When Emotions Take Charge (May, 2010)

There’s no debate that the past year and a half has been a challenging period not just for Americans, but for people around the world. We have seen volatility in the stock market that rattled the confidence of even the most risk tolerant investors. September of 2008 began a two month range of extreme volatility during which the Dow experienced its largest one day point loss, one day point gain and largest intra-day range, closing at a six year low of 7,552 in November of 2008. While we have come a very long way since then, the so called “Flash Crash” on May 6^th , where the Dow closed with a 348 point drop after falling as low as 999 points intra-day, reminded us of the looming unpredictability in the markets. While there have been numerous economic and political reasons for such volatility, we can’t ignore the role emotions, such as fear, play in large market swings.

An increasingly popular field in the finance arena is behavioral finance, a combination of psychology and finance to explain why people make seemingly irrational decisions regarding money. Just take a look at the lottery. Millions of people purchase lottery tickets hoping to hit the big jackpot. Logically, it does not make sense to buy a lottery ticket when the odds of winning are overwhelming against the ticket holder (about 1 in 150 million). Most economic and financial theories assume that individuals act rationally and consider all available information when making decisions, but many researchers believe that this is not the case and the incorporation of psychology can help explain many stock market anomalies, bubbles and crashes. Let’s take a look at a few examples that reveal patterns of irrationality in the way people arrive at decisions when faced with uncertainty.

First let’s consider the Prospect Theory which proposes that investors fear losses much more than they value gains. Studies have shown that if an investor is offered the choice of a sure $50 or, after the flip of a coin, the possibility of winning $100 or winning nothing, he or she will most often choose the sure $50. However, if that same person is offered the choice between a sure loss of $50 or, after the flip of a coin, the possibility of losing $100 or nothing, he or she will likely choose the coin toss. Applying this to the stock market, investors willingly remain in a risky stock position hoping that the price will bounce back because they do not want to realize the loss. People are willing to take more risks to avoid losses than to realize gains.

Continuing with the example of a coin toss, another theory, know as the Gambler’s Fallacy, suggests that individuals often erroneously believe that the onset of a certain random event is less likely to happen following an event or series of events. For example, if you flip a coin 20 times and it lands on heads every time, it is common to think that the next one will likely land on tails. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future. The same goes for choosing numbers on a lottery ticket or pulling the handle of a slot machine.

Human beings tend to fear being left behind in the event of a market upturn. According to the Herd Effect, people tend to mimic the actions (rational or irrational) of a larger group. An infamous example is the bursting of the dot.com bubble in 2000. Herd behavior leads to greed in bubbles and fear in crashes. Fear during crashes such as Black Tuesday of 1929, Black Monday of 1987 and on a smaller scale the 2010 Flash Crash led to massive sell offs.

Although there are many more theories pertaining to behavioral finance, I’d just like to mention two more. The concept of Confirmation Bias proposes that investors tend to look for info that supports their previously established opinion and decision. This leads to overvaluing the stocks of currently popular companies. Along those same lines, the Neglected Firm Effect suggests investors tend to undervalue stock of overlooked companies. This also relates to the Herd Effect: if no one else sees value in this company, why should I?

You’ve all been told the key to making money in the stock market is buying low and selling high, but investors repeatedly do the opposite: they watch a stock go higher and higher until they can’t take it anymore and they buy. As the stock falls, they watch it go lower and lower until they can take no more and sell. I feel strongly that there is enough evidence to prove that investors are not always rational and emotions do come into play in making financial decisions, especially when losses are involved. In 1969, a psychiatrist came up with a 5-Stage process people go through in dealing with grief. Recently this process has been applied to investors coping with the current global financial crisis. The five stages of grief are denial, anger, bargaining, depression and acceptance and I will briefly show how I would assign recent economic events to this process.

During the denial stage, people tell themselves “this isn’t happening to me.” The denial stage of the global financial crisis probably began in late 2007. After the housing market peaked in 2006, home prices had began to decline and people debated whether or not we were in a housing bubble. Subprime lending had skyrocketed over the past 2 years and some people began questioning whether or not there was a mortgage problem brewing. While there were some defaults and foreclosures, many companies still had high earnings expectations and for the most part investors were convinced that any downturn would be temporary.

The denial stage is followed by the anger stage when we ask ourselves “why me?” People often begin to play the blame game. From late 2007 through late 2008, the market faced a deep and steady decline. The blame shifted to many different groups including mortgage brokers (too lenient of lending policies), mortgage holders (took out more than they could afford), regulators (loose regulation), the Fed (lax monetary policy), and Wall Street speculators among others.

The third stage is the bargaining stage during which we have realized that there is a problem and are trying to fix it before things get out of control. I think we entered this stage in late 2008. In September of 2008, the government stepped in to rescue GSE’s Fannie Mae and Freddie Mac to address a capital deficiency and to try to calm the markets. This was followed by a series of bailouts including AIG, the auto industry, Citigroup, and BOA. The Federal Reserve continued lowering the federal funds rate. Unfortunately the economic downturn continued.

The next stage is depression which is characterized by feelings of hopelessness, self pity and mourning. We most likely entered this stage around Spring of 2009 after the Dow closed in March at its lowest level since Spring of 1997. Unemployment had sharply increased and companies engaged in unnecessary mass layoffs as they feared the direction the economy was heading. Those who were laid off feared how they would pay their bills, perhaps most importantly their mortgage, and those who had jobs feared they could lose theirs at any moment.

Acceptance is the final stage of the grief process and is when people begin to deal with reality. I believe that we are currently in this stage and have been since fall of 2009. The market has begun to rebound significantly and unemployment along with other aspects of the economy has stopped getting worse.

In summary, after examining these five stages of grief and how they can be applied to the global financial crisis of 2007-2010, it seems obvious that human emotions do affect the way we perceive the economy and what we do with our money.

So if it is human nature to let emotions play a role in financial decisions, what can you do to lessen the negative effects this can have on your portfolio? Here is one simple answer: have an investment plan and stick to it through thick and thin. In many cases this also means hiring an investment manager. An investment manager can be an unemotional third party that will help prevent you from acting on your impulses. On the contrary, sales people such as brokers benefit financially by catering to investors’ emotions. This is due to the way that they are compensated.

The dust seems to be settling from the major market downturn we have been facing. If you do not have an investment plan or question the one you have, there has never been a better time than now to address those concerns. If you know someone who could benefit from a second opinion, ask them to call us for our free portfolio consultation. More information is available on our website at http://www.alderfinancial.com/PortfolioReview.htm.

Inflation 3 (April, 2010)

Welcome to the final installment in my series about inflation. As I've mentioned before, inflation is the "silent killer" of portfolio value, and is very important for investors to understand. Inflation is a phenomenon that has existed since the advent of money, thousands of years ago. It will continue to be a force into the future, probably as long as we still measure value in currency. This month, I will be bringing the series to a close with some thoughts about the practical impact inflation has on a portfolio and a few strategies that investors use to combat inflation's effect.

As I've mentioned several times, inflation eats away at the value of your money in silence. If you keep $100,000 under your mattress, in 10 years with 2% inflation (the approximate, long term average) it would have the same value as about $82,000 today. You would lose $18,000 in purchasing power without losing a dime of your money! This fact is what leads financial advisers to caution strongly against leaving your money "under the mattress" or in low yielding savings and checking accounts for long periods of time.

Fortunately, there is good news for investors. There are several strategies and securities that can be used to minimize the effects of inflation for everyday investors.

Younger investors who own mostly equity (stock) type instruments don't need to worry about inflation. Over time, the earnings of the companies they own will increase with inflation, and this will be reflected in their stock prices. As we have seen over the last several years, stocks may not increase for years at a time but in general earnings should increase with inflation.

Another common "hedge" against the effects of inflation is commodities. Commodities are raw materials such as oil and gold that can be bought in the financial markets. They can also be bought in the form of diversified funds that track the price of multiple commodities at once. The value of commodities is measured in dollars. As dollars have less and less value, the number of dollars needed to value a certain amount of commodities goes up. Buying commodities negates the effects of inflation by exchanging your money for an asset that isn't affected by the change in value of currency. Later, you can sell the commodities for an increased price since dollars have been depreciating due to inflation.

Other strategies have to do with investing in foreign currencies. The theory is that since inflation doesn't have the same impact everywhere in the world, investing in the right foreign currency will lessen the impact inflation has on your portfolio. This is difficult to do because it involves projecting interest rates and inflation rates in the U.S. as well as the country in which you plan to invest.

Finally, the most common way investors can mitigate inflation is through U.S. Treasury Inflation Protected Securities, or TIPS. TIPS work like normal bonds; they have a purchase price and pay interest. The principal is adjusted to account for CPI periodically and this indexes it to inflation (approximately). One problem with TIPS is the way they are taxed. The gains on principal are taxed even before they are realized (the so called "phantom tax"). Even so, TIPS can be an excellent way to minimize inflation effects on part of your portfolio.

Inflation is a very important topic for investors to understand. It must be accounted for and kept in check because it has the ability to diminish the value of a portfolio over long periods of time. There are several techniques for diminishing the effects inflation will have on a portfolio, but there is no real "silver bullet". Using a variety to techniques will yield the most effective inflation strategy.

I hope you've enjoyed this series. Inflation is a very complex topic and there are entire fields of study devoted to it. Although this has been more of an overview than an in depth study, I hope you have learned a little bit more about inflation, its causes and what investors can do to mitigate its effects. If you are interested in learning more, there is a wealth of information and statistics on the internet, or feel free to contact me at any time.

Inflation 2 (March, 2010)

This is the second installment of my three part series about inflation. Last month, I spoke generally about the basics of inflation. I mentioned that inflation is the gradual increase of prices over time. It leads to an erosion of wealth, since your dollars will buy smaller and smaller amounts of goods and services. This month, I will talk about the main theories about why inflation occurs.

Economists have several different views about the causes of inflation. I will be covering the ideas that fall in the Keynesian and Monetarist schools of thought. Keynesian economics is attributed to John Maynard Keynes. He was an economist in the early 1900's who had a major influence on modern economic thought and theory. Keynes believed that the supply of money in the system does not directly affect inflation, but that inflation is driven by other pressures in the economy. He was a proponent of government intervention into markets to smooth the effects of business cycles. He has several different theories about the cause of inflation.

The first is the so called "demand-pull inflation." As citizens and governments buy more goods and demand more goods, the price of those goods goes up. This causes the government to increase spending when the economy is sagging in hopes of "inflating" economic activity. Demand-pull proponents tend to see fiscal policy, government spending, as the solution to controlling inflation.

"Cost-push" is another inflation theory. This theory assumes that as the price of an input increases, a firm will raise the final price of the good to cover costs. An example is a beet farm. If the cost of fertilizer goes up, the farmer will raise the final price of beets. While the previous theory called for an increase in demand to push inflation, this one deals with a decrease in supply causing prices to go up. When those two forces work together, prices can sky rocket. We experienced something similar to this here in Georgia after Hurricane Katrina hit the Gulf Coast, our number one supplier of gasoline. Expecting shortages, people bought as much gas as possible and hoarded it (demand went up). These two complimentary forces shot prices up as high at $10+ a gallon in some areas.

The final Keynesian theory is called "built-in" inflation. This theory is similar to cost-push, but is much more cyclical. Workers demand more money in wages, therefore firms raise the price of the goods they sell to cover the increases. As more firms do this, workers can no longer afford the goods they normally buy (since the prices are all going up), so they demand more wage money. As you can see, this is a never ending cycle; workers think they are getting richer, but price increases negate their raises.

The last major theory about the causes of inflation is attributed to the "monetarist" point of view. Monetarists believe that monetary policy (actions by the Federal Reserve) is the most effective way to fight inflation The monetarist theory suggests that inflation is caused by the easing of credit, which in turn increases the amount of money in the economy. The more money there is available, the easier it should be to obtain credit. However, the increase in money also leads to increases in inflation. In the 1950's, Milton Friedman became the main opponent to Keynesianism and the main advocate of monetarism, influencing individuals such as Federal Reserve Chairman Ben Bernanke. Currently, the American Federal Reserve follows a modified form of monetarism.

Economists have been debating the cause of inflation for decades (and longer!). These are the most prevalent theories from the last 100 years or so, but it is surely only a matter of time until the next new theory comes around. Like many other things in science and academic fields, there is a continual search for evidence that clearly points to one cause over the others.

Next month, I will be wrapping up this series with a few ideas about the impact inflation has in a practical sense on an investor's portfolio. I will also include some strategies that are used to mitigate the effects of inflation.

Inflation 1 (February, 2010)

We all can agree that health care has been a very hot topic over the past year. In the forefront of discussion is Medicare, which has somehow become the “poster child” for public health care in the United States. Because Medicare will affect all of us one day, it is important that everyone understand the benefits available, the rules for enrollment, and the financial concerns with the program.

First, I’d like to start out with a general overview of Medicare. The Social Security Act of 1965 created Medicare to provide insurance for people over 65. There were originally two parts to Medicare, Part A and Part B. Part A provides hospital and skilled nursing care coverage and is paid for by the government as long as the insured has 40 or more quarters of Medicare-covered employment. It is financed mostly by the Medicare tax of 2.9% split between employer and employee. There is a deductible of $1,100 per year.

Part B covers physicians and other out-of-hospital expenses. The insured person contributes to the cost through a monthly premium, currently $96.40 with a deductible of $155 per year. If you receive over a certain level of income or if you miss your initial enrollment period (discussed later), your premium may be higher. Medicare pays for only 80% of approved charges which often differ from actual charges. For this reason, some doctors refuse to accept Medicare, and this will only worsen if Medicare cuts reimbursement rates as proposed. Medicare Advantage plans are private plans that can help supplement Medicare benefits for an additional premium and are referred to as Part C.

In 2006, Part D, a prescription drug discount plan, became effective. This part has received a lot of attention lately as Congress and the White House have expressed plans to plug the large “doughnut hole.” The “doughnut hole” refers to a gap in coverage for drug costs between $2,830 and $4,550. After a $310 deductible, Medicare pays 75% of drug costs up to $2,830, then nothing until over $4,550, at which point it pays 95%.

So now that you know the gist of what benefits Medicare provides, let’s look at the rules for enrolling in the program. When an individual turns 65, he or she is eligible for Medicare. These days, many seniors are choosing to work past 65 and keep employer health benefits, which can limit your access to Medicare if you are not careful. So here are the rules for enrollment: If you are enrolled in Social Security, you are automatically entitled to Part A and B and a Medicare card will be mailed to you about 3 months before your 65^th birthday. If you aren’t receiving Social Security, you can enroll up to 3 months before your 65^th birthday and no later than 3 months after. If you fail to enroll during this initial enrollment period, you will have to wait until the general enrollment period which is January through March and coverage will not begin until July 1^st. Additionally, the cost of Part B may go up 10% for each 12 month-period that you could have had Part B but didn’t take it and this rate increase is permanent.

There are a few common trap seniors fall into when in comes to Medicare enrollment. One is not checking to see whether their company’s plan requires them to sign up for Medicare Part B upon turning 65. Secondly, some people receiving retiree medical benefits are unaware that the eight-month deadline applies to them. One last trap involves Cobra, a federal law that allows workers to temporarily stay enrolled in an employer’s health plan. If you miss your initial enrollment period, you will have to wait until July of the year you enroll for coverage. Some retirees have chosen to go with Cobra during the gap in coverage only to find out that the Cobra coverage is considered secondary to Medicare. Be sure to research the facts when it comes time for you to consider enrolling in Medicare.

I can’t discuss Medicare without acknowledging the severe financial strain it has on the government. Medicare spending accounts for a large portion of federal spending, trailing behind only Social Security and defense. Program spending is projected to grow around 8% annually. The Medicare Hospital Insurance Trust Fund is projected to be depleted by 2017. The Medicare Report shows that the HI Trust Fund could be brought into actuarial balance over the next 75 years by changes equivalent to an immediate 134 percent increase in the payroll tax (from a rate of 2.9 percent to 6.78 percent), or an immediate 53 percent reduction in program outlays, or some combination of the two. Larger changes would be required to make the program solvent beyond the 75-year horizon.

That being said, the new Senate health care bill proposes a Medicare cut of $500 billion. What will Medicare cut, because clearly, something has to give? The first place to cut would be fraud, which is estimated to be around $60 billion a year. One has to be skeptical on this point. If eliminating fraud was so easy, why hasn’t it been done before now? Even after eliminating fraud, a lot of cuts still need to be made and they have to come from somewhere.

In conclusion, Medicare is a very beneficial program for senior citizens, but it does have many pressing concerns that endanger its sustainability in the future. In fact, Medicare is in even worse shape than Social Security which is also on a bad track. Until the issues with Medicare are resolved, I think it is best that the government focus on Medicare’s shortcomings before instituting yet another public option.

Need to Know: Medicare (January, 2010)

We all can agree that health care has been a very hot topic over the past year. In the forefront of discussion is Medicare, which has somehow become the “poster child” for public health care in the United States. Because Medicare will affect all of us one day, it is important that everyone understand the benefits available, the rules for enrollment, and the financial concerns with the program.

First, I’d like to start out with a general overview of Medicare. The Social Security Act of 1965 created Medicare to provide insurance for people over 65. There were originally two parts to Medicare, Part A and Part B. Part A provides hospital and skilled nursing care coverage and is paid for by the government as long as the insured has 40 or more quarters of Medicare-covered employment. It is financed mostly by the Medicare tax of 2.9% split between employer and employee. There is a deductible of $1,100 per year.

Part B covers physicians and other out-of-hospital expenses. The insured person contributes to the cost through a monthly premium, currently $96.40 with a deductible of $155 per year. If you receive over a certain level of income or if you miss your initial enrollment period (discussed later), your premium may be higher. Medicare pays for only 80% of approved charges which often differ from actual charges. For this reason, some doctors refuse to accept Medicare, and this will only worsen if Medicare cuts reimbursement rates as proposed. Medicare Advantage plans are private plans that can help supplement Medicare benefits for an additional premium and are referred to as Part C.

In 2006, Part D, a prescription drug discount plan, became effective. This part has received a lot of attention lately as Congress and the White House have expressed plans to plug the large “doughnut hole.” The “doughnut hole” refers to a gap in coverage for drug costs between $2,830 and $4,550. After a $310 deductible, Medicare pays 75% of drug costs up to $2,830, then nothing until over $4,550, at which point it pays 95%.

So now that you know the gist of what benefits Medicare provides, let’s look at the rules for enrolling in the program. When an individual turns 65, he or she is eligible for Medicare. These days, many seniors are choosing to work past 65 and keep employer health benefits, which can limit your access to Medicare if you are not careful. So here are the rules for enrollment: If you are enrolled in Social Security, you are automatically entitled to Part A and B and a Medicare card will be mailed to you about 3 months before your 65^th birthday. If you aren’t receiving Social Security, you can enroll up to 3 months before your 65^th birthday and no later than 3 months after. If you fail to enroll during this initial enrollment period, you will have to wait until the general enrollment period which is January through March and coverage will not begin until July 1^st. Additionally, the cost of Part B may go up 10% for each 12 month-period that you could have had Part B but didn’t take it and this rate increase is permanent.

There are a few common trap seniors fall into when in comes to Medicare enrollment. One is not checking to see whether their company’s plan requires them to sign up for Medicare Part B upon turning 65. Secondly, some people receiving retiree medical benefits are unaware that the eight-month deadline applies to them. One last trap involves Cobra, a federal law that allows workers to temporarily stay enrolled in an employer’s health plan. If you miss your initial enrollment period, you will have to wait until July of the year you enroll for coverage. Some retirees have chosen to go with Cobra during the gap in coverage only to find out that the Cobra coverage is considered secondary to Medicare. Be sure to research the facts when it comes time for you to consider enrolling in Medicare.

I can’t discuss Medicare without acknowledging the severe financial strain it has on the government. Medicare spending accounts for a large portion of federal spending, trailing behind only Social Security and defense. Program spending is projected to grow around 8% annually. The Medicare Hospital Insurance Trust Fund is projected to be depleted by 2017. The Medicare Report shows that the HI Trust Fund could be brought into actuarial balance over the next 75 years by changes equivalent to an immediate 134 percent increase in the payroll tax (from a rate of 2.9 percent to 6.78 percent), or an immediate 53 percent reduction in program outlays, or some combination of the two. Larger changes would be required to make the program solvent beyond the 75-year horizon.

That being said, the new Senate health care bill proposes a Medicare cut of $500 billion. What will Medicare cut, because clearly, something has to give? The first place to cut would be fraud, which is estimated to be around $60 billion a year. One has to be skeptical on this point. If eliminating fraud was so easy, why hasn’t it been done before now? Even after eliminating fraud, a lot of cuts still need to be made and they have to come from somewhere.

In conclusion, Medicare is a very beneficial program for senior citizens, but it does have many pressing concerns that endanger its sustainability in the future. In fact, Medicare is in even worse shape than Social Security which is also on a bad track. Until the issues with Medicare are resolved, I think it is best that the government focus on Medicare’s shortcomings before instituting yet another public option.

Will Santa's Sleigh be Light This Year? (December, 2009)

The stock market opened 2009 very poorly, but the economy has been showing signs of life over the past months. As you can imagine, the retail industry has been holding its breath this Holiday Season. Consumer spending makes up about 70% of the U.S. economy, so December is a particularly informative time about the state of the economy. With only a week to go until Christmas, this year’s numbers have been mixed.

Consumer sentiment has been at record lows throughout the year. With unemployment reading over 10%, Americans have been worrying about their own homes, jobs, and the prospects of a “jobless recovery.” This uncertainty understandably causes people to spend less. When home values and retirement accounts decline, consumers also tend to cut back. A recent CNN poll found that 49% of people will be spending less than last year, and 39% will be spending the same as last year, with the remaining 12% spending more. Charities are also being hit, with 51% of respondents saying that they will be giving less this year, as well. In an effort to save, many families are focusing on spending time together and less on presents this year.

The news might not all be bad, though. The retail numbers in November were better than expected with sales growing by 1.3%. Bargain hunters are pushing sales with 42% of shoppers expecting to buy from discount stores. After holding back for several months, many shoppers are finally releasing some of their pent-up demand. It also seems that this year shoppers are procrastinating more than in the past. According to the National Retail Federation, on average, people had finished 46.7% of their holiday shopping by the second week of December, the lowest since 2004. Retailers are looking forward to a big push by these last minute shoppers this weekend, with December 19^th being the busiest shopping day of the year, traditionally.

The official results will come out at the beginning of next year, and it is too early to tell if shoppers will be keeping a tight grip on their wallets this holiday season. This new era of frugality can be good for consumers if the habits they start this year carry over into the future. One positive is that the number of shoppers buying gifts on credit cards (with money they pontentially don’t have) has gone down slightly since last year. As we all know, overextension of credit is a main contributor to the mess our economy is trying to get out of. Let’s all hope our country as a whole and consumers individually have learned lessons from the past couple of years and that our economy will continue to recover throughout 2010.

Gobble 'til You Wobble

by The Alder Financial Group Staff

Thanksgiving is a wonderful day to spend time with family and friends, relax while watching the Macy's parade or football, and last but not least, enjoy really good food. In light of the holiday season, we would each like to share one of our favorite Thanksgiving recipes. I am sure you all have your own traditions, but if you get the urge to try something new, here are a few Alder suggestions.

Black-Eyed Pea Succotash With Creole Mustard

Shared by: Alan Gaylor

This recipe is for those who like a little something different for Thanksgiving dinner. The vinaigrette gives this vegetable mixture a little spice. It has become one of my favorites over the years. Plus, it is great to save for the next day's meal.

Ingredients:

6 cups water

1 1/3 cups dried black-eyed peas (about 8 ounces)

1 tsp salt

1 bay leaf

1/4 cup unseasoned rice vinegar

1 1/2 tbsp Creole mustard

1 tbsp honey

5 drops hot pepper sauce

6 tbsp extra-virgin olive oil

1 16-ounce package frozen corn kernels, thawed, drained

1/2 cup finely diced red onion

1/2 cup thinly sliced green onions

1/3 cup diced red bell pepper

1/3 cup finely diced green bell pepper

Directions:

Combine 6 cups water, black-eyed peas, salt, and bay leaf in large saucepan. Bring to boil. Reduce heat to medium-low and simmer until peas are just tender, stirring occasionally, about 35 minutes. Drain well; discard bay leaf.

Whisk rice vinegar, Creole mustard, honey, and hot pepper sauce in medium bowl to blend. Gradually whisk in oil. Season vinaigrette to taste with salt and pepper. Mix in black-eyed peas. (Black-eyed pea mixture can be made 1 day ahead. Cover and refrigerate).

Mix corn, red and green onions, and bell peppers into black-eyed pea mixture. Season succotash to taste with salt and pepper. Serve at room temperature or warm over medium heat until heated through if desired.

Yield: 10 servings

-By Alan Gaylor, CFP®

Onion Pie

Shared by: Charles Webb

It clearly isn't a dessert and if I had told my kids what the dish was called when they first tried it, they never would have touched it. They love it though and so do I. This casserole-like dish is something my mom has made for years and is always a hit with anyone who tastes it.

Ingredients:

Crust:

2 tbsp melted butter

1 stack Ritz crackers (crushed)

Filling:

2 large Vidalia onions (thinly sliced)

2 eggs

1 cup milk

3/4 cup sharp cheddar cheese (grated)

2 tbsp butter

1 tsp salt

Pinch of pepper

Directions:

Crust:

Mix butter and cracker crumbs and line in a pie pan.

Filling:

Saute onions in butter and place in pie pan. Mix eggs, milk, salt and pepper and pour over onions. Cover top with cheese. Bake in a preheated oven at 325 degrees for 30 minutes or until custard is set.

Yield: 8

-By Charles Webb

Apple Cranberry Casserole

Shared by: David Chambers

My family first started using this recipe when we discovered it at my 1st grade Thanksgiving Luncheon. It has become a staple of our holiday season, and I hope you enjoy it as much as we have!

Ingredients:

Casserole:

1/4-1/2 cup sugar

2 cups raw cranberries

4-6 apples - peeled, cored and sliced

Pam and 2 qt casserole dish

Topping:

1 cup oatmeal, uncooked

4-6 tbsp butter, melted

1/2 cup brown sugar

1/4-1/2 cup pecan bits

Directions:

Preheat oven to 350 degrees. Lightly spray casserole dish. Make 2 layers of apples, cranberries and sugar in casserole dish. Combine topping ingredients. Sprinkle over fruit. Back 45-60 minutes.

Yield: 8-10

-By David Chambers

Lemon Blossoms

Shared by: Lori Eason

I chose to share one of my favorite dessert recipes. Last holiday season, I discovered Lemon Blossoms and they have been a hit everywhere I've taken them. They are great if you plan on having a party or several people because the recipe makes 5 dozen!

Ingredients:

Cupcakes:

18 1/2-ounce package yellow cake mix

3 1/2-ounce package instant lemon pudding mix

4 large eggs

3/4 cup vegetable oil

Glaze:

4 cups confectioners' sugar

1/3 cup fresh lemon juice

1 lemon, zested

3 tbsp vegetable oil

3 tbsp water

Directions:

Cupcakes:

Preheat oven to 350 degrees. Spray miniature muffin tins with vegetable oil cooking spray. Combine cake mix, pudding mix, eggs and oil and blend well with an electric mixer until smooth, about 2 minutes. Pour a small amount of batter, filling each muffin tin half way. Bake for 12 minutes. Turn out onto a tea towel.

Glaze:

Sift sugar into a mixing bowl. Add the lemon juice, zest, oil, and 3 tbsp water. Mix with a spoon until smooth. With fingers, dip the cupcakes into the glaze while they're still warm, covering as much of the cake as possible, or spoon the glaze over the warm cupcakes, turning them to coat completely. Place on wire racks with waxed paper underneath to catch any drips. Let the glaze set thoroughly, about 1 hour, before storing in containers with tight-fitting lids.

Yield: 5 dozen