As the May flowers bloom Upstate, our thoughts turn to our mothers. And what a wonderful day we mark on the calendar to celebrate those special women in our lives! However, as many Hallmark greetings note, it should not just be this time of year that we lift up and cherish these role models – we should do it daily.

Just as we remember who impacts us, it’s also good to be mindful of what impacts us both now and in the future. Investing is a core aspect of our lives that has a significant influence! Yet too often we remember to demonstrate our love for others, but we forget that it’s okay to think of ourselves as well.

There is a simple investment strategy that can be a regular expression of care for yourself and others. It’s called dollar-cost averaging (DCA). DCA is a strategy that involves investing a fixed dollar amount into your mutual fund at regular intervals. Since you always invest the same amount, you will purchase more shares when the price is low and fewer shares when the price is high. It allows you to focus on long-term growth and ignore short-term market conditions.* The way I do this is through my FAM Fund account; before I have a chance to think about what dollars come out of my checking account, they’re invested!

Reflecting on Mother’s Day, FAM Funds has a true story we use as an example of DCA and what a considerable difference it can make. FAM Funds’ George Chelius had the idea to show shareholders how DCA could work for them – and him. Seven days after his daughter Anna’s birth, George opened a FAM Value Fund account for her with $2,000. Every month after he added $100 and did so for 18 years. Upon high school graduation, Anna’s account had grown to $89,348.42.

So as we praise our mothers and their care for us this month, consider also putting that gratitude to work for yourself or a loved one with dollar-cost averaging.

* Keep in mind that dollar-cost averaging is a long-term investment philosophy. It takes advantage of the cyclical nature of the market and, in essence, averages the highs and lows as they affect your mutual fund account. Day-to-day market fluctuations become less of a concern when focusing on the long term. An investor must consider their financial ability to continue purchases through periods of low price levels. Also, dollar-cost averaging does not guarantee a profit or protect against a loss in declining markets.



What did we learn from the tumultuous markets and depressed economy? One thing for sure is that it’s important to save for a rainy day. And a good place to start is to maximize your retirement savings. If you have a 401(k) at work or a similar retirement plan, taking advantage of it may be one of the best decisions you ever make - especially if your employer matches your contribution!

Putting retirement savings into your 401(k), a "defined contribution plan," via payroll deposit is easy to do and may have the added benefit of an employer match. That means for each dollar you save, you get more - it’s like “free money!”

There are two key 401(k) advantages you should consider:

1. Because this retirement plan is funded with pre-tax wages, you don't pay taxes on what you save until you make withdrawals. Also, the amount you contribute to the plan is subtracted from your earnings in order to calculate your annual Adjusted Gross Income, therefore reducing your income tax.

2. Try to contribute at least enough to get any matching contribution - this multiplies the money you invest. Also, if you can afford to max out your plan, I highly recommend it.

Please note:

1. Changing jobs? A direct rollover of a 401(k) to a No-Fee FAM Funds Traditional IRA is a nice option because it allows you to avoid both the 10% early distribution penalty and any Federal income tax.

2. FAM Funds may be available through your retirement plan at work. Ask your employer or give us a call.

3. You still have time to contribute to your retirement accounts for 2009 (until April 15, 2010). Do it today!

4. You can convert any Traditional IRA into a No-Fee FAM Funds Roth IRA.

A recent headline, “Will We Ever Again Trust in Wall Street?” reminded me that there is still a lot of investor anxiety in our midst. Perhaps this has to do with fear of the unknown – the complicated investment choices in the market and the mystery of the frenetic activities in lower Manhattan.

Additionally, many investors are trying to understand where to allocate their capital amid the barrage of recommendations from an overwhelming number of sources. Since the market malaise of 2008 - 2009, countless investors have supplanted sound fundamental investment analysis, like we do at Fenimore, with asset allocation. They have the false belief that there is “no risk” with asset allocation because of the way it has been touted.

But instead of diversifying their portfolios - the true intent of asset allocation - many investors let their emotions impede their judgment and continually change their investments based on the sectors of the market that recently performed the best. Unfortunately market timing, or attempting to catch the market at its highest or lowest point hoping to maximize returns, just doesn’t work! Countless research studies have shown that the average investor significantly underperforms the overall market because they let their emotions get in the way of rational decision making. They chase the latest fads with the typical result being that they miss the upswing and their gains are substantially less than what they would have been if they had just stayed the course.

If you’ve followed our previous tips and are saving according to a long-term financial plan you’ve established, then we encourage you to stay the course. A rational perspective and solid investment strategy can provide for years of prosperity. Don’t let the short-term views on Wall Street influence your long-term goals.

Who looks out for you best? Who can prioritize your needs like no other? The obvious answer is you! And wouldn’t you love a few extra dollars to spoil yourself in retirement?

It’s that time of year when we begin to gather our tax documents such as W2s, 1099s, mortgage interest statements, and charitable deductions. Since it’s a great time to review, check and see if you made an IRA contribution – Roth or Traditional – for 2009. For an individual under 50 you can add $5,000 to your retirement savings, or for those 50 and over $6,000, before April 15th.

If you continue to make investments annually, this could have a tremendous impact on your future income. In fact, it’s not too early to contribute for 2010 either. Contributions for 2010 must be made before April 15, 2011 and the limits are the same as 2009.

Even adding just a portion of the contribution limit amount to your retirement today could greatly benefit you tomorrow. Before investing, we always suggest that you have a bit of savings in case of an emergency. Make a plan and save for your golden years now – it may be the best New Year’s resolution you ever make!

Please remember that you can convert any Traditional IRA from another company into a No-Fee FAM Funds Roth IRA.

You may be faced with certain circumstances in 2010 that will change over the years:

• Your ability to contribute to your retirement accounts
• Paying off your mortgage
• Projecting your next promotion or pay raise
• Planning a child’s wedding
• Dealing with the death of a loved one
• Welcoming a grandchild
  

And in the day-to-day we neglect to take the time to think ahead:

• How long will your current vehicle get you to and fro?
• What additional education might you undertake?
• Will your children come to you for short-term funds?
• Will you or your spouse need nursing home care?

In all of your savings projections, it is impossible to predict what lifestyles or circumstances your investments can maintain, unless you take the time to develop a comprehensive plan. Make the hard choices today so that you are prepared for the future. For example, too many investors believed that their dividend yields would continue forever and this simply wasn’t feasible.

Being realistic, with conservative projections, and saving will allow you to meet your financial objectives; as you get closer to the goal, you will have the capability to review and adjust your plan as necessary. The earlier you take control, the more flexibility you’ll have in the future.