Every Wednesday, Legg Mason Wood Walker financial adviser Jonathan Murray answers e-mail on your investments. To be included next time, send your questions.
> From: Goldstein, Jon W.
Sent: Tuesday, January 29, 2002
To: ‘Murray, Jonathan P.’
Subject: $
Hello, Jonathan,
Why doesn’t Alan Greenspan speak in regular English? After confusing
investors earlier this month and sending markets lower with what was
interpreted to be a gloomy outlook, the Federal Reserve chairman is sure to issue another head-scratcher at the conclusion of the Fed’s meeting today. Will we need a translator?
Thanks
From: Murray, Jonathan P.
Sent: Tuesday, January 29, 2002
To: Goldstein, Jon W.
Subject: RE: $
It is almost humorous to watch and hear the Fed chairman, as he paints his
word pictures with obfuscation. I think he does it on purpose, to describe
all sides of the economic equation.
To his credit, the inner workings of an
economy are often arcane and complex, and hard to put “in layman’s terms.”
However, I agree that he could bring it down a peg or two, so that normal,
everyday Americans might have a clue as to what he’s talking about.
As you interpret what Greenspan is saying, listen for certain phrases
such as, “there still exist significant risks to the economy,” or conversely, “the economy is showing signs of accelerated growth, which could
lead to inflationary pressures.”
For most investors, I feel confident that Alan Greenspan and the entire
Federal Reserve Board are doing a decent job of steering our economy through
these turbulent seas.
> From: Goldstein, Jon W.
Sent: Tuesday, January 29, 2002
To: ‘Murray, Jonathan P.’
Subject: $
I am a recent college grad and want to start putting money away now so that
I can retire ASAP. However, I also have substantial credit card debt. What
should come first, the plastic payoff or the IRA?
Thanks
From: Murray, Jonathan P.
Sent: Tuesday, January 29, 2002
To: Goldstein, Jon W.
Subject: RE: $
My advice, if you can do it, is to do a bit of both: pay down the credit
card AND begin to invest in an IRA.
To begin, call your credit card
company and ask if they can lower your rate. If they can’t, shop around and
see if you can transfer that balance to a lower rate card. That will help,
as you pay it down.
Next, always pay more than the stated minimum due on the
card. By only paying the minimum, it will take you years longer to pay off
the card.
At the same time, start investing in an IRA for your retirement.
Look for a nicely balanced, long-term growth fund that has a good track
record and is well-diversified. Even if you just invest a little bit, the
power of compounding will astonish you over the next few decades. Start now
and you will be happy that you did come retirement.
> From: Goldstein, Jon W.
Sent: Tuesday, January 29, 2002
To: ‘Murray, Jonathan P.’
Subject: $
With the new tax law changes, can I now put my rollover IRA into my company
401(k)? If so, how?
Thanks
From: Murray, Jonathan P.
Sent: Tuesday, January 29, 2002
To: Goldstein, Jon W.
Subject: RE: $
Through the recently passed EGTRRA (Economic Growth and Tax Relief
Reconciliation Act) you may now be able to transfer your IRA to your 401(k)
plan, if your employer permits it. Make sure that your employer’s plan
document has been amended to permit this. They will need to account for the
transferred balance separately from your existing 401(k) balance.
State laws
may vary with respect to the new legislation; you should verify that your
state of residence has adopted the EGTRRA legislation.
Please consult your
legal and/or tax adviser regarding your specific situation prior to
implementing any course of action.
> From: Goldstein, Jon W.
Sent: Tuesday, January 29, 2002
To: ‘Murray, Jonathan P.’
Subject: $
Thanks, Jonathan.
Talk to you next week
