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Jordan Goodman is the author of Everyone's Money Book, available at 888-201-6300. This is the third edition of the book. You can also visit his Web site at www.moneyanswers.com. He talks with us on Thursday mornings.
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December 18, 2003
"The Highlights and Lowlights of Personal Finance in 2003"
It has been an extremely eventful year in the world of personal finance in
2003, so I hereby nominate the highlights and low points for the year:
Highlights:
Tax cuts: Their effect on the federal deficit may be controversial, but
the tax cuts clearly put billions of dollars in consumer and investor
pockets. It reinvigorated the economy and stock markets, and lowered capital
gains and dividend rates to 15%, their lowest levels ever.
Medicare drug bill: It clearly wasn’t everything seniors had wanted, but
it was the largest increase in a federal program in 30 years, costing about
$400 billion over the next 10 years at a time of huge deficits. Some
seniors will get a great deal of benefit, while some will end up losing, but
many more seniors will be able to get drugs they need now.
Credit Reporting Bill: The Fair and Accurate Credit Transactions Act of
2003 will give people better access to their credit records and
credit scores. It will also help prevent ID theft and help people recover when
they have been hit.
FTC Do Not Call List: The Federal Trade Commission, empowered by a new
law, started the Do Not Call list and tens of millions of Americans signed
up for it so they wouldn’t be bothered at dinner by unwanted telemarketing
calls. Even so, there were thousands of complaints by people who had signed
up for the list and were still getting annoying calls.
Rebound of the stock market: A year ago, everyone had given up on the
stock market and was talking about deflation and Depression -- and the
possibility of the coming war in Iraq. Now, with the stock averages sharply
higher, speculative fever has returned and people are jumping back into tech
stocks like it was 1999 all over again.
Lowlights:
Mutual fund scandals: Everyone thought that mutual funds were pristine and
untarnished by all the scandals from Wall Street and corporate board rooms
of the last few years. But the epidemic of late-trading and market-timing in
a litany of fund groups shook investor confidence in the
$7 trillion industry. This will lead to a raft of new mutual fund SEC rules
and legislation in 2004.
Parade of corporate scandals: All of the scandals of 2001 and 2002 hit
the courtrooms in 2003, as the parade of “perp walks” by Tyco’s Kozlowski,
Adelphia’s Rigas family, Martha Stewart, Sullivan of WorldCom, Quattrone of
First Boston and many, many others disgusted investors, pensioners and
employees of the affected companies who saw their stock values and jobs
wiped out. Despite the Sarbanes-Oxley law, new major corporate scandals
continued to erupt, such as the phony accounting at Freddie Mac and
HealthSouth.
So, 2003 was a year of great contrasts -- new legislation to help
investors and consumers, and a continued parade of corporate scandals which
will continue to play out in 2004.
For More Financial Tips From Jordan Goodman
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