Dear Friends & Family,

School is out, the weather is nice and the 4^th of July is almost here! Summer is a good time for our annual review of your 401k plan asset allocation. If you would like us to look this over, please fax or email your current 401k allocation and your options (with ticker symbols) to our Bethesda office at 301-542-0033 or email Julie@katzfamilyfinancial.com.

With summer comes vacations — and therefore we drive more. You may be asking yourself, what is driving the high cost of gas and oil?

One of the basic rules of economics is “The solution to high prices is high prices”. Every month for the last 6 months driving was down compared to last year (a total of more then 1 billion miles.)Storage of refined products (gasoline, diesel) was recently reported up over 4 million barrels while the storage of crude oil was down over 4 million barrels.This was reported as negative news. Speculators concluded that the decrease in the amount of crude oil being stored was caused by the decrease in the actual supply or availability of crude oil.

This may not be the case. Now that consumers have cut back on their use of gas and diesel we are now seeing an increase in storage of these refined products — leaving less of a need to store crude oil. The classic supply vs. demand rule may hold true, as the demand for gas decreases so will the price of crude oil. Perhaps this signals the first crack in oil prices.

Below are a few tips for fuel-efficient driving and avoiding those high prices at the pump.

• Avoid aggressive driving, “jack-rabbit” starts and stops and hard braking can increase fuel consumption by as much as 40%.
• Drive steadily at posted speed limits
• Avoid idling your vehicle, in both summer and winter. Idling wastes fuel, gets you nowhere and produces greenhouse gases.
• Make sure tires are properly inflated
• Use your air conditioning sparingly — this will increase fuel consumption by 10% in city driving.
• Use cruise control, this will help save fuel
• Service your vehicle regularly and choose the octane fuel which best suits your car.
• Summer is a great time to walk or ride a bike.

Have a wonderful, safe and healthy summer!

Sincerely,

Katz Family Financial