CCA e-Newsletter
4th Quarter, 2009

** REMINDER ** Join us for our 4th Annual Holiday Wine Tasting. We are hosting this enjoyable evening on Nov 5th at Tim’s Wine Market in Winter Park. More formal invitations are forthcoming.

Happy Fall! And fall is not what the markets have done the last 3 months…stocks have continued to climb through September, bringing the third-quarter gain for the large-cap Vanguard 500 Index Fund (which replicates the S&P 500) to 16%. For the year to date, that benchmark is now up 19.3%.

Although we have seen an impressive rally from the March lows the market is still down 30% from its October 2007 peak. Of course we all want to know where do we go from here. To bring some perspective, we have highlighted in this quarter’s newsletter a speech given to a group of analysts by the San Francisco Fed President Janet Yellen. She has proven to be one of the more astute economic forecasters at the Federal Reserve and we found her speech to resonate with us. It is fairly long but well worth the read.

Also in this quarter’s newsletter we have taken an excerpt from Littman Gregory's (an experienced research firm in which we outsource some research and data) quarterly newsletter where they outline the challenges ahead of us.

As many of you know effective January 1, 2010 the federal government is permanently dropping the income limit for transferring your IRA/401(k) savings to a ROTH IRA. We have included an article here that explains the process.

In other retirement plan news, those of you that are over 70.5 are not required to take a mandatory distribution from your IRA this year. This also applies to inherited IRA’s.

It’s now widely understood that we’ve been living through a notable period for the financial history books. These are challenging times for all of us and we continue to look for ways to bring context and understanding to the “news of the day.” Hopefully this newsletter is a useful resource for you, and we look forward to communicating with you at the start of 2010.

We hope that the remainder of this year if productive for you, and we send our wishes for a truly wonderful holiday season.

Keith & Debbie
Carpenter Claydon Advisors, Inc.

Latest News

Presentation to the San Francisco Society of Certified Financial Analysts

It’s a pleasure to appear before a group of professionals who spend as much time trying to understand the financial markets and the economy as I do. It’s fair to say that the last two or three years have provided all of us an education—a far-from-welcome one—of just how complex these subjects are. We have had to rethink old assumptions and question conventional wisdom in the face of a crisis whose dimensions few of us might have imagined.

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Challenges in the Present and Future

Evidence now strongly suggests that the recession ended sometime this summer. However, that does not mean that we are assured a lengthy period of robust growth that will quickly return the economy back to its long-term growth trend line and support a sustained bull market for stocks.

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7 steps to a 2010 Roth IRA conversion

If you have funds in an individual retirement account, converting them into a Roth IRA in 2010 presents an unprecedented opportunity to sock away tax-free retirement income.

The IRS is even offering taxpayers a three-year window in 2010 to pay taxes due on a conversion and is removing income limits that have kept higher-income taxpayers from setting up Roth IRAs.

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Did You Know…

• Australians are the heaviest gamblers in the world; an estimated 82% of Australians bet. That is twice as much per capita as Europeans or Americans. Yet, Australia, with less than 1% of the world population, has 20% of the world's poker machines.
• There are more than 9 million millionaires and about 800 billionaires in the world - depending on how the stock market did today.
• 80% of millionaires drive second-hand cars.
• In 1900, the price of gold was less than $40 per ounce. It reached $600 in 1930, and has now reached over $1000 per ounce.
• If Los Angeles County was a country, it would be the 19th largest economy in the world.
• The NASDAQ stock exchange was totally disabled in on day in December 1987 when a squirrel burrowed through a telephone line.
• About 30% of consumers use their credit card as their main means of buying Christmas goodies, 70% do not save to buy Christmas gifts and 86% of consumers do their Christmas shopping during December.

Wines of the Quarter

The holidays are an easy time to splurge and go overboard, from the gifts, to the parties, to the food and drink you put on your table. But we’re here to tell you that you don’t have to spend a lot on great wines, to get the holiday effect you’re looking for. The selections of this quarter prove that:

Chenin Blanc is a grape variety that many people adore during the Thanksgiving holidays. It doesn’t matter if it is from South Africa, BC, France, or Washington State, there is a regal quality to top of the line Chenin Blanc that is more enjoyable than Sauvignon Blanc or Pinot Grigio.

For this Thanksgiving a open a bottle of the Arabella 2008 Chenin Blanc from South Africa. In its native land it is also referred to as Steen.

Your nose is greeted by aromas of White nectarine, orange blossom, lilac, and Bartlett Pear. The palate is dry and full citrusy, rich tree fruit flavors. The finish is clean and fresh. This is a wonderful pairing for Thanksgiving dinner with Sweet potatoes or yams, savory stuffing, full flavored gravy and a dab of cranberry sauce.

When you put the whole package together this is a great wine for the combination that is Thanksgiving dinner, and it leaves your mouth clean.

This deep, impressively extracted version of this perennial CGCW favorite marries well-defined blackberry fruit with a layer of ripe currants, a good dose of sweet oak and touches of milk chocolate. Its sense of layered richness and it accents of sweet earth speak to classic Napa Valley character, and, thanks to its provenance, its unique mix of grapes and the attention that the Duckhorn folks pay to it, it continues to be a more sophisticated wine than Zinfandel typically yields.

This wine is a perfect blend of 64% Zinfandel, 27% Cabernet Sauvignon, 7% Merlot and 2% Cabernet Franc.

Dense color with a red cherry hue Aromas of plum, chocolate and cherry pie accentuated by hints of violet, clove, cinnamon spice and vanilla bean. Bright red fruit flavors of Bing cherry, strawberry and raspberry, contrasted by dark and compelling layers of blueberry, mocha and molasses. Great structure with smooth, fine tannins, a black pepper mid-palate and long nutmeg and red currant finish.