A Subtle Secret about Financial Planning

Considering the time of year this is written, one might expect a financial planning and investment management firm to share virtues of saving and investing. More than likely, most people already know that they should be saving and investing. However, what some may not have considered are the subtle secrets about their personal financial affairs. In fact, if you or your house suffers from this secret, I hope you might consider taking the advice in this blog and making it your New Years resolution.

In many marriages and partnerships, we find that there is one person who is the bill payer and also handles financial matters. In an environment where more and more bills are able to be paid online, we find that there are as many websites and passwords too. As we age, our financial affairs become more complicated, with more account numbers, passwords, and various forms of insurance policies. Thus, our organization and filing system becomes more complicated too. Herein lays the subtle secret: because our financial affairs have become more complicated and the demands for our time and attention have become greater, there is a good chance that a lot of this financial “data” is stored in one’s head. Simply put, there is a good chance that this information is either poorly organized or poorly communicated.

To take this a step further, consider for a moment what happens when the bill-payer passes away and inadvertently did not organize and communicate their financial matters, such as those mentioned above. Now imagine the other spouse trying to find a password, pay a bill, or locate an insurance policy. As you might have figured, it can be extremely challenging. Tragically, we encounter this situation more often than we would like to admit.

Four years ago, I resolved to help my wife by organizing and centrally locating important information like passwords, insurance policies, bills, and our estate plan. For me, the hardest part was knowing where to start. Luckily, I found a really neat organizer called Life.doc and it has been a tremendous help. Essentially, it puts all of our financial matters at our fingertips. During a time of grief and sorrow, the last thing I want for my wife is to have to dig through our filing cabinet and not be able to find something. The process was liberating because I have confidence in knowing she will be able to spend her energy on more important things, such as raising our daughter.

Neal Nolan, CFP(R)

Financial Advisor

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Market Update through 12/15/11

as of December 15, 2011        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 -0.52% -2.46% 8.25% -2.66%
S&P 500 0.49% -1.36% 8.01% -2.42%
DJ Industrial Average 6.39% 5.26% 9.52% -1.35%
Nasdaq Composite -1.91% -3.27% 5.51% -2.99%
Russell 2000 -5.58% -7.49% 11.48% -2.83%
EAFE Index* -16.48% -17.48% -0.35% -4.12%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 8.80% 7.51% NA 0.79%
Barclays Intermediate US Gov/Credit 6.38% 5.56% NA 0.55%
Barclays Municipal  11.03% 10.03% NA 1.29%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $93.88    $99.74
Natural Gas    $3.12    $3.61
Gold    $1,586.20    $1,734.60
Euro    $1.30    $1.34
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Tax Loss Selling

‘Tis the season for tax-loss selling. As the year winds down investors often have an eye toward the taxable capital gains they incurred during the year. When possible, you can sell securities that have losses to offset those gains, wiping out the taxation on the gains.

At Parsec we routinely look at the gains our clients incur, and try to offset with losses. There aren’t always losses that can be taken, and sometime even when there is a loss, we don’t necessarily want to sell that particular security because we like its future prospects too much to sell it.

It’s important to keep perspective on capital gains. Nobody likes to pay taxes, but realizing that the gains are due to money that you made on your investment makes it easier to swallow. Also, the capital gains tax rate is relatively low, lower than many taxpayers marginal tax bracket.

Harli L. Palme, CFA, CFP®
Financial Advisor

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Market Update through 11/30/11

as of November 30, 2011        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 7.00% 0.20% 11.21% -0.27%
S&P 500 7.83% 1.08% 10.68% -0.22%
DJ Industrial Average 12.38% 6.70% 11.02% 1.18%
Nasdaq Composite 5.99% -0.28% 8.77% -2.18%
Russell 2000 2.76% -4.80% 14.72% -0.36%
EAFE Index* -7.03% -13.93% 3.93% -5.16%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 5.52% 6.67% NA -0.09%
Barclays Intermediate US Gov/Credit 3.67% 4.98% NA -0.24%
Barclays Municipal  6.53% 8.63% NA 0.59%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $99.74    $100.84
Natural Gas    $3.61    $3.42
Gold    $1,734.60    $1,770.90
Euro    $1.34    $1.34
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Market Update through 11/15/11

as of November 15, 2011        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 6.79% 0.93% 12.02% 0.46%
S&P 500 7.20% 1.82% 11.50% 0.51%
DJ Industrial Average 10.88% 6.87% 11.21% 1.35%
Nasdaq Composite 8.01% 2.14% 11.41% 0.19%
Russell 2000 4.55% -4.13% 15.53% 0.34%
EAFE Index* -12.21% -13.71% 4.20% -4.92%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 6.13% 6.84% NA 0.07%
Barclays Intermediate US Gov/Credit 4.21% 5.34% NA 0.09%
Barclays Municipal  5.66% 8.25% NA 0.23%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $100.84    $93.19
Natural Gas    $3.42    $3.93
Gold    $1,770.90    $1,725.20
Euro    $1.34    $1.39

Mark A. Lewis

Director of Operations

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Veterans Day

Today is Veterans Day and speaking as a veteran, I can’t help but to think of my fellow brethren who served and are still serving our country.  It is with fondness that I reflect upon my military service.  I chose to join the Army, just as my father and grandfather did; though, my motives were to take advantage of the GI Bill, not the then-present day war.

One of my fondest memories is during the hurricane Andrew relief effort in 1992.  Initially it was thought that this was a category 4 hurricane, later upgraded to category 5.  I only mention this to try and build a sense of the aftermath and utter devastation I witnessed; I have never seen anything so horrible in my life.

Yet, there is a bright spot in this story.  Upon hearing of the need for help inFlorida, I volunteered to join a company of Combat Engineers (I was an Army Medic) and assisted with the clean up efforts.  We were working in an unknown neighborhood and while they took a break, I began walking around the neighborhood.  I remember seeing this 5 year old Hispanic boy watching me walk down the street.  It looked as if he had a stick in his hand and pretending it was a rifle.  I didn’t think much of it until I walked back up the street to find my unit.  His dad came outside and waved me over from across the street.  I couldn’t figure out why he had a camera in his hand and why the little boy was so antsy.  His father explained that his son wanted to be a soldier one day and asked to have his picture taken with me.  I can remember looking down at the boy and him looking at me with hopeful innocent eyes.  The father took one picture with his camera and one with mine.  Overjoyed for his son, he then thanked me and shook my hand.  To this day, I still have the picture of that little boy on my desk at home; judging by the expression on his face, there is little doubt that I made his day. 

With the holiday season quickly approaching, I have much to be thankful for.  I am very grateful for our nation’s heroes who are serving and served our country.  I hope you will take time to thank a veteran today.

 

Neal Nolan, CFP(R)

Financial Advisor

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Retired! Now What?

If your hobby is your job, then you will be frustrated in retirement. Even if you have a hobby or two, could you fill up your time with golf or boating every single day? Having little to do will could possibly lead to an early death by boredom.

We have busy clients doing all sorts of volunteer activities that bring much satisfaction to their lives. Meals on Wheels is a popular volunteer job, as well as helping out with the Asheville Symphony. I have a client who is a guardian ad litem and her husband volunteers at the VA hospital. Another couple has an RV and they travel all over having unbelievable adventures. This last year they served as guides in the Wyoming Territorial Prison (that’s guides, not guards). This is a prison that was built in 1872 and is now a tourist attraction. They have also cleaned litter off of trails at the Wyoming Green River Lakes and the Rails to Trails in Susanville, California. They have served as guides on cave tours in the Long Horn Caverns in Texas and next year they are planning to go to Houston to do tours on the Battleship Texas. In exchange for their labors, they get free camping privileges with their RV, but must pay for the gas to travel themselves.

There are unlimited volunteer opportunities, both locally and far away. I have clients whose children are helping out in Africa. So if you are sitting at home, watching television or surfing the internet (reading this article?), perhaps you could find some fun and exciting volunteer job that is just right for you!

Barbara Gray, CFP®
Partner

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Market Update through 10/31/11

as of October 31, 2011        
  Total Return
Index 12 months YTD QTD October
Stocks        
Russell 3000 7.90% 0.47% 11.51% 11.51%
S&P 500 8.09% 1.30% 10.93% 10.93%
DJ Industrial Average 10.39% 5.45% 9.72% 9.72%
Nasdaq Composite 8.14% 1.94% 11.20% 11.20%
Russell 2000 6.71% -4.46% 15.13% 15.13%
EAFE Index* -6.89% -9.24% 9.59% 9.59%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 5.00% 6.76% NA 0.11%
Barclays Intermediate US Gov/Credit 3.22% 5.24% NA 0.30%
Barclays Municipal  3.78% 8.00% NA -0.37%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $93.19    $86.68
Natural Gas    $3.93    $3.69
Gold    $1,725.20    $1,682.00
Euro    $1.39    $1.37
         
         
RECOVERY!        
  Since 3/09/09    
Index  Total Return TR annualized    
Stocks        
Russell 3000 100.34% 30.02%    
S&P 500 95.60% 28.85%    
DJ Industrial Average 96.21% 29.00%    
Nasdaq Composite 117.11% 34.03%    
Russell 2000 123.61% 35.53%    
EAFE Index* 65.13% 20.87%    
*EAFE index does not include dividends.        

Mark A. Lewis

Director of Operations

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Market Update through 10/14/11

as of October 14, 2011        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 6.03% -2.12% 8.63% 8.63%
S&P 500 6.47% -1.05% 8.35% 8.35%
DJ Industrial Average 7.75% 2.64% 6.80% 6.80%
Nasdaq Composite 10.66% 1.30% 10.49% 10.49%
Russell 2000 2.39% -8.17% 10.66% 10.66%
EAFE Index* -10.82% -11.74% 6.58% 6.58%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 4.04% 5.80% NA -0.79%
Barclays Intermediate US Gov/Credit 2.47% 4.39% NA -0.50%
Barclays Municipal  2.62% 7.27% NA -1.04%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $86.68    $77.32
Natural Gas    $3.69    $3.64
Gold    $1,682.00    $1,656.00
Euro    $1.37    $1.33
         
         
RECOVERY!        
  Since 3/09/09    
Index  Total Return TR annualized    
Stocks        
Russell 3000 95.16% 29.33%    
S&P 500 91.05% 28.27%    
DJ Industrial Average 90.99% 28.26%    
Nasdaq Composite 115.73% 34.41%    
Russell 2000 114.91% 34.21%    
EAFE Index* 60.60% 19.99%    
*EAFE index does not include dividends.        

Mark A. Lewis

Director of Operations

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Market Update through 9/30/11

as of September 30, 2011        
  Total Return
Index 12 months YTD QTD Sept
Stocks        
Russell 3000 0.55% -9.90% -15.28% -7.76%
S&P 500 1.14% -8.68% -13.87% -7.03%
DJ Industrial Average 3.84% -3.89% -11.49% -5.91%
Nasdaq Composite 3.00% -8.32% -12.70% -6.31%
Russell 2000 -3.53% -17.02% -21.86% -11.21%
EAFE Index* -12.02% -17.18% -19.60% -9.86%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 5.26% 6.65% NA 0.73%
Barclays Intermediate US Gov/Credit 3.40% 4.92% NA -0.12%
Barclays Municipal  3.88% 8.40% NA 1.03%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $77.32    $88.01
Natural Gas    $3.64    $3.80
Gold    $1,656.00    $1,806.30
Euro    $1.33    $1.37
         
         
RECOVERY!        
  Since 3/09/09    
Index  Total Return TR annualized    
Stocks        
Russell 3000 79.66% 25.70%    
S&P 500 76.32% 24.78%    
DJ Industrial Average 78.82% 25.47%    
Nasdaq Composite 95.25% 29.85%    
Russell 2000 94.21% 29.58%    
EAFE Index* 50.68% 17.36%    
*EAFE index does not include dividends.        

 

Mark A. Lewis

Director of Operations

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