INSIDE FINANCE:
Spring Cleaning

By Robert M. Jaffe, MBA, AAMS
March 25, 2005

For those of us who have spent the winter in and around Clifton, spring couldn't be a more welcome arrival. Coming after what has seemed to be an eternity of snow and chill, Longfellow's ode to the season is very timely. " If spring came but once a century, instead of once a year, or burst forth with the sound of an earthquake, and not in silence, what wonder and expectation there would be in all hearts to behold the miraculous change!" Believe me, Mr. Longfellow, we're ready for the change.

With spring comes ritual spring-cleaning and not just for the household; it's a good time to review your portfolio and consider some sprucing up there as well. In an earlier column (January 24, Volume1 No.3, www.cliftoninsider.com) I suggested six questions to ask yourself when reviewing your portfolio. If you took the advice to heart, perhaps you've already made some changes or see no reason to do so at this time.

Here's another thought to put in your spring bonnet. Does your portfolio contain an allocation to non-US investments, equities or fixed- income, mature or emerging foreign markets? With the current decline of the dollar, a subject I intend to address in a future column, having a component of non-US investments could prove valuable. I recommend this course of action and here's why. As the dollar weakens investments in non-dollar denominated currencies strengthen on a relative basis. Therefore the Net Asset Value per share would be greater when the underlying securities in euros, for example, are translated back into dollars.

There has long been a school of thought that the non-correlation of foreign and domestic returns provides a balance. Therefore, an allocation that includes a component of non-US holdings would tend to reduce the level of risk in a portfolio. Simply put, when US returns are down, non-US may be up. This doesn't always hold true, but as a long-term strategy, having such a mix makes good investment sense, in my opinion.

There are myriads of mutual funds from which to choose ranging from country and style specific (growth vs. value) to broad regional categories such Europe, Asia, Global non-US. Check with your financial advisor, or, if you are one and the same, then do some research on your own. Financial publications and websites abound, including our own, www.cfsias.com. I invite you to spring into action by logging on to utilize our links to many valuable resources.

There may be additional risks associated with international investing such as currency risk, economic and political risk, and differences in accounting practices.

The preceding article is for informational purposes only and should not be used as the primary basis for an investment decision.

The views expressed in this article are those of the author and are not necessarily those of Cambridge.

Please Email bob@cfsias.com with your questions.

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INSIDE FINANCE will appear regularly, addressing financial matters of interest to our readers. Any questions? Email bob@cfsias.com

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member NASD/SIPC. Cambridge and CFS are not affiliated.

The preceding article is for informational purposes only and should not be used as the primary basis for an investment decision. Indices mentioned are unmanaged and cannot be invested into directly. Past performance does not guarantee future results. All examples given are hypothetical and do not reflect actual investments. The views expressed in this article are those of the author and are not necessarily those of Cambridge. Bob Jaffe is Managing Director of CFS Investment Advisory Services, LLC in Totowa and has been a Clifton resident since 1984. Active in community affairs, Bob is Past Board Chairman of the North Jersey Regional Chamber of Commerce and a member of its foundation board. He serves as a commissioner on the Clifton Rent Leveling Board and the Committee for Individuals with Disabilities. He is Vice President of the Clifton Rotary Club. Representatives of Cambridge do not offer tax or legal advice. Consult a professional for your personal situation.