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Tuesday, August 19, 2014

Weekly Update 8 16 14

Word's for the week consistency and conviction.

"There must be consistency in direction."  W. Edwards Deming 

 
"If you're not consistently carrying out your plan ninety percent of the time, you really don't have a plan at all." Alwyn Cosgrove

"Small disciplines repeated with consistency every day lead to great achievements gained slowly over time."  John C. Maxwell

"Core passions and aspirations should be consistent and in sync."  Lorii Myers,

"Work on your goals, one step at a time. Remain focused and do not stop. You will be amazed how much you can accomplish over the years. In most things in life, it is not the speed but the consistency that matters."  Roopleen


"Conviction is worthless unless it is converted into conduct."  Thomas Carlyle

"You cannot build a dream on a foundation of sand. To weather the test of storms, it must be cemented in the heart with uncompromising conviction." T.F. Hodge

"To yield readily--easily--to the persuasion of a friend is no merit.... To yield without conviction is no compliment to the understanding of either."  Jane Austen

"Internal conviction drives external action." Todd Stocker

"Growth of consciousness does not depend on the might of the intellect but on the conviction of the heart." Wayne Gerard Trotman

I could call this discipline revisited. (See the update from last week)
Discipline in Wealth Management involves a consistency in methodology along with a conviction to maintain processes and strategies of implementation.

There are basics of financial planning.

  • Cash Flow Structure- Income, Fixed Expenses, Discretionary Expenses, Savings Needs/Goals. Etc.
  • Protection from catastrophic loss with low cost insurance solutions.
  • Short term savings first; checking plus savings account. Twelve to eighteen months of fixed expense.
  • Medium Term Savings; Money Market, Short Term Bonds, two to three year Certificates. Liquid for an emergency, or goal within 4 years.
  • Investments; long term savings beyond five years.
  • Beneficiary, aging, longevity, gift and legacy planning.

These are the areas of expertise of a Financial Planner. Financial Planners often can be your representative and consultant for you to interact with other professionals such as attorneys, accountants, insurance professionals, investment advisors and accountants.

Investment Advisors (Not Brokers) are experts in managing investment portfolios; analyzing investment allocations, selecting investments, investment strategies or investment managers.

Investment Advisors are consultants not sales people. Investment Advisors chiefly manage investment assets for fee, they should not be taking commissions or selling products.
The selling of products by collecting compensation from the product vendor or earning commissions based on the product sold produces a conflict of interest.
Brokers as product distributors have a different role than an Investment Advisor.

Wealth Managers essentially take on the role of both Financial Planner and Investment Advisor. (Beware names can be deceiving)

True Wealth Managers gain expertise in both world's Financial Planning and Investment Advisory.
Wealth Managers have designations such as CFP® Certified Financial Planner or CHFC® Chartered Financial Consultant plus CIMA® Certified Investment Management Consultant®, AWMA® Accredited Wealth Management Advisor and AIF® Accredited Investment Fiduciary.  
Wealth Managers demonstrate expertise both as a Financial Planner and an Investment Advisor.

I am going to pick back up with the basics of the Investment Advisor Role next week and continue with my theme of consistency and conviction next week.
For now I feel like I am getting a little long winded on this front.

I want to conclude by highlighting the area of saving!
Craig Israelsen has put together data in the latest Financial Planning Magazine that highlights the deficit in Financial Planning by many, they save very little or begin saving late.





The point is, if you need to live off your investments for twenty to thirty years during retirement, you may need significant help in both areas Financial Planning and Investment Advisory.

More on discipline, consistency and conviction next week.



The S and P 500 index trended up last week. + 1.22
The 10 year Treasury Yield index trended down last week.
-         2.90%
The US Dollar index ended even to where it started last week.
The CRB Commodities index trended down last week. - .85
The Gold Index trended down last week - .39%
Inflation Linked Bonds trended down last week - 1.94%
The US Aggregate Bond Index trended up last week + .48%
The International Aggregate Bond Index ended even to where it started last week.
The New York Composite Index trended up last week. +.98
The Dow Jones World Index trended up last week - 1.67%

The NCREIF Index is aggregated and reported quarterly and is a total return broad representation including rents and appraisal of non-traded Commercial Real Estate.

2014 2nd qtr + 2.91%

Year to date gold and real estate lead. The yield on the ten year treasury is down 22% year to date.


Many investors take the wrong approach looking primarily at recent return and average percentage rates. Overall risk measures and managing downside risk play an increasing role in end results.

Investors instead should be focused on managing Dynamic Beta exposure, evaluation Active Share, Sharpe ratios, Treynor ratios, Sortino ratios and Alpha.

The above is for informational purposes only and not an offer or recommendation to buy or sell. Past performance is no guarantee of future return. All decisions about investments should be made within parameters of risk, time frame, financial position and overall asset allocation.


Tuesday, August 12, 2014

Weekly Update 8 9 2014

Word for the week discipline.

"Discipline is the bridge between goals and accomplishment."Jim Rohn

"Effective leadership is putting first things first. Effective management is discipline, carrying it out." Stephen Covey

"It was character that got us out of bed, commitment that moved us into action, and discipline that enabled us to follow through." Zig Ziglar

"Discipline is the refining fire by which talent becomes ability." Roy L. Smith


"Seek freedom and become captive of your desires. Seek discipline and find your liberty.Frank Herbert 

 

 "We must all suffer one of two things: the pain of discipline or the pain of regret or disappointment." Jim Rohn


I mention Benjamin Graham in my writing quite a bit. He wrote a book titled; "The Intelligent Investor". He was the mentor to Warren Buffett on investing. These men have very disciplined value oriented investing principals that have made them stand out in the results they achieved.
Another person who stands out as having a very disciplined value oriented approach is Sir John Templeton.

What these men taught us in a demonstrable way is the starting point and ending points in successful investing is in knowing value, based on fundamental valuation methods. They help us to understand when to invest in undervalued securities and how to avoid those which are overpriced.

We at Marrs Wealth Management search hard for deep value oriented investments or investment managers who are very much oriented to a deep value oriented style.

We realize there is a debate about what constitutes discipline in investing.

Some would say discipline involves a strict buy and hold mentality. These people might also say passive indexing is what matters most. Buy the entire market and hold on.
In a manner they are correct. Average investors don't do better than those who buy and hold the market averages for a long time.


The problem is investors get skittish and sell when investments get less expensive. They then turn around and buy when investments become more expensive.
This is why in a multitude of studies it has been shown typical investors realize less than half of the average return of the overall market.

The other way to be disciplined is to have a diversified allocation that is rebalanced in a regular disciplined manner and is tactically managed based on asset valuations.
This is the approach of great investors such as Graham, Buffett and Templeton. 
Yes they would be disciplined to hold on to investments that were fairly valued or undervalued, however they were equally willing to sell when overvalued.

To be sure any disciplined approach works more often than what the typical investor achieves. The question is, what disciplined approach achieves superior results?


Gregg S. Fisher (http://www.forbes.com/sites/greggfisher/) details some the benefits of disciplined rebalancing of diversified investment portfolios.

In his article titled, "Discipline's Reward" he says;
"Implemented over extended time periods, systematic rebalancing tends to improve a portfolio's risk-adjusted returns quite substantially. For example, we looked at two portfolios comprised of 60%stocks, 30% bonds and 10% commodities from January 1, 1992 to May 31, 2012.* We rebalanced the first portfolio quarterly and never rebalanced the second one. Result: the rebalanced one returned 7.66% annualized, compared to 7.19% for the second one. Due to the power of compounding, a $100,000 investment in the rebalanced portfolio grew to $451,000, compared to only $413,000 in the case of no rebalancing, a 12% greater profit. Rebalancing reduced portfolio volatility quite dramatically , from 10.79% to 9.47 %. Overall, rebalancing resulted in a 21% improvement in the portfolio's reward/risk ratio.

In his piece on "Why Tactical Asset Allocation is Changing the Investment World" Ken Faulkenberry demonstrates the value of tactically moving away from expensively priced assets to underpriced assets makes sense.

"A tactical asset allocation is the value investors most important strategy tool. Buy and hold has failed for most investors. This is partly because it doesn't work well in secular bear markets, and partly because investors let their emotions cause them to make poor decisions. This can be corrected by concentrating on value."
"We know from history that when asset prices are lower than their fundamental or intrinsic value they provide higher than average rates of return in the long run. When asset prices are expensive compared to their fundamental value they provide lower than average rates of return in the long run."
"Investors can take advantage of portfolio volatility if they understand market emotions affect asset prices. When focusing on value, investors can look for opportunities in assets that are experiencing extreme pessimism, and look to take profits in assets that are experiencing a buying euphoria."


In follow up Ken gives strategic advice for Investors or Investment Advisors to follow. "5 Value Strategies For Asset Allocation" by Ken Faulkenberry

"1. Time and Long Term Value Investing
In our fast paced world, with internet trading and instant gratification, it is popular to look for quick returns through schemes and strategies that carry undue risk. Benjamin Graham and Warren Buffett have taught the virtue of patience and the willingness to hold investments for long periods of time."

"2. Valuation Timing - Take Advantage of Mis-priced Markets
Graham used the parable of Mr. Market to illustrate the fact that investments are often mis-priced, sometimes overvalued, and other times undervalued. It makes sense to capitalize on mis-priced investments in order to increase your probability of making a profitable investment. Valuation timing is the discipline of weighting your asset allocation based on valuation. Asset categories which are expensive should be avoided or underweighted, and categories that are bargains may deserve an overweighting."

"3. Require a Margin of Safety
Purchasing investments at a deep discount reduces the risk of owning that asset. The margin of safety allows for problems, mistakes, or unforeseen disasters. Negative surprises may have less impact on an asset that is already priced low."

 
"4. Portfolio Rebalancing & Weighting
At the same time there is more upside to investments bought at a large discount to its real or intrinsic value. To be a successful investor you need to understand how compounding works for you and against you."

 
"5. Capital Preservation
Preservation of capital should be an investor's highest priority. Warren Buffett famously said; "Rule # 1: Never Lose Money; Rule # 2: Never forget Rule #1."If you lose 50% and gain 50%, you still have a 25% loss! These rules of mathematics make capital preservation extremely important."

 

 
These are the same rules for investing that we utilize at Marrs Wealth Management. We are vigilant to look to value, be diversified and manage the risk to avoid the peril of a deep downside event.

Some may say why not just buy and hold. On top of the examples of Graham, Buffett and Templeton. Others have shown empirically that a focus on value and tactical investment management can add value above passive buy and hold only.



"Value and Momentum Tactical Asset Allocation" published in March 2012 a study. A summary of some of their findings in the study is below.


"We analyze 3 papers in the "value and momentum" series. Our primary focus is on a paper by Peng Wang at the Georgetown Investment Office ("PW"), which offers the most practical and straight forward analysis of applying value and momentum."
"PW shows that a model combining momentum, timing, and value signals can significantly improve overall performance. The other papers highlight the same basic result."
"Adding MA rules on top of value and momentum increases portfolio attractiveness."



"***E: Equal weighted market; E(M): EW Momentum Strategy; E(MT): EW Momentum and Timing Strategy;
E(MT&V): EW Momentum, Timing and Value Strategy
Source: Applying Value and Momentum across Asset Classes in a Quantitative Tactical Asset Allocation Framework"



Now, to be clear, timing of the ups and downs of assets is not a disciplined approach to investment management, apart from a disciplined strategy of valuation and rebalancing between diversified asset classes. The strategy must be based on fundamental and quantitative measures.

 
Discipline, related to tactical asset allocation, does not mean jumping in to hot often speculative investments or jumping out of an investment that is falling in price.

 
Discipline means having a solid, proven and well researched investment strategy and following through with that strategy.

"Discipline is the refining fire by which talent becomes ability." Roy L. Smith


The S and P 500 index trended up last week. + .33
The 10 year Treasury Yield index trended down last week.
- 3.59%
The US Dollar index ended even to where it started last week.
The CRB Commodities index ended even to where it started last week.
The Gold Index trended up last week + 1.19%
Inflation Linked Bonds trended down last week - .32%
The US Aggregate Bond Index trended up last week + .12%
The International Aggregate Bond Index trended down last week. - .21%
The New York Composite Index ended even to where it started last week.
The Dow Jones World Index trended down last week - .91%

The NCREIF Index is aggregated and reported quarterly and is a total return broad representation including rents and appraisal of non-traded Commercial Real Estate.

2014 2nd qtr + 2.91%

Year to date gold, real estate and inflation linked securities lead. Stocks are outperforming bonds. 



Many investors take the wrong approach looking primarily at recent return and average percentage rates. Overall risk measures and managing downside risk play an increasing role in end results.

Investors instead should be focused on managing Dynamic Beta exposure, evaluation Active Share, Sharpe ratios, Treynor ratios, Sortino ratios and Alpha.

The above is for informational purposes only and not an offer or recommendation to buy or sell. Past performance is no guarantee of future return. All decisions about investments should be made within parameters of risk, time frame, financial position and overall asset allocation.

Monday, August 4, 2014

Weekly Update 8 2 2014

Words for the week syn·er·gy ˈsinərjē noun
noun: synergy; plural noun: synergies; noun: synergism; plural noun: synergisms

1.    the interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects.


"Synergy is almost as if a group collectively agrees to subordinate old scripts and to write a new one."  Stephen R. Covey

"Synergy: The combined effect of individuals in collaboration that exceeds the sum of their individual effects."  Stephen R. Covey 

"The whole is greater than the sum of its parts."  Aristotle


This weeks' update is written by our summer intern Jim Kain. Marrs Wealth Management looks forward to the synergy he brings to us, to make us a better Investment Advisor, for the greater good of all who have entrusted us with their financial wellness.

 
Jim holds a degree from Iowa State University in Accounting and will earn a Master's Degree in Finance, next May, from the University of Iowa. Jim will join us full time next year as an Investment Advisor Representative.




 
Roger is on a much deserved vacation and has asked me to fill in as author of this week's update.   I am in the waning stages of what has been a terrific internship at Marrs Wealth Management.  Craig, Roger, Judy, Kent, and Dylan have provided me a tremendous opportunity and I have learned a great deal over the past weeks.  I cannot wait to begin my full-time career here next summer and to continue meeting the wonderful clients and people associated with this business.  In the meantime, I will complete my MBA at the University of Iowa.

Marrs Wealth Management is not the typical landing point for those completing an MBA program.  Many of my classmates will work for large corporations such as Amazon, Dell, Disney, and Hershey.  While these companies are attractive, they cannot provide the career experience I desire.  Roger has written about Marrs Wealth Management being held to a fiduciary standard in prior updates, and this is an important differentiator that requires our firm to do what is best for our clients, not merely what is suitable.  This differentiation is what appeals most about Marrs Wealth Management and sets it apart from alternative career paths.  The fact that it is located in the community in which I was raised makes it the perfect fit.

In my short time at Marrs Wealth Management, I have approached the firm's investment philosophy with a critical eye.  I am thankful that Craig and Roger have welcomed this approach and have been willing to have open discussions on various topics.  In hindsight, this willingness to listen to my opinions proves how truly aligned their interests are with the interests of their clients.  Ultimately, the process of researching funds, creating rating systems, and looking at simulated portfolios has resulted in the realization that our investment philosophies are aligned and are truly in the best interest of our clients.  

The consultative component of Marrs Wealth Management is another unique service not common in the industry.  Not only does Marrs Wealth Management offer investment advice for investable assets, but it is also available to answer any questions relating to any personal financial situation that may arise.  These situations can include debt reduction advice, real-estate decisions, college planning, and much more depending on individual circumstances.  This is advice that should be asked of trusted professionals with many years of experience and not of the deep depths of Google's great algorithm. 

I am excited to be joining the Marrs Wealth Management team and am especially looking forward to achieving my goal of being in a position to make a positive impact in the lives of others.  It is reassuring to know that when I talk with clients, my sole objective is to be truthful, unbiased, and helpful in the advice I provide.  This philosophy is what makes Marrs Wealth Management a respected firm in the community.  I look forward to working with existing and future clients and to adding value to the services provided at Marrs Wealth Management.

Jim Kain



The S and P 500 index down last week. -2.69
The 10 year Treasury Yield index trended up last week.
+ 1.46%
The US Dollar index was up last week. + .35%
The CRB Commodities index trended down last week. - 1.96%
The Gold Index trended down last week - 1.02%
Inflation Linked Bonds trended down last week - .70%
The US Aggregate Bond Index ended even to where it started last week.
The International Aggregate Bond Index trended down last week. - .12%
The New York Composite Index ended down last week. -2.67
The Dow Jones World Index trended up last week + 2.37%



The NCREIF Index is aggregated and reported quarterly and is a total return broad representation including rents and appraisal of non-traded Commercial Real Estate.

2014 2nd qtr + 2.91%

Year to date gold, real estate and inflation linked securities lead. Bonds are outperforming stocks.



Many investors take the wrong approach looking primarily at recent return and average percentage rates. Overall risk measures and managing downside risk play an increasing role in end results.

Investors instead should be focused on managing Dynamic Beta exposure, evaluation Active Share, Sharpe ratios, Treynor ratios, Sortino ratios and Alpha.

The above is for informational purposes only and not an offer or recommendation to buy or sell. Past performance is no guarantee of future return. All decisions about investments should be made within parameters of risk, time frame, financial position and overall asset allocation.


Saturday, July 26, 2014

Weekly Update 7 26 2014

Words for the week care, caring.

"Without a sense of caring, there can be no sense of community." Anthony J. D'Angelo

"From caring comes courage." Lao Tzu

"People with handicaps teach me that being is more important than doing, the heart is more important than the mind, and caring together is better than caring alone." Henri Nouwen

"The closest thing to being cared for is to care for someone else." Carson McCullers

"Excellence is the Result of Caring more than others think is Wise, Risking more than others think is Safe, Dreaming more than others think is Practical, and Expecting more than others think is Possible." Ronnie Oldham

"Never be so busy as not to think of others."  Mother Teresa


Caring is one of the most important aspects to being a Trusted Financial Advisor.
The problem for the investor is that, even if the person is very caring, there are different standards of care adhered to by advisors. It depends on the platform in which they work.

There are basically three different platforms.
  1. 1.   Brokers sell on commission. They are usually offer investments directly connected to where the Brokerage Company has selling agreements. The company and the broker get paid on the different investment products they offer. Also they might get incentive pay for offering certain investment products. They are held to a Suitability Standard. Most likely they will not hold themselves out as a fiduciary.
  2. 2.    Fee Based Advisors are often brokers working for commission and sometimes receive fees for managing investments or financial planning. They also get paid differently based on the products they offer or the way they provide advisory services to you. Usually they are held to a Suitability Standard and will not hold themselves out as a fiduciary. Also they might get incentive pay for offering certain investment products. They are supposed to disclose to the investor any conflicts of interest.
  3. 3.   Fee only Registered Investment Advisors never receive commissions. They always are under a Fiduciary Standard by law. They must avoid conflicts of interest and in most cases act under prudent investor guidelines.
So what is the big deal? Why is it important to know this about standards of care?

David Serchuk writes in Forbes "Suitability: Where Brokers Fail".
"While suitability offers investors some sort of protection, it falls short in some important ways. For starters, it doesn't require brokers to find the best products, only ones that are ostensibly suitable for you. If an underwhelming house brand security lines up with the vague outlines of what is considered suitable they can still push it, even if it costs more to own, or underperforms peer securities."
"In other words, mere suitability alone falls short of what the fiduciary standard brings to the table. Here are some key differences. Whereas the suitability requirement is about as far as most mainstream investment houses will go, when your financial planner is considered a fiduciary they have the legal obligation to put you in only the very best products they can, and to act in your own best interest, not their own. Becoming a fiduciary, also, takes a lot more work than becoming your typical broker. You have to fulfill a certification process that requires you to uphold prudent investment guidelines and practices as delineated by state regulators. Simply put most mainstream stock brokers do not meet this standard."


A recent article in Financial Advisor Magazine tells of how regulators are concerned over brokers' activities.
"One issue of concern was brokerages that sell pricey share classes of mutual funds and variable annuities. Goodman cited "an explosion" of so-called "L-shares," a type of mutual fund shares held in variable annuities that have short surrender periods, but higher upfront costs. A surrender period is the number of years that investors must wait in order to withdraw money from an annuity, or cash it in without a penalty. It is often seven years, but can be three or four years for L-shares, according to marketing literature."

"The SEC was interested to know whether investors were aware of the fees they pay for different types of share classes and whether these charges were appropriate for the investors buying them, Goodman said."

"We want to make sure these share classes aren't being chosen or marketed based on the higher commissions they generate," Goodman said."


WHAT DOES IT REALLY MEAN
TO BE A FIDUCIARY?
According to The Investment Adviser Association's
Standards of Practice, "As a fiduciary, an investment advisor has an affirmative duty of care, loyalty, honesty and good faith to act in the best interests of its clients."
The Investment Adviser Association goes on to define what these fiduciary duties are as they relate to the advisory relationship. These generally include the duty to:
  • At all times place the interests of clients first;
  • Have a reasonable basis for its investment advice;
  • Seek best execution for clients' securities transactions where the advisor directs such transactions;
  • Make investment decisions consistent with any mutually agreed upon client objectives, strategies, policies, guidelines and restrictions;
  • Treat clients fairly;
  • Make full and fair disclosure to clients of all material facts about the advisory relationship, particularly regarding conflicts of interest; and
  • Respect the confidentiality of client information.

The Unified Prudent Investor Act has a list of factors which must be considered in making investment decisions, including "general economic conditions," "possible effect of inflation or deflation," "the expected total return from income and the appreciation of capital," and, "other resources of the beneficiaries."  The Advisor, acting as a Fiduciary under the Prudent Investor Act, must take tax consequences of investment decisions into account.  There is a positive obligation to diversify assets "unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying." The trustee's obligations are significant, requiring sophisticated approaches to investment that really take into account the right risk to return ratio for the particular trust.
In addition, a Fiduciary Investment Advisor's performance is measured by the performance of all the assets together.  Thus taking the truly holistic approach to investment practices.

At Marrs Wealth Management we take great care to analyze investment offerings that we use to build portfolios.
Below are a list of funds with ten criteria that we use to analyze investments. This is a beginning point of looking at investments.
We don't get paid more or less for using any particular investment. We receive no third party money or incentives to invest in any one area.
We only look at what is best for you the investor. Prudently building portfolios that will add long term benefits to individual financial goals.
Below is what we have termed our Stability Rating.
The identity of the attached investments is withheld, not because they are a secret, the list is available by request.
It is important to remember that past return is not guarantee of future performance. That this is for information only and should not be construed as an offer to buy or sell any security. Past Return is no guarantee of future return.

  • All metrics are benchmarked to the S & P 500 Index.
  • The purpose of using the S & P 500 Index as a benchmark to all investments is to measure risk/return metrics and low correlation of assets as related to the capital market base.
  • It is always very important to review the investment metrics against the most closely related benchmark category to each investment as well.
75% of our clients' investments are in Exchange Traded Funds, Institutional Level Mutual Funds, and Individual Securities.
On average we reduce internal costs by approximately $1,800.00 per client in relation to individuals investing in retail shares of mutual funds. Average client assets equals $800,000. 




Maintaining a risk profile consistent with your goals, expectations and risk tolerance is of utmost importance.

Losses can outweigh high returns and be extremely difficult to recover from over time. 


Inexpensive investment providers have done a great job of focusing investors to cost, and investments that track market weighted indices, while completely ignoring the costs of steep downturns in the investments performance.
Many have bought into the fable that you cannot do any better that only keeping costs low and tracking market returns are viable investing options.

The SPY SPDR S & P 500 tracking ETF has averaged approximately 5.5% annualized return from July 2000 to July 2014.

We target an annualized return of between 6% and 8% depending on goals and risk measurements.
We target Risk, Beta and Standard Deviation to about 50% of the S & P 500 Index.
We are constantly evaluating and monitoring the investments and portfolios of our clients. 


It may be time to find a competent advisor who will invest prudently with your best interest in mind? 



The S and P 500 index ended even with where it started last week.
The 10 year Treasury Yield index trended down last week.
-  .60%
The US Dollar index was up last week. +.66%
The CRB Commodities index trended up last week. + .31%
The Gold Index trended down last week - .62%
Inflation Linked Bonds trended up last week + .12%
The US Aggregate Bond Index trended down last week. - .07%
The International Aggregate Bond Index trended down last week. - .45%
The New York Composite Index ended even with where it started last week.
The Dow Jones World Index trended up last week + .31%

The NCREIF Index is aggregated and reported quarterly and is a total return broad representation including rents and appraisal of non-traded Commercial Real Estate.

2014 2nd qtr + 2.91%

Year to date gold, real estate and inflation linked securities lead. Stocks are outperforming bonds.


Many investors take the wrong approach looking primarily at recent return and average percentage rates. Overall risk measures and managing downside risk play an increasing role in end results.

Investors instead should be focused on managing Dynamic Beta exposure, evaluation Active Share, Sharpe ratios, Treynor ratios, Sortino ratios and Alpha.

The above is for informational purposes only and not an offer or recommendation to buy or sell. Past performance is no guarantee of future return. All decisions about investments should be made within parameters of risk, time frame, financial position and overall asset allocation.

Monday, July 21, 2014

Weekly Update 7 19 14

Words for the week, life planning.

"There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle."  Albert Einstein

"Sometimes the questions are complicated and the answers are simple." Dr. Seuss

"I'm not afraid of death; I just don't want to be there when it happens."  Woody Allen

"The fear of death follows from the fear of life. A man who lives fully is prepared to die at any time."  Mark Twain

"May you live every day of your life."  Jonathan Swift

Financial planning really should be more life planning. Setting priorities and goals. Revisiting and readjusting through life's changes.
To write a financial plan has limited value! Working lifelong with a Financial Advisor has inestimable value, if they are truly helping you to work towards your best outcome. If they are a fiduciary towards you and your entire financial life.


Fred Reisch writes; ERISA imposes the fiduciary standard and "prudent man rule"-including that duty of loyalty-as well as the prohibited transaction rules to regulate the decision makers' conduct.
Wouldn't it be best if everyone in the room were required to put the participants first in making recommendations and decisions? ... Arguably, it would be. ...
Many advisers are fiduciaries, but many are not. How can a plan committee tell the difference? It's fairly easy. If an adviser says in writing that he, or the firm, is a fiduciary, then the adviser is. If the adviser doesn't provide such a written statement, then he, or the firm, isn't (or at least the adviser doesn't think so). The moral of that story is, if you want to ensure your adviser puts the interests of the participants first, just as you are required to do, then get it in writing."

http://www.plansponsor.com/mobile/magazinearticle.aspx?id=6442498449&sname=

As a fee only Registered Investment Advisor we serve as fiduciary to our clients. Our interest is as closely as possible aligned with the best interest of the individuals we advise. We avoid any conflicts of interest that might diminish trust and replace serving in the best interest of others.

There are many other risks to a person's financial life than investment risk. This past week the Supreme Court ruled that Inherited IRA accounts were not considered retirement plans. The result is Inherited IRA's are not protected from creditors.

One may want to establish a trustee relationship as a part of designating beneficiaries of their IRA's.
Other considerations in naming a beneficiaries IRA to a Trusteed IRA may be, ability for minor beneficiaries to inherit, to establish some control on how fast the IRA can be distributed or establish who may be named as eventual beneficiary of he account.

Marrs Wealth Management can work with a partner Administrative Trustee and serve as a Directed Fiduciary Investment Advisor for your heirs Trustee IRA.

Other life concerns may arise around many different issues.

Some recent articles in Trusts and Estates Magazine surround, diminished capacity planning, trustee considerations and taxation issues.

It may be time for you to consider additional reasons to review with your adviser and attorney, issues in planning other than investment decisions.  




 The S and P 500 index trended up last week + .54%
The 10 year Treasury Yield index trended down last week.
-         1.43%
The US Dollar index was up last week. .48%
The CRB Commodities index trended up last week. + .12%
The Gold Index trended down last week - 2.13%
Inflation Linked Bonds trended down last week - .12%
The US Aggregate Bond Index trended up last week. + .05%
The International Aggregate Bond Index trended down last week. - .11%
The New York Composite Index trended up last week.
+ .45%
The Dow Jones World Index trended up last week + .44%

The NCREIF Index is aggregated and reported quarterly and is a total return broad representation including rents and appraisal of non-traded Commercial Real Estate.

2014 1st qtr + 2.21%

Year to date gold and inflation linked securities lead. Stocks are outperforming bonds. 



 Many investors take the wrong approach looking primarily at recent return and average percentage rates. Overall risk measures and managing downside risk play an increasing role in end results.

Investors instead should be focused on managing Dynamic Beta exposure, evaluation Active Share, Sharpe ratios, Treynor ratios, Sortino ratios and Alpha.

The above is for informational purposes only and not an offer or recommendation to buy or sell. Past performance is no guarantee of future return. All decisions about investments should be made within parameters of risk, time frame, financial position and overall asset allocation.