07 | Permalink

The best defense against today’s markets? Play offense, regularly

The best defense against today's markets? Play offense, regularly

The volatile stock markets we've endured over the past few years can be a serious challenge for investors. Have you held back from the markets because of you lack confidence about their short-term direction?

One of the most effective strategies in times like these may be to take advantage of price swings and keep putting money to work in the market. Investing a lump sum into stocks during such unpredictable times may not be particularly enticing to most of us. But making regular investments on a consistent basis over time could turn the market's volatility in your favor.

While some may think it is never good to invest when stocks are losing value, a systematic investment strategy creates the potential to turn a weak market into a profitable, long run opportunity. If you believe stocks will gain in value between now and the time you need to take your money out of the market, today's volatility might create an attractive opportunity for you.

The dollar-cost averaging approach

Dollar-cost averaging is a term that has become commonplace for many investors. It involves buying shares of an investment, such as a mutual fund, with a fixed dollar amount at regular intervals. When share prices are low, your investment purchases more shares. Over time, the average cost of your shares will usually be lower than the average price of those shares.

When share prices rise, fewer shares are purchased. This strategy is not guaranteed to result in a profit or protect against a loss. To be most effective, it requires continuous investing, regardless of fluctuating price levels. Before committing to a systematic investment program, you must consider your financial ability and willingness to continue to invest through fluctuating markets.

The big payoff from dollar-cost averaging through volatile periods can come when markets regain lost ground. If you continued to invest throughout the market's downturn, you are likely to have accumulated a larger number of shares (compared to making a lump sum investment at the start of the investment period) and could come out dollars ahead. Investors should consider their ability to continue investing through periods of low market prices.

Consider the example of an investor assessing his investment options in October 2007. This happened to be just when the stock market peaked before the major downfall that lasted until March 2009. The following example is based on a hypothetical investment in the Standard & Poor's 500 stock index, an unmanaged index of stocks. (It is not possible to invest directly in the S&P 500 or any other index. No taxes or fees are assumed.).

A lump sum of $3,000 invested at the start of October 2007 would have lost ground, declining to a value of $2,435 by the end of March 2010. That's a loss of almost 19 percent in 2-1/2 years. By contrast, the individual who decided to consistently invest the $3,000 in small bites - $100 per month for 30 months - would have seen the investment grow to a value of $3,305. That's a 10 percent increase in value for the total sum invested over the same period of time.

The difference was dollar-cost averaging, which took advantage of the market's temporary downturn to build additional shares of the investment. That paid off when the market began to recover lost ground, as it did in the last 12 months of the period in this example.

This hypothetical example demonstrates two potential benefits of dollar-cost averaging. First, it allows market downturns to potentially work in your favor and may make it easier to invest through difficult times. Second, if the market does rally, you benefit more when the environment improves, having purchased more shares in the market during different periods at varying price levels.

You may already do it at work

If you participate in a retirement savings plan at work and continue to defer income out of each paycheck into your plan, you are already making use of dollar-cost averaging. You are putting money into the market on a systematic basis. That may help insulate your retirement portfolio from the market's continued volatility and unpredictability.

Even if your retirement accounts lose ground temporarily when market corrections occur, it may make sense to continue investing through the difficult times. In many ways, maintaining a consistent investment pattern throughout the ups-and-downs of the market may be your best defense against the impact of short-term swings. If you believe that the market will, over time, maintain its long-term pattern of growth, you may be best served by using this strategy to take advantage of periodic downturns to purchase more shares with your investment dollars. Many find that this strategy makes it more realistic to keep investing money over the long run.

Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor

3220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

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File #102068

Posted: 2010-07-06 16:28:17 | Permalink

What’s a ‘double dip’?—and other language of today’s market

What's a 'double dip'?-and other language of today's market

Just when you thought you'd mastered the lingo, here comes another wave of financial jargon to describe what's going on in the markets today. To help keep you up-to-speed, here's a short glossary of some of the terms you might encounter.

Double dip

In economic parlance, this refers to the risk that the economy, not long after coming out of a recession, will slip back into another recession. In the current economic environment, some are raising the possibility that this could happen in the U.S. or elsewhere.

U-, V- or W-shaped recovery

This concerns the pace of an economic recovery. A "V-shaped" recovery means the economy dips dramatically (the downslope of the "V") and rebounds just as quickly (the upslope of the "V"). A "U-shaped" recession and recovery is less pronounced and slower to develop. A "W-shaped" recovery involves a sharp decline in certain economic metrics, followed by a sharp rise, followed again by a sharp decline then finishing with another sharp rise.

Deflation

Most of us are familiar with the concept of inflation, an increase in living costs. Whether modest or significant, inflation has been a way of life for Americans through recent generations. Deflation is the opposite-a period when prices for goods and services begin to fall. Deflation is typically associated with a decline in the standard of living, and some suggest that the risk of this has recently risen.

Market correction

When the stock market declines by a level of 5% or more, up to 20% (as measured by a broad market index such as the Dow Jones Industrial Average or S&P 500), professionals generally describe it as a correction in stock prices.

Bear market

The generally accepted standard to qualify for a bear market is when stocks (as measured by an index) drop 20% or more in a set period of time, perhaps within two months or less.

Bubble

In economic terms, a bubble occurs when the value of a particular item or industry rises dramatically over a short period of time, usually to unsustainable levels. In recent times, bubbles have occurred in the technology industry (the "dot-com" bubble of the late 1990s) and in real estate (the housing bubble that began to burst in 2007).

Derivatives

This is the name given to a contract between two parties that derives its price from an underlying asset. The value is based on changes in the prices of the underlying asset, which can range from hard assets like gold or agricultural products to interest rates and stocks. While they provide a way to hedge risk, more regulation may be placed on those that attract speculators, which some believe has caused problems in the markets.

High Frequency Trading (HFT)

Much of the market's recent volatility has been blamed on rapid trading strategies that large institutions execute through powerful computers. These machines can quickly crunch numbers to identify potential short-term price opportunities and then execute very large buy and sell orders. If it works right, it has the potential to generate significant profits for the firms doing the trading. Technology advances have made this a factor in the markets only in recent years.

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Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor

3220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. It is not possible to invest directly in an index.

File #10258

Posted: 2010-07-06 16:27:06 | Permalink

Are the markets predictably unpredictable?

You've heard these words before - the direction of the stock market - particularly over short time periods - is very difficult to predict. Look no further than the recovery in stocks that began, unannounced, in early March 2009.

That period of time represents yet another case where, just when you are convinced the market will continue moving in one direction, sentiment shifts without notice and stocks are suddenly heading in a completely different direction. While this has happened throughout the history of the markets, too many investors have a difficult time remembering the market's history of unpredictability, and often change course at precisely the wrong time. Many make the mistake of selling near the market's low point, then miss out on a recovery.

Those who sold out in early 2009 paid a steep price. From its low on March 9, 2009 to the end of April 2010, the Dow Jones Industrial Average (DJIA) gained 67 percent, a dramatic rally for such a short period of time - but not unprecedented. Compare it to other major bear markets and follow-up recoveries in U.S. history:

Bear market begins DJIA low* DJIA 13 months later** %age gain

1929 (89% market drop) 41.22 102.41 148.4%

1973 (48% market drop) 577.60 975.28 68.9%

2000 (49% market drop) 7286.27 10428.02 43.1%

* Lowest point reached in bear market before a sustained recovery

** Price at end of 13th month after market low was reached (for instance, April 30, 2010 following March, 9, 2009 market bottom.) Source: Historical record of public data posted by Dow Jones & Co.

In each of the cases, the starting point of the rally was unpredictable. Yet the results were extremely beneficial for those who kept their money working in the market.

Have a plan and stick with it Just as dramatic market recoveries often begin without notice, the same can be true of market downturns. In today's environment, where the media can provide you with nearly a minute-by-minute assessment of where the markets stand, it is easy to think about short-term trends and get caught up in the idea of trading in-and-out of the market. This is a very challenging investment approach that few have managed to master. It is also a high stress style of investing that is subject to a wide range of unforeseen variables that can impact markets on a day-to-day basis.

For most of us, it may be more sensible to maintain a "tried-and-true" approach to investing. This involves:

• Putting money to work regularly - most of us do this with each paycheck by directing part of our income into our workplace retirement plans. Regular contributions to IRAs and other investments also make sense.

• Owning a diversified mix of investments - you should choose an asset allocation strategy that is appropriate for your risk tolerance level, investment objectives and the time you have available to let your investments grow.

• Holding for the long run - to help avoid the potential for losses from short-term market swings, you may be better positioned for success by maintaining a long-term stance with your portfolio.

Most of us are trying to achieve long-range goals. Trying to manage money in a short-term fashion in response to changes in the market may be detrimental in your quest to build wealth over time. You may be better served by maintaining a disciplined, long-term, diversified approach. Discuss strategies for your situation with your financial professional. 2

Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor 3220 Creamery Rd | New Hope, PA 18938

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

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We shape financial solutions for a lifetime® An Ameriprise Financial Franchise. Ameriprise Financial Services, Inc. offers financial advisory services, investments, insurance and annuity products. RiverSource® and Columbia ManagementSM products are offered by affiliates of Ameriprise Financial Services, Inc., Member FINRA and SIPC. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. Diversification helps you spread risk throughout your portfolio, so investments that do poorly may be balanced by others that do relatively better. Diversification and asset allocation do not assure a profit and do not protect against loss in declining markets. The Dow Jones Industrial Average is an unmanaged index that follows the returns of 30 well-established American companies, and is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in the market prices, but excludes brokerage commissions and other fees. It is not possible to invest directly in an index. © 2010 Ameriprise Financial, Inc. All rights reserved. File # 100802 (5/10)

Posted: 2010-06-14 16:48:20 | Permalink

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