Fix Your Finances Now

After three of the worst years for investors, we offer guidance from top financial advisors

for those individuals who do not join a 401(k) plan because they believe they can’t afford it. This allows them to receive some type of tax credit–anywhere from 5% to 10%, depending on their income–from the contributions they have elected to defer to an IRA, up to $2,000. A lot of people forget about this tax credit, and I think it can help. It’s an elective for lower income and single individuals who make under $25,000 and for married individuals or heads of households who make less than $37,500.

B.E.: Is there any tax advice for small businesses owners?

SMITH: For small businesses, the government just increased the capital expenditures rules, like section 179, from $25,000 to $75,000. That’s huge because if you have a vehicle that weighs over 6,000 pounds, you can use section 179 for that. So if you buy a Yukon or an Escalade through your business, you can write the whole thing off as long as it costs less than $75,000. I think that’s a tremendous benefit for small business owners because they can take advantage of it going

Michael Smith ProFocus Inc.
I’m recommending stocks and mutual funds that have had consistent earnings growth over the last two years.

eBay has a terrific business model. It was an online auction company, but it has transformed into a business-to-consumer marketing and distribution network. It’s expanding globally, and its earnings growth is consistent.

Health Management Association manages about 40 hospitals in most of the southern states. It is very cost-conscious, and with its distribution network, it is really driving down the cost of hospital equipment and pharmaceutical services, which has led to consistent earnings growth.

Royce Special Equities Mutual Fund has a great model when it comes to picking small value holdings. It’s one of few fund groups that has had a flat or positive return over the past two to three years. Going forward, it has positioned itself for a market upswing. msmith@profocus.com

Company (Exchange: Ticker) Price at
Recommendation*
5-Year Estimated
EPS Growth Rate
eBay Inc. (Nasdaq: EBAY) $75.28 45.4%
Health Mgt. Assoc. (NYSE: HMA) 18.34 15.7
Mutual Fund (Ticker) Fund
Category
3-Year
Trailing Returns**
Royce Special Equity (RYSEX) Small-cap Value 18.01%
*AS OF JAN. 24, 2003 **AS OF FEB. 7, 2003
SOURCES: MORNINGSTAR INC.; YAHOO! FINANCE; ZACKS INVESTMENT RESEARCH
   

 

Cheryl Creuzot Wealth Development Strategies L.P.

My selections are primarily based upon performance vs. style-specific benchmarks, management tenure, and the funds’ buy-sell discipline. I stress the proper asset allocation for investors and suggest the following portfolio breakdown using mutual funds in today’s market. This portfolio is appropriate for the moderately aggressive investor with a 10-year time horizon.

Cheryl_Creuzot@wealthdevelopmentstrategies.com

Fund
Category
Percentage of
Portfolio
Mutual Fund (Ticker) 3-Year
Trailing Return*
Large Growth 22% Bramwell Growth (BRGRX) -14.55%
Large Value 25 Ameristock (AMSTX) 0.15
Mid Growth 6 Navellier Mid-cap Growth (NPMDX) -21.80
Mid Value 7 Berger Mid-cap Value (BEMVX) 8.81
Small Value 10 Ariel (ARGFX) 12.60
Foreign Stock 10 American Century International (TWIEX) -22.89
Short-term Fixed Income 13 Strong Government Securities (STVSX) 10.30
High-Yield Bond 5 Columbia High-Yield Z (CMHYX) 4.64
Cash 2    
*AS

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