Thanksgiving, Kid’s Secret Millionaires Club and Your Weekly Update

Happy Thanksgiving to you and your family!

This week’s Update focuses on kids (of any age) and a great way for parents and grandparents to teach them about money over this holiday season. One of the sources is no less than Warren Buffet, through his Secret Millionaires Club.

In generations to come, sound financial management will be ever more important. So it pays to start early if possible and if not… just start now. So whether you’re a new parent or a seasoned grandparent, you’re sure to pick up some ideas to have some fun with over the holidays.

Enjoy!

Best always,
Lee and Jeremy


This Week’s Quote:

“Someone's sitting in the shade today because someone planted a tree a long time ago.” ~ Warren Buffett

JL Davis Thoughts This Week:

Children are indeed our future and teaching them about money is no longer optional. It’s required.

Gone are the days when a family can afford to keep financial matters “secret” or when conversing about money was “verboten.” Today’s younger generations are not only capable of understanding money, they often hunger for it. Which is a good thing, because in an age of escalating taxes and increasing costs of living, they will need a strong financial skill set.

When my eldest grandchildren, Haley and Dawson were born, Kathy and I set up investment accounts and life insurance policies for them that we’ve since funded consistently. Their Mom and Dad established accounts for them too. Through the years, we’ve jotted a simple note on their statements routinely saying something like, “Way to go!” Or in down markets, “Let’s buy more while it’s cheap!”

We look at those statements together now and then too. We have some fun talking about which companies they own (within their mutual funds). We laugh about where they shop and spend, saying, “Should we eat at the McDonalds you own part of?” Or, “Nice iPad; you own a piece of the Apple you know!” Pretty neat.

Their parents and us have also encouraged them to save at every opportunity, Kathy and me matching any amount they put into their investments. Birthday gifts, jobs they earn money for, they all add up. Happily, they got the idea, putting their own money in. It didn’t hurt that we added payments for good grades along the way too. Save first, and then spend.

Now ages 13 and 16, it looks like they’ll have a nice fund to help them in their college years and beyond. Accounts they’ve put their own money into and now pay attention to.

Mr. Buffett was right about the idea of “planting a tree long ago,” We’re always happy to help you select the spot, and we’ll even pick up the shovel with you. Call us and let’s talk about those great children and grandchildren of yours.**

Lee and Jeremy

PS- The “Secret Millionaires Club” can be found at http://www.smckids.com/learnandearn/learn-and-earn/. You might also like to read the Financial Planning Association’s great piece at http://www.fpanet.org/docs/assets/20E04F8A-1D09-67A1A5B8F1C53559CE0/KidsAndMoney2.pdf

PSS—Not to worry. Jeremy’s two year old daughter Sloane is doing quite well so far, too.


Market Week: November 25, 2013

The Markets

Another week, another record: The Dow's seventh consecutive week of gains ended with a close above the psychologically significant
16,000 level for the first time ever, while the S&P 500 surpassed 1,800 for the first time. Meanwhile, the price of the benchmark 10-year Treasury note fell midweek after minutes of the Fed's most recent monetary policy meeting were released, but managed to regain some strength by the end of the week.

Last Week's Headlines

• A nearly 3% decline in gas prices cut consumer inflation by 0.1% in October, according to the Bureau of Labor Statistics. That put the annual inflation rate for the last 12 months at 1%. Gas prices also were largely responsible for a 0.2% drop in the wholesale inflation rate during October, leaving the increase in wholesale prices over the last 12 months at a mere 0.3%.
• Retail spending by U.S. consumers rose 0.4% in October, and retail sales were 3.9% higher than a year earlier. The Commerce Department said sales of autos, electronics/appliances, and clothing saw the strongest monthly gains. Auto sales were up almost 12% from last October, and sales at nonstore retailers rose more than 8% during the same time.
• Minutes of the Federal Reserve's most recent monetary policy committee meeting suggested that tapering of the Fed's economic support is still likely to happen sometime over the course of the committee's next few meetings. Members also suggested that once the Fed begins to cut back on its bond purchases, it may attempt to provide more guidance on the future of interest rates.
• Two key gauges of U.S. manufacturing activity showed signs of slowing growth in October. The Philly Fed survey fell to 6.5% from October's 19.8%, while the Empire State survey declined 2.2%, its first negative reading since May.
• Sales of existing homes were down for the second month in a row, according to the National Association of Realtors®, though sales were 6% higher than the same time last year. October's 3.2% decline was attributed to the relatively low number of homes for sale as well as double-digit year-over-year price increases for the last 11 months.
• Recurring uncertainty about the U.S. debt ceiling and budget battles, as well as the anticipated impact of future Federal Reserve policy, threaten global recovery even more than financial conditions in the eurozone and Japan, according to the Organisation for Economic Co-operation and Development. The OECD's semiannual forecast for global growth fell roughly half a percent to 2.7% for 2013 and 3.6% for 2014, with the United States seeing growth at 1.7% and 2.9% over the same time frames.


Eye on the Week Ahead

Housing is likely to be the focus of the holiday-shortened week as two months' worth of data on housing starts and building permits, as well as the most recent data on home prices, will be released. Estimates of Q3 economic growth will undergo revision.

Key dates and data releases: housing starts for September and October, home prices, second estimate of Q3 GDP (11/26); durable goods orders, personal income/spending (11/27).

Data sources: All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: U.S. Treasury (Treasury yields); WSJ Market Data Center (equities); Federal Reserve Board (Fed Funds target rate); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold, NY close); Oanda/FX Street (currency exchange rates). Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

Prepared by Lee Davis** and Broadridge Investor Communication Solutions, Inc. Copyright 2013