Dear Friends & Family,

Happy New Year! What a year it has been. Everything from oil prices, world credit markets, housing, and the stock market took a turn for the worse. Although it seems impossible to take anything positive away from a year that appears saturated with negativity, we believe this creates opportunity in 2009 and beyond.

As you may know, we have expanded our research by adding asset classes and investment vehicles to help take better advantage of these opportunities moving forward. We look forward to discussing these enhancements with you during our next call. Please note, we do offer educational seminars for any groups you are involved in that would like to learn more about what is happening in the world markets.

Since our last letter, the SEC adopted new rules designed to stem conflicts of interest and provide more transparency for Wall Street’s credit-rating industry, which was widely faulted for its role in the subprime mortgage crisis. The new rules ban the rating agencies from advising investment banks on how to package securities to secure favorable ratings.

Of special note, several tax provisions are being extended, including the special rule allowing otherwise taxable IRA distributions to be tax-free if distributed to a qualified charitable organization. This applies to taxpayers age 70½ and older. Also, the process of converting your traditional IRA to a Roth IRA—if you are under the income limits—is still a very appropriate investment and tax planning tool for 2009. Please discuss this with us if appropriate.

On December 23, 2008, President Bush signed the Worker, Retiree, and Employer Recovery Act of 2008, which suspends Minimum Required Distributions (MRDs) from certain retirement accounts for 2009. Please note the following:

• Suspension of the MRD is only for 2009; there are no changes to the 2008 MRD regulation.
• The suspension applies to IRAs and employer-sponsored qualified retirement plans.
• The suspension does not apply to non-inherited Roth IRAs.

We wish you and your family a very Happy 2009. We look forward to speaking with you in the coming month.

Sincerely,

Katz Family Financial