The last few articles I have written have been fairly depressing.  The economy had been growing slowly and none too surely.  Conflicts were increasing and wages were dwindling.  I didn’t take any pleasure writing them.

However, things are looking fairly good right now.  The sources I follow have been as optimistic as I’ve seen since the crash in 2009.

One of the sources I read is the Financial Times.  On January 30, 2012, they published an article regarding US consumer spending.  While the article did state that consumer spending had been stagnant in December from the rate in November, the majority of the article was positive. 

Incomes went up by a half percent in December.  Historically, that may be a fairly small number.  However, it is quite good when looking at the recent past.  The increase was primarily placed in savings, which increased to four percent (4%) of disposable income.   Compared to many industrialized Countries, that is not a real high number.  However, it is fairly high compared to the recent past for the USA.

Increasing the rate of savings of total disposable income is generable a positive thing for the Country.  However, right now, we could use more spending to help ramp up the economy.  Consumer spending accounts for around seventy percent (70%) of the economy in the USA. 

What will it take to get people to spend more?  In the past, an improving job market has done the trick.  The job market includes the feeling of stability with present employees, the prospects for those that don’t have a job, as well as the number of new jobs compared to lost jobs.  Those issues also have a large impact on wage increases. 

In the Economist, the same topics were discussed and others were analyzed in an article that credited additional debt, in the form of bank loans, for keeping the recovery going.  Specifically, improvements in job creation, hitting bottom on housing and the Federal Reserve keeping interest rates very low. 

Those, as well as inventory restocking, helped the economy grow in the fourth quarter by a 2.8% annualized rate.  The growth rate is predicted to slow down due to the need to reduce debt.  The hope is that larger wage increases coupled with low inflation will allow debt to be paid down while spending continues to increase.  So long as the private sector is allowed to proceed before the government tries to reduce the national debt and the US is not overly hurt by the European economy, things are looking much better for the next few years.

The Wall Street Journal said the numbers indicated sustained growth.  The numbers included almost a quarter of a million net new jobs in January.  Those jobs decreased the unemployment rate to 8.3%, the least since 2009.  The unemployment rate was 9.1% as recently as August.  The jobs were spread over most of the private sector.

Of the net job increase, there was actually a reduction in public sector employee jobs of 14,000 for the month.  It is fairly normal for the public sector’s economic conditions to lag a year or so behind the private sector.  Hopefully the additional taxes provided by the private sector’s growth will turn things around in the public sector as well.

While I was writing this article, The Christian Science Monitor also sent me an article on the economy.  In addition to much of what the others said, there was a reference to the Dow Jones, which jumped more than a hundred points after the announcement of the January numbers.

The job growth was spread throughout the various portions of the market.  Professional and manufacturing jobs had the largest increases.  Even construction hired over twenty thousand workers.  Further, the government analyzed the data and increased the number of jobs added over the prior two months by sixty thousand.

On the other hand, the USA is still over five and a half million jobs below the level prior to the start of the recession.  There is also quite a bit of concern over the European recession predicted to start any time now.  It could have quite a negative impact on US exports.  

A chocolate cake. Pasta. A pancake. They’re all very different, but they generally involve flour, eggs, and perhaps a liquid.  Depending on how much of each ingredient you use, you can get very different outcomes.  The same is true of your investments.  Balancing a portfolio means combining various types of investments using a recipe that’s right for you.

Getting the right mix

The combination of investments you choose can be as important as your specific investments.  The mix of various asset classes, such as stocks, bonds, and cash alternatives, accounts for most of the ups and downs of a portfolio’s returns.

There’s another reason to think about the mix of investments in your portfolio.  Each type of investment has specific strengths and weaknesses that enable it to play a specific role in your overall investing strategy.  Some investments may be chosen for their growth potential.  Others may provide regular income.  Still others may offer safety or simply serve as a temporary place to park your money.  And some investments even try to fill more than one role.  Because you probably have multiple needs and desires, you need some combination of investment types.

Balancing how much of each you should include is one of your most important tasks as an investor.  That balance between growth, income, and safety is called your asset allocation, and it can help you manage the level and type of risks you face.

Balancing risk and return

Ideally, you should strive for an overall combination of investments that minimizes the risk you take in trying to achieve a targeted rate of return.  This often means balancing more conservative investments against others that are designed to provide a higher return but that also involve more risk.  For example, let’s say you want to get a 7.5% return on your money.  Your financial professional tells you that in the past, stock market returns have averaged about 10% annually, and bonds roughly 5%.  One way to try to achieve your 7.5% return would be by choosing a 50-50 mix of stocks and bonds.  It might not work out that way, of course.  This is only a hypothetical illustration, not a real portfolio, and there’s no guarantee that either stocks or bonds will perform as they have in the past.  But asset allocation gives you a place to start.

Someone living on a fixed income, whose priority is having a regular stream of money coming in, will probably need a very different asset allocation than a young, well-to-do working professional whose priority is saving for a retirement that’s 30 years away.  Many publications feature model investment portfolios that recommend generic asset allocations based on an investor’s age.  These can help jump-start your thinking about how to divide up your investments.  However, because they’re based on averages and hypothetical situations, they shouldn’t be seen as definitive.  Your asset allocation is – or should be – as unique as you are.  Even if two people are the same age and have similar incomes, they may have very different needs and goals.  You should make sure your asset allocation is tailored to your individual circumstances.

Many ways to diversify

When financial professionals refer to asset allocation, they’re usually talking about overall classes: stocks, bonds, and cash or cash alternatives.  However, there are others that also can be used to complement the major asset classes once you’ve got those basics covered.  They include real estate and alternative investments such as hedge funds, private equity, metals, or collectibles.  Because their returns don’t necessarily correlate closely with returns from major asset classes, they can provide additional diversification and balance in a portfolio.

Even within an asset class, consider how your assets are allocated.  For example, if you’re investing in stocks, you could allocate a certain amount to large-cap stocks and a different percentage to stocks of smaller companies.  Or you might allocate based on geography, putting some money in U.S. stocks and some in foreign companies.  Bond investments might be allocated by various maturities, with some money in bonds that mature quickly and some in longer-term bonds.  Or you might favor tax-free bonds over taxable ones, depending on your tax status and the type of account in which the bonds are held.

Asset allocation strategies

There are various approaches to calculating an asset allocation that makes the most sense for you.  

The most popular approach is to look at what you’re investing for and how long you have to reach each goal.  Those goals get balanced against your need for money to live on.  The more secure your immediate income and the longer you have to achieve your investing goals, the more aggressively you might be able to invest for them.  Your asset allocation might have a greater percentage of stocks than either bonds or cash, for example.  Or you might be in the opposite situation.  If you’re stretched financially and would have to tap your investments in an emergency, you’ll need to balance that fact against your longer-term goals.  In addition to establishing an emergency fund, you may need to invest more conservatively than you might otherwise want to.

Some investors believe in shifting their assets among asset classes based on which types of investments they expect will do well or poorly in the near term.  However, this approach, called “market timing”, is extremely difficult even for experienced investors.  If you’re determined to try this, you should probably get some expert advice – and recognize that no one really knows where markets are headed.

Some people try to match market returns with an overall “core” strategy for most of their portfolio.  They then put a smaller portion in very targeted investments that may behave very differently from those in the core and provide greater overall diversification.  These often are asset classes that an investor thinks could benefit from more active management.

Just as you allocate your assets in an overall portfolio, you can also allocate assets for a specific goal.  For example, you might have one asset allocation for retirement savings and another for college tuition bills.  A retired professional with a conservative overall portfolio might still be comfortable investing more aggressively with money intended to be a grandchild’s inheritance.  Someone who has taken the risk of starting a business might decide to be more conservative with his or her personal portfolio.

Things to think about

• Don’t forget about the impact of inflation on your savings.  As time goes by, your money will probably buy less and less unless your portfolio at least keeps pace with the inflation rate.  Even if you think of yourself as a conservative investor, your asset allocation should take long-term inflation into account.
• Your asset allocation should balance your financial goals with your emotional needs.  If the way your money is invested keeps you awake worrying at night, you may need to rethink your investing goals and whether the strategy you’re pursuing is worth the lost sleep.
• Your tax status might affect your asset allocation, though your decisions shouldn’t be based solely on tax concerns. Even if your asset allocation was right for you when you chose it, it may not be right for you now.  It should change as your circumstances do and as new ways to invest are introduced.  A piece of clothing you wore 10 years ago may not fit now; you just might need to update your asset allocation, too.

Joseph C. Randazzo, JD, CFP®                                
Michael Embrescia     Suzanne Lipps    Sal Catalano    Bill Matejka    Loren Cross   
Financial Network of America LTD
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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2012

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www.fnaohio.com

Solicitations for application for FY12 cops hiring funding begins today, Thursday, March 1st. The deadline for applications is Thursday, March 22nd.

It is important to note that the application process for FY 12 funding is limited to law enforcement agencies that applied but were not funded or only partially funded under FY11 COPS Hiring Process. Funding can be used to rehire officers who have been laid off or for departments that would like to hire new officers. New hires have to be Veterans with at least  180 days of active service post 9/11.


Should you have any questions please be sure to contact NAPO or the COPS Office (1-800-421-6770).

For a full list of funding solicitations within DOJ please visit this site:
http://www.ojp.usdoj.gov/funding/solicitations.htm

Thank You.

Jeff Pedicino

Will Become the 4th Executive Director
of the O.P.B.A on January 1, 2012

Education

• Cleveland State University: Studied Labor Relations and Personnel Management 1976-1980
• James B. Nance College of Business Administration (CSU): Certificate in Labor Relations 2002
• More than 2500 hours of Law Enforcement training.

Law Enforcement Experience

• Police Officer with over 31 years of experience.
• Solon Police: 2003 Officer of the Year, D.A.R.E. Officer 12 years, F.T.O., Law Enforcement Instructor
• O.P.B.A. Director and Lead Negotiator for 25 years while a Solon Patrol Officer

O.P.B.A. Experience

• 1993 Trustee -1998 Financial Secretary - 2005 Executive Secretary - 2012 Executive Director

What I Commit to do as Executive Director.

• Maintain and strengthen fiscal accountability with your organizational monies.
• Meet with Directors throughout the year in your areas as well as moving membership meetings to allow more participation of members.
• Aggressively monitor your interests as it pertains to the Ohio P & F and O.P.E.R.S. funds as well as other attacks on your rights by actively interacting with our State Legislatures to protect your interest and rights.
• Update our website and use various technologies to disseminate information in a more effective and efficient manner.

For a complete resume see my website at https://sites.google.com/site/voteforpedicinoopba

I originally took out this full page ad for my for my candidacy to become the next Executive Director prior to the nominations meeting, however, at the September 1, 2011 meeting I was nominated unopposed. I want to thank all of you who visited my website and Facebook Fan Page. Also, those of you who reviewed the letters that had been dropped off at various departments.

Thank You,
Jeff Pedicino

The Greater Cleveland Peace Officers Memorial Society and the Ohio Bureau of Motor Vehicles announce the availability of specialty license plates beginning on February 27, 2012.

In June, 2011, Governor John Kasich signed the legislation authorizing the "Honor Our Fallen" special interest Ohio license plate that honors our fallen law enforcement officers. It became law on September 23, thanks to the efforts of Sen. Tom Patton who introduced the legislation within House Bill 65, ORC 4503.713 (A)(B)(C).

The plate was created and designed by the Greater Cleveland Peace Officers Memorial Society (GCPOMS) with the expert assistance of the Ohio Bureau of Motor Vehicles to help us all keep "The Promise" to never forget our fallen officers. Every license plate issued serves as a reminder of the dangers that our law enforcement officers face every day, and honors the memories of those that have died in the line of duty. A portion of the proceeds from the sale of the license plates help to further the goals of the GCPOMS, and ensures that we keep our promise to never forget their sacrifice.

Plates will be available for purchase through the Bureau of Motor Vehicles beginning March 27, 2012. Ask the staff at your Deputy Registrar's Office for the "Honor Our Fallen" specialty plates when renewing/buying your vehicle's license plates. You may also exchange your current plates for this specialty plate at a reduced rate of $36.75. Please visit http://bmv.ohio.gov/fees_for_services.stm for more information.