Housing and the Obama Stimulus Package

Dear Fellow Consumer, here is our take on the Stimulus Bill and Treasury announcements made this week. We look at the Stimulus package AND the Treasury's package holistically, in compliment with each other - mostly because that's how the Obama team is looking at it.

The National Association Realtors Board of Directors, asked in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are:

• - Get loan limits raised for high cost areas,

• - Make the $7,500 tax credit NOT a loan,

• - Try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and

• - Help provide solutions to the foreclosure/short sale problem.

So here's what was achieved:

• - The loan limits will be raised to $727,000 in high cost areas,

• - The tax credit will be raised to $8,000 with NO payback [a true credit],

• - Interest rates have come down 125-150 basis points, and

• - The bill has over $50 billion in it for foreclosure mitigation, with Geitner's Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES's thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductibility, real estate tax deduct ability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit -- and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carry back deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of 'what we are willing to give up to get a $15,000 tax credit' and kept the debate again, on how much it should be. It's pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution -- there is much more to come and we are working diligently with the Administration to help 'unclog the pipeline' and get capital flowing into housing again.

Alero Equities is Moving to the Flynt Building

We Got It!

Alero Equities, the Financial Professionals, is bringing Wall Street to Los Angeles. We are the Only Firm in the City that has a Trading Floor connected directly to the New York Stock exchange, the nation's financial head quarters. Look for our Grand opening e-flyer coming soon.











The luxurious Flynt Building is located at 8484 Wilshire boulevard in Beverly Hills.

Our new facilities features:

- 24 hour security on site

- Valet parking for visitors

- Underground 3/1000 + parking for Tenants

- Beautifully appointed lobby 15.5% load factor on multi-tenant floors

- Walking distance to La Cienega's Restaurant row, Starbucks, and Coffee Bean

- Walking distance from Washington Mutual, Bank of America, Wells Fargo, and CitiBank

Contact us at 866-354-5125 to schedule an appointment and visit our new flagship location!

Retire in Style

Human beings are distinguished from other species by our ability to think ahead and to plan ahead. However, most of us have great trouble thinking about the long term and preparing for it. We're too caught up in the hectic schedules of our day-to-day lives. Heck, it's difficult enough to plan something just six months ahead, like a summer vacation. How on earth are we supposed to be able to think about something in the distant future -- like retirement?

Thinking in advance, though, and acting on those thoughts, are keys to preparing for the future. The younger you are, the more distant is retirement -- and the more power you have at your fingertips in the form of compounded returns over time. That is why now is the time to start investing in your future so that you can benefit from these compounded returns in your retirement years.

Alero Mack, of Alero Equities, is a specialist in retirement planning, and can lend lend his insight to help us answer the important questions on retirement planning.

• How much will I need for my retirement in order to live comfortably?

• What are my goals?

• When should I start?

• What should I do?
  

• How much can I count on from Social Security?

• What costs might I run into once I've actually retired?

These are the questions that we all need to ask; questions that we often wait too long to ask. However, now is the best time to make these choices to ensure that you and your family are taken care in the years ahead.

Please contact us at 866-354-5125 or by email to discuss your retirement goals in person.

Take a moment to watch these instructional videos on

• "Click Here --> Watch a Video on How to Create Wealth" and

• "Click Here --> Watch a Video on How to Eliminate Debt"

Women and Retirement

Nearly twice as many women as men will face poverty in retirement, according to the incoming president of the American Association of Retired Persons.

Prospects for financial security in old age is starkly more bleak for minorities, said Jennie Chin Hanson, formerly the executive director of an elder care agency in San Francisco.

Women must learn details of their family finances and begin planning for retirement early in life, said Hansen, a former nurse.

Speaking to an audience of elder care providers at the City Club of Cleveland, Hansen cited several AARP sponsored studies and reports that suggest an emerging risk of poverty for females.

The poverty rate in retirement for African-American women is nearly three times the rate for white women.

Nearly 2/3 of white women who are poor in old age were not poor in earlier years.

Women face challenges in preparing for retirement because they often earn less than male counterparts, often must periodically leave the workforce to provide family care and often have not adequately planned for retirement, she said.

Hansen, who becomes AARP president in May, offered several tips for retirement planning.

Women should become financially literate. "People who understand compound interest are must more likely to plan for retirement, " she said.

Existing Social Security benefits frequently provide only about 40 percent of financial needs, estimates show. Today, many retired females qualify for only about $1,100 per month in Social Security, she said.

Retirees will need about 70 percent of the pre-retirement income to maintain their lifestyle, she said.

Workers should participate in company subsidized retirement savings plan, like 401 programs. Employees should contribute enough to gain the maximum contribution from their employer, she said.

AARP was organized 50 years ago as a method to provide health insurance to retirees. The nonprofit organization has nearly 40 million members and annual revenues and expenses of about $1 billion.

The group is often cited as one of the nation's most powerful political lobbies.

Life Insurance Facts

All life insurance policies have one thing in common: They provide a tax-free death benefit to your beneficiary when you die. But that’s where the similarities stop.

Here, the Maryland Association of CPAs offers an overview of the most common types of life insurance to assist you in determining which best meets your needs.
Term insurance

Term life insurance policies offer death benefits only. Term insurance is simple to understand and it allows you to purchase the most coverage for the least amount of money. You buy a policy for a specific amount and term -- 15 years, for example. If you die during that term, the policy pays the death benefit to your beneficiaries. If you outlive the term of the policy, you get nothing. However, you can renew the policy at much higher rates or convert the policy to a permanent form of life insurance.

The two key types of term insurance are level term life insurance (in which the premiums remain the same over a specified period of time) and yearly renewable, which starts out with a lower initial premium, but the premium rises each year.
Whole life insurance

Rather than insuring you for just a part or a “term” of your life, a whole life policy is designed to cover you for your entire life.

Whole life policies cost more than term policies because, in addition to providing a death benefit, a whole life policy builds up what is referred to as "cash value." This is essentially an investment component that, after a certain number of years, you can withdraw or borrow against. (Unpaid loans against the policy are subtracted from the death benefit.)

The investment return on a whole life policy is likely to be lower than what you might earn investing on your own, because insurance companies typically invest conservatively.
Universal life insurance

Flexibility is the key selling point of universal life insurance.
With this type of whole life insurance, you can increase or decrease the death benefit as your insurance needs change. You can, within limits, determine how much of your premium is used for insurance and how much goes toward the policy’s investment component. You can also increase or decrease the amount of premium payments and how often you pay them.
Variable life insurance

Variable life insurance differs from whole life insurance in that it allows you to invest the cash value of the policy in stocks, bonds or money market funds within the insurance company’s portfolios.

With a variable life policy, both the death benefit and the cash value depend on the performance of the investments you choose, but most policies guarantee that the death benefit will not fall below a specified minimum.

A variable life policy is considered a security and sold only by prospectus.
Making the decision

The type of life insurance you buy will depend on your individual needs and what you hope to get out of your policy. It’s important to consider how much protection your family needs, how long you need coverage and how much you can afford to pay in premiums.

If what you need is strictly income protection for a set amount of time, term insurance is the more appropriate and cost effective option. Term insurance works out particularly well if you follow the principle of “buy term and invest the difference.” This means you set aside and invest on your own the money you would have spent on a more costly whole life policy.

For people with more complicated or long-term needs, whole life insurance or one of its variations may make sense. For example, if you have contributed the maximum to your retirement savings and other tax-sheltered plans, you might consider whole life insurance because the cash value in the policy builds up tax-free.

As is the case with most important financial decisions, your life insurance choice should be made within the context of your overall financial plan and circumstances. A CPA can help you determine the type of policy that works best for you.

Only CPAs are equipped to address your full range of financial needs with integrity and insight. In california Financial Advisors must pass a rigorous examination, adhere to strict ethical and Professional standards. CPAs must pass a rigorous two-day examination, and adhere to strict ethical and professional standards, and, beyond college, complete 80 hours of continuing education every two years to be certified by the state — accountants do not.

Your doctor is certified; your lawyer is certified. Make sure your accountant is a certified public accountant.

______________________________________________

Alero Equities has the plan you can REALLY Retire in 5-7 years. Retire and stay Retired. Only 2% of Americans can Retire and Stay Retired. Live the American Dream in your later years.

Call 1-866-354-5125 for dates and times of our weekly Financial Workshops.

Alero Equities Knows Where to Park Your Cash (In 2009)

Now's the time to invest! David and Tom Gardner's new book reveals their strategy for million dollar wealth.

You have money, you need a place to put it for a while and the financial institutions are lining up at the door. You may be tempted to fall for whatever suitor makes a good first impression, but remember: This choice is all about you.

The best short-term savings account is the one that best matches your needs in the following areas:

Access: How often will you need to dip into the account, and what's your preferred method of access -- ATM, check-writing, online, and the like?

1. Interest: How much will the institution pay you for babysitting your money, and does the amount you need to park in the account qualify for the best rates?
2. Service: Might you require bells and whistles, such as in-person customer service, or are you more of a DIY, low-maintenance customer?
3. Penalties: Should your plans change -- you need to get to your moola sooner than planned, for example -- how harsh of a punishment will you need to endure?

Now, let's review the major aspirants:

Checking accounts

Checking accounts are meant for transactions, not savings. That's why many don't pay much, if any, interest. However, some banks do combine the conveniences of checking with the return of a money market account. Also, as "asset management" accounts at brokerages become more feature-rich -- offering unlimited check writing, ATM access, and money market rates -- more folks are shunning the banks in favor of brokers.

Pros

Your money is only a check or an ATM machine away.

• A bank branch is usually not far, often in your grocery store, if you're so old-fashioned as to want to deal with a human being.

• As with all bank deposits, checking accounts are insured by the Federal Deposit Insurance Corp.

Cons

• Depending on the bank, you may not earn much, if anything, on the money in your account.

• Many checking accounts require a minimum balance or charge fees, or both, which are a pox upon your pecuniary patience.

Savings accounts

In the old days, savings accounts -- or passbook accounts, as they're sometimes known -- were the most popular rest area for short-term savings. Fortunately, folks are getting smarter and parking their pelf in higher-yielding investments. The pittance you earn in most savings accounts isn't enough to even keep up with inflation.

Pros

• The money in a savings account is insured by the FDIC.

• Account minimums are often low.

Cons

• The return on savings accounts is so low, some mattresses pay more in interest.

High-yield bank accounts

Nowadays, you can find high-yield savings and checking accounts. They're an ideal place to park money for your monthly bills. They offer flexibility (you can add or withdraw funds at any time) and liquidity (your dough isn't locked in for a specific time period). Some even boast interest rates on par with more restrictive investments like CDs. The best rates by far are offered by online-only banks that keep costs low by cutting back on frills.

Pros

• Better rates than many standard bank accounts.

• Same FDIC insurance applies to high-yield accounts.

Cons

• Bare-bones banks with no ATM/debit access or check-writing privileges can be a big hassle if you need your cash fast.

• Customers must coordinate their cash flow by transferring money back and forth from the online bank to a linked checking/savings or brokerage account. That means delays -- two to five days -- before everything's reconciled.

• Watch out for limited-time teaser rates by researching the product's six-month interest rate history.

Money market deposit accounts

Money market deposit accounts are offered by banks, usually require a minimum balance, and permit a limited number of transactions per month (six transfers, three of which can be checks written on the account).

Pros

• Money market deposit accounts are very liquid. Most allow for easy access through checks, transfers, and even ATMs.

• Because they are offered by banks, money market accounts are insured by the FDIC.

Cons

• Unfortunately, you may pay for the liquidity by receiving less in return than from certificates of deposit.

• If your account falls below the minimum required balance, or you exceed the limited number of transactions, you might pay a penalty.

Money market funds

Money market funds are offered by brokerages and mutual fund families. These funds invest in highly liquid, safe securities such as certificates of deposit, government securities, and commercial paper (i.e., short-term obligations issued by corporations).

Pros

• With a money market fund, you can have the money in your hot little hands very quickly. Often, you can write checks or use an ATM card.

• The returns on money market funds are typically higher than the return on money market accounts.

• Issuers go to great lengths to keep the NAV (the price of each share of the fund) at $1, so your principal is relatively safe.

Cons

• Money market funds are not FDIC insured.

• There is no guarantee that the NAV will remain at $1.

Certificates of deposit (CDs)

CDs are debt instruments with a specific maturity, which can be anywhere from three months to 60 months (i.e., five years). Most CDs are issued by banks, but they can be bought through brokerages.

Pros

• CDs are very safe because most are offered by banks, so they are FDIC insured.

• Depending on how long it is to maturity, CDs may pay more than money markets.

Cons

• Your money is off-limits until the CD matures. If you must, you can redeem the CD early, but you'll pay a penalty.

U.S. government bills or notes

"Treasuries" are backed by the full faith and credit of the U.S. government. Treasury bills mature in less than a year; Treasury notes mature between two and 10 years.

Pros

• Treasuries are considered the safest investments in the world.

• They can be bought directly, commission-free, at TreasuryDirect.

• They are exempt from state and local taxes.

Cons

• If you shop around, you might get a better return from money markets, CDs, and corporate bonds.

• If you need your money before the security matures, you may not get back all of your original investment.

I Bonds

No, they have nothing to do with the Internet. I Bonds are inflation-indexed savings bonds issued by the U.S. government. The amount an I Bond pays is adjusted semiannually to keep up with inflation and protect the purchasing power of your money.

Pros

• I Bonds are backed by the full faith and credit of the U.S. government.

• The "I" in I Bond protects your investment against inflation risk.

• They are sold in manageable denominations, ranging from $50 to $10,000.

• They can be bought from most financial institutions, including TreasuryDirect.

• The earnings are exempt from state and local taxes, and can be tax-free if used for post-secondary education expenses.

• Taxes on earnings can be deferred for up to 30 years.

Cons

• You must hold an I Bond for at least 12 months, and you will pay a penalty of three months' earnings if you redeem the bond before owning it for five years.

Municipal bonds

Municipal bonds (or "munis," as the big talkers refer to them) are issued by state and local governments in order to build schools, highways, and other projects for the public good. Municipal bonds are most attractive to high-income investors looking for tax-friendly income.

Pros

• Munis are just a step down from U.S. securities in terms of safety.

• Income is exempt from federal taxes, and might be exempt from state and local taxes if you live in the municipality that issued the bond (check on the tax implications beforehand).

Cons

• Interest from munis is relatively low. Unless you're in a high tax bracket, you'll usually get a better return from other investments.

• You may have to pay a commission to buy municipal bonds.

• If you need your money before the bond matures, you may not get back all of your original investment.

Corporate bonds

Corporate bonds represent debt issued by companies, from the blue chips to the "cow chips," if you know what we mean. The more creditworthy the company, the less it'll pay in interest. Moody's and Standard & Poor's rate companies as to their ability to meet their debt obligations. Only short-term bonds are appropriate for short-term savings.

Pros

• Corporate bonds usually pay more than government securities, money markets, and CDs.

Cons

• The company that issued the bond could suspend interest payments, or even go belly up.

• You may have to pay a commission to buy bonds.

• If you need your money before the bond matures, you may not get back all of your original investment.

Bond funds

Bond funds are mutual funds that pool the money of investors to buy bonds of all stripes.

Pros

• They are an efficient way to buy bonds in small increments and get the diversification that minimizes the risk that you picked a bond from a deadbeat company.

Cons

• The NAV (i.e., the share price) of a bond mutual fund fluctuates, because of interest rate movements and the bonds bought and sold inside the fund. Therefore, you're not sure exactly how much of your original investment will be around when it's time to take your dough. Likewise, the yield on a mutual fund fluctuates.

• You will pay an ongoing expense to own the fund, called the "expense ratio," and you may have to pay a commission, called a "load."

This story is adapted from a Robert Brokamp article. It has been updated.

Mutual Funds Fall

NEW YORK (CNNMoney.com) -- Investors continued to drain money out of mutual funds last week, adding to an even greater decline from the week before.

According to a report from TrimTabs Investment Research released Thursday, about $2.8 billion was withdrawn from equity-based mutual funds in the week ended Dec. 10. The week before, $12.1 billion flowed out of these funds.

"The report shows how much risk aversion there is," said Vincent Deluard, a TrimTrabs analyst. "Either money is going under mattress or people are losing their jobs and they need the money."

Mutual funds that invest primarily in U.S. stocks posted an outflow of $1.7 billion, after losing $8.3 billion the week before. Funds that invest in overseas stocks shed $1.1 billion compared with $3.8 billion that came out during the previous week.

Surprisingly, bond funds fell for the second week in a row. Though corporate bonds have not performed well this year, they have certainly outperformed stock-based funds, with the S&P 500 index falling 38% over the course of 2008.

But bond-based mutual funds suffered even bigger declines than stock funds, as investors took out $10.6 billion from those funds, compared to an outflow of $6.8 billion in the previous week.

Experts say investors are almost exclusively interested in U.S. Treasury investments, shunning even conservative corporate bonds.

Exchange-traded funds, or ETFs, that invest in U.S. stocks posted an inflow of $8.4 billion, compared with an inflow of $920 million the previous week. ETFs of non-U.S. stocks grew $2.9 billion, compared with inflow of $643 million in the previous week.