“It takes the hammer of persistence to drive the nail of success.”

– John Mason

QUESTION: Two years ago, I retired from my large multi-national employer who maintained a very beneficial “cafeteria plan”. Then, I started my own company. May I start a cafeteria plan for my small company?

ANSWER: Yes, the 2010 Health Care Act created a “simple cafeteria plan” for small businesses and provides a safe harbor from the nondiscrimination requirements for benefits including group term life insurance, self-insured medical expense reimbursement plan, and benefits under a dependent care assistance program.

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.

This winter is too long! How could it be, the Monday after the first weekend in April, and I have played only one round of golf in 5 months. I have a feeling that I will not be playing anywhere close to my handicap when I finally get out there for a couple rounds. I think a 2-week Florida vacation in January/February is in order for next year.

Last week there were more POSITIVE than NEGATIVE developments, and the stock market strung together its best two weeks since June.

ECONOMIC REPORTS LAST WEEK

Positives:

1) Private sector payroll growth solid in March
2) ISM mfr’g solid but some key components moderate
3) Feb Pending Home Sales better than expected
4) Irish debt gets some relief as bank stress test in line with bailout cost estimates
5) Taiwan raises rates to join other Asian nations in fighting inflation
6) Yen at 3 1/2 month low providing breather to Japanese exporters (but cost of needed imports go up)

Negatives:

1) No wage growth as inflation pressures continue, WMT endorses that as fact
2) Case/Shiller Home Price Index back to near the lows
3) Consumer Confidence at 4 mo low as 1 yr inflation expectations rise to 6.7%
4) Portugal and Greek debt ever more toxic
5) 3yr, 5yr, 7yr U.S. Treasury auctions soft

Source: The Big Picture

Having snagged its best first quarter since 1998, the U.S. stock market began April on a hopeful, if hesitant, note, encouraged by evidence that our economy is improving, but a little fearful that this may be as good as it gets.

On Friday, the Dow Jones Industrial Average nudged briefly above its recent February peak to reach its highest level in nearly three years, effectively brushing aside recent concerns such as high oil prices, flailing European banks and disruptions in the wake of Japan’s disaster that had so alarmed investors mere weeks earlier.

But the blue chips gave up half those gains by dusk, perhaps mindful that the problems they so summarily shrugged off—like rising commodity costs—could still come back to crimp profit margins and vex consumers in the days ahead.

Buyers were emboldened by the gathering economic momentum: Employers added 216,000 jobs in March, while unemployment shrank to a two-year low. State and local tax revenues bounced back to within 2.3% of their 2008 haul. Our factories enjoyed their busiest winter since early 2004, and both General Motors (ticker: GM) and Ford (F) gleefully reported double-digit sales jumps in March. Meanwhile, companies from eBay (EBAY) to General Electric (GE) broached deals, while Nasdaq OMX Group (NDAQ) and the IntercontinentalExchange (ICE) offered $11.3 billion to lure the NYSE Euronext (NYX) from its proposed merger with Deutsche Bourse.

Will the improving economy let our central bank dial back its extraordinary benevolence? Its campaign to buy Treasuries may expire in June, but bulls hope the coddling Federal Reserve will stay accommodating a lot longer. After all, corporate profits are pushing new nominal highs, but the stock market is still 15% off its 2007 peak. Investors plowed more than $29 billion into stock mutual funds in the first quarter, but that’s a mere fraction of what they yanked from the stock market in recent years.

There are other reasons why the market doesn’t seem close to a major top, argues Jason Trennert of Strategas Research Partners. Cyclical sectors like industrials, materials and technology are humming along merrily, mergers are picking up and getting bigger, and 10-year annualized equity returns are just beginning to turn up from secular lows, which should egg on buyers.

Against this backdrop, can you blame traders for growing unwilling to bet against the market? As of March 30, the value of stocks on loan to short sellers stood at just $273 billion, the lowest in five years, while the ratio of long to short bets is near a six-year high, says Data Explorers, a research firm based in London. Except for spots in solar energy, banking, materials and software, “hedge funds are less willing to take a contrarian view against a rising tide,” says Will Duff Gordon, research director at Data Explorers. The amount of money that can be deployed for short selling also is shrinking with less leverage, fewer proprietary trading desks at big firms and more regulatory uncertainty.

The Dow ended last week up 156, or 1.3%, to 12,377. The Standard & Poor’s 500 is a hair off its Feb. 18 peak. The Nasdaq Composite Index rallied 47, or 1.7%, to 2790, while the Russell 2000 jumped 23, or 2.8%, to 847, its highest close since July 2007. Crude oil climbed toward $108, a 30-month high.

The first-quarter gains tallied 6.4% for the Dow, 5.4% for the S&P 500, 4.8% for the NASDAQ, and 7.6% for the Russell. The S&P 500 has rallied in seven of the past eight quarters and is up 26% since Aug. 30 (Source: Barrons Online).

Last week, US Stocks and Foreign stocks increased while Bonds were little changed. During the last 12 months, U.S. STOCKS outperformed BONDS.

Returns through 4-1-2011	1-week	Y-T-D	1-Year	3-Years	5-Years	10-Years
Bonds- BarCap  Aggregate Index	0.0	.4	5.3	5.4	6.0	5.6
US Stocks-Standard & Poor’s 500	1.4	6.4	11.9	-4.2	-1.5	1.6
Foreign Stocks- MS EAFE Developed Countries	.7	3.1	6.6	– 6.0	-1.3	2.9