Financial Frontlines®

In nominal terms gold just hit an all-time high and everyone seems focused on the fact that since 1999 gold prices have climbed from roughly $250 an ounce to well over $1,000.  An equally important but overlooked fact is that after trading for the (then) record price of $850 an ounce in 1980, gold prices generally declined over the following 19 years.

 In 1980 there was no shortage of “experts” predicting gold prices above $1,000.  Inflation was running at double-digit rates and, as everybody knows, gold is a hedge against inflation so investing at least 15% of your portfolio in gold was considered to be a conservative strategy.  

 Now you could say that those experts are finally correct even if it took 29 years.  Except for one fact:  Inflation!  Had gold prices in 1980 actually kept pace with inflation, an ounce of gold today would be worth $2,225.  In other words, gold would have to sell at twice today’s price just to have broken even after adjusting for inflation. 

 Once again we have experts predicting higher gold prices.  They might be right, especially if inflation returns.  But remember that most of the “Forty-Niners” who hoped to strike it rich in the California Gold Rush ended up broke.  Those who did get rich were, like Levi Strauss, the ones doing the selling.

News from the VA on the latest illnesses attributed to Agent Orange.
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If you have questions or need help working with the VA on your claim, I recommend you contact your county Veteran Service Officer who works for your state government VA Department. To find your nearest county service officer refer to this VA web site for state VA Departments.  I find the state VSOs to be helpful because they can counsel on both state and federal programs.

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VA Extends “Agent Orange” Benefits to More Veterans

Parkinson’s Disease, Two Other Illnesses Recognized

WASHINGTON (Oct. 13, 2009) – Relying on an independent study by the Institute of Medicine, Secretary of Veterans Affairs Eric K. Shinseki decided to establish a service-connection for Vietnam Veterans with three specific illnesses based on the latest evidence of an association with the herbicides referred to Agent Orange.

The illnesses affected by the recent decision are B cell leukemias, such as hairy cell leukemia; Parkinson’s disease; and ischemic heart disease.

Used in Vietnam to defoliate trees and remove concealment for the enemy, Agent Orange left a legacy of suffering and disability that continues to the present.  Between January 1965 and April 1970, an estimated 2.6 million military personnel who served in Vietnam were potentially exposed to sprayed Agent Orange.

In practical terms, Veterans who served in Vietnam during the war and who have a “presumed” illness don’t have to prove an association between their illnesses and their military service.  This “presumption” simplifies and speeds up the application process for benefits.

The Secretary’s decision brings to 15 the number of presumed illnesses recognized by the Department of Veterans Affairs (VA). 

“We must do better reviews of illnesses that may be connected to service, and we will,” Shinseki added. “Veterans who endure health problems deserve timely decisions based on solid evidence.”

Other illnesses previously recognized under VA’s “presumption” rule as being caused by exposure to herbicides during the Vietnam War are:

·                              Acute and Subacute Transient Peripheral Neuropathy

·                              AL Amyloidosis

·                              Chloracne

·                              Chronic Lymphocytic Leukemia

·                              Diabetes Mellitus (Type 2)

·                              Hodgkin’s Disease

·                              Multiple Myeloma

·                              Non-Hodgkin’s Lymphoma

·                              Porphyria Cutanea Tarda

·                              Prostate Cancer

·                              Respiratory Cancers, and

·                              Soft Tissue Sarcoma (other than Osteosarcoma, Chondrosarcoma, Kaposi’s sarcoma, or Mesothelioma)

Additional information about Agent Orange and VA’s services and programs for Veterans exposed to the chemical are available at www.publichealth.va.gov/exposures/agentorange. 

*****UPDATE FOR NAVY PERSONNEL*****

8 Dec 09: The Navy site is up and running.  Go to: :   http://www.npc.navy.mil/channels to make your application.

25 Nov 09. The Navy Retro Stop-Loss Pay program isn’t quite finalized yet, but soon. Once finalized, details will be published on the Navy Personnel Center web site. In the meantime, you can contact the project office to have your name added to the list of eligibles. The eligibles will be contacted with application procedures. Call or write: CDR Raffier, (703) 614-5565 or john.raffier@navy.mil.

—————-UPDATE 25 Nov 09——————-

I spoke to the Army last Friday. The process is stumbling along but there is nothing shady going on. The Army program office is getting plenty of “help” from the top of the food chain. This program is getting loads of visibility from OSD and Congress. Until they get the flow down on the process, things will be a bit rocky. The main issue with the mismatch letters is how the law and Army policy defines being Stop-Lossed. Evidently, the law-policy is not the same as the dates on Service docs. That causes manual reviews.

Regarding the Navy; they owe me a call back but I’ll be following up with them. When I spoke to them 3 weeks ago or so, I was told there are so few Navy members impacted by Stop-Loss that the Navy would personally contact each member and work the application. I’ll confirm this soon.

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UPDATE 21 Oct 09. So you folks in the Army are already applying and finding the web site works. Excellent.

Here is the Army site for applicants. 

For you Air Force folks, here is your application site.

For Navy, email NXAG_N132C@navy.mil.

For Marines, go to https://www.manpower.usmc.mil/stoploss.

Please help spread the word on this special pay. There is a one year application period starting 21 Oct 09. If someone misses the window, that’s all she wrote. Let’s try to prevent the situation where some people never get the word.

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This comes thanks to the Stars and Stripes Newspaper. Looks like 21 Oct will be the start of the program and everyone eligible has until 21 Oct 2010 to apply for payment. Help spread the word to your family, friends and neighbors who may be involved.

While this speaks of the Army, so far it seems the Navy and Marines, who have the fewest members due this payment, will probably contact their eligible members personally.  We haven’t heard from the Air Force on their possible game plan.  I’ll post new details as soon as I get them.  Same timelines apply to all Services.

Quote:

Army says stop-loss back payments are set to begin

Soldiers with claims dating to 2001 may receive $500 for each month they were extended

By Jeff Schogol, Stars and Stripes

European edition, Friday, September 25, 2009

ARLINGTON, Va. — All soldiers who spent extra time on active duty because of stop loss since September 2001 will be eligible by for $500-per-month cash payouts that could begin arriving later this year, an Army compensation official said.

Earlier this year, the Army began compensating soldiers held under stop-loss since October 2008, but Congress has expanded the program to include all troops stop-lossed since September 2001.

Those eligible under the program can receive $500 for every month they were held beyond his or her initial end of obligated service, said Deborah Holman, deputy chief of compensation for Army G-1.

The Defense Department will issue implementing instructions for the new program on Oct. 21. The Army plans on setting up a Web site by November that will allow people to apply for the compensation, Holman said.

Stop loss allows the Defense Department to hold servicemembers beyond their separation or retirement date to complete their deployments. All of the services have used stop loss, but only the Army has continued to use it since 2003.

Roughly 185,000 servicemembers are eligible for the compensation. Of those the Army estimates about 136,000 are soldiers or family of deceased soldiers.

Current and former soldiers, as well as surviving spouses, can apply for the compensation. Holman said applicants must provide a servicemember’s DD-214, a copy of their contract, and proof that the soldier was stop-lossed.

Those eligible under the program have until Oct. 21, 2010, to apply, she said.

Congress allocated $534.4 million to the program in June, but the Defense Department may need about $600 million to make all the payouts, Holman said.

Of the remaining servicemembers who are eligible for compensation, about 39,000 are from the Air Force, 9,660 are from the Marines and 250 are from the Navy, officials said.

Unquote.

Go to the web site www.regulations.gov.

In the Search Box labeled “Enter Key Word or ID” type RIN 0790–AI58.

When the search comes back, the HAP is in the search result box. Note the comments hypertext to the right.

The quickest and easiest way to increase your investment return is to eliminate unnecessary expenses. This is another one of those “not-so-secret secrets of successful investing” that everyone understands but few seem to follow.

It is amazing how many investors have no idea how much they are paying in annual mutual fund fees. Some even say “Oh, I don’t pay anything because I only buy no-load funds.” But while it is true that “no-load” funds don’t carry sales charges (commissions), all mutual funds have management fees.

The average equity mutual fund charges management fees of around 1% a year (bond funds generally charge less) which may not seem like much at first glance. So when a client hears that he is paying 1% a year it doesn’t always register. But it never fails to get his attention if I add, “That means you are paying $2,000 a year on your $200,000 investment.” Then it becomes real money.

Of course cost is only part of the story. What really matters is value: are you getting fair value for what you pay? That subject will have to wait for a future article. In the meantime, if you are unsure about what you are paying you can ask your advisor or read the fund’s prospectus. An easier way to check is to go to www.morningstar.com and type in your fund’s five letter ticker symbol. Under the Expenses tab you can see both management fees and 12b-1 fees (which cover distribution costs including deferred sales charges paid to brokers). For maximum effect convert that percentage into actual dollars.