Yeske Buie Live Big® Digest – September 24, 2010

As I write this, the Dow is trading at its highest point in over four months; up more than 8% in September.  Should we care?  Well, perhaps to the degree that the stock market is a “leading economic indicator” —  its moves tend to foreshadow the strength of economic performance 9 -12 months into the future — the answer is yes.  Beyond that, however, the Dow represents such a small slice of the world stock market that its movements shouldn’t be quite so mesmerizing.  It’s true that, in the short-run, the Dow and other major markets around the world tend to move in sympathy with one another. However, over longer periods of time other factors come into play and markets both large and small tend to diverge.

We’ve all become Dow watchers, it seems, but a little more focus on other aspects of our financial life would undoubtedly serve us better.  With this edition of the Live Big Digest, we highlight a few of those other things, including some tips for being better prepared for economic surprises, ways to stretch a dollar, and disaster preparedness.  And, of course, a few notes related to goings on at Yeske Buie.

Have a great weekend!

Political Prattle
Responding to a CNBC interview in which famed former General Electric CEO Jack Welch discussed the risks of the Obama administration’s “anti-business” bias, Daniel Gross, economics editor for Yahoo Finance makes the counter argument that the administration is actually following a much more moderate course than the overheated rhetoric might suggest.

He starts with a historical note, reminding us that former Bush advisor Michael Boskin declared in a March 2009 Wall Street Journal article that “Obama’s Radicalism is Killing the Dow.”  That was when the Dow stood at 6,600, before proceeding to rise 79% to its current level.

By highlighting this article, we’re not trying to take sides in a political debate so much as suggesting that the sour and sometimes apocalyptic tone of public pronouncements on all sides is no guide to the current state of the economy (though a sad commentary on the current state of political discourse in this country, to be sure).

Recession-Proofing Your Life
While we believe the risk of a “double-dip recession” is remote, and growing more so with every passing day, it seemed like a good time to revisit an article Dave published in Boomer Living last year on “recession-proofing your life.” The advice contained therein is as sound as ever for anyone wishing to build some resilience into their financial lives.
Stretching a Dollar
And speaking of financial resilience, one of the most powerful things you can do to take control of your finances is a solid focus on cash flow.  We all have “leakages” that slip by largely unnoticed, like that addiction to a daily Caramel Macchiato that quietly adds up to $1,600 a year.  A great site for learning how to get by on less is The Dollar Stretcher (www.stretcher.com).  The site contains everything from tips for teens to sources of free firewood, not to mention the hidden costs of everyday items.  Our friend Dick Wagner once said that at its most basic, financial planning boiled down to “spend less, save more, and don’t do anything stupid.”  Dollar Stretcher can certainly help with the first part of that equation.

Yeske Buie in the News
Dave was quoted by Kathleen Pender in an SF Chronicle article asking the question: “Is the flight to bonds inflating the risk?”  Here’s an excerpt:

Early last decade, “clients were asking me why they shouldn’t take all their money out of the stock market and buy real estate. Now they all want to go into the bond market,” says David Yeske, managing director of Yeske Buie. “It sure smells like tech stocks in 1999 and real estate in 2006.”

Read more here:
https://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/09/12/BUID1FBH1E.DTL

Yeske Buie has a new website!
If you haven’t already seen it, visit our new website at www.yebu.com.  Our site has been completely revamped with a new look and feel in both the main site and our Client Private Pages.  As always, our site is a work in progress and exists to serve you, so please share any comments or suggestions you may have.

What’s in your kit?
We’ve long recommended that everyone prepare for disaster by “making a plan and making a kit,” whether your biggest risk is the next hurricane or the next earthquake.  Our prescription for the emergency kit was always long on first aid kits, flashlights, food, and water.  However, a recent Red Cross sponsored email from Jamie Lee Curtis reminded us that there can be a lot more to a kit than that.  Here are some of the responses she received when she asked members of the American Red Cross community, “what’s in your kit?”

“iPhone and charger, food to share, books and more books, sweats!” – Sue, NJ

“Pack food and any needed medications for your pets.” – Judy, NC

“Bible, bed pillow, family pictures, etch a sketch to be creative.” – Carol, IN

“Personal items that remind you of home, such as family pictures.” – William, MS

“Cash in small bills and coins.” – Dennis, IL

So, what’s in your kit?  Share your special ingredients with us and we’ll pass them along in a future edition of the Live Big Digest.