What is the Difference between a Financial Plan and Financial Planning?
A financial plan is a static point-in-time view of your financial position, whereas financial planning is an ongoing, dynamic process that helps to keep your financial plan on track. At D3, we do financial planning.
This is why we do an annual plan update for all of our Affordable Family Office (AFO) Clients. All of our AFO clients should have received notification, or will be receiving notification next week, that your plan update Data Confirmation Report is on your client portal. We strongly encourage you to review this information, because it is critical to make sure your cash flow and assets are up-to-date to ensure your financial plan update will be accurate and meaningful.
Please review this information and return it to us. If you want to go over it over the phone or in a meeting, please call Sharon or Patty to set one up. Our goal in this process is to use our financial planning skills to help maximize the probability that you can achieve all of your goals. By reviewing this Data Confirmation Report, you help us help you. Any other client that wants a financial plan update, please contact Adam or Don.
D3 Continues to Grow
Please welcome Dan Crowley to the D3 team. Dan joined D3 on June 1st as a Junior Financial Planner based initially out of our Downers Grove office. Dan graduated from Illinois State University where he earned a Bachelor of Science degree in Finance with a minor in Financial Planning this past May. He will be the newest member in D3’s Financial Planning Management Development Program. Please welcome Dan when you talk to him on the phone.
Brett Spencer has graduated to Level 2 of D3’s Financial Planning Management Development Program. Besides being a Financial Planner, he has also taken on the role of Trader/Assistant Portfolio Manager. Additionally, Brett is getting married in August. Please congratulate Brett when you talk to him on the phone.
Don has been added to two new boards. Don is currently serving on the Finance Committee at the University Club in Chicago. Additionally, Don is on the Advisory Board for the Institute of Financial Planning and Analysis at Illinois State University.
Client Portal Update
Because your client portal is partly maintained by D3 and partly maintained by you, we want to make sure you have accurate information on the portal. Next week we will send out an email focused on our responsibilities and your responsibilities in maintaining the client portal. The email will also cover increasing security to make sure your data remains safe.
On May 17th, the S&P 500 index lost 1.82%. This was the largest single day loss since September of 2016. We consider this market behavior normal and expect more days like this moving forward.
Although there will be days like May 17th, we’d like to emphasize focusing on long term results rather than short term movement. Overall the S&P 500 was up about 1% for the month of May, while international stocks continued to outpace stocks here in the U.S., as the EFA index was up about 3.5% for the month. There were no major movements in the bond market, as the Barclays aggregate bond index was up about 0.5% for the month of May.
Home prices have begun to pick up steam in the most recent monthly economic publications (up 0.9% from previous month). Although home prices are increasing, home sales are stagnant, likely due to a lack of housing inventory. This morning’s employment report from the Bureau of Labor Statistics was a bit of a disappointment, as nonfarm payrolls increased 138,000 in May vs. expected growth of 185,000. Wages are rising at a modest pace (2.5% year over year growth), but are nothing to write home about. The disappointing payroll numbers released today will likely not affect the expected June rate hike by the Federal Reserve. Wage and housing increases hopefully provide a tailwind for consumer spending this summer. Hopefully that continues to translate into the rebound in corporate earnings.
We will be spending the month of June looking for potential tax loss harvesting opportunities for investments in our clients’ taxable accounts. Because all major asset classes are positive for the year, we expect little trading to occur as a result of this process.
We would like to emphasize that a benefit of our financial plan updates is a review of the risk in your portfolios relative to your financial goals. Because the markets are up from last year, that will likely mean you will be able to reduce portfolio risk if your goals have not changed. We will advise you on the ability to reduce risk when we complete your financial plan update. If you are not an Affordable Family Office client and would like a financial plan update to see if you can reduce portfolio risk, please contact Don or Adam.
One of the reasons you may have hired D3 is because of our commitment to the financial planning process. A key component of that process is your annual financial plan update that we are currently undertaking. Please give us a call to set up a time review your Financial Plan Update Data Confirmation.
As always, thank you for letting us serve your financial planning and investment management needs.