Conference Call on Our Website: Market Thoughts and Recommendations

Recently, we held a phone call for any client or guest - incidentally, our call date was Thursday, October 9th - the day before the BIG DROP. It is about a 60 minute presentation with the following agenda:

What Happened and What the Government Did
· Why Sept. and Oct. 08 will go down in market history for volatility
· Why the lending system is so important and it?s effect on the stock market
· What the government has done to try and fix it

What has Changed and Our ?Take? on the Situation
· Understanding the fundamental shift that has now taken place
· Are we sure we want to be in the market, still?

5 Key Questions We Think EVERY Investors Should be Asking

What changes might need to be made to your investment strategy given the strong possibility of a flat but volatile market?

How diversified are you and, if suitable, do you hold alternative asset classes in your mix? (real estate, commodities, precious metals, etc.) If so, do you have a strategy to ?redirect? if the hedges that worked in similar hard times don?t work again?

If you are contributing and/or withdrawing from your accounts, what changes might be made to potentially capitalize on the volatility instead of letting it work against you?

What has this market done to our retirement projections and what are our realistic chances of recovery?

Given taxes are probably going up fast and our account values down, what tax moves should we be looking at today with our tax advisors ? even before year end ? to make some lemonade out of lemons?

All of this material is available to you on the Home Page of our website at www.invresource.com. Listen and share!

Federal Elections and Tax Decisions

The outcome of the 2008 federal elections is anything but certain. For the first time since 1928, there is no presidential heir-apparent, and both houses of Congress are up for grabs. Taxes are very much in the forefront of the political debate. But where is tax policy headed?

At this point, no one knows for sure, but the implications all lead to one, unambiguous conclusion - - With the dawning of 2009, every section of the federal tax code will likely be reviewed and perhaps changed significantly or even eliminated. This brings to light several questions for many more complex investors:

1. Should you consider accelerating income and receiving it in 2008, rather than in later years when ordinary income rates may be higher?

2. Should you consider taxing your compensation currently, rather than deferring compensation to later years when tax rates may be higher?

3. Should you consider deferring discretionary deductible payments (such as charitable contributions) to later years when they may be worth more due to higher tax rates?

4. Should you consider selling assets and recognizing capital gains in 2008, rather than wait to sell in later years when the capital gains rate may be higher?

5. Are you eligible to take advantage of the 0% capital gains rate available in 2008? Can we manage your taxable income to qualify for that rate?

6. Should we review your estate planning when the outlines of estate tax reform become clearer?

7. Should you be gifting assets to family members, or others, in lower tax brackets, so the earnings on those assets are not subject to higher tax rates (recognizing that gifts to minors may be taxed at your rate)?

Answering these questions is anything but easy. If you find yourself thinking the same thing, then likely we should talk. Word about our company and the services/advice we give spreads one person at a time. I look forward to a call from you if you so feel we could be of assistance.

Worst Dow Drop of the Decade...and longer...

Financial markets fell off a cliff Monday, with the Dow Industrial Average (an unmanaged index of 30 widely held stocks) finishing the day at 10,365.45..... down 777.68 points, or 6.98%, from Friday's close. The drop occurred after the House of Representatives unexpectedly rejected a proposed $700 billion package designed to relieve the financial industry of its troubled mortgage-related debt. Despite Monday?s market plunge, September 29, 2008, in all likelihood will NOT replace the "Black Monday" of October 19, 1987, when the Dow Industrial Average (an unmanaged index of 30 widely held stocks) lost more than 22% of its value. Other widely followed indices fell spectacularly Monday, as well.

To add to the gloom, yet another marquee bank was broken up as Citigroup agreed to take over the banking operations of Wachovia for $2.2 billion. And that just days after Washington Mutual collapsed and was gathered up by JPMorgan Chase for $1.9 billion. The redrawing of the American financial landscape continues unabated, and experts tend to agree that several smaller banks are likely to need rescuing. Most banks that have either failed or been swallowed up found themselves in trouble because they were heavily exposed to mortgage-related investments.

Observers were dumbfounded by the failure of the bailout bill, a massive measure designed to allow the government to buy up bad and suspect debt from troubled financial institutions. After more than a week of debate, meetings and political compromises, Congressional leaders on both sides of the aisle thought that their bipartisan approach would spur House passage on Monday. As you have often heard, confidence is a determining factor in markets and market value. When confidence is shaken badly, as it has been over the past year and over the past few weeks in particular, the only solution is to restore it. The bailout measure was designed to do that. While it was defeated Monday, it seems likely to somehow be resurrected. Late in the day it was reported that the House will reconvene on Thursday to try again.

In such a fluid situation, investors with a long-term horizon may best be served by keeping a watchful eye on the situation and avoiding hasty moves. No one knows how deep the lack of confidence and financial industry troubles will drive the markets, but, historically, such black periods...sometimes quickly, more often, slowly...have been wiped away by subsequent restoration of confidence and, with it, value. If you have questions about the state of the financial services industry, the meaning of the bailout package, or would like to discuss how your portfolio and specific investments are faring, please feel free to contact me.

REMEMBER WE HAVE A CONFERENCE CALL FOR ANYONE TO CALL IN NEXT THURSDAY, OCT 9 @ 9 am CST to discuss just what our thoughts are (the moves we are making and suggesting) and recovery strategies.

CALL 877-639-1065. CONFERENCE ID# 66391211. Feel free to share this with friends.

Also, we are evaluating key moves within ALL ACCOUNTS to take advantage of a market drop (which might include taking more risk at this point, adding more to accounts, or tweaking holdings). Today will be a key day for me to do additional evaluation so don't be surprised if you hear from any one of us in the next few days for moves and options. If you have given us discretionary authority on your accounts, you can bet we have been and are already acting. Not all accounts can have the ability for us to do moves without your authorization , but if you would like us to implement this on your accounts, we will try everything we can do to get the account to qualify for that service?.we especially think this is a huge benefit in today's environment. Let us know if you'd like to convert or see if your account can be converted to this type of arrangement going forward.

Keep the faith and know we are on the job!

Why You Need a Power of Attorney

What happens if you are in a serious accident, laid up in a hospital somewhere, and you need to make a financial decision?

If you have accounts in your individual name only or own IRA's, a power of attorney may be the only way to have financial decisions made if you are unable to make them. For example, let's say Mrs. Smith owns an IRA with a lot of stock in it and the value of the stock is dropping rapidly. If her broker calls to suggest an action and finds out she is in serious condition at the local hospital, nothing can be done....unless Mrs. Smith has prepared for such an occurrence.

Many individuals feel they've "covered their bases" if they draw up a will. After all, the will expresses their wishes for what happens with their property if something happens to them. So true. But what if you don't die, the will never goes into effect. Statistically speaking, many are more likely to be incapacitated than to die. A power of attorney is a relatively inexpensive legal document that when properly executed designates who can make financial decisions on your behalf. Usually there is an alternate person listed if the first cannot serve. You can choose whether to set up a power of attorney that 'kicks in' anytime you are unable to be located or just upon incapacity. If Mrs. Smith (above) gave her son permission to act on her behalf if incapacitated through a power of attorney, he could decide whether or not to sell the stock in the IRA.

One common problem with the power of attorney is the date listed on the document. If the date is more than 90 to 180 days old, which is likely the case, there may be some question as to whether the power of attorney is still in effect. While this may be frustrating, these controls are put in place to protect the person for whom the power of attorney is drawn up.

For example, Mrs. Smith's son may have to prove that the power of attorney is still in effect because it may have been set up 5 years ago. If this is the case, how does the broker know that Mrs. Smith hasn't done a new power of attorney with someone else listed in the last month? The son may have to sign a "Full Force and Effect Letter", in which he must testify that the power of attorney is still "good" and that his actions are indeed authorized. This way, if the son has been replaced as current power of attorney, the financial institution is not responsible for taking direction from the wrong person. All fault and blame would be on the son.

Consult with your attorney about the "ins and outs" of any legal document you have drawn on your behalf....And, for past powers of attorney already drawn up, ask your attorney if you need it updated with any of the latest language.