Dear Friends and Family,

Happy Holidays! As 2011 ends, here are some key tax and planning reminders:

• Take RMDs if you’re 70½+.
• Consider making IRA charitable donations directly from your IRA before year-end.
• Make up to $13,000 in annual tax-free gifts per person in 2011.
• Consider energy-efficient home upgrades.
• Unless extended, the above-the-line $4,000 college tuition deduction ends in 2011.
• Review gains and losses with us for tax optimization.

Why we stay invested:

• $2.6T sits in money markets earning little.
• Bonds may have peaked after 30 years.
• Stocks are under-owned and earnings are strong.
• Stocks help combat long-term inflation.

We believe the deficit panel’s failure may force needed fiscal changes. Though the process is messy, cuts are coming—and markets may welcome them.

Sincerely,

Katz Family Financial