Business Update

D3 20 Year Client Appreciation Event:
Please save the date Saturday, January 13, 2018 for our 20 year client appreciation event. You should all have received invitations in the mail. Please RSVP to Patty by Friday, December 22 either by email ( or telephone (630-271-0033).

Contract Update:
All of you have received your revised contracts to conform with the most recent Department of Labor and Securities and Exchange Commission regulations. Please sign the new contracts and return to Patty as soon as possible. If you have any questions, please call to set up a time to talk with Don or Adam.

Estate Plan Reviews Completed for Affordable Family Office (AFO) clients:
We have completed reviewing our AFO clients’ estate plans. The purpose of the review was to accomplish the following:

  1. Review existing estate documents that we have on file and make recommendations for additional documents and/or suggest modifications based on your plan update.
  2. Ensure that the individuals named in your estate documents are up to date.
  3. Determine if you are currently subject to Federal or Illinois estate tax.
  4. Depict estate distribution to your beneficiaries and recommend ways to avoid probate.
  5. Ensure that your existing beneficiaries on your qualified accounts and life insurance reflect your intentions.

If any other clients would like to have their estate documents reviewed, please call the office to set up a call or meeting with Don. After speaking with him, he will be able to estimate the time and cost for the review.

Estimated Tax Update:
Because the financial markets have performed so well this year, we anticipate large capital gain distributions from many of the funds our clients hold. For all AFO clients, we are updating our estimated tax analysis and looking at potential tax planning opportunities. Depending on your situation, we will be asking for updated W2, 1099, and business income so we are able to make accurate estimates.  If any other clients would like D3 to calculate estimated taxes, please call the office to set up a time to talk to Don so he can provide you with an estimate of the time it will take.

Market Insight

The markets are currently beating to the drum beat of tax reform and political drama. On a day to day basis, tax reform has been positive for the markets while political drama has been negative for the markets.

Our view is that the biggest beneficiaries of tax reform will be corporations, which will have a significant positive impact on the U.S. equity markets over the long-term. We are somewhat concerned that some of the positive implications may already be priced into this market. Our view regarding the political drama in the U.S. is that the last 17 years have provided evidence that it doesn’t really matter who is in the White House; the economy continues to move forward independent of our political leaders.

Another observation about the timing of this tax reform legislation is that it will act as a stimulus because the U.S. economy has been growing consistently and the unemployment rate is low. Unless there is significant slack in the economy, a fiscal stimulus often leads to higher inflation and as a result, higher interest rates.

Another aspect of the tax reform legislation is that it is projected to add at least $1 trillion dollars to federal debt. Usually when the government borrows money to reduce taxes, the economy is stimulated if tax payers spend those additional funds. The jury is still out on whether corporations (the biggest beneficiary of tax reform) will spend the additional funds.

Last month we said “Based on our distilling of market information, inflation and rapidly rising interest rates are the biggest threats to the current stock market bull run. We do not see either of these on the near- term horizon.” If the tax reform legislation is enacted and it does act a stimulus for additional spending, interest rates will rise faster than we had previously anticipated.

Investment Strategy

We executed a fund swap and will be doing tax loss harvesting (to the extent possible) this month. We are also reviewing our current asset allocation models to determine how best to take advantage of the projected worldwide economic markets in 2018 and beyond.

We have been spending a significant amount of time digesting the proposed tax law changes to determine the impact on our clients and in turn if there will be any impact on our portfolio management strategies. It appears the biggest impact may be to accelerate charitable donations for those who will no longer be able to itemize deductions going forward. We will strive to incorporate the  changes that are most likely to occur into our analysis when we update our AFO clients’ estimated taxes this month.

Final Thoughts

We look forward to celebrating our 20 years of Helping Smart People Make Smarter Financial Decisions™ with you on January 13, 2018. We hope you will invite a couple of your friends that would benefit by being introduced to D3.