The purpose of the legislation is to make sure that investors accurately report gains and losses on securities when they file their taxes. If you would like more information about the Emergency Economic Stabilization Act of 2008 that initiated this change, please click here.

If you have any questions, or would like to schedule time to discuss these changes, please don’t hesitate to call or email to set up a time to talk.

Best Regards-

James W. Heard, CFP®

President & CEO

The third quarter produced negative market returns in every equity asset class as global debt concerns increased and the Euro’s survival remained a question.  This time last quarter we were wringing our hands about raising the U.S. debt ceiling to avoid a default.  Since then, a temporary measure was passed, S&P lowered its U.S. credit rating, and equity markets everywhere declined…significantly.  Now, the focus is mostly on the debt problems overseas and the hope for the Euro’s survival which still remains very much in question.

Net, net, markets returned to their year-ago levels as the one-step back, two-steps forward market recovery continues.  In preparation of the Client Summit on the 27th (see below), we‘ve prepared some data on the market recovery since 2008 and the bottom that was reached in March 2009.  We were surprised at the numbers, and I’ll leave that as a tease to entice you to come.

Meanwhile, here are the most recent quarterly index returns.

Economics

Certainly, the theme for the last several years has been “debt,” and too much of it.  Europe’s issues are somewhat different than the U.S.  Ours is within our political control, but Europe has currency and loan problems that are not backed by any real authority.  Germany and France are still weighing the difficult decision of how much of the profligacy of other countries they’re willing to guarantee.  It’s not as if they can foreclose on the Parthenon or the Coliseum to get their money back.

Ultimately, the market is looking for a de facto joint and several backing of the Euro from all the countries, just like any other financial partnership would be required to do.  Basic issues of sovereignty and enforcement are in play, and it remains unclear whether an agreement among the parties can be reached anytime soon.

Politics

The election cycle politics is moving into third gear.  You must be as excited as we are.  Just wondering – are we paying too much for what we get, or do we get what we pay for?  Think about it.

Enough of the cynical comments.  The history of our political process up close and personal has always been ugly, and we shouldn’t expect it to be any different this time.  History also tells us that the results have been pretty darned good over time.  So regardless of your persuasion, we suggest you hold your nose, put on your hazmat suit, and jump in the political pool with both feet.  Elections matter, and this one is no different.

Come on in.  The water’s fine.

What’s New

The 2011 Client Summit, October 27, 5pm, Grand Hyatt, Buckhead.  Be there!

5pm – drinks and hors d’oeuvres.  6pm – Speakers – Dr. Rajeev Dhawan – “Global Economic Outlook” followed by Jim Heard – “The Markets from 2008 Until Now.”

This year’s Summit will be particularly special because there will be plenty of new faces due to the recent merger plus quite a bit of growth.  We’ve assembled a great team of professionals AND clients.  We’re excited about everyone getting together.  If you’d like to attend, call Chris Holland at 678-510-2740 to let her know.

Investments - We’re making some changes to our bond allocation.  These changes are very modest and broaden our bond diversification.  Specifically, we’re adding un-hedged short-term, high quality foreign bonds, and we’re slightly extending our maturity and credit quality.  The un-hedged foreign bonds will represent approximately 10% of the total bond allocation, the duration will extend from approximately 3.6 years to 4 years, and the average credit quality will drop only marginally and will stay at AA+.

Online Reporting – Finally, over the next six months, we will be rolling out internet access to your portfolio information.  In this day and age of instant information, online access is expected, but being able to provide it from a multi-custodial platform is a challenge.  We believe we now have a great solution.  As an added benefit, this also should reduce the urgency of having client meetings immediately after the quarter ends since portfolio information always will be current and available as of the previous day.  Expect to see more information on this in the next 90 days.

Hope to see you at the Summit!

October 19, 2011
What’s in Your View Finder?
by Weston Wellington
Vice President, Dimensional Fund Advisors

He is no longer with us, and the world is poorer for it.

A restless college dropout, he founded a wildly successful company whose innovative products touched millions of lives. He was a brilliant, dictatorial, and cantankerous leader, relentlessly pushing his staff to solve one impossible problem after another. He had no use for conventional market research, and trusted his own vision to create products with little detectable demand that flew off the shelves upon introduction. He zealously guarded his personal privacy but reveled in his role as a master magician on stage when introducing his firm’s latest innovations to eager crowds of industry followers. Stockholders wore big smiles as the shares vaulted to one new high after another. In many ways, he was the antithesis of the conventional corporate chieftain, and despite his demanding persona, he was revered by employees, customers, and even competitors to a greater extent than almost any other chief executive in recent memory.

A tribute to the late Steve Jobs? No—to Edwin Land of Polaroid.

The son of a scrap metal dealer, Land dropped out of Harvard to pursue his own research at the New York Public Library on polarized light filters. He founded Land-Wheelwright Laboratories in 1934 with his former physics professor, and his low-cost polarizing filters proved useful in products ranging from sunglasses to army tank telescopes and gunsights. After the war, he turned his attention to photography and introduced the Polaroid-Land instant camera in 1948. Despite a stiff price tag of $89.75 the first shipment of 57 cameras sold out in a matter of hours at a Boston department store, and the firm never looked back.

Numerous improvements followed, and sales boomed as the cameras and film became smaller, lighter, easier to use, and less expensive. The stock price did likewise, and Polaroid became a bellwether “glamour” stock during the postwar bull market, soaring tenfold in just five years from 1963 to 1967.

When a cover story in Time appeared in June 1972, Polaroid seemed all but unstoppable. Land’s inventive genius had resulted in an astonishing new industry with technology protected by a wall of over 1,000 patents. (Land himself held 535 patents, second only to Thomas Edison.) Eastman Kodak offered only token competition in instant photography, and was eventually vanquished in both the marketplace and the courtroom. Kodak was forced to pay Polaroid nearly $1 billion to settle a patent infringement suit and withdrew from the instant camera business. Polaroid shares reached an all-time high of $149.50 in mid-1972, amid intense excitement over the ingenious new SX-70 single lens reflex color camera and rumors of an instant movie product. Government surveys at the time identified photography as one of the fastest-growing industries in the country, and Polaroid appeared to be a key beneficiary: In the premium category (cameras selling for $50 or more), Polaroid was not only the undisputed leader but outsold all other global competitors combined.

Land was one of Steve Jobs’ heroes, and the youthful computer tinkerer from California felt almost a mystical connection with the Cambridge scientist forty-six years his senior. Both were impatient perfectionists, often driving themselves even harder than their overworked employees. Land was infamous for wearing out staff members, who rotated in shifts while he focused on knotty problems. During one marathon research session, Land wore the same clothes for eighteen straight days. When Jobs had the opportunity to meet Land personally, he found that he and Land shared a peculiar characteristic: Both believed that new products were not invented so much as discovered. Both could visualize a product that did not yet exist down to its smallest details, and the task of development was thus akin to Michelangelo’s description of sculpture: The artist’s task was to remove the unnecessary material to reveal the beauty already contained within the stone.

Alas, Time’s cover story marked the beginning of the end. The instant movie project (“Polavision”) turned out to be a costly failure and led to Land’s resignation in 1980. Jobs was dismayed when Land was pressured to leave the firm he had founded, calling him a “national treasure.” Jobs would suffer a similar fate after a losing boardroom battle in 1985.

Although Polaroid products continued to sell well, the shift to digital photography caught the firm unprepared and slowly hollowed out the highly profitable film business. Polaroid filed for bankruptcy in October 2001. The research labs and film factories were shuttered, although the brand name, traded from one sharp-elbowed financier to another, survives as a ghostly reminder of its illustrious past. The years have been kinder to Eastman Kodak, but not by much. Founded long before Polaroid in 1888, it has outlived its former adversary but now struggles to avoid a similar fate.

What is the message for investors?

As we observed in a previous note, the forces of competition are relentless, and today’s astonishing innovation may be tomorrow’s commodity—or garage sale castoff. We have no reason to believe that Apple has anything but a bright future, but those of us tempted to concentrate our investment capital in a handful of exciting industry leaders should consider the fate of Polaroid before declaring, “It can’t happen here.”

by Jennifer E. Acuff, CPA, CFP®, PFS, Windham Brannon Financial Group, LLC

Most likely you or someone that you know has been a victim of identity theft. Unfortunately, you are not alone – an estimated 11 million people were victims just last year.  Roughly 1 in 20 people will be a victim this year and you have higher odds if you are a small business owner or young adult.  Why is that? Small business owners often use their personal accounts and home addresses to complete business transactions by mail or internet. Young adults, especially those at college, have higher odds because they are likely to share computers (library, dorms, computer labs, etc) with strangers.

It is estimated that the average victim can expect over $6,000 in fraudulent charges, an average of $500-$2,500 in fees to rectify those charges, and between 40 to 600 hours of work. This does not include the subsequent time verifying future transactions & statements, frustrations, and stress involved to recover your identity.

So, how does identity theft happen??? There are several ways:

• False Identification: After a criminal obtains your personal information, they can get false drivers licenses, birth certificates, passports, medical ID cards, etc.

• Credit Card Fraud: Criminals can make unauthorized charges by simply having your credit card number or the card. Numbers are found on statements, receipts, new cards arriving in the mail, or lost/stolen cards. This fraud can happen over the telephone or Internet where you do not need to be present to purchase goods.

• Skimming: This type of fraud involves copying the magnetic stripe from an authentic credit or debit card and transferring the information to a replacement counterfeit card – all in the normal course of a legitimate transaction.

• Computer Hacking: Databases of personal information are targets for criminals with limited technology skills who can hack into computer systems. Be careful before you buy goods on the internet and provide your information only to reputable companies that have proper security measures. You should also take measures to prevent access of your home computer by having anti-virus software, buying a personal firewall, and storing important information off line.

• Phishing: This is the illegal practice of divulging your personal information (also known as “pretexting”) under false pretenses. Many times this comes in the form of a phony email from your bank, IRS, Credit Card Company, brokerage account, etc. The criminals then use this information to obtain further information about you or may already have sufficient details on you to commit an identity crime.

• Dumpster Diving: Believe it or not this happens…. criminals dig through trash to obtain important personal details. This is the reason it is imperative to shred important documents or mail that contains any sensitive information. Note: It is crucial to shred the “pre-approved” credit offers that arrive in the mail without warning.

If you believe you have been a victim of identity theft, click here to begin the necessary steps. If you would like more information on steps to decrease the likelihood that you will become a victim of identity theft, click here.

Jennifer E. Acuff is a wealth advisor for Windham Brannon Financial Group, LLC, a wealth management firm in Atlanta, A Certified Public Accountant (CPA), Certified Financial Planner (CFP®) and a Personal Financial Specialist (PFS), Jennifer has an extensive background in personal tax planning and consulting. She can be reached at jacuff@wbfinancial.com or 678-510-2766.

Beware of the word “prevent” – no product or person can completely prevent identity theft. There will be theft so long as criminals can profit from stealing.  However, you can make it more difficult and lower your chances of becoming a victim by following these tips:

• Do not carry unnecessary cards in your wallet – There are few reasons to ever carry around your social security card or birth certificate. Leave those, along with any other credit cards rarely used, at home.
• Beware “shoulder surfers” – Carefully cover your hand when entering your personal identification numbers and watch for people standing uncomfortably close when using your credit or debit card. Given the technology of today and use of camera phones, your information could be stolen before you leave the store.
• Don’t Click – Do NOT click on any links from financial institutions, the government, or any other unusual sender. Most of these emails are not legitimate and could likely be a virus that could expose your computer. One recurring fraudulent email is one posing to be from the Internal Revenue Service (IRS) and asks you to enter personal information for verification. Remember that the IRS will never send emails to taxpayers.
• Do not give out your personal info on the phone – Many criminals pose as bank representatives, utility employees, or government agents in order to get you to reveal your social security number, Mother’s maiden name, or other identifying information. Hang up and call the customer service number on a recent statement to verify the legitimacy.
• Install virus, spyware, & firewall software – Be sure and keep all software systems updated on your personal and work computer.
• Take credit card receipts with you – Never leave receipts on the table or toss them without first shredding if the receipt includes your entire credit card number.
• Shred all unused checks after you close any checking account.
• Pick up new checks at your bank – Do not have the bank mail new checks to your home address; instead, pick them up at your local branch.
• Review & Reconcile – Frequently review & reconcile your checking account and credit card transactions. Immediately challenge any unfamiliar purchases.
• SHRED SHRED, SHRED – Shred all pre-approved credit card offers, any statements that list account numbers,  insurance information, physician statements, or any other personal information.  Note: You can opt out of receiving offers of credit in the mail by calling 1-888-5-OPTOUT (1-888-567-8688).
• Keep list & secure – Keep a list of all materials in your wallet, make photocopies of everything, and keep in a secure place (safe, lock box, etc). This way you will know exactly what is missing and the numbers to call if your wallet gets lost or stolen.
• Do NOT “remember me” – Do not allow a website to “remember me” and enable automatic login when you visit the website later. Security trumps convenience!
• Destroy before you Dump – Be sure to physically remove the hard drive of any old computer you throw out to ensure you are not passing along personal financial data.
• Monitor Reports – Make it a habit to monitor your credit reports from the credit bureaus and inquire about any credit cards, balances, or past addresses they know is incorrect. Each person is entitled to one free credit report per year at annualcreditreport.com. Choose a date that is easy to remember, like your birthday or a holiday.

The last tip of monitoring your credit reports will be especially important if you question how severe an incident may be to warrant making an identity theft claim. If you were a victim of phishing or you lost your checkbook, your identity has not been stolen and used fraudulently… yet. However, you will need to monitor all accounts very closely to be sure you minimize the risk in the future.  As a second layer of security, consider paying for a monitoring service (for example – LifeLock). These services alert you when they detect your personal information may have been used, and they also help cancel and replace the contents of your wallet if it is lost/stolen. In severe cases, many services will pay for the fees to hire experts to help with the recovery process in the event of Identity Theft.

This list of steps may initially seem like a lot of work, but keep in mind that an ounce of prevention now could be worth hours of future time later and endless frustration.

Jennifer E. Acuff is a wealth advisor for Windham Brannon Financial Group, LLC, a wealth management firm in Atlanta, A Certified Public Accountant (CPA), Certified Financial Planner (CFP®) and a Personal Financial Specialist (PFS), Jennifer has an extensive background in personal tax planning and consulting. She can be reached at jacuff@wbfinancial.com or 678-510-2766.

“I wasn’t prepared for this” says a client who was a recent victim of identity theft. He calculated that it was much more than the approximate 200-250 hours that he has already put in to try and remedy the horrific situation – “it was the frustration”.

If you know (or think) you have been a victim of identity theft, here are some helpful steps to follow to protect yourself:

• Call all three Credit Reporting Agencies – initial alert, extended alert, security freeze:
  • Experian 1-888-EXPERIAN (39737426)
  • Equifax 1-800-685-1111o
  • TransUnion 1-800-916-8800

A fraud alert puts a special notation in your credit that you may be a victim of identity theft. Creditors are then required to take additional measures to verify your identity before approving credit in your name. This initial fraud alert stays on your record for 90 days. An extended fraud alert stays on your record for 7 years, but you must show evidence that you have been a victim of identity theft (i.e – police report).  An additional step is putting a security freeze on your account with all 3 agencies. This makes it very difficult for others to try and open credit in your name. If you later need credit, it can be unfrozen by calling each of the agencies.

Note that when you put the initial fraud alert on your record, it is by phone on an automated system. An observation from our client was that “you are very reluctant to give [The Credit Bureau’s automated system] all the information that someone just stole from you”. He said that this is a very vulnerable time immediately following the identity theft, and “it was very hard to convince me not to be paranoid”.

• Carefully review the credit report that the Agencies send after you file the alert.
• Create an ID Theft Report with the Federal Trade Commission (the FTC) by calling 1-877-IDTHEFT (438-4338).
  The form is also available from the Federal Trade Commission at www.ftc.gov/idtheft. Additionally, you can provide a printed copy of your online Complaint form to the police to incorporate into their police report.  The printed FTC ID Theft Complaint, in conjunction with the police report, can constitute an Identity Theft Report and entitle you to certain protections.  This Identity Theft Report can be used to (1) permanently block fraudulent information from appearing on your credit report; (2) ensure that debts do not reappear on your credit report; (3) prevent a company from continuing to collect debts that result from identity theft; and (4) place an extended fraud alert on your credit report.

Word of caution – this Q&A form is very hard to use and doesn’t always apply to your specific situation. There are no places on the form to clarify the details of what happened.

• Close the accounts that you know have been tampered with. Word of Caution – although a cumbersome task, it is crucial in preventing future fraudulent activity! You will also need to be sure and update any auto debit payments with the new checking account or debit/credit card number so that you are not delinquent on any bills.
• Call your other creditors (credit card companies) to notify them about the theft.
  If you have accounts that appear to be untouched, do not close those accounts, but contact the companies to inform them about your situation and at least change your Personal Identification Numbers (PIN) and your passwords. Some credit card companies may offer other security measures that can take effect immediately.
• File a report with your local police or the police in the community where the identity theft took place.
  Inform your local police department that you want to file a report about your identity theft.   If the theft took place out of state, a police report will be difficult to obtain.  You must be persistent about getting this report or you cannot get a new Driver’s License! (Hint: The police department can mark the form “information only” so the local police don’t have to follow up on the report.) Ask the officer to attach or incorporate the ID Theft Complaint you filed with the FTC into their police report. Tell them that you need a copy of the “Identity Theft Report” (the police report with your ID Theft Complaint attached or incorporated) to be able to dispute any future fraudulent account activity created by the identity thief.
• Obtain a new Driver’s License Number – you will need to take a copy of the police report and Identity Theft Report in order to get a new license. IMPORTANT – be sure you get a new drivers license number when you get your new card.
• Contact the Social Security Administration – Toll free at 1-800-772-1213
  This is in the extreme case when your SSN has been stolen and frequently being used. The police will then likely recommend you go through the rigorous process of obtaining a new number. Otherwise, just be prepared to monitor the use of your SSN for the rest of your life by checking credit reports & your annual Social Security Wage Statement for accuracy.

• Stolen Passport Only: Notify the US State Department in writing to the following address:

U.S Department of State, Passport Services
Consular Lost/Stolen Passport Section
1111 19^th St NE Ste 500
Washington, DC 20036

Unfortunately it could take weeks, months, or even years to finally clear up your identity and completely refurbish your credit. When asked for final advice from a recent victim, he said to “keep notes on everything you do and everyone you talk to”.  Remember that YOU are your best advocate in this situation, so be persistent and leave no stone unturned!

Jennifer E. Acuff is a wealth advisor for Windham Brannon Financial Group, LLC, a wealth management firm in Atlanta, A Certified Public Accountant (CPA), Certified Financial Planner (CFP®) and a Personal Financial Specialist (PFS), Jennifer has an extensive background in personal tax planning and consulting. She can be reached at jacuff@wbfinancial.com or 678-510-2766.

O.K.  I know my third grade English teacher would cringe at the grammar, but I hope it gets the point across.  But have you ever pondered the question?

Historically, capital markets have provided positive returns.  But why?  Risk is not the only answer.  There are plenty of types of risk that don’t produce positive outcomes.  Certainly, some types of investment risk can explain differences in returns (stocks vs. bonds, small companies vs. large companies, etc.), but these risks in and of themselves don’t explain why there are any returns at all.

Sometimes the investment community gets so lost in minutia that the larger picture is often lost.  In the end, investing is the process of capturing the positive outcomes of the human effort as we go through life.  Sounds noble?   I think it is.  Now, I know there are many types of returns besides financial returns, but investing is focused primarily on the financial aspect of the global human effort.

Do people add value?  I contend that without people, there is no value in a commodity or a business.  It’s the application of the human element to these things that ultimately produce the value that’s reflected in the financial markets, and that’s what we try to effectively capture for you.

The market over the last few days has been ugly.  There’s no way to sugar-coat the obvious (although I’m going to try in a few paragraphs).  I’m not usually surprised by market moves, but I confess a little head-scratching on this one.  Other than some not-so-good economic news, there isn’t really anything new that would drive the market down, in my view.

Are we really surprised that Washington is dysfunctional?  Or that the U.S. government spending is out of control?  And that the fiscal trajectory is unsustainable?  This.. is.. not.. news.

Or maybe it’s just in keeping with normal markets.  “WHAT!?” you might say.  Stay with me here.  Let’s take a look at a chart showing the annual returns from 1980 (grey bar) superimposed over annual top-to-bottom market declines for each year (red dots).  Out of the last 31 years, 17 had a mid-year correction of at least -10%.  Of those 17, 11 of those years ended with a positive market for the year.  As of Friday, the S&P had declined just over 11% since July 7^th, and 17% as of today.  So what’s different about this?  Possibly the quickness of the decline, but not much else.

Maybe, the market is leading the news, pricing information that is yet to be public, or this simply could be the short term risk that comes with long-term returns from markets.  In other words – it just happens.

Yes, I know, it’s different this time…but as I’ve said before, what makes this time like every other is that it’s ALWAYS different.

Can it get worse?  Yes, but we’re well within the range of “normal,” so our best counsel is to avoid getting caught up in the mania, and turn off CNBC (we’re watching it for you).

Feel free to call us with questions about how this impacts you personally.  That’s why we’re here.

3630 Peachtree Road, NE
Suite 600
Atlanta, GA 30326

Our phone and fax numbers will remain the same:

404-898-2000 (main phone number)
404-898-2010 (fax)