Well, it’s finally over. The killing of the world’s most wanted terrorist by Navy Seals? Yes. The sweep by Dallas of the LA Lakers in their quest for a third straight NBA title? Yes. The royal wedding in Britain of William and Kate? Yes. All three are finally over! We still have at least two more to go. Please read on.

With nearly a million people gathered around Buckingham Palace, and another 2 billion watching on TV, William and Kate exchanged vows at Westminster Abbey. The double kiss was followed by a weekend of partying in London. Considering the British economy is fairly anemic and the wedding cost was an estimated to be $35 million, it’s not surprising that there was more interest in the Colonies than in the Commonwealth.  “We were supposed to have just a small family affair.” Prince William joked to Kate’s father. 

The Lakers, 2-time champs of pro basketball, just couldn’t make it 3 in a row. The major contributing factors to their downfall were: “Father Time” catching up with Fish and Kobe, a lame-duck coach in Phil Jackson, a weak bench, and a mostly pitiful effort on defense. It’s tough to stay at the top…whether you are a great sports team, a mutual fund, or a stock. Usually, a focused commitment, exceptional talent, and great management give you the best chances for long-term success. “If you meet the Buddha in the lane, feed him the ball,” Zen master Jackson once quipped. LA could have used a Buddha on both ends of the court. 

The world’s most wanted terrorist is dead and we definitely care…especially those connected personally to 9/11…but the markets hardly skipped a beat.  The major indices jumped briefly after the news of the raid in Pakistan. However, things quickly settled down. The economic recovery is the big news in the financial world, as companies report higher earnings, more jobs, and more cash. Prices are up, particularly oil, and manufacturing numbers are higher, too.  “We can’t accommodate terrorism. When someone uses the slaughter of innocent people to advance a so-called political cause, at that point the political cause becomes immoral and unjust and they should be eliminated…” Rudy Giuliani. 

Through Friday, May 13th, the S&P 500 Index has risen 7.1% this year. Rising oil prices have not stemmed the tide of higher led by these sectors in 2011: Healthcare +15.2%, Consumer Staples +10%, Utilities +9.4%, Energy + 8.9%, Telecom +7.3%, and Technology + 5.1%. Gold closed on Friday at 1505 per ounce, up from 1237 a year ago, while a 6 month CD averages .31%. The nation’s unemployment rate was 9% in April… however, if you had a college degree, it was half that number at 4.5%.[1]  

“An investment in knowledge pays the best interest,” wrote Ben Franklin. 

We have been receiving a greater number of referrals from you. A major reason seems to be that when CD’s mature, it is both a shock to see the new rate and a call to action. Many do-it-yourselfers are now seeking professional financial guidance. Thank you for sending your friends and relatives our way. 

It may come to you as a surprise, but Americans are now paying the smallest share of our income for taxes since 1958. According to USA Today, the total tax burden for all federal, state, and local taxes was 23.6% in the first quarter of 2011. In the 1970’s, 1980’s and 1990’s, individuals spent roughly 27% of income on taxes. The national average is now $23,600 for a person earning $100,000. It was $28,700 in 2000 and $27,300 in 1990. It may come as no surprise to you that the government is spending more today per person: $18,086 in 2011 versus $13,552 per person ten years ago. 

The provisions of the new rules in TRA 2010 include an extension of estate, gift, and generation-skipping taxes through 2012. The new exemption amount is $5 million for all three taxes and the top rate is capped at 35%. Any unused portion of the exemption can be transferred to a surviving spouse. We have noticed an increase in family gifting methods. This law expires on December 31, 2012 and we return to the $1 million exemption and a top rate of 55%. Please consult your tax advisor or call us for ideas. 

Many of you, like me, love to work in the garden. Its springtime and your roses and flowers should be blossoming and making things around you more beautiful.  While mulching and digging in the dirt last week, it occurred to me again how much investments are similar to soil. They both need to be fertilized, mulched, and watered properly in order to see the best results. 

As mentioned in the opening paragraph of this report, there are still at least two more big events to finally be over for us soon. You’ve probably guessed them: Dancing with the Stars and America Idol. Hopefully, your spring will be filled with happiness, health, and good fortune.

Today’s the day.  

Mitch Fisher  

[1] J.P. Morgan Asset Management 5-16-11