Tax season is nearly over.  We have two observations:

  • People are paying significantly more taxes due to higher tax rates on both earned income and investment income.
  • The fed and the states are enforcing underpayment of estimated tax penalties.

D3 staff will continue to focus significant efforts in 2014 on tax minimization strategies for our family office clients.

As part of our annual ADV filing we are required to make you aware of any material changes at D3 and to make our ADV available to you.  You can review our ADV on the bottom of the home page of our website ( or ask Patty to email or send it to you.  The material changes are listed below:

  • D3 has grown large enough to go back to being registered with the Securities and Exchange Commission. We manage over $100 million in client assets.
  • We have added a new Goal Planning Service for people primarily focused on if they are on the right track for retirement (this is a small subset of our family office service).
  • For affordable family office clients with assets over $5 million we have reduced our fee structure.

D3 Staff is participating in Money Smart Week (April 5-12), sponsored by the Federal Reserve Bank of Chicago.  Money Smart Week is designed to promote financial literacy and Adam, Don and Ryan provided pro bono ½ hour financial planning sessions at the College of DuPage on April 6th and at the Harold Washington Library (after a presentation by Terry Savage) on April 7th.

In conjunction with the Chicago CFA Society’s support of Money Smart Week, Don will be making a presentation at Northern Trust on April 10th,  entitled, How to Maximize After Tax Wealth: Asset Location, Dedication, and Diversification (essentially introducing some of the concepts  we use to help our clients). If you know someone that may benefit from this program, they can register using the link below.  Register Today

Shortly after April 15th, we will start preparing financial plan updates for our family office clients.  This is the opportunity to fine tune your financial plan in order to increase the likelihood of you achieving your life goals. If any non-family office clients want their financial plans updated please call Don.

Investment Outlook:

Corporate Profits Rise to Record High, Outpacing GDP Growth. Frugal corporate spending and minimal hiring last year helped U.S. companies post profits that overtook the country’s growth rate. After-tax corporate profits rose to $1.9 trillion in the final three months of the year, the Commerce Department reported. Corporate profits stood at 11.1% of gross domestic product, up from the prior quarter. The 6% increase in corporate profits from the year-ago period easily exceeded nominal GDP growth of 4.1% before adjusting for inflation. But the figures underlined the fact that many companies are hoarding cash rather than putting it back into the economy in the form of new hiring, almost five years into the economic recovery. Many businesses continue to keep a tight grip on spending amid uncertainty about the economic outlook at home and abroad.

The latest GDP reading showed the economy was stronger than previously estimated ahead of damage wreaked on the economy by the weather, which dragged output down in the early months of 2014. The report showed stronger consumer spending late last year than estimated earlier. Business investment picked up at a 5.7% annual rate – slower than estimated earlier, but a reflection of firms investing in equipment and other areas designed to boost output. Additionally the last 2 months employment reports have met expectations.

While these reports and economic trends indicate the potential for the economy to accelerate growth, we continue to focus on the slow and steady thesis rather than the rapid acceleration thesis.  We do suspect that volatility will pick up in both the stock and bond markets, especially if the data point to more rapidly accelerating economic growth.

Investment Strategy:

Based on the foregoing summary, we are comfortable continuing to stay the course we have outlined in our previous letters since the beginning of this year. We continue to focus on the economic fundamentals and relative value.  We are constantly monitoring your investments to determine if these are the best available to achieve, high quality, risk adjusted returns that meet your cash flow needs.  You will see us making some fund swaps during April and May.

If you know of anyone that complained about taxes this year, please do not hesitate to refer them to D3 for a second opinion. Let them know about the D3 challenge, where we are focused on providing them more value than the fees we charge. 

As always, thank you for your confidence in D3 Financial Counselors where “We serve our clients by providing Integrity, Trust, Wisdom and Confidence.

                                       By: Donald Duncan MBA, CFP®, CPA, CFA™ – April 9th, 2014