August, 2009 Issue 1
"Manage The Markets"
with Catherine Avery


Dear Friend,       
Summer is starting to wind down  and before you know it the kids will be back in school and everyone starts to take a serious look at what's in front of them for the months ahead.  It turned out to be a great summer.  The weather finally improved, the markets were positive, 2nd quarter earnings were mostly above expectations for many companies and we had great weather for our annual boat trip.  What more could you ask for!  We are concerned that companies will be able to continue many of their enthusiastic earnings reports into the next 2 quarters.  While they may begin to show positive progression, most of the gains will be coming from cost cutting measures (like laying off workers and closing down facilities).  Real earnings growth is made up of solid increase in the amount of products sold and increasing prices.  While we are positive long term on the financial markets, we prefer to invest slowly when the market pulls back.  Remember we are in a bear market.
September is also a time when you should start to look at whether or not you should be taking losses in your investment portfolio.  Plus, there is another opportunity you might want to look at.  Should you convert your IRA or old 401k plans to a Roth IRA.  Today's newsletter talks about this opportunity.  As always, please call me with any questions.  
Warm regards, 


Catherine Maniscalco Avery

Catherine Avery

CAIM specializes in creating and managing 

customized and fully diversified investment portfolios for private investors.
203.966.2712  p
203.966.5697  f


Can you create more retirement $?

The News
There's a big topic circulating in the news these days. It involves the decision of whether or not to convert your existing IRA to a Roth IRA.   Until now anyone interested in this retirement plan option had to have a modified adjusted gross income of less than $100,00.  But current tax laws provide for the removal of this restriction beginning in 2010.   Which means that this option will be available to many more people. 
When is an IRA a Roth?
An IRA is like a 40(1) K Plan in that you pay taxes on it when you withdraw the money.  Taxes could therefore be high if you've saved a lot of money!  A Roth, on the other hand, is pre-taxed so that there are no taxes when you want to withdraw.  Which explains why some people might want to make the conversion to a Roth.
To Switch or Not to Switch
Would the switch be right for you?  Depends on whether you answer 'yes' to any of the following:
  1. Are you retired with money in a 401k Plan
  2. Do you have an old 401k Plan from a previous employer and want to convert to a Roth?
  3. Do you think your tax bracket will be higher when you retire than it is today?
  4. Has your portfolio gone down in value in the past two years?
If you answered 'yes' to any of the above, it may be a good idea to convert your current IRA into a ROTH IRA.   But HOLD IT, there's just one caveat.
Do you have the necessary disposable income to pay the tax now?  (You can also pay incrementally over the next two years.)   If not, better to stay where you are.
If you think this type of conversion might be a good option for you, please contact your financial advisor or accountant for further details.

See you in two weeks with more updates and news!

This information is copyrighted August 2009

For those of you with questions, feel free to call me at 203.966.2712.  Also please visit my website at

Please pass along this newsletter to friends and family to spread the word!

Catherine Avery Investment Management | 197 Deep Valley Road | New Canaan | CT | 06840