For several weeks, we have been watching closely as events in North Africa and the Middle East unfolded. First, to sort through all the claimants and wannabes of this revolution, and find out whom the main powers are. Second, to search for signs of Egypt’s crises spreading to other countries. Well, the crisis has now clearly reached Libya which is probably headed toward a long, painful civil war.

In the future we must keep a vigilant eye on three critical countries: Algeria, Bahrain, and Saudi Arabia. If the political upheaval gets out of control in any ONE of these countries, WATCH OUT!

“You live longer once you realize that any time spent
being unhappy is wasted.”

– Ruth E. Renkel

QUESTION: I am an employee and I work on the road for a company that requires me to use a cell phone. How can this be set up to benefit me and my employer the best for income tax purposes?

ANSWER: I recommend that you have your employer pay for the cell phone and the monthly cost. Your employer will obtain a full deduction and be able to write off the full cell phone cost, under Section 179, in the year of purchase. Recordkeeping rules were recently relaxed and your employer no longer must keep onerous records of your business versus personal use. It is interesting that the IRS has not yet exercised its authority to treat your personal use of the cell phone provided by the employer as income (a good thing).

Feel free to contact me if you or someone you know has this type of situation. Financial Planning and tax planning advice presented here is general in nature, and individual circumstances make applying these general rules tricky; thus, the above answer cannot be applied to all circumstances because the slightest variation could cause a different outcome.

Those of you who are well acquainted with me know that I eat very little meat. I limit myself to eating only one (cheese) burger one time a year – on St. Patrick’s Day – along with a sizeable order of French fries. This year, I am seeking the “Best Cheeseburger & fries” in the Lehigh Valley. I would love your input. Let me know where you think I should go this upcoming St. Patrick’s Day to enjoy. Just send me an email with your vote – and put “Cheeseburger in Paradise” as the subject.

Stocks’ relentless levitation suffered a rare pause last week as tension in the Middle East sent crude-oil prices over $100 a barrel. But old habits die hard, and following a three-day selling jag, stocks rebounded Friday after Saudi Arabia raised output to quell concerns that a Libyan rebellion might disrupt oil supply.

The market’s loss last week came to just 1.7%, but that was enough to qualify as the biggest weekly loss in three months. Just as quickly, the horde of bullish investors shrank from 47% to 37%, the biggest one-week drop in—you guessed it—three months. In the short term, this fickle lot likely will continue taking its cue from the direction of oil prices. Meanwhile, Wall Street’s habitual upgrading of economic growth forecasts will be put on hold, at least for now.

Energy stocks jumped, and even before Friday were up 12.6% this year—nearly triple the 4.8% gain for the next-best group, industrials. In fact, the energy sector has rallied more than 40% over the past six months. Bespoke Investment Group analyzed the five prior instances since 1940 when energy stocks have had similarly big spurts. Historically, they’ve pulled back four out of five times to register an average decline of 2% a month later and were still down 1.1% after three months. This might suggest the benefits of rising oil prices are quickly priced in.

On the other hand, energy stocks trade at just 13.4 times projected earnings. That’s in line with the broad market, says Morgan Stanley, and growth expectations aren’t much more elevated compared with the overall market’s. And energy stocks benefit if oil keeps climbing. Who suffers if that happens? Typically, sectors with a high proportion of commodity costs but limited pricing power, like auto, retail, food and beverages and household products.

Crude ended last week up 9.1% at $98, and gold climbed to $1,409 a troy ounce. Despite a lift from Boeing (ticker: BA), the Dow Jones Industrial Average suffered its second loss in 13 weeks and closed down 261, or 2.1%, to 12,130. The Standard & Poor’s 500 snapped its three-week winning streak and fell 23 to 1320. The Nasdaq Composite Index lost 53, or 1.9%, to 2781, while the Russell 2000 slipped 13, or 1.5%, to 822 (Source: Barrons Online).

Last week, US Stocks and Foreign stocks fell sharply. Bonds increased. During the last 12 months, U.S. STOCKS outperformed BONDS.

Returns through 2-25-2011	1-week	Y-T-D	1-Year	3-Years	5-Years	10-Years
Bonds- BarCap  Aggregate Index	0.7	.2	5.0	5.9	5.8	5.7
US Stocks-Standard & Poor’s 500	-1.8	5.3	18.9	-4.7	-1.5	1.1
Foreign Stocks- MS EAFE Developed Countries	-1.6	4.4	17.5	– 5.6	-.5	2.4

Source: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized excluding dividends.