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For Family Finance Success, Use 3 ‘Ds’

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Kim Ciccarelli Kantor  |  Naples Daily News  |  August 15, 2013

There is no one right way to run your “household financial business,” yet these words of wisdom can lead to success: discuss, design and delegate.

These words of wisdom stem from personal experience as well as the shared intimate lifelong experiences of my financial planning clients.

You may be familiar with the saying, “People do not plan to fail; they fail to plan.” Nothing can be closer to the truth when it comes to running your household financial matters. It does not matter which spouse is the financial guru in the family, nor who actually pays the monthly bills.

What does matter is that you discuss your finances and how you want to run them.

For a great way to begin your discussions, start by designating a certain day and time every week – perhaps, a Saturday morning. Whether you enjoy financial matters or not, spouses need dedicated time to discuss their finances and strategic plans together.

Although critical financial discussions are made jointly in most families, few actually discuss their current circumstances or plan of action. Leave the television off, don’t bring up the kids, and keep an open mind. Review your general cash flow, analyzing income and expenses, and expected cash on hand for reserves by year end. Remember, running your finances is like running a business so plan accordingly. Save the inventory of your assets via compilation of a balance sheet and your portfolio review for your meeting with your financial advisor.

This special time is to discuss how you want to spend and save your money, whether you both have similar priorities or any unforeseen circumstances that will hinder or help your financial health and your expectations for the next six to twelve months. (Examples might be income tax preparation, a new roof, retirement plan contributions, tuition expense, or family vacation.)

After you discuss your financial matters, plan. Set your priorities for the next three months. List them out and design your plan of action. Be sure both of you understand the needs and expected results of your plan. Set a dollar amount to your priority items and designate a time table for completion.

As a final item in running all successful businesses, delegate. Your “household financial business” demands no less. Delegate which of you will be responsible for each area. There is no right or wrong way to do this, and there is no such thing as “splitting up the list.”

As a matter of interest, many families have only one spouse who actually handles all financial responsibilities.

This is okay, as long as together you discuss, plan and delegate.

To be truly successful at this, meet with your spouse each week – forever!


New Market Highs (Yawn…)

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The headlines have been telling us over and over again that the U.S. stock market is achieving record highs, and the not-so-subtle implication is that they have nowhere to go but down.  In fact, the “lost decade” of 2000 to 2010 has obscured the fact that, historically, it is pretty common for stocks to achieve record highs.

Yawn 082013

If you look closely at the accompanying chart, you’ll see that since 1950, the overall trend, until 2000, was a smooth if somewhat boring upward climb from 21.40 in January of 1950 to 55.34 in January of 1960 (more than a 150% gain), to 89.63 in January of 1970, to 102.09 in January 1980, to 339.94 in January of 1990.   Record highs were recorded on a routine basis, and the trend accelerated from 1990 to 2000.  That’s roughly 50 years where the news media would have found nothing remarkable about stocks traveling into uncharted territory.

The pullback associated with the “tech wreck” decline in 2000 and the 2008 market meltdown have turned a relatively smooth ride into the kind of rollercoaster that carries warnings for people with back problems and heart conditions.  Never mind that the markets are up 9,706.42% since 1950; the headlines today tell us that we’re back above the market tops of 2000 and 2007.

History suggests that the steady, moderate growth of the 50 years ending in early 2000 is more normal than what we experienced during the first decade of the 21st century, when we endured two major collapses, the first brought on by rampant speculation in dotcom ventures (and Wall Street’s phony and ultimately punished “research”), the other by Wall Street’s reckless speculation on packaged mortgages.  The ride may never become as smooth as it was in the past century, and it’s certainly possible that the returns won’t be quite as generous.  We don’t know.  But it’s possible that four or five years from now–or 50 or 60–all the incremental market tops will elicit barely a yawn from investors, and won’t command headlines in our newspapers.  Maybe we should prepare by ignoring them today.

We’re Pleased to Announce the Following Accomplishments of Our Team

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Kim - approved headshot (brown background)


The prestigious Barron’s Business and Financial Weekly has named Kim
Ciccarelli Kantor, CFP®, CAP™, President of Ciccarelli Advisory
Services, Inc., to its “Top 100 Women Financial Advisors” for 2013. Ms.
Kantor was ranked 44th. She has previously been named to this
esteemed list in 2012, 2011, 2010 and 2007. “A thank you must go out to
my clients, my peer groups in our industry, our team of qualified staff and
advisors who all have enriched the development of our firm from its original
mission statement 30 years ago. Our firm now serves fourth generation family
members. I am privileged to accept this recognition on behalf of our team.”



D3C_3521r - Kay edited


Kay M. Anderson
successfully completed the
course work and testing to
acquire her Series 7
and Series 66 Registrations.



D3C_3527r SusieB


Susan M. Banta
successfully completed the
course work and testing to
obtain the designation of
Registered Paraplanner



D3X_5363r- Jason


Jason Baum, ChFC®
successfully completed the
course work and testing to
acquire his CFP® licensing.



D3C_3540r - Jasen


Jason Gilbert, CFP®
successfully completed the
course work and testing to
acquire his Florida life, health
and variable annuity licenses.





Steven T. Merkel, CFP®, ChFC®
successfully completed the
course work and testing to
acquire his Florida life, health
and variable annuity licenses.



The “Barron’s Top 100 Women Financial Advisors” – The rankings are based on qualitative criteria: professionals with a minimum of seven years financial service experience, acceptable compliance records, client retention reports and customer satisfaction reports. Advisors are quantitatively ranked based on varying types of revenues and asset advised by the financial professional, with weightings associated for each. Additional qualitative measures include: in depth interviews and discussions with senior management, peers and customers. Because individual client’s portfolio performance varies and is typically unaudited, this ranking focused on customer satisfaction and quality of advice. Please see http://online.barrons.com/report/top-financial-advisors for more information. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation.

Ciccarelli Advisory Services featured in June 2013 e Bella magazine

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Reap Benefits of the Be-The-Change-Challenge

Local businesses are givers and receivers when they reach out to help in the community.

The Be-The-Change-Challenge, sponsored by è Bella, is touching many lives as more people make commitments to do one act of kindness a day for 30 days. So far, 2,190 acts of kindness have been pledged this year. Even more exciting are the activities of businesses and nonprofit organizations making a commitment among their staff.  To read more, click the image below…

e Bella June 2013 Ciccarelli WEB_Page_1

Economic Update – Second Quarter 2013

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Review and Outlook
This past quarter was a very interesting one. The quarter that ended on June 30, 2013 was not as strong as the one that preceded it, but the Dow Jones Industrial Average (Dow) still posted a 2.3% gain. The Dow is up 13.8% for the first six months, which is the best first-half showing for the index since 1999. These strong results were in spite of all the economic and political issues we’ve faced during that time. In fact, at the beginning of the year, predicting double-digit gains for the first 6 months didn’t even seem possible!
Let’s see where we are today at the midway point of 2013:
Short Client Version 2qtr 2013

Recently, several major issues surfaced, including: tax increases, the federal sequester, problems in China and other emerging markets, the recession in Europe, the Fed’s recent talk about tightening monetary policy and the ensuing rise in interest rates. Despite these issues, some recent data tells us that the economy is still doing well.

Quantitative Easing
A major reason for the improvement in the economy and the stock market is the unconventional measures and policies implemented by the Federal Reserve since the financial crisis. Since late 2008, the Fed has kept the federal funds rate close to 0%, and promises to keep it at historically low levels until the unemployment rate falls to 6.5% and as long as inflation remains under 2%. In addition, the Fed has implemented three rounds of Quantitative Easing (QE)—printing money in order to buy large amounts of assets from the market. They are currently buying at a rate of $85 billion per month, mainly mortgage-backed securities and longer-term Treasuries.

QE boosts the prices of the purchased assets and reduces their interest rates. This helps the economy in general by driving down borrowing costs, pushing up asset prices and therefore encourages more investing, spending and hiring. The Fed recently restated the idea that it could taper off those purchases going forward, depending on economic conditions—if growth picks up or unemployment comes down, the Fed said it could start the “wind-down” of the QE program later this year, and possibly stop buying bonds altogether by the middle of next year. (Source: WSJ, June 20, 2013)

June showed a strong unemployment report—195,000 new jobs, which was well over the predicted 166,000. Was this enough to encourage the Fed to stay on this course?

The financial markets have currently been fixated and dependent on monetary policies therefore the markets did not react favorably to these comments. Merely the threat of limiting QE swiftly sent bond prices down and yields soaring since early May. Fed officials recently reassured investors that they aren’t going to bring their monetary policy to an abrupt halt. (WSJ, June 20, 2013)

Of course, it’s possible that investors overreacted to Ben Bernanke’s recent statements. He’s said the same thing before—that the Fed will adjust its monthly bond purchases depending on the economic data. Right now the numbers don’t justify reducing monthly bond purchases, but that could change in only a few months. Bernanke expects the Fed won’t raise short-term interest rates until some time after the unemployment rate hits 6.5%, which would be more than a full percentage point lower than its current level.

The Economy
On a positive note, it appears lately the economy has shown indications that it is still expanding, even if only at a modest pace. In addition, Mr. Bernanke also stated that the risks to the economy were diminishing. Last year, Fed policymakers were worried that Europe’s financial market and fiscal woes would affect the U.S. Also, many investors are concerned about the impact of U.S. tax increases and spending cuts. They are now less worried about Europe and encouraged that the U.S. economy has held up and stocks have performed solidly despite fiscal headwinds at home. Still, Europe’s contraction has affected exports, and corporate growth has suffered, keeping U.S. growth too sluggish for the Fed to trim monetary easing by much or to justify much higher market interest rates.

In fact, the main concern for many economists is not inflation and an over-heated economy, but the possibility of deflation and a stall in growth. While the economy adjusted well to the fiscal tightening earlier this year, a continuing rise in interest rates or decline in stock prices would trim growth.

What lies ahead for investors in the second half of this year? We made some progress on unemployment and shrinking the Federal deficit, but the economic recovery is still fragile, and we still have to deal with the debt limit. One of the key factors will be corporate earnings.

The headlines in recent weeks have been filled with scandals and controversies that have sharply divided the American public including:

  • The U.S. government appears to be spying on its citizens and even on our allies.
  • The IRS appears to have unfairly targeted special interest groups.

Regardless of where you stand on these issues, it is important to remember several historical events that we have just commemorated the 150th anniversary of the battle at Gettysburg and the birth of our nation 237 years ago. During these times in our country’s history, we have faced and overcome far greater obstacles, both political and economic, than those in the news today.

Interest Rates
Interest rates have been rising rapidly since Ben Bernanke mentioned in late May that the Fed’s asset-buying could possibly come to an end this year. In a month, long-term mortgage rates jumped from about 3.7% to 4.5%, and there is plenty of reason to believe that rates might continue to rise. This increase has caused a sharp decline in the refinancing of existing mortgages, as well as fewer new loans being put on the books. That means less cash for consumers from their home equity and lower overall demand going forward.
The Federal Open Market Committee voted 10-2 on June 19, 2013 to keep short-term interest rates unchanged for a 36th consecutive meeting. It has now been four and a half years since the Fed made any change to short-term rates. (Source: Federal Reserve, June 24, 2013)

The Bond Market
After a three-decade bond bull market and half a decade of unprecedented Central Bank intervention, bond yields entered 2013 near all-time lows and the first four months of the year still produced further price gains. Unfortunately, if you’ve looked at your bond portfolio lately, you’re painfully aware of what has happened since. The yield on the 10-year Treasury note, which had fallen to 1.6% on May 2, 2013, stood at 2.175% as of June 14, 2013. (Source: Barron’s, June 17, 2013)

Many bond investors probably guessed they could end up hurting this year, but they probably didn’t anticipate the suffering of the last couple months. Many investors were shocked by the speed and scope of the resulting losses. The worst part was that some of the biggest declines came in parts of the markets traditionally viewed as safe but offering higher yields, such as municipal bonds and dividend-paying stocks. When interest rates rise, bond prices usually fall.

Many investors believe that Treasuries in particular still look very expensive, although it’s hard to imagine that yields could go anywhere but up. Many economists believe that the bond market will not burst any time soon, since the Federal Reserve is committed to holding interest rates down for about two more years. The intention is for the market change to resemble not so much a popped bubble as a gradually melting block of ice.

How can an investor potentially reduce the potential damage of rising interest rates on a bond portfolio? Some ideas include:

  1. Focusing on bond durations. The greater the duration, the more the value will change with changes in the interest rate.
  2. Consider investing in Treasury Inflation Protected Securities (TIPS). These values and interest rates will change depending on the inflation rate.

Despite the recent rise in volatility and dip in stock prices, it appears the bull market in U.S. equities is far from over. The pullbacks in bonds, emerging markets, and metals have been sharper and swifter than the drop in the broad U.S. stock market. Many investors had actually been hoping for a correction so they could catch up to the stock market’s rally, but had second thoughts as interest rates spiked too sharply, emerging markets went reeling, and worst of all the Federal Reserve talked about ending its monetary program.
Equity investors are still not sure what to make of the rise in bond yields. On the one hand, the drop in bond prices (and corresponding rise in yields) could represent a response to the prospect of faster economic growth, which in turn would hopefully bring with it stronger corporate revenues and profits. On the other hand, faster growth would also decrease the need for Federal Reserve bond buying, which is now approaching the $2 trillion mark and has been a huge boost for the stock market. Naturally, investors fear that withdrawal of that liquidity, in whole or in part, will adversely impact stocks. (Source: The Complete Investor, June 3, 2013)

When many investors think of risk, one thing comes to mind: volatility. Increasingly, however, it appears that short-term risk and volatility don’t matter as much as the permanent loss of capital. Remember this: volatility is not the same as risk, because all historical declines have been temporary, while the advance of equity values has been permanent. Volatility can pass but the returns stay. Some of the long-term risk of owning equities is beyond volatility prices and the global economy; it is in the emotional impact on investors. Unfortunately, many investors view a significant temporary decline as the onset of some apocalypse. Therefore, one of the dominant factors in long-term, real-life financial outcomes is investor behavior. (Source: Nick Murray Interactive, November 2012)

While volatile times can be rough on investors, communicating with your financial advisor can help keep you focused on your goals.

The Consumer Price Index was up only 1.2% in the first quarter from a year earlier, which is well below the Central Bank’s target. It was the weakest annual reading since the third quarter of 2008. The Fed has a 2% inflation goal and doesn’t want consumer prices to veer too much above or below that number. Seeing inflation below the Fed’s 2% target creates a nagging worry. While such low inflation is acceptable in an expanding economy, if recession strikes, there isn’t much distance to cover before prices fall. This could push the economy into a deflationary trap.

Although some Fed officials seem eager to start tapering off the Fed’s bond purchases, given such low inflation, any reduction will likely be gradual. In fact, if inflation should go even lower, then the Fed has considered an increase in bond purchases, rather than a reduction.

Stocks and bonds aren’t the only investments under pressure lately. The current market turmoil has pushed gold to its lowest level in two and a half years. Since closing at an all-time high of $1,888 per ounce on August 22, 2011, the price of gold has fallen 36% down to $1,201 per ounce on June 27, 2013. Although gold could fall further, in the near time, many economists believe that the downside risk is limited. (Source: CME Group)

Real Estate
Housing had good news this quarter. Although housing prices fell 3.2% in June, that followed a strong month in May when home prices came in 12.2% higher than they were a year ago. New home sales also recorded a strong increase following mid-June’s increase in existing home sales. Even with foreclosures for sale on the market, new home sales are still more competitive. Pending home sales also increased sharply. In fact, the index is at its highest level since 2006. We’ll have to see if the recent increase in mortgage interest rates slows housing activity, but history shows it usually doesn’t as long as the economic growth continues and the rate increases aren’t too sharp. (Source: Retirement Watch, June 27, 2013)

As we previously noted, the average rate on a 30-year mortgage rose significantly from May to June, and refinancing applications were down. While many lenders had predicted that refinancing would taper off, not many anticipated that the move in rates would happen so quickly and intensely. Even so, some buyers are still trying to take advantage of mortgage rates that, despite the increase, remain historically low.

Some investors are worried that Mr. Bernanke’s plans could hurt the housing market by driving up mortgage rates. Many economists believe that the Fed has created an artificially low mortgage rate. However, the housing industry depends on that below-average mortgage rate, and the housing recovery would most likely slow down without it.

The interest rate moves highlight the difficult task facing the Fed. Fed officials may want to start pulling back on their bond buying program soon, but they communicated that they want to do it in a gradual way that won’t send short-term interest rates up too quick. This could prove to be a delicate task, since investors have already shown just how sensitive they are to even hints of a small adjustment.

Few economists expect the stock market to repeat its first-half results in the second half of this year because investors are simply too uncertain about the actions of the central banks, and the Federal Reserve in particular. Still, many economists prefer U.S. stocks to almost any alternative. After all, bonds are plunging, gold is tarnished, and many emerging markets are no longer emerging.

The bottom line is this: It’s complicated. We have a huge economy ($16 trillion covering 330 million people) and we feel the impact of not just our own actions but other economies all over the globe. We face problems for which there are no easy solutions, and no good way to predict the changes that are surely coming in the future. (Source: Bob LeClair’s Newsletter, June 29, 2013)

As we said earlier, it is still best to work with your advisor to put together a strategy that you’re comfortable with and to stay focused. Try not to let the media get you riled up with every new statement, scandal or economic sign, because that kind of emotion can be the biggest risk to investors. As always, we’re happy to review your portfolio with you to make sure you have a balance of investments that is appropriate for your current situation.


Note: The views stated in this article are not necessarily the opinion of FSC Securities Corporation and should not be construed, directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investors should be aware that there are risks inherent in all investments, such as fluctuations in investment principal. With any investment vehicle, past performance is not a guarantee of future results. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs or expenses. No investment strategy, such as asset allocation and rebalancing, can guarantee a profit or protect against loss in periods of declining values. In general, the bond market is volatile, bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. The investor should note that investments in lower-rated debt securities (commonly referred to as junk bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. The investor should be aware of the possible higher level of volatility, and increased risk of default. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. International investing involves special risks including greater economic and political instability, as well as currency fluctuation risks, which may be even greater in emerging markets. The price of commodities is subject to substantial price fluctuations of short periods of time and may be affected by unpredictable international monetary and political policies. The market for commodities is widely unregulated and concentrated investing may lead to higher price volatility.
Sources: Wall Street Journal (4/29/13, 6/14/13,6/20/13, 7/5/13, 7/6-7/13, 7/10/13, 7/12/13), Retirement Watch (6/27/13), Barron’s (6/17/13, 7/1/13), Dow Theory Forecast (7/1/13), Money Magazine (5/2013), The Complete Investor (6/3/13), By The Numbers (6/24/13), Kiplinger’s Personal Finance (6/2013), Bob LeClair’s Personal Finance (6/29/13, 7/6/13), Nick Murray Interactive (11/2012) Contents Provided by MDP, Inc. Copyright 2013 MDP Inc.

Plan Well For A Satisfying Retirement

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Kim Ciccarelli Kantor  |  Naples Daily News  |  July 24, 2013

That magic time in your life might already have come for you; that time when you can proudly call yourself a “retiree.”

This is a time for a sense of freedom to do what you wish with your day and a change from your normal habits of accumulating assets to now preserving and enjoying them. As a retiree, you have an overriding concern to be sure your money lasts as long as you do.

You will face a task that might be more difficult than many challenges previously experienced in your career. Your success will be in planning how to use your portfolio without using it up.

Following are tips for planning your cash flow:

Review your Expenses
Determine the appropriate income you must have to pay necessary expenses to maintain your lifestyle. Your expenses can be categorized into generally three areas: 1) necessary living expenses; 2) travel or leisure activities; and 3) charitable and/or family gifts. Be sure you are realistic in totaling your necessary living expenses. It may be helpful to prepare a spreadsheet to ensure you don’t forget to include all your monthly, quarterly and onetime annual expenses such as property taxes and insurance, auto insurance, life insurance and golf club membership dues, to name a few.

Design your portfolio
Select the appropriate balance of stocks, bonds, and cash to keep within your portfolio. Understand your time horizon and your tolerance for volatility. Based on the Morningstar Index return guide (1), stocks historically provide more return over time than bonds or cash, but not without any down years. Your assets will need to support increased living needs over time and should be properly allocated between equities and fixed instruments.

Organize your cash flow
Determine how much you can afford to withdraw each year from your portfolio, and the timing of the withdrawals. This will help you plan ahead and prepare for the most effective way to live off your portfolio. I have found over the years a realistic percentage of assets to take each year might be around 4%. Taking less than the expected average annual return can provide a cushion to make up for any negative return years. Of course, the appropriate percentage to withdraw from the portfolio will be directly related to the type of investments you hold. In retirement, cash flow should be related to the total return on your invested assets (dividends, interest, and appreciation).

Plan for taxes
Your tax bill will have an effect on how you organize your cash flow. If a pension or supplemental income is providing a major source of your retirement cash flow, then your portfolio might be designed to minimize taxable income. When calculating your net cash flow, be sure to account for the after-tax results.

For many, retirement means freedom of choice. Be sure to study your financial choices, meet with your financial advisor to discuss your options and carefully design your retirement picture.

Webinar: The ABC’s of Planning for Your Future Healthcare

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From the comfort of your home or office:

Guest speaker, Joe Chambers – Executive Sales Director, Vi at Bentley Village in Naples, FL

Tuesday, February 26, 2013  |  3:30-4:30 PM

Topics to include:

  • Hear about the latest innovations to retirement lifestyle communities
  • Understand the questions to ask before you select your plan for your future
  • Learn about the important tax savings & strategies
  • Understand the various types of communities and contracts
  • Learn about when you need a long term care policy


RSVP is necessary to receive instructions to log into this webinar. Instructions and login information will be sent the day before the session.

Kindly respond by February 22, 2013

239-262-6577 or Ciccarelli@CAS-NaplesFL.com

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