Happy Thanksgiving!


This update is short and sweet; focused on some recent accomplishments we are thankful for and some information on the Fiscal Cliff (we are not thankful for).


  1. D3 Financial Counselors is recognized as a “Best Financial Advisor for Doctors” by Medical Economics, November issue.  Here is the link //www.d3financialcounselors.com/documents/D3-Best-Financial-Advisors-for-Doctors.pdf


  1. D3 Financial Counselors sponsors the CFA Society of Chicago and Don meets Erskine Bowles, former co-chair of the National Commission on Fiscal Responsibility and Reform and former White House Chief of Staff.  Here is a link to a picture of Don with Mr. Bowles: //www.d3financialcounselors.com/d3events.html. Read the attached PDF if you want to understand the underlying issues about the Fiscal Cliff as summarized in the Fiscal Responsibility and Reform Committee Report.


  1. Adam’s Fiscal Cliff Notes:

The market did not greet the U.S. election kindly, losing about 4% in the week following the election.  This is in large part due to the election producing a “status quo” outcome, not resolving any doubts regarding the looming fiscal cliff, which would reduce U.S. GDP by 4%, inducing a recession.  Don and Adam have been listening to conference calls of the top financial, tax and political experts trying to gauge potential outcomes of the Fiscal Cliff, and how these outcomes will affect financial planning and investment decisions going forward.  From what we have heard and read, there is no consensus on how or when the Fiscal Cliff will be resolved.  There are two main bases for uncertainty heading into the end of the year; what will be included in the compromise, and when a deal will be reached.


What is in the deal to avert the Fiscal Cliff will have a large impact to current and future economic growth in the U.S.  Most pundits include in their “base scenario” that the U.S. will come to some sort of a compromise on issues that take effect on January 1st.  Although addressing our unsustainable spending pattern will be an important part of a compromise, we are more concerned with the tax issues, which will have the greatest impact on our financial planning and investment strategies.  Most pundits expect an increase in tax rates for high income earners as part of this compromise.  Unfortunately, it is still very unclear as to how these tax increases will be implemented (rate increase on investment income, increased income tax rates, reduced deductions, etc.).  From a financial planning standpoint, we have already analyzed which clients will be most affected by an increase in investment income tax rates, and have developed strategies to accelerate investment income if rates are scheduled to increase in 2013.  We will contact you in the next month if we recommend accelerating investment income in 2012.


When a deal is reached will also have a large impact on stock market performance and volatility though year end.  The closer we get to December 31st without a deal, the less time there will be to implement any potential year-end tax strategies, and the more volatility we will expect from the stock market.  Obviously, the sooner congress can take action, the better.  If congress lets December 31st pass without a deal in place, we would still expect a compromise that would retroactively take effect on January 1st.  This would be the least desirable outcome, and would cause a lot of unwarranted market stress.  As stated before, we have “staged” implementation steps for different scenarios for the different “whats” and “whens”, and stand ready to implement once a decision by congress has been reached.


  1. We had implemented lower volatility, cash flow oriented strategies earlier in the year.  We had completed our tax loss harvesting strategies in October.  As soon as we have some clarity on tax issues, we will implement any final  year-end tax strategies.  Hold on to your hat, it may be a wild ride (we hope not).


Another thing we are thankful for is your confidence in our ability to serve your needs.  Thank you for your business. As always, let us know if you have any questions, concerns or changes in  your financial affairs


P.S. Don’t eat too much tomorrow!



Don Duncan MBA CPA CFA™ CFP®                    Neil LeFort, MBA J.D. CPA

Michael Meyers MBA CFP®                                   Patty Shipinski, Office Manager

Adam Glassberg CFP® CIMA®                              Ryan Pace, Financial Planner


We serve our clients by providing Integrity, Trust, Wisdom and Confidence.