LWA NEWS

Diahann appeared on the CNBC Power Lunch show on March 10, 2003. She also appeared on CNBC’s Open Exchange with Tyler Mathisen on March 28^th. The topic was mistakes individuals should avoid in the current market environment.  Her next appearance is scheduled for May 12, 2003.

Suzanne Low was appointed to serve on the 2003-04 Board of Directors for the prestigious Bonita Springs Speakers Assembly.

Congratulations to Jodi Cirignano!  She passed all 4 parts of the CPA exam with super scores. 

Jonne Morris, part of our Support Team, was recently promoted to Investment Associate, and will be joining our Investment Team.

Ann Guedes, who has been with us as a part-time member of our Support Team for two tax seasons, has accepted a full-time position as part of our Support Team at LWA.

LWA is participating in answering questions in the “Biz Brain” column of the Star Ledger and will be participating in the new Money Makeover column starting in a few weeks.

Diahann was featured in the April issue of The Practical Accountant in an article titled, “Step-by-Step Guide for Single Working Mothers.”  They included a great picture of our staircase and Diahann, of course.

Jodi and Clare made a presentation on the tax issues associated with selling a principal residence at the Senior Citizen’s Center in New Providence on April 17^th. 

Clare and our Tax Team are extremely happy to celebrate the conclusion of another successful tax season.

Identity Theft – What You Should Know

by Diahann W. Lassus, CFP®, CPA

I received a newsletter the other day from an insurance agent I know.  The topic was Identity Theft.  It seems that Identity Theft is now the most common cause of consumer fraud complaints in the United States.  Last year, more than 900,000 people had their identities hijacked.¹

Excerpt from Insurance Perspectives published by Personal Lines Insurance Brokerage, Inc.

THE RISK - While some identity theft happens on-line, the majority occurs off-line with thieves intercepting an individual’s mail or credit card receipts.  These thieves use a victim’s personal information to open credit card accounts, access bank accounts, purchase cars (and even houses) and ruin credit ratings for years.

Identity theft is not like a mugging or a burglary, where there is physical evidence of a crime.  You have to convince people you’re a victim of a crime, and that can take a considerable amount of time and money.  Statistics show that the average identity fraud victim spends 175 hours and more than $1,000 straightening out the problem.

PREVENTING IDENTITY THEFT - While you can’t be certain that you won’t be the target of identity theft, there are some things you can do to safeguard against it, including:

• Invest in a shredder for credit card receipts, billing statements and discarded mail.
• Avoid giving your personal information, account information or Social Security Number to anyone over the phone or on-line particularly when you did not initiate contact.
• Obtain and review your credit report on a regular basis.
• Monitor your credit card statements each month and report any suspicious charges immediately.
• Tear up pre-approved credit card applications.  They are often targeted by identity thieves who easily convert them to fraudulent accounts.
• Consider identity fraud coverage.  Some insurance companies offer this coverage as part of your homeowner policy, and it can help defray the costs associated with reclaiming your identity.

WHEN PREVENTION DOESN’T WORK - If you are a victim of identity fraud, take these steps immediately:

1. Place a fraud alert on your name and Social Security Number.  This alert means that any company that checks your credit knows your information has been stolen, and they must contact you to authorize new credit.
2. File a police report immediately in the jurisdiction where the ID was lost or stolen.
3. Cancel all of your credit cards immediately.

¹  www.identitytheft.org

The Basics of Bond Investing

by Gigi Collins, CFA

You might feel that the safest place for your money these days is bonds instead of the stock market.  While, yes, bonds may be less volatile than stocks, they are definitely not risk-free.  Not even US Treasury bonds are totally risk free.   Most of our bond investment is in the form of mutual funds.  The reason is the diversification it provides us in controlling the risk level of the investment. Another advantage for bond mutual funds is being able to choose a fund for each bond category that fits into your overall asset allocation, for example, short-term bonds, intermediate bonds, municipal bonds and high-yield bonds.

To better understand your bond allocation, you need to understand some of the risks of any bond investment.  One of the major risks is associated with the movement of interest rates. 

All bonds have interest rate risk.  The prices of bonds fall when interest rates rise, and they rise when interest rates fall.  The longer a bond’s maturity, the greater the interest rate risk. The higher the quality of the bond, the more it is impacted by the movement of interest rates.  You can reduce, but not eliminate, interest rate risk by investing in shorter-term bonds.  US Treasury bond prices tend to move quickly based on the market while corporate bond prices can move more slowly based on the economic conditions of the company backing the bond.

Another very important risk to consider is credit risk.  Bond investors can lose money if an issuer defaults or the bond’s credit rating is lowered.  By investing in a bond mutual fund, you diversify your credit risk from a single issuer to many issuers.  Bond funds also will have restrictions on the credit ratings of bonds that they are allowed to hold in their portfolio.

There are other types of risks for bonds, such as, call risk (some bonds can be called before they mature), inflation risk (inflation is a serious concern for those relying on bond income), manager risk (managers can make poor choices that lead to sub par returns).   The key is to maintain your diversification and to make sure no one asset class such as bonds takes over your portfolio.  

ENJOY THE SPRING…  STAY SAFE AND KEEP IN TOUCH.  J

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