April 2011: Quarterly Letter

Dear Clients and Friends,

I hope you are enjoying your spring!  Wasn't it Tennyson that said "In the spring a young man's fancy lightly turns to thoughts of ... finances."  Maybe I'm just remembering it wrong.  Certainly there has been a lot going on in the world.  In a few short months, the sentiment on the US market has turned decidedly more positive.  There is increasing consensus from economists and pundits that recovery in the US is tentatively taking hold.  Meanwhile, in what can be considered a big flip-flop of sentiment, many developed and emerging markets are suddenly seeming a lot more risky.  From debt problems in the Euro zone, to unrest in the Middle East and North Africa, to a hot real estate market in China, risks seem to abound in the world.  Watching events play out should certainly remain interesting.  I am confident that a globally diversified and disciplined investing program will continue to provide a sound basis for clients to realize their financial goals.

On a more personal note, the current change of seasons is probably prompting you to dust our your closets, pile up your donations for the Salvation Army (tax deductions!) and generally blow the cobwebs out of your home.  Of course, there is always more to it than just taking a load of junk down to the recycling center...

Annual Credit Review
(Or: Spring Cleaning - Bootstrap Style)

Every year, Mrs. Bootstrap and I spend some time spring cleaning - financially speaking of course.  We review our credit reports.  Yes, we are geeks.  I just want to point out that Mrs. Bootstrap originally suggested the idea.  My kind of girl!

In any event, financial geek or not, you should review your credit report annually.  There are many unscrupulous people with computers out there (if only they would use their powers for good instead of evil) and they would like nothing better than to borrow your excellent financial standing for their own nefarious purposes.  You have no excuse not to do this: it takes less than 20 minutes and its free.  Follow these two steps to credit bliss.

Step 1: Get your free annual credit report

Go to www.annualcreditreport.com to get your free credit report.  This is the government sponsored site for individuals to monitor their credit reports from any of the three major credit rating agencies.  Don't be fooled by other credit reporting agencies like freecreditreport.com, they are not necessarily free and will definitely attempt to sell you additional services.

Once you input your personal info you will get a detailed credit report.  A couple of things to look for:

• Right at the top you'll see your public mortgage details.  Ever wonder why you get all those mortgage offers that seem to know exactly what your mortgage is and when it is resetting?  It is public information.  Democracy is wonderful.
• Further down you should see your individual credit accounts.  They may be listed as "Satisfactory" or "Unsatisfactory". You are looking for any of the 30-60-90 day past due records.  Check to make sure they are correct.  If not call the credit company and ask them to fix it.
• You should also see credit inquires.  There are several types.  Regular Inquiries are made for the purpose of establish a credit account such as mortgage or credit card.  They stay on your report and can affect your credit score (on the theory if you are trying to establish lots of credit, you may be desperate for cash).  Account Review Inquiries are made by partners that you do business with for the purposes of account review.  These are not visible if someone other than you pulls your credit report and they do not affect your score.  Promotional Inquiries are amusing but nothing more.  You can see all the companies trying to get your basic credit info so they can offer you yet another 0% balance transfer offer.

Check that all the data is accurate and that there have not been unauthorized regular inquiries or new accounts opened that you have not authorized.  This site does not offer your actual credit score - just the basic credit data.

Step 2: Get your free credit score

If you are interested, you can go to creditkarma.com to get your free credit score.  This won't do anything to help detect identity theft, but it will give you your actual score.  This can be useful if you will be applying for a mortgage or other form of credit.  A score of 760 or above (out of 850) will get you the best rates.  This can also be useful to see if you have improved your credit rating over time, or if you are just insanely competitive, make sure that it is the highest it can possibly be.

That's it!  Two steps, 20 minutes, once a year to make sure your financial peace of mind can be maintained.  If you do happen to find a discrepancy, or if someone has opened an unauthorized account under your name, call the respective credit agency immediately and they will put a fraud alert on your account.  You only need to call one, that agency will alert the other two.  The contact information is listed below:

• Equifax: 1-800-525-6285
• Experian: 1-888-397-3742
• TransUnion: 1-800-680-7289

In Closing

The responsible use of credit is important to your long term financial plans.  It would be a shame to have that ruined through identity theft.  Hopefully a few minutes each year can help you maintain your credit and your peace of mind.

If your friends and family have questions about credit reporting or any other financial issue, please don't hesitate to make an introduction or forward this letter.  We provide Financial Planning and Investment Management services and would be happy to talk with your acquaintances.  We will treat your friends and family with the same care and diligence that we treat you.
Thanks,

Brian McCann