Q1/2008 Earnings Announcements

First quarter earnings announcement are about 50% complete. So far, excluding the financial sector, the S&P 500 has increased year-over-year by 5%. The financial sector is down 85% for Q1/2008, no surprise there. Below is a percentage chart of surprises to date:

• Earnings Upside Surprise 55%
• As Projected 12%
• Earnings Downside Surprise 33%

Historically, upside surprises range from 60% to 68%. As expected Crew is projecting we will fall short of the historical average. But from in investment basis this provides opportunity to go long stocks.

Stay posted for additional information. Source Bloomberg TV. Which can be accessed through the web, www.bloomberg.com.

HSA????? What is it?

Today we are honored to introduce our first guest blogger, Dan Morse, an independent insurance agent.

Crew Capital is a Registered Investment Advisor. As a part of advising our clients, we often review their specific situation and make recommendations in conjunction with the expertise of a variety of other professionals with whom we collaborate. We do not sell insurance. For insurance needs, we utilize the expertise of professionals like Dan Morse to execute the purchase of health care coverage.

What is a Health Savings Account (“HSA”)?
A Health Savings Account is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.

You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account. You own and you control the money in your HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer. You will also decide what types of investments to make with the money in the account in order to make it grow.

What Is a “High Deductible Health Plan” (HDHP)?
You must have an HDHP if you want to open an HSA. Sometimes referred to as a “catastrophic” health insurance plan, an HDHP is an inexpensive health insurance plan that generally doesn’t pay for the first several thousand dollars of health care expenses (i.e., your “deductible”) but will generally cover you after that. Of course, your HSA is available to help you pay for the expenses your plan does not cover.

For 2008, in order to qualify to open an HSA, your HDHP minimum deductible must be at least $1,100 (self-only coverage) or $2,200 (family coverage). The annual out-of-pocket (including deductibles and co-pays) for 2008 cannot exceed $5,600 (self-only coverage) or $11,200 (family coverage). HDHPs can have first dollar coverage (no deductible) for preventive care and apply higher out-of-pocket limits (and co pays & coinsurance) for non-network services.

How can I get a Health Savings Account?
Consumers can sign up for HSAs with banks, credit unions, insurance companies and other approved companies. Your employer may also set up a plan for employees as well.

How much does an HSA cost?
An HSA is not something you purchase; it’s a savings account into which you can deposit money on a tax-preferred basis. The only product you purchase with an HSA is a High Deductible Health Plan, an inexpensive plan that will cover you should your medical expenses exceed the funds you have in your HSA.

Dan Morse is an independent insurance agent in the Cincinnati area; feel free to contact Dan via e-mail - dmorse@fuse.net

Will Social Security Trust Run Out of Money??????

According to the attached article, there is a shell gaming going on. At first the SS trust was to run out of money in 2032, then it was 2037, and now it is 2041. But these are just projections which, with a little twist, change dramatically. I'd say it's a "chicken little" scenario.

I do believe scenario analysis is required and change in who qualifies for social security is needed. The Social Security program must return to its original purpose, that of a retirement income program.

My grandfather, some 33+ years ago, stated that he was concerned that my generation would not ever receive SS benefits. I am a little more optimistic. As the attached article points out, it at least looks better.

http://finance.yahoo.com/focus-retirement/article/104852/False-Alarm?mod=retirement-preparation

401(k) Features - Who Is Using Them

The link below provides vital statistics on features now available in many 401(k) plans. Interestingly enough, reading between the lines, it illustrates that companies are continuing to push the responsibility for retirement planning onto the employee. The startling problem is that employees are not listening. There must be a greater effort made to make it very clear to employees that they are responsible for their own retirement. Washington is not the solution, though their involvement is definitely needed.

Here at Crew Capital, we have been ringing the alarm to draw attention to this problem for some time. We offer "Portfolios" investment simulation seminars as an educational tool to help illustrate the basics of investments and portfolio management through game play. If you'd like additional information, please check out our website www.crewcapital.com .

Link: http://finance.yahoo.com/focus-retirement/article/104833/The-Best-New-Features-of-a-Rich-401(k)?mod=retirement-lifestyle

Retirement Plans for the Self Employed

The following article offers a few suggestions for retirement plans for the self employed. The focus of the article is on "defined contribution" plans, which are plans that focus on the amount of allowable contributions to the plan each year.

http://finance.yahoo.com/focus-retirement/article/104809/Tax-Free-Retirement-Accounts-for-the-Self-Employed?mod=retirement-IRA

An alternative retirement plan that the self employed especially should consider is called a "defined benefit" plan. For individuals older than 45, the annual contribution amount is greater than that for a defined contribution plan and, therefore, the tax savings is greater. Defined benefit plans are little more complex, but for the right individual, this option is of greater value.

The following chart illustrates the maximum contributions for different plans for a person 52 year old.

Highest Contributions

OnePersonPlus may allow you to contribute 3-4 times the amount you might otherwise contribute to a SEP or 401(k). Your contribution maximum is based on your age, income and years to retirement.* 2007 plan maximum contributions for a 52 year old, including "catch-up" contributions for $5,000 for a 401(k).

For more information please visit our website.

How to Retire With a Million Dollars - It's Math

Below is a link to an article that illustrates what one needs to do to retire with a million dollars. The assumption are valid: it's the "Eighth Wonder of The World - COMPOUNDING", as noted by Albert Einstein.

The biggest problem is the balancing of today's spending with future savings, and knowing the difference between needs and wants. A strategic plan and education will, with help, manage this problem and focus the individual on their long-term goal. This education needs to start when one is young. As in all education, the teacher will bear most of the work in the beginning.; but, over time, the work will transition over to the student.

For more information on education programs, visit our website. We have a fun and interactive game that addresses this problem and a few others.

http://finance.yahoo.com/focus-retirement/article/104801/The-One-Year-%241-Million-Challenge?mod=retirement-401k

Bernanke Testifies In Congress; US Recession Concerns; Investment Strategy

Federal Reserve Chairman Ben Bernanke said, in a Senate hearing yesterday, that the full effect of the Fed's recent reductions in interest rates has not yet been realized by the economy. Said Bernanke, "Further actions will have to depend on how the economy evolves and we are looking of course at both sides of our mandate, growth and inflation."

Stock Market up +3%, Best Second Quarter Start In 70 Years

The second quarter of 2008 started off with big gains:

• Dow Industrials closed up 391 points (+3.2%),
  
• NASDAQ +83 points (3.67%),
• S&P 500 +47 points (3.58%).

Why the gains?

A change in prospective is the main reason being quoted, as investors shift from the glass half empty view to glass half full view. Recent actions by the Fed are taking hold and having positive impact on the economy. The first interest rate cuts from 2007 are starting to impact the market. ISM Manufacturing Index increased to a reading of 48.6 in March from 48.3 in February. This reading shows a decrease in manufacturing but at a slowing pace. A reading below 50 notes contraction.

First quarter earnings announcements will start soon with financials and home builders expected to report negative results. Major write downs are the catalyst for the negative results. Housing inventories are still at an all time high with sales at 20 year lows. Crew projects a rotation from the financial and home builders sectors to higher quality stable sales and earnings sectors. This shift will benefit many of the stocks Crew follows.

Expect pullback from yesterdays gains as the market finds footing to build from.

Can I retire? The Big Question Facing Baby Boomers.

Here is a link to an article which starts you on the course to answer the big question: Can I retire? The article provides the first step in framing the information you need to answer the question; but the question itself needs to be expanded. It is critical for you to define & describe what you want your retirement to look like. Let's look at the article. Based on the information in the article, Liz is going to have a tough time retiring. Using the Trinity Study, Liz can expect to withdrawal 4% from the 401(k) and not exhaust the 401(k); but, if the pension doesn't have a Cost of Living Adjustment(COLA), she is going to have a tough time and, by age 70, is going to regret having made the decision to retire.

Examples like these clearly show why the help of a professional planner is needed in this process. A good professional planner has the experience of having worked on many retirement plans and the familiarity with the issues at hand and with regulatory changes. They understand what questions to ask in defining how you want your retirement to be, and are familiar with the many different pathways you can choose along the way to your goals. A professional planner knows when and how to challenge your expectations and balance them with reality. They know how to help you balance saving & investing with your current spending needs. This blend of experience and objectivity is critical to building the framework that will allow you to dream, plan and live smart.