Tax season is over! Yahoo! We want to make an observation for 2014 and provide a tool for you to use in 2015. We anticipate the IRS will be scrutinizing non-cash charitable donations. We recommend all of our clients use “Its Deductible” software from Intuit to keep track of these donations for 2015. The link to the free software is //turbotax.intuit.com/personal-taxes/itsdeductible/.
We have finished the 1st quarter review of all the investments in the accounts that we manage. We have identified some better products that we will be swapping into. One example is an exchange traded fund (ETF) that has 66% lower fees than our current fund. Other examples are funds that have better anticipated risk adjusted returns (i.e. potentially lower volatility). You will see the bulk of these trades occurring this week.
Additionally, we rebalanced all of your portfolios to target cash allocations. This was important because many of you had cash inflows and outflows due to taxes.
Invoices for our quarterly fees were either mailed or emailed to you earlier this week. A number of our clients have asked how to have the fees deducted from their Fidelity accounts. If you do not have this feature and want to add it, please email Patty@D3FinancialCounselors.com and she will get you signed up.
We are now moving into financial plan update season. Our family office clients will be receiving our update questionnaire the first week of May. Our goal is to identify financial planning opportunities available to you and to help you assess the appropriate level of risk you need to take with your investments to achieve the goals in your financial plan. These plan updates help answer the question, “Am I on target to achieve my goals and am I taking too much risk?” For asset management or hourly clients that want a financial plan update, please call Don.
D3 Breaking News:
In case you did not hear, Adam and Amanda had a baby girl, Addison, on April 4th, 2015. Adam and Amanda are proud parents.
Don, Adam and Ryan worked the crowd with Terry Savage (financial reporter for the Chicago Tribune) at the Harold Washington Library on April 20th. This was an opportunity for D3 staff to help promote financial literacy during Money Smart Week, sponsored by the Federal Reserve Bank of Chicago. Here is the link to some pictures from the event: //www.d3financialcounselors.com/terry-savage-event
Last month we said that the markets were at an inflection point due to the rising dollar and potentially rising interest rates. So far interest rates have not risen and we have not had enough earnings reports to quantify the rising dollar’s impact on corporate earnings. We believe the jury is still out on how soon these two negative factors with affect corporate earnings and equity valuations.
One piece of new information regarding corporate earnings is that a number of major corporate employers (McDonalds, Walmart, Target, etc.) are raising wages for their employees. While this may be good from a societal perspective, we do know that these actions will likely have a negative impact on corporate earnings. We see no economic recession on the horizon, be we do see the clouds forming for a corporate earnings recession in the United States. If market participants care about equity valuations (and sometimes they don’t, i.e. 1998-2000), then a market correction could occur sooner rather than later.
Our philosophy is geared toward helping smart people make smarter financial decisions. We use best practices, well-honed procedures and systematic evaluations and reviews. We encourage all of our clients to review the level of risk in your portfolios relative to your plans and to the extent your plans are over funded, be willing to take some risk off the table.
Our focus for your portfolios is on balance and diversification. We will be conducting an in-depth review of our bond fund managers to assess whether or not we should reduce some of the more volatile fixed income funds. We are also looking for some additional non-equity correlated alternative investments.
Please let us know if your time horizon for needing cash flow from your investments changes or if your ability to tolerate risk changes.
Don will be on vacation from 4/25/15 through 5/3/15. If you need any assistance with your financial affairs, please call the office (630-271-0033) and Patty, Adam, Ryan or Kirsten will help you.