Insecurity Grows Among Retirees

In an article carried in the Retirement Income Journal (whose subtag is "The information journal of the decumulation industry"!)we find some alarming data:

The number of retirees who say they are worried about financial security has more than doubled in the past year, and many are tightening budgets or seeking professional financial advice. Forty-nine percent of retirees said they felt less secure than when they first entered retirement, compared with 20% who said so last year.

The findings come from a survey of retirees aged 56 to 77 with $100,000 or more in investable household assets.

The survey also found a significant decline in the number of retirees who feel very confident they have saved enough money to live comfortably throughout their retirement. Today, only one in four of the retirees are extremely confident they have saved enough, a 12 percentage-point drop year over year.

Over four in ten said their tolerance for investment risk has gone down since last year, and many were concerned about the possibility of inflation (45%), not having enough time to recover from the downturn (39%), concern about the economy (79%) and change in house value (28%).

But the real kicker comes from page 10 of the Report, a stunning observation that 34% of retirees from the 2009 survey had not estimated how long their assets and investments might last in retirement and fully 11% had never thought about it!

My goodness! People, what are we thinking here? At least the Report showed that retirees had increased their willingness to involve a financial planner in their decision-making, growing from 56% in 2008 to 61% today. Another data point showing that when it comes to our finances we may be our own worst enemies.

Fall Is Coming! Time to Plan for College

Summer has finally arrived in New England. We now have daily highs approaching 90 and the pools and lakes are filled with kids and parents looking for relief. Labor Day starts the school season again so parents have many days left to plan summer activities. Calls to the Midwest about vacations are answered with the sobering fact that there school is just weeks away. That means that education costs are on most parents' minds once again.

Today, and because of the calendar, we look at some tax laws that greatly effect the planning calculus for one of life's major expenses: the cost of education.Here, and especially for the next two years, Congress has provided an array of choices. So today we consider the following three: The new American Opportunity Credit, the Lifetime Learning Credit and the Tuition and Fees Deduction.With these three tax benefits it is mandatory that you keep in mind what is considered an eligible expense, income limitations and how the credits and deductions can be combined. Let's take a look.

The American Opportunity Tax Credit

A new tax credit for 2009 and 2010: the American Opportunity Tax Credit is a refundable tax credit for undergraduate college education expenses. This credit provides up to $2,500 in tax credits on the first $4,000 of qualifying educational expenses. Forty percent of the credit (up to $1,000 maximum) is refundable. What does that mean? Even if you have ZERO tax liability you can get money back from Uncle Sam. Now here's the catch. The credit is only available for tax years 2009 and 2010. After that it disappears, unless Congress decides to extend it.

In contrast to the Lifetime Learning Credit or the Hope credit, the definition of qualifying educational expenses is broader under the AOTC. In addition to tuition and required school fees, students can also include the cost of course materials such as books, lab supplies, software and other class materials. (Note: Best to keep all receipts as supporting documentation.)

Lifetime Learning Tax Credit


The Lifetime Learning Credit is a tax credit for any person who takes college classes. It provides a tax credit of up to $2,000 on the first $10,000 of college tuition and fees. You can claim the Lifetime Learning Credit on your tax return if you, your spouse, or your dependents are enrolled at an eligible educational institution and you were responsible for paying college expenses. Taking as little as one class qualifies.

All accredited colleges and universities are eligible educational institutions. Additionally, vocational schools and other post-secondary institutions are also eligible.

Qualifying expenses include amounts paid for tuition and any required fees (such as registration and student body fees). Qualifying expenses do not include any of the following: books, supplies, equipment, room and board, insurance, student health fees, transportation, or living expenses.

In calculating the credit, you must reduce your qualifying expenses when figuring your tax credit by the amount of financial assistance received from grants, scholarships, or reimbursements from your employer. You do not need to reduce your qualifying expenses, however, if you paid for college tuition using borrowed funds, including student loans, or by using gifts from family members.


If your son or daughter is going to college, and you claim him or her as a dependent, then you can claim the education credits on your tax return. If your son or daughter is no longer a dependent, then he or she should claim any education credits on his or her own tax return.


As previously warned, you must pay close attention to income limitations. The Lifetime Learning Credit is limited over a phase-out range. If your adjusted gross income is below the phase-out, your credits are not reduced. If your income is in the middle of the phase-out range, your credits will be reduced. If your income exceeds the phase-out range, you are not eligible to claim any education tax credits.

* $48,000 to $58,000 : Single, Head of Household, or Qualifying Widow
* $96,000 to $116,000 : Married Filing Jointly

Compare this with the income limitations on the tuition and fees tax deduction. The full $4,000 deduction is allowed if you earn less than $65,000 (single, head of household, qualifying widow) or less than $130,000 (married filing jointly). The deduction is limited to $2,000 if your income is between $65,000 and $80,000 (unmarried taxpayers) or is between $130,000 and $160,000 (married filing jointly).

What about Married Filing Separately? No education tax break of any type. Separate filers are not eligible for the Hope Credit, Lifetime Learning Credit, or the tuition and fees deduction.

Tuition and Fees Tax Deduction

2009 is scheduled to be the last year that taxpayers can take this deduction, which is taken directly on your Form 1040.


The maximum amount of the tuition and fees deduction you can claim is $4,000 per year. The deduction is further limited by income ranges:
$4,000 max for income up to $65,000 ($130,000 for joint filers)
$2,000 max for income over $65,000 up to $80,000 ($160,000 for joint filers)
no deduction for income over $80,000 ($160,000 for joint filers).

(Note: Measured using adjusted gross income modified to add back certain types of foreign income that are excluded from US income taxes.)

What qualifies?

* Tuition
* Fees required as a condition for enrollment or attendance

Books, student health fees, and other school related costs are generally do not count as qualifying expenses for the tuition deduction. Schools report qualifying expenses to you and to the IRS using Form 1098-T.

The deduction is available for any person who paid tuition and other required fees for attending college, university, or other post-secondary school. The deduction is available for parents whose dependents attend college, but only if the parents claim the student as a dependent. Taking even one class qualifies. As with the Lifetime Learning Credit, the deduction is not available for married couples who file separate tax returns.

As can be expected, a careful consideration of the interplay between these credits and deductions provides the largest tax benefits. Generally, see IRS Publication 970. For how they will work for you in your individual situation, consult your tax advisor or trusted financial professional.

Ten Rules of Investing-Times Two!

As the stock market continues it frantic rally from the March lows, I thought I'd throw in the distillations of a couple of other thinkers whose ideas about the capital markets are widely respected. Charlie Munger is widely regarded as the silent genius behing Berkshire Hathaway along with Warren Buffet, that other fellow you may have heard of. Bob Farrell was Merrill Lynch's chief market strategist from 1967-1992, a 25 year period featuring the "Go-Go" stock market years of the Sixties. I am presenting their ten rules of investing found in numerous places around the blogosphere because many of them bear repeating, especially the tidbits regarding Bull and Bear Markets. I am presenting them without editorializing upon them. I think it's an interesting exercise to take your OWN market experiences and to compare them to these timeless truths. In this way they become an iterative lesson and thereby part of your knowledge base as well. Enjoy!

Charlie Munger's Ten Rules

1. Measure risk

2. Be independent

3. Prepare ahead

4. Have intellectual humility

5. Analyze rigorously

6. Allocate assets wisely

7. Have patience

8. Be decisive

9. Be ready for change

10. Stay focused

Bob Farrel's Ten Rules

"10 Market Rules to Remember."

1. Markets tend to return to the mean over time

2. Excesses in one direction will lead to an opposite excess in the other direction

3. There are no new eras -- excesses are never permanent

4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways

5. The public buys the most at the top and the least at the bottom

6. Fear and greed are stronger than long-term resolve

7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names

8. Bear markets have three stages -- sharp down, reflexive rebound and a drawn-out fundamental downtrend

9. When all the experts and forecasts agree -- something else is going to happen

10. Bull markets are more fun than bear markets

Fixed Annuity Sales Surge

Arrgh! I expected this but believe me its the last thing I wanted to see. Investors flocking to fixed annuities. I understand the mentality but this is likely the worst time to do this.

We have already discussed how investors typically rush in when prices are high and sell when prices are low. It's just human psychology. Now they are doing it again.

Consider this from National Underwriter:

Two new studies show fixed annuity sales were significantly higher in the first quarter than they were in the first quarter of 2008.

...

The surge was due to a 74% sales increase for fixed annuities, from $25 billion in first quarter 2008 to $36 billion in the comparable period of 2009, LIMRA, Windsor, Conn., says.

Variable annuities sold just $30.1 billion in the first quarter of this year, in sharp contrast to first quarter 2008, when VA contracts outsold FA contracts by $42 billion to $20.5 billion.

Consumers’ recent preference for fixed products was a result of the unstable stock market and a desire for guaranteed rates of return, says Joe Montminy, director of annuity research at LIMRA.

Sales of variable annuities showed double-digit declines for the fourth straight quarter, LIMRA says.

Sales increased for all fixed deferred annuity product-types in the first quarter of 2009, LIMRA found.

...

Comparable results for fixed products were found in another study, from Beacon Research Inc., Evanston, Ill.

Beacon’s Fixed Annuity Premium Study estimates U.S. sales of fixed annuities amounted to about $35 billion in the first quarter of 2009, up 78% from the comparable period a year earlier.

There are legitimate places in financial planning for fixed rate annuities. I am not denigrating an entire product here. But what the article is describing is panicky herd behavior, pure and simple. These investors are likely buying high (low fixed rates) and selling low (when rates rise).And that is the road to investing ruin.

Data: Shaken Not Stirred

Sorry for the James Bond reference but sometimes my age shows through.

I always seek to provide good value to the readers (since this blog is FREE you may be wondering what value you exactly are receiving) and in this instance I have come across a data source complete with graphs that those of you looking for original source material for those series making and moving the economy and the markets may find very useful. From the Atlanta Fed, two compilations- one on economic highlights, one on financial highlights. The economic series in PDF form can be found here. The financial one here.

Neither contain proprietary material and come from a government source so may be freely used. (It would be more than kind to provide appropriate references and links should you choose to use them.)

The Duration of Stocks

“Life is all about timing... the unreachable becomes reachable, the unavailable become available, the unattainable... attainable. Have the patience, wait it out. It's all about timing.”-Stacey Charter


For more experienced investors, the concept of duration in assessing the risk in bond investments is a simply executed yet vital tool. We can find clear explanations of "duration" in many places, but here is just one:

The concept of duration is straightforward: It measures how quickly a bond will repay its true cost. The longer it takes, the greater exposure the bond has to changes in the interest rate environment. The greater the exposure, the higher the risk.


Let's say that two bonds that each cost $1,000 and yield 5%. A bond that matures in one year would more quickly repay its true cost than a bond that matures in 10 years. As a result, the shorter-maturity bond would have a lower duration and less price risk. The longer the maturity, the higher the duration.

You can easily see that a bond's "coupon rate", the bond's payment, is a key factor in calculating duration. If two otherwise identical bonds pay different coupons, the bond with the higher coupon will pay back its original cost quicker than the lower-yielding bond. The higher the coupon, the lower the duration.

(Source: About.com)

Bonds have other risks of course, but it is the simplicity of calculations such as these that make bond investing somewhat more malleable to the blunt tool of a calculator in assessing risks than say, equities.

Or is that true? What if we were told that stock duration can be calculated as well? Wouldn't that be a huge help in assessing the risk from investing in that asset class? Let me allow John Hussman, economist and President of Hussman Econometric Advisors, to set up the discussion (found in his always informative Weekly Market Comment):

The relative performance of stocks versus bonds last year has had an important impact on durations, which investors should not overlook if they plan “rebalance” their portfolios in the weeks ahead. (Omit)

In order to understand the importance of the duration shift that we've observed over the past 15 months, recall that for a passive “buy-and-hold” investor having no view about short- or long-term market direction, the appropriate portfolio allocation strategy is to match the “duration” of the portfolio to the anticipated date that the money will be needed. So for example, an investor needing to use the funds in 5 years would tend to choose relatively shorter-term, less price-sensitive securities, while an investor having a 40-year horizon would typically choose longer-duration securities.

In 2007, the effective duration of a 30-year Treasury bond was just over 16 years. Meanwhile, the effective duration for the S&P 500 Index (which turns out to be essentially the price/dividend ratio) was nearly 60 years. At that point, in order for a passive long-term investor to achieve an expected long-term return of 7%, it would have been necessary to have a 60-year expected holding period, with a 100% position in stocks being the only passive investment allocation capable of achieving that result.

Equivalently, for an investor with only 20 years or so to invest, the largest appropriate allocation to stocks was only about 1/3 of the portfolio (i.e. 1/3 of 60 years = 20), provided that the balance of the portfolio was held in cash. For that investor, the reasonable prospect of 7% long-term returns was unavailable, without taking excessive risk. Even if one had no views about market direction, the extremely long 60-year duration of stocks in 2007 forced passive investors to accept a terribly limited menu of options, all with disappointingly low expected return prospects.

Why is this important now? Because with the recent surge in Treasury bond prices, the effective duration of a 30-year Treasury bond has climbed from just over 16 years to nearly 20 years. Meanwhile, the stock market's freefall plunge has collapsed the duration of the S&P 500 from nearly 60 years to just about 30 today.

For investors who rebalance their portfolios annually, this is essential information. Given the probable long-term returns that stocks and Treasury bonds are priced to deliver, an investor seeking a 7% long-term total return would currently require an allocation of about 60% in stocks and 17% in bonds, for an overall portfolio duration of about 21 years – only a third of the duration that an investor seeking that same long-term return would have had to accept just 15 months ago! Given the poor long-term returns that Treasury bonds are priced to deliver, an investor with any view at all about market direction would likely forego the 17% allocation to long-term bonds, opting for shorter-duration (and only slightly lower yielding) securities until the Treasury market normalizes.

Investors are sometimes urged to allocate a percentage of assets to stocks equal to 100 minus their age. In my view, this formula is terribly crude, because it ignores the impact of valuation on the duration of stocks. Again, at a dividend yield of 1.7%, stocks have a duration of nearly 60 years. At a dividend yield of 4%, stocks have a duration of just 25 years. Clearly – even for passive investors having no view about market direction – the appropriate allocation to stocks is inverse to their valuation. This point can be argued on the basis of duration alone.

For a 50-year old passive investor with, say, a 20-year investment horizon, the appropriate investment strategy isn't to plop 50% into the stock market regardless of valuation. At an S&P 500 dividend yield of 1.7%, as we saw in 2007, the duration of stocks was 60, so the appropriate allocation to stocks for that investor was no more than 33%. At an S&P 500 dividend yield of 4%, it could comfortably rise as high as 80% (20/25), provided the balance of the portfolio was in cash, which has zero duration. Given current valuations, the appropriate allocation – again for a passive investor with a 20-year horizon – could be as high as 58% in stocks, provided that the remainder of the portfolio is in fairly short-duration, low-volatility securities.

I can't stress enough the importance of Hussman's comment about time-frames for passive investments. In his view you have to match duration to an investor's needs for funds, i.e. the end of the investor's investment horizon. If you do not match horizons (for the investment and for the investor) you have recommended an inappropriate use of monies and misused the tools (duration calculations) at your disposal. A primary consideration? Absolutely! In fact I believe an advisor who hasn't considered this to be ignoring a vital source of market risk: the likelihood of the investment NEVER being paid back. We see this everywhere today with near retirees who have been devastated by the market's declines.

Read the entire piece CAREFULLY. A working knowledge of this important concept is essential to your investing health. As always, contact your advisor if you have further questions.

Planning Basics: The Number We All Need to Know

I'm not talking about Mom and Dad's home number for birthday greetings, anniversaries wishes or, if you are in college, the occasional request for advice and money. (Not that you don't need that occasionally too!) I'm talking about the number we all need to know for planning purposes: our marginal tax rate! Exciting eh?

Individuals can use the tax rate schedules in a number of ways to help plan their finances. You can use these tax rates to figure out how much tax you will pay on extra income you earn. For a taxpayer in the 25% tax bracket, extra income will be taxed at that rate until the taxpayer reaches the next tax bracket. Useful if you are trying to figure out whether to take that part time job, pay the sitter, tolls, wardrobe upgrade and meals out or just continue as Mr. Mom. Alternatively, you can use these tax rates to figure out how much tax you will save by increasing your deductions, such as those given for mortgage interest, contributions to charities or any number of deductible items.

Your top marginal tax rate is 10%, 15%, 25%, 28%, 33%, or 35%, depending on your taxable income, as shown in the tables below. If your top bracket is 25%, for example, this means that each additional dollar of ordinary income (such as salary or interest income) will be taxed at 25% for regular income tax purposes.

The most favorable tax brackets apply to married persons filing jointly and qualifying widow(er)s who also use the joint return rates. The least favorable brackets are those for married persons filing separately, but filing separately is still advisable for married couples in certain situations.

2009 federal tax tables are divided into four sections based on your filing status: single, married filing jointly, married filling separately, head of household.

Filing status: SINGLE

*10% on income between $0 and $8,350
*15% on the income between $8,350 and $33,950; plus $835.50
*25% on the income between $33,950 and $82,250; plus $4,675.00
*28% on the income between $82,250 and $171,550; plus $16,750.00
*33% on the income between $171,550 and $372,950; plus $41,754.00
*35% on the income over $372,950; plus $109,216.00
(Tax Rate Schedule X)

Filing status: MARRIED FILING JOINTLY

* 10% on the income between $0 and $16,700
* 15% on the income between $16,700 and $67,900; plus $1,670.00
* 25% on the income between $67,900 and $137,050; plus $9,350.00
* 28% on the income between $137,050 and $208,850; plus $26,637.50
* 33% on the income between $208,850 and $372,950; plus $46,741.50
* 35% on the income over $372,950; plus $100,894.50
(Tax Rate Schedule Y-1)

Filing status: MARRIED FILING SEPARATELY

*10% on the income between $0 and $8,350
*15% on the income between $8,350 and $33,950; plus $835.00
*25% on the income between $33,950 and $68,525; plus $4,675.00
*28% on the income between $68,525 and $104,425; plus $13,318.75
*33% on the income between $104,425 and $186,475; plus $23,370.75
*35% on the income over $186,475; plus $50,447.25
(Tax Rate Schedule Y-2)


Filing status: HEAD OF HOUSEHOLD


* 10% on the income between $0 and $11,950
* 15% on the income between $11,950 and $45,500; plus $1,195.00
* 25% on the income between $45,500 and $117,450; plus $6,227.50
* 28% on the income between $117,450 and $190,200; plus $24,215.00
* 33% on the income between $190,200 and $372,950; plus $44,585.00
* 35% on the income over $372,950; plus $104,892.50
(Tax Rate Schedule Z)

Please note: The tax rate on qualified dividends and net capital gains is generally lower than your top bracket rate on ordinary income. Qualified dividends are subject to a rate of 15% or are tax free, depending on your top bracket, and net capital gains are also generally subject to a rate of 15% or are tax free (depending on your top bracket), but the rate can be higher if you have 28% rate gains or unrecaptured Section 1250 gains.

For those of you who are sticklers on this subject of marginal tax rates, we are ignoring Alternative Minimum Tax effects, which will be discussed in a later article.

To actually compute your 2008 regular income tax, you will either look up your tax in the Tax Table, use the Tax Computation Worksheet, or if you have net capital gains or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet or Schedule D Tax Worksheet.

The next is in all caps so the author-ME-must think it is important. THESE TAX SCHEDULES ARE PROVIDED FOR INFORMATIONAL (PLANNING) PURPOSES ONLY. If necessary,please see your tax professional or trusted advisor when making important decisions regarding your taxes.

Making Sense of Modern Day Investing

Not everything that can be counted counts, and not everything that counts can be counted.- Albert Einstein

It is no secret that Wall Street has , shall we say, exposed its seamier side during the last two bear markets. From Bernie Madoff and Alan Stanford, Enron accounting to off balance sheet vehicles for banks, we have seen some things we were never intended to. But now we know and hopefully all of us are a little bit wiser for it.

Alan Marks is a veteran portfolio manager with Oaktree Capital Management, L.P. He recently penned a memo to his clients about the recent lunacy. Drawing upon Warren Buffet's latest address to Berkshire Hathaway shareholders and Buffet's comment on modern times:

There's so much that's false and nutty about modern investment banking. If you just got rid of the nonsense, that would be a goal to shoot for.

For the next 15 pages Howard writes about what happened, why, and some things to think about for next time. It's a great read, very informative, sometimes humorous and sometimes a head-shaker(at modern financial practices). The missive sums up most of what I believe about what has taken place and sound investment practices, and I have a hard time pointing to any one place where I would have put it much differently. You'll find many of these same ideas exposed in different forms as this blog evolves. I give it to you here via the fantastic blog Zero Hedge. Click here and enjoy.

"Real" Home Price Index

A little graphical followup to my previous article about housing as an investment. This from Case-Shiller, their Real Home Price Index from 1890-2009.



A bit above a mean of zero return, a bit below, then BOOM! the Great Housing Bubble and subsequent crash. Going nowhere but in an interesting way.

The Most Important Issue in Financial Planning: Part II

“If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless”- Thomas Jefferson

(Ed. Note: Hmmm. Might want to paste that quote on the fridge.)


As I stated in my prior post on this topic, I believe that the question of whether we face inflation or deflation going forward is the most important question for advisors and investors out there. Why? The assets classes that do well in one environment struggle in the other and vice versa. Get this question right and your portfolio is set up for success. Get it wrong and the portfolio is likely to fail to meet its objectives. Split the baby and the portfolio is likely to have a mixed or muddled performance. Let's take a look.

The case for inflation going forward has multiple parts. The first is the need to finance existing and future federal obligations, including the national debt. The Congressional Budget Office (CBO) forecasts that the national debt held by the public to GDP ratio will hit 70% in 2012 and 82% by 2019. That is their base-case projection assuming entitlements evolve in line with EXISTING laws and that discretionary spending grows at the rate of inflation. Those sanguine assumption appears to be in direct conflict with the announced aims of the Obama administration regarding health care, not to mention any other programmatic expansions.

The publicly held national debt is absolutely dwarfed by the current and unfunded liabilities of the federal government. If we total the publicly held national debt, plus federal employee and veterans' benefits, insurance, leases and estimated scheduled benefits under Social Security and Medicare, as of September 2008 these unfunded mandates total $56.5 trillion. That's four times the size of our GDP.

Look at the following chart from the White House's Office of Management and Budget (whitehousegove.org/omb):




Starting in the early 80s, the national debt as a percentage of GDP has been on an inexorable climb upward, interrupted only by the mildly declining rate in the Clinton years, and re-accelerated under Bush and now Obama. If the nation's books are in such disarray, what price will we need to pay to attract the capital to finance these debts. If higher interests rates are in store those must percolate throughout the economy and effect the financing decisions of all entities withing it, labor and capital combined.

A second argument for inflation is the sheer magnitude of money supply growth. The financial crisis has brought about an amazing response from the Federal Reserve. See below.



A central bank is best at creating liquidity and in response to the current crisis that is exactly what the Fed (and every other central bank) has been doing. If you believe that inflation is brought about by too much money chasing too few goods then the chart above will scare the bejeezus out of you. Once into the system, how does a central bank control where the money goes?


Per the April 29, 2009 statement of the Federal Open Market Committee, the Federal Reserve plans to purchase up to $1.25 trillion of agency mortgage-backed securities, $200 billion of agency debt, and $300 billion of Treasury securities. That $1.75 trillion in purchases is awfully close to the $1.8 trillion deficit that is projected for the budget in 2009. Look at the explosion from September 2008 until end of March 2009. All kind and manner of securities, once held in the private sector, have been purchased by the Federal Reserve.



TALF, CPLF, ABCP, CPDF. A veritable alphabet soup of programs has been created by the Fed and Treasury in the last year to inject money into the system while provide a place to park assets held in the private sector that could not otherwise be exchanged for acceptable prices. At what cost does our central bank become the only financier for these dubious instruments?

The flooding of money into the system. The need to finance an ever growing national debt. The monetization of large swaths of the credit markets. All are argued to be inflationary pressures underneath the system that are only being held in check for now by the vast amount of wealth destruction engendered by the housing and stock market collapses.

How will this play out in the coming months as we work our way through this crisis? That is the question facing advisors and investors and one which likely holds the key for acceptable returns going forward.

Summer Reading

I am sunning it on the beaches in hot, hot, HOT South Carolina this week.

A bit of summer reading for you. None of these books rival a John Grisham novel for entertainment value but they are featured in a prominent place in my investing and planning library. If you are as interested in these topics as I am may I suggest these as "must read"?

1. Unexpected Returns, Ed Easterling
2. Fooled by Randomness, N. N. Taleb
3. The Only Investment Guide You Will Ever Need, Andrew Tobias
4. Against The Gods: The Remarkable Story of Risk, Peter Bernstein
5. Irrational Exuberance, Robert J. Shiller
6. Practicing Financial Planning for Professionals, Mittra and Sahu
7. Financial Planning Answer Book, Jeffrey Rattiner
8. Questions Great Financial Advisors Ask, Parisse and Richman
9. Anatomy of the Bear, Russel Napier
10. Valuing Wall Street, Smithers and Wright


And as a bonus a little-known jewel: Stock Cycles by Michael Alexander

Enjoy!