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Tampa Bay Times from St. Petersburg, Florida • 52
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Tampa Bay Times from St. Petersburg, Florida • 52

Publication:
Tampa Bay Timesi
Location:
St. Petersburg, Florida
Issue Date:
Page:
52
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8d SUNDAY, AUGUST 1,2004 TIMES Short-term bonds eliver strong yields, less risEc Lef take it as a sure thing: Interest rates are going to rise. What, then, should consumers and investors do to get ready? Some things are pretty obvious. If you're thinking of getting a new mortgage, youU probably get a better deal today ically with long maturities. Bernstein identified two "sweet spots" where bond yields are relatively high related to risk. The first is in short-term bonds those with maturities of about two years.

These are good for investors who want to protect their principal and use bonds to diversify portfolios mat also contain lots of stocks. With your money tied up for only two years, you won't be hurt much if interest rates rise, and youU be able to get hold of your money relatively quickly if another investment looks more promising. The second sweet spot is in bonds maturing in five to six years. The prospect of losing money from falling bond prices is fairly low, though higher than with two-year bonds. And yields are pretty good.

Of course, these intermediate bonds do tie up your money longer. So they're best for investors seeking stable income and higher returns over time, Bernstein said. PHILADELPHIA INQUIRER market rates for longer. On the other hand, long-term bonds offer higher interest rates to compensate for that price risk. For the investor, the trick is to find the right balance between risk and return.

Bernstein Investment Research and Management a New York money manager, recently looked at this trade-off and concluded that the most attractive bonds have maturities of only two to six years. The reason is that rates don't go up steadily as maturities lengthen. Instead, they rise quickly as maturities go from three months to two years, and then go up only gradually. The yield on a five-year note is considerably more generous than a three-month bill, but you don't get much more by tying your money up an additional 25 years with a 30-year bond. The long-term bond is even less appealing when risk is taken into account since long-term bond prices take a bigger hit when rates rise.

Risk goes up only a little as maturity rises from three months to five years, but it rises dramat stick with that mix. But it might pay to re-examine your bonds or bond funds and emphasize safer ones those with relatively short times to maturity. Those are much more appealing than most investors realize, even if interest rates are not threat-eningtogoup. Some background: A new bond typically sells for $1,000, and when the bond matures after a given period, its owner gets that $1,000 back from the company or government entity that first sold the bond. In the meantime, the bond owner earns interest But before the bond matures, it may pass from one investor to another at prices set by supply and demand more than $1,000 or less.

Bond prices fall as interest rates rise (and rise as rates fall). Pay $1,000 for a bond that "yields" 4 percent interest and you might get only $900 for it next year if newer bonds pay 5 or 6 percent Long-term bonds are hit especially hard when rates rise, since their owners are stuck with below- than six months from now. Also make it a priority to pay off credit card debts. If card rates go up, youU have to pay more each month just to cover the interest charges, making it harder to whittle the debt For investors, the smart moves are not quite as obvious. If JEFF BROWN COIUHN usually a bad idea to try to "time the market," to place big bets on changes you think are coming.

So if you have a standard investment portfolio of 60 percent stocks, 40 percent bonds, its probably best to Faith Trigaux from 1D from 1D FT" ri i Wl I -n til i -t V'f Time photo CHRIS ZUPPA Jeffrey Damm, vice president and creative director of Digital Lightbridge, founded the firm in part to merge career with Christian faith. Damm said that while the company allows Christians to be open about their religion in the workplace, it does not discriminate based on faith. hired to minister to employees and other faith-based programs are sprouting up in businesses that range from mobile home park management to high-tech companies. "Hopefully, if a trend thaf positive both here and around the world," said Jerry Key, a senior chaplain with Corporate Chaplains of America and executive director of Tampa Port Ministries. "Employers are beginning to realize their employees have lives outside the office door." Just 12 years ago, there were about 25 faith-based organizations in the workplace in the United States, said Os Hillman, president of the International Coalition of Workplace Ministries, an Atlanta Christian nonprofit group that tracks faith in the workplace.

In 2004, International Coalition identified more than 1,200 such organizations. The organizations vary widely in size and product Coca-Cola has a group called the Christian Employee Fellowship. The owner of Sign-Age of Tampa Bay in Clearwater, a company that manufactures promotional signs, belongs to C12 and holds a weekly prayer meeting. ChurchForce Inc. in Tampa links Christian companies and job seekers online.

"People are looking for more in their jobs," Hillman said. "Everyone has a God-shaped vacuum in their life." Groups such as C12 are determined to fill that void. Founded in Apollo Beach in 1992 by Buck Jacobs, C12 has swelled to 206 members in 29 groups throughout the country, including seven groups in Florida. Membership costs depend on the corporate revenue, ranging from $450 to $850 a month. Jacobs, who moved his headquarters to Atlanta last year, said he fields calls and requests from businesses around the world, including, most recently, Nepal and Zimbabwe, that are interested in developing faith-based programs.

The separation of our work life and our faith life is becoming more unusual," he said. He attributes the interweaving of the corporate and religious worlds in part to the Internet Technology links people around the world, bypassing traditional church hierarchies, he said. "Business is all about relationships," Jacobs said. When employees are treated as if "they all have something to offer," productivity increases. If a business doesn't see increases in profits, they don't have to stick with C12, he said.

The trend does have potential pitfalls, though, Hillman warned. The danger can be when any CEO goes beyond the limits of what the government allows us to do in terms of religion in the workplace." TO READ MORE For related stories on business and faith, log on to www.sptimes.comlinks we can adapt to that change," he told a crowd recently at San Jose State University. Kerry says Iacocca who in 2000 appeared in TV ads for Bush now backs him because he will fight to reduce the deficit Bush's economic team suffered for years after promising early in the first term to create millions of new jobs. That never happened. Recently, the team has enjoyed a rebounding U.S.

economy including new job creation just as the presidential campaign grows more intense. Just how solid a rebound remains unclear, after the government reported Friday that economic growth in the spring has slowed considerably from the rapid pace of the past year, and consumer spending had dropped to the weakest rate since the slowdown of 2001. Also Friday, the White House projected that this year's deficit will hit a record $445-billion, a figure bound to aggravate the campaign season debate over fiscal responsibility. Still, the message from Bush's team remains focused. The tax cuts are starting to pay off.

Business is picking up. So why, the team argues, change anything right now? Among Bush's key economic players: John Snow: He replaced Treasury Secretary Paul CNeifl, pushed out for disloyalty and speaking his independent mind. Snow is Bush's point man, known for "staving on message" and spreading good news about the economy. Snow joined the Bush administration from CSX Corp. The Jacksonville-based railroad giant last week said earnings fell 6 percent and has laid off about 900 workers.

Don Evans: A longtime and loyal oil-and-gas friend to Bush, the Commerce secretary says tax cuts are pumping new life into the economy and offering a soft landing to the recession. Elaine Chao: A former board member of St Petersburg's Raymond James Financial, the Labor secretary is busy trying to sell Bush's new overtime regulation as a plus for employees and not a new tool to cut the paycheck of as many as 6-million workers. Stephen Friedman: After replacing Larry Lindsay tt- sacked for poor sales skills at the White House as director of the National Economic Council, he's low-key and best at telling how Bush's tax cuts will help the economy. Greg Mankiw: The respected Harvard economist turned chairman of Bush's Council of Economic Advisers succeeded Glenn Hubbard, who resigned in early 2003. With a advance, Mankiw authored a bestseller introductory college textbook, Principles of Economics, in which he wrote that an economist claiming tax cuts pay for themselves is like a "snake oil salesman who is trying to sell a miracle cure." Mankiw, who calls things as he sees them, landed on the hot seat in early 2004 by saying job outsourcing to cheap-labor countries eventually will benefit the United States.

That may be true, but he is rumored to be heading back to Harvard next year. For the Bush team, there's a curve-ball approaching. Pitching tax cuts was the message of Bush's first term. In a second term, Bush's economic message may carry a different tune because of the hefty federal deficit And that some economists suggest means Bush may seek fresh economic faces to market new policies. Just like top sports franchises, the players on elite economic teams are always subject to the whims of the owners.

Robert Trigaux can be reached at (727) 893-8405 ortrigauxsptlmes.com. Warren Buffett Apple Computer CEO Steve Jobs and former Chrysler CEO Lee Iacocca. Recruiting is slow. Many business leaders initially were disappointed last month when Kerry named Sea John Edwards, a trial lawyer who made millions suing corporations, as his running mate. The task of rallying more CEOs to Kerry belongs to Wall Street financiers Roger Altman and Steve Rattner.

So far they have attracted, among others, Bear Stearns president Warren Specter, Symantec Corp. chairman John Thompson and LCInterAc-tiveCorp (which owns Home Shopping Network in St Petersburg) CEO Barry Diller. Billionaires Bui Gates, George Soros and Donald Trump are also in Kerry's camp. This month, the Kerry campaign is expected to announce more than 100 additional business supporters, including dozens of CEOs. On the surface, Kerry's economic team looks a lot like the team that helped power Clinton to two terms in the White House and guided U.S.

economic policy during the longest economic expansion in the modern era of the country. There's risk and reward in Kerry's choice. The candidate does not want to look like he is simply mimicking Clinton. But if this economic team was so successful then, why not give it a chance to make it happen again? Among Kerry's closest advisers: Gene Sperling: Clinton's former "MVP" of economic advisers wants to be sure the Kerry-Edwards economic message stays centrist and away from any traditionally liberal spin that hints of "big spender." He's tops at finding weaknesses in Bush's policies: the huge fiscal deficit; a jobless recovery followed by new jobs that pay less; and a Republican disregard for the nation's outsourcing fears. He's even a contributing writer and consultant on the NBC TV drama The West Wing.

Laura D'Andrea Tyson: Clinton's onetime chief economist and dean of the London School of Economics now helps Kerry tell the story of Two Americas" the rich and prosperous one, and the larger one made up of people who feel squeezed by flat wages and spiraling health care costs. Roger Altman: Clinton's former deputy treasury secretary resigned in 1994 after getting caught up in the Whitewater scandal. But the deficit hawk is back counseling Kerry as head of a Wall Street banking boutique called Evercore Partners. The firm has had some big merger deals, including Viacom's purchase of CBS and the General Mills acquisition of Pillsbury. If Kerry wins, he could become Treasury secretary.

Steve Rattner. The onetime New York Times correspondent built a new career cutting big media company deals asaWall Street financier. He now heads the Quadrangle Group investment firm, best known for media and telecommunications deals. Comcast tapped Rattner's expertise' when it tried to purchase Walt Disney (the deal never happened). Rattner also helped Al Gore in 2000.

Rattner's wife, Maureen White, is the finance chair of the Democratic National Committee. Warren Buffett With $40-biHion, the world's second richest man and a Democrat who advised Arnold Schwarzenegger in his campaign in California, says he does not like Bush's tax cuts that favor the wealthy. Lee Iacocca: The former Chrysler CEO tells his many Republican friends the world is changing. "We need a leader who will level with us about how men make their way through the lobby of the Sheriton Suites Hotel near Tampa's Jefferson High School. They sit at the bar, but God is on their minds.

They are Tampa's Christian Business Men's Committee, a group whose mission is to minister to other business people about origin of the committee's Tampa chapter dates to the 1930s. When Bill Martin joined the group 20 years ago, he owned a cable television company in Bradenton and was looking for a way out of in debt he said. He met a member of the committee, who introduced him to "the manufacturer's handbook," more commonly known as the Bible. "When you're not familiar with what to do as a businessman, you get a handbook," he said. He figured it worked that way with religion, too.

He thought employees at his cable television company could use it too. He said the other committee members helped him find solutions to cut down his debt and pay back what he could. Now, he tries to help others. "We try to touch people in such a way that their primary focus is not business," said Martin, now a financial adviser and no longer in debt "What is it worth if a person gets ahead but misses out on the most important thing going to heaven?" The introduction of religious practices and beliefs in the workplace is meant to improve business ethics and help employees, he said. When employers cross the line and begin to hire based on religious beliefs or exclude people whose beliefs differ from their own, their practices negate the intent of the movement he said.

"America is a place of freedom," he said. "But there are limits of certain expressions in certain areas." The Council on American-Islamic Relations, or CAIR, is a national Muslim civil rights and advocacy group. The group also cautioned about the influx of religious beliefs into the business world. These types of programs can be a healthy aspect and a nice benefit for employees," said Ahmed Bedier, Tampa-based spokesman for CAIR. "However, ifs like a double-edged sword.

You have to be careful not to alienate your workforce by not giving a diversity of religious beliefs." Bedier worried that many nonde-nominational programs tend to espouse Protestant Christian value systems. Vulnerable employees in search of help may not critically evaluate the advice they're given, he said. "At the end of the day, they're still a Christian perspective," he said. "How are they going to help a Muslim or Jewish person?" Mark Cress, president of Corporate Chaplains of America, oversees a staff of about 70 full-time chaplains. Companies pay a flat fee based on the number of employees in exchange for the chaplains' services.

Cress is optimistic about the increasing number of programs such as his. He bemoaned the lack of scientific research into the trend but said ifs clear that faith in the workplace is gaining momentum, increasing interest in his business. "As they say, The trend is your he said. He cited President Bush's openness about his Christian beliefs, marketplace downsizing that has left employees wanting someplace to turn for support, and the increasing stress level for baby boomers who now are caring for aging parents as a few explanations for the trend. Some say ifs a trend that has been forming for decades.

Each Thursday morning, about 10 Huntley from 1D value of an annuity if the insurance company is declared insolvent Companies are not allowed to advertise this fact in selling annuities. If the insurance company that issued your annuity is in strong financial condition, your decision should be based on income tax and investment considerations rather than safety. It might be beneficial for you to withdraw some of the money if you are planning to leave this annuity to your children and you are in a lower tax bracket than they are. Get a tax preparer or financial adviser to run the numbers for you before making a decision. Q.

Which is wiser: a will or a trust? I understand that with a will you have to go to court and with a trust you do not have to and it costs less. Am I mis-Informed? The answer depends on your situation, particular ly the kind of assets you have, how much they are worth and what you want to do with them. You are correct that a will passes through probate and a trust does not However, even if you have a trust you should have a will to convey assets that are not in the trust I recommend that you talk to a lawyer experienced in estate planning about what is best for you. The cost will depend on the complexity of your plan, the lawyer you choose and whether you hire other professionals, such as a trustee for your trust Helen Huntley writes about Investing and markets for the Times. you have a question about Investments or personal finance, send It to On Money.

We'd try to answer those we think are of greatest reader Interest All questions must be submitted In writing, but readers' names will not be published. Send questions to huntleysptlmes.com or Helen Huntley, Times, RO. Box 1121, St Petersburg, FL 33731. avoid becoming. (If you already are a fraud victim, you can complain to the Federal Trade Commission by calling toll-free 1-877-3824357 or using the complaint form on the Internet at wwwitc.gov.) Q.

I have a fixed annuity, currently earning 3 percent, that matures in August I do not take withdrawals and the total has grown to more than $120,000. Would it be wise to split it into two annuities or to pay the deferred tax and place it in a safer CD? Every statement I get warns me that annuities are not insured by the FDIC or other government agency. The Florida Life and Health Insurance Guaranty Association covers up to $100,000 of the present cife.

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