Money Report

Now more than ever, a relationship with your banker is the most important financial connection you can make. Uncertain and dynamic economic conditions magnify the advantages that your banking partnership offers.

At Atlantic Community Bank, we place a high priority on forming new associations which are mutually beneficial, and strengthening our existing loan and deposit relationships.

Lenders are ready to work with qualified buyers.

In the past 12 months the mortgage industry has traveled back in time. All of the mortgage products born during the early part of the decade are gone and we are back to the 30-year-fixed-rate mortgage. Many   home buyers are under the misconception that the mortgage industry has hung up an “Out of Business” sign. In reality there is an abundance of mortgage money available at some of the best rates we have seen in 40 years.

A bank’s goal should be to help borrowers become homeowners for the long term. This means borrowers should have a minimum of a 10 percent down payment, spend no more than 45 percent of their monthly income on their monthly obligations and have a demonstrated record of excellent credit management.

Strategies for maximizing your deductions in 2008.

As we reach the close of a very troubling year for markets and the economy, astute investors need to use all the tools at their disposal to make the best of a bad situation and maximize their tax advantage. Here are some important end-of-year tax items we think are worth reviewing.

First, estimate adjusted gross income, for both 2008 and 2009
The time-honored strategies of accelerating deductions and deferring income need to be evaluated carefully; these are tied to adjusted gross income, and thus impact your ability to maximize itemized deductions related to gross income.

If you anticipate being in a higher tax bracket in 2009, you may benefit from accelerating income into 2008. If you expect your adjusted gross income to be higher in 2008 than in 2009, or you anticipate being in a higher tax bracket in 2008, you may benefit by deferring income into 2009. Be sure to consider the effects on Social Security; additional income may increase the rate of tax paid or the percentage of benefits taxed.

Visions of donkeys and elephants dance in our heads.

In a few days we’ll know our next president. Pundits are hard at work examining the twists and turns of the final days of this election season, ferreting out the clues that will help craft successful investment strategies for the years ahead.

Who will be better for the stock market and the economic recovery, McCain or Obama?

There are a lot of statistics out there on election results and market returns — some meaningful, some less so — most of dubious value to long-term investors. Each administration inherits a unique set of domestic economic and global circumstances; where you start from determines to a great extent how the markets and economy will perform.

An alternative asset class.

Has the economic crunch affected the international art market? Not according to Christie’s and Sotheby’s auction houses in New York, who rang up sales of $583.5 million in contemporary, modern and impressionist paintings and sculpture over two evenings in May of this year. The fine art market doesn’t always correlate with traditional financial investment markets but can offer an intriguing alternative asset class, particularly for investors concerned with accumulating capital gains rather than current income. There are certainly risks and considerations unique to art and there are very few art investors who buy for investment consideration alone. Considering the uncertainty of traditional financial markets, though, many investors with liquid capital look to fine art as a safe haven.

Money smarts you can share with your children.

You may have at one point in your adulthood said to yourself, “If only I knew more about money then.” Well it may be too late for you, but you can fix it for your children. Here are some easy to teach tips that will make a difference in their financial lives.

When they’re young show them the basics, the difference between something needed and something wanted. Discuss spending priorities; is something really needed for survival, work or school? Will it make life appreciably better, or is it just for fun and entertainment? Teach them to pay the most important bills and make the most important purchases first.

Determine your policy for an allowance and stick to it. Yo u need to consider whether household chores are expected in return, and what expenses the allowance is meant to cover. A fixed amount of cash will encourage thought before spending.

New legislation could impact your investments.

Is that a misprint? No. It’s not well known, but beginning in 2008 and through 2010, taxpayers in the lowest two federal tax brackets may use a zero percent rate on qualified dividends and long-term capital gains. Yo u are eligible for this tax break if your adjusted gross income is less than $32,550 for single tax payers or $65,100 for married taxpayers filing jointly.

Many retired couples with comfortable incomes, but who draw a significant part of their income from Social Security and tax exempt interest, may be well below the $65,100 threshold. This presents an opportunity to cash out some of those highly appreciated stock positions or sell an appreciated piece of property without paying a sizable chunk in taxes. In an alternate scenario, children of these retired couples could transfer highly appreciated assets to their parents, while retaining the same cost basis and holding period. The parents could cash the asset out at zero percent capital gain; this strategy could be ideal in the case of children assisting elderly parents.

Smart women and their money.

Money and finance were “taboo” topics of conversation in my family when I was growing up; we lived with a “those who have it shouldn’t talk about it” mentality. In college, I was amazed to discover that other students had their own checking accounts, and I was totally shocked by my future husband’s family’s openness about financial matters. Still, this was the very beginning of a journey that eventually ended with an MBA in finance, a CFP certification and a life long commitment to financial planning, especially concerning those issues specific to women.

Our culture puts a premium on financial success and security, but often, for women, withholds the opportunity, exposure and experience required to become fluent in financial language and comfortable interacting in the world of investments. Women on their own face some daunting cultural and circumstantial challenges.

Heed the following warnings and invest with confidence in uncertain times.

In this turbulent period, when markets and the economy are experiencing an unending drumbeat of bad news, it is hard to keep a long-term perspective. Even knowing that periods like this have been - almost without exception - superb opportunities for stock market investment, this is not enough.

Distancing yourself from the daily assault of irrelevant and impractical information can be helpful. Look at some of the things that really can derail long-term wealth preservation and accumulation, no matter what kind of market you may live through. Six real risks we see are: a weak investment plan, over concentration, behavior, taxes, discord and liability.