FINANCIALLY, how should we approach 2002?
Financial Planning Perspectives says, "2001 has been difficult for many families, even before September 11. A once-invincible economy fell into recession and stocks suffered. Heading into 2002, many people are edgy about their financial situations." The newsletter lists "Smart Financial Moves for 2002:" Excerpts:
"Build an emergency fund. Have a `cash cushion' of at least 3-6 months of bare-bones living expenses to help through a layoff.
"Minimize debt. Especially avoid high-interest installment debt such as credit cards.
"Prepare for a job change. Even secure jobs seem less secure since September 11.
"Don't quit investing. Historically, most markets rebound, given enough time.
"Review insurance coverage. September 11 illustrated need for adequate insurance - life, disability, medical, long-term care, etc."
MONEY-SAVER: "Plan to take advantage of new, more generous IRA contribution rules as early in 2002 as possible," says Seymour Goldberg, CPA. "Doing so will maximize tax savings.
"If you make your IRA contribution in January 2002 instead of at the last moment - April 15, 2003 - you'll get 15 months more of tax-deferred returns, plus compounding in future years."
WALL STREET WATCH: "Interest rates are low worldwide, and that is boosting the markets. If investor sentiment continues to improve, for whatever reason, stocks will continue to move up." (The Aden Report, in this week's Barron's)
"Stocks have rallied strongly, while interest rates have increased sharply over the past few weeks. This behavior of both markets is consistent with economic recovery. Investors now look ahead and see a healthier economy - as do we." (Economic Commentary)
