Newsletter November 2004

No. 4

November 2004

In This Isssue

Our accomplishments this year...

Auto donations will be restricted after 12/31/04

Take your property tax bill with you when you move

Bond redemptions are accelerating

Oracle offer for PeopleSoft stock

Take a look at our accomplishments this year…

Added and trained staff
Gone 100% “paperless”
Focused our resources on Comprehensive Financial Management
Improved our client database
Registered as an Investment Advisor with the SEC(Required to move from California regulation to Federal when managed assets surpass $30 million.)
Offered annual Financial Plan updates to all Investment Management clients
Added password-protection capability for sensitive documents sent via e-mail

Auto donations will be restricted after 12/31/04

Taxpayers may currently deduct the current market value of their used vehicle when donated to a charitable organization.

Beginning on January 1, 2005 the value of the deduction will be limited to the price the organization actually receives for the vehicle.

How does this affect me?

Take your property tax bill with you when you move: Propostions 60 & 90

California homeowners who move to a new home can avoid an increase in property taxes if:

You are 55 or older, or disabled, and
The new replacement home costs less than or equal to the sale price of your old home, and
You move within the same county.

Without this provision homeowners with low property assessments could easily double or triple their tax bills even if they “downscaled” to a less expensive house.

Prop 90 allows for reciprocity between counties that have elected to accept Prop 60 transfers.

Prop 60 Questions and Answers

Counties Accepting Prop 90

Bond redemptions are accelerating

Investors are learning the hard way about the drawbacks to callable bonds. Interest rates on bonds issued in the 1980’s were in the low teens, and bonds issued in the 1990’s were in the 6 - 8% range.

Now it’s hard to find a high-quality corporate bond that pays more than 5%.

Issuers of bonds issued before 2000 with call features will almost certainly call, i.e., redeem, those bonds. The investor receives the face value of the bond, and the issuer takes back the bond.

The investor is then forced to reinvest the bond at current (lower) interest rates.

Oracle offer for PeopleSoft stock

The current offer for $24 per share is in force until midnight on Friday November 19, 2004. If a simple majority of the shares are tendered Oracle will then attempt to have the two “poison-pill” provisions voided. If it is unable to do so, presumably Oracle will replace the board of directors with a board that would allow Oracle to void the provisions.

To tender your shares: if you own shares in a brokerage account you would fill in a Letter of Transmittal, obtained from your broker.

If you own shares in an account managed by Grubman Financial, you would contact us.

If you hold certificates, you would download this form and follow the mailing instructions on the form.

In all cases, the transmittal forms MUST BE RECEIVED by Oracle’s agent by Friday, November 19, 2004.

Stock options do not have voting rights.

PeopleSoft accelerated the vesting of its 2004 stock option grants in the event that Oracle acquires the company.

Who’s who at
Grubman Financial?
Audrey Grubman, CFP
Patrick McDermott, CPA
Halle Brown,

Office Manager
Jill Martin,
Administrative Assistant

Protecting your privacy
We can password-protect documents that we send by email. Click here to request password-protection

If you are not an Investment Management client
We no longer provide tax services unless we manage your assets. We can provide a referral to an independent CPA if you need one.

In the next newsletter…
Identity theft, how to avoid it and what to do if it happens to you