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Happy Centerversary

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 While the Center celebrates 28 years serving our clients, our newest Client Service Associate, Melissa Cyrus, is also celebrating a milestone … her first “Centerversary” with us. 

We are proud to take a moment and recognize Melissa. It was a year ago May 14th that she added her enthusiasm to our team.  Melissa said the momentous occasion sort of snuck up on her, telling us, “It’s been a year already?  Hard to believe … it went by so fast!  I feel very fortunate to be working at such a wonderful place surrounded by such awesome people.  It sure makes the time fly.” 

Guess Melissa just proved the old adage Time flies when you’re having fun. And all that wisdom from someone who has only been around for a year. Just wait to see what she has to say on her 10th Centerversary!

Is Your Portfolio Off to the Races?

 We just got to enjoy what has been called “The Greatest Two Minutes in Sports.”  I have always been a fan of the Kentucky Derby, the horses, the outrageous hats, wondering who is wearing the hats, and a blanket of roses.  I’ve had the privilege of actually going down to Louisville to watch but I have never been part of the glamorous, hat-wearing crowd. We’ve always watched from the infield, though “watch” is a loose term. It is more like standing on your tip toes to see a blur of horses run by you for about one-tenth of a second and then return to drinking your mint julep.  But it is fun nonetheless. 

This year the market has felt a lot like we have been off to the races.  It has been one of the strongest starts to the year this decade.  Is it too much too fast?  A new chart put out by Russell Investments says maybe not.

 

For additional disclosure and interpretive guidance on this chart, please click on the following link: http://www.russell.com/Helping-Advisors/Markets/acd.aspx?d=t 

How to interpret the chart:

  1. The gray bar is the full range of 1 year returns the asset class has experienced throughout history
  2. The blue portion of the bar is where returns fall most of the time (68%)
  3. The number highlighted in orange is where returns fell for the 12 months that ended as of March 31st, 2013

Even with the strong returns, as of recently, most indexes are still hovering near “middle of the road” returns for the past 12 months.  So perhaps it hasn’t been too much too quickly.

If you are seeking some advice on an appropriate strategy for your portfolio, put the odds in your favor and contact your Financial Planner today!

Angela Palacios, CFP®is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well asinvestment updates at The Center.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Links are being provided for information purposes only.  Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors.  Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

Planning for Marriage May Include a Prenuptial Agreement

 If an “I do” is in your near future, you need to make another commitment … this one to your financial planner. Before all the wedding planning and honeymoon booking are complete, a conversation with your financial planning team is also recommended to take a look at how marriage will impact your financial situation.  Two people coming together with unique financial positions can create a number of financial issues to think about and plan for prior to entering this new chapter in life. 

While prenuptial agreements aren’t for everyone, they are important planning tools especially if you or your future spouse have substantial assets, will receive a future inheritance, or have children from a previous marriage.

A prenuptial agreement typically provides direction in the following areas:

  • Assets and liabilities – who brings what into the union
  • Contributions of each partner – will there be special considerations
  • Estate Planning – who gets what at the death of either spouse
  • Division of property – when a couple decides to dissolve their marriage

More importantly the prenuptial document creates an understanding between partners and a roadmap for conducting financial affairs together. It determines how the assets and debts will be shared. It spells out how children from a previous marriage or relationship will inherit and it addresses the financial needs of the survivor in the case of death.

While talking with an attorney about a prenuptial agreement can be a stressful and touchy topic for many couples, the many beneficial aspects are worthy of consideration. 

Laurie Renchik, CFP®, MBA is a Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

You should discuss any tax or legal matters with the appropriate professional.

Marilyn Gunther, CFP® Receives Recognition

 In the immediate future, women’s wealth will be on the rise.  As reported by wealthmanagement.com, the global wealth owned by women is projected to grow 8 percent per year through 2014, “And just about every wealth management firm wants a piece of that pie.” The same article names the Center and one of our own founding partners Marilyn Gunther, CFP® to the Top 50 Women-Owned RIA’s (Registered Investment Advisor) in 2013. Marilyn is lauded as a trail-blazer in an industry that has long been dominated by men.  In fact, she vividly remembers the first Raymond James meeting she attended because there were five women in a room filled with men.

The welcome recognition underscores what we at the Center have always known:  Helping women manage their personal wealth is not only fundamental to our business, but it comes naturally. That’s because we have key female players at our helm.  In fact, of our 19 team members, 14 of them are women!  We can truly say we understand what women want. And according to wealthmangement.com, statistics say 61 percent of female business owners prefer to work with women advisors. Does that give us a leg up? We think our long list of female investors is all the proof we need.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of RJFS or Raymond James. Candidates had to meet the following requirements: they directly own at least 25 percent of their firm, and that their firm has no more than 50 percent institutional clients and have some individuals for whom they do financial planning. Also, none operate a broker/dealer or are affiliated with a bank or investment company. REP.’s Top 50 Women RIAs list was assembled using data from SEC filings and Meridian-IQ (in which Penton Media has a stake). Advisors are ranked by their firm’s total assets under management.

My Meetings with Some of Our Portfolio Managers and Their Teams

 Over the last 22 years I have come to realize on many occasions that we are not in the numbers business but in the people business.  Clients like to know that we understand their investments, and more importantly, the people behind the investments.  While numbers are crucial and we spend a lot of time in the depths of many calculations, I find the most value when I get to understand the people behind the numbers. 

Recently, I met with many of the managers from the PIMCO family of funds.  PIMCO has been a long time resource, providing portfolio management services for the funds of Center clients for over a decade. I alone have made this trip 3 times in the last 10 years while others from the Center have also made the trip. These onsite visits take time, usually a day of travel to their offices and back and many hours of sitting, talking and listening to their strategies, philosophies and themes.  I listen to their logic, really  like to see that passion that drives them to succeed for Center clients.

I joke with our investment department about passion, “The managers we want jump out of bed like a piece of toast in the morning to get to work.”  These managers could retire but they would prefer to manage money rather than golf.  I always find these meetings with our managers as worthy time spent.  I have come back from meetings with conviction in people and their teams we have in place and sometimes found that we need to look elsewhere for a replacement.

Some things can’t be discerned in the numbers alone.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

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Center Named Birmingham Bloomfield Chamber Legacy Sponsor

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 As an honor and sign of our dedication to the community, The Center is proud to announce we are a 2013 Legacy Sponsor of the Birmingham Bloomfield Chamber of Commerce. Every year four companies are selected, each for having committed serious time and money to supporting the Chamber’s mission of connecting with the community. We see this not just as an honor, but a sign that we are achieving an important part of The Center Vision 2020*. The goals we set forth in that visioning process include Partnering with a Passion for the Community. Specifically, here’s what we have committed to do:

We have fostered a natural space to reinforce our firm’s intrapreneurial spirit. If a Center team member feels strongly that the firm might have an opportunity to make a difference for people, they will feel inspired to bring their inspiration to the table, leverage the talents of our team and commitments of our firm, and see the rewards of their vision.

We continue to demonstrate leadership by providing our time and talents to the organization. Center planner, Troy Wyman, CFP® was recently elected Secretary of the Chamber’s Executive Committee and has served on the board for the last six years. The Chamber has provided an excellent extension for reaching our professional, local, and personal communities. Our Legacy Sponsor designation is just one example of the many ways we remain committed to serving our communities. And we at the Center are proud of the results we help to create.  

*Our 2020 vision, originated at an all team member retreat in April 2012, paints a picture of the healthy and vibrant organization that we nurture and sustain. Our collective 2020 vision inspires, rallies, and guides our deci­sions. Day in, day out, The Center is driven by Mission, Firm Values, and Firm Service Values.

Are Extended Warranties Worth the Expense?

 How many times have you been asked about buying an extended warranty on a product purchase?  Probably every time you make a purchase.  Salespeople are trained to push extended warranties to “upsell,” and the extended warranties are huge money-makers for retailers (about 60% is profit according to Businessweek!) because most consumers never use them.

Here are 3 Reasons Why You Should “Just Say No” to an Extend Warranty:

  1. The manufacturer’s warranty is usually enough:  Most products come with a standard no cost warranty that covers the purchase for up to one year.  Most minor problems with a product occur within the first year, with major malfunctions occurring much later (often after even the extended warranty has expired).
  2. Cost is a consideration:  Often, the cost of the extended warranty is up to a third of the cost of the product itself.  Since consumer products generally depreciate in value very quickly, it might make more sense to keep the extra dollars and save for a future repair when or if it is needed, or for your future replacement purchase.
  3. There are other ways to get the same protection:  Many credit cards offer protection on purchases made with the card.  Many also offer to double the length of the manufacturer’s warranty.  Make sure to investigate all of the benefits you might have available through your credit card provider.

Although there are many reasons to “Just Say No,” there are a few instances when it might make sense to say yes to an extended warranty:

  • You are buying an item that is new technology or is prone to problems.
  • You are buying a refurbished product, or one that was a floor model.
  • You are buying a very pricey item that would be expensive to repair or replace; the more expensive the item, the more consideration to give the extended warranty.

And above all else, don’t fee like you need to make an “at the register” decision.  Most retailers allow you to purchase an extended warranty for up to 15 or 30 days after a purchase.  Take your time to make a good financial decision.

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

The Center Curtain Call

 The Center's Team enjoys sharing their knowledge with the press to help stories come to life, share facts and bring important topics to the forefront.  We are also honored when we are recognized by media and publications for our work and service to our profession. Here's what's new:

Top 50 Women Owned RIA's in 2013

Marilyn Gunther, CFP® and The Center were named to REP’s Top 50 Women RIAs list for 2013.

Candidates had to meet the following requirements: they directly own at least 25 percent of their firm, and that their firm has no more than 50 percent institutional clients and have some individuals for whom they do financial planning. Also, none operate a broker/dealer or are affiliated with a bank or investment company.

REP.’s Top 50 Women RIAs list was assembled using data from SEC filings and Meridian-IQ (in which Penton Media has a stake). Advisors are ranked by their firm’s total assets under management.

Financial Planning Magazine

Marilyn Gunther, CFP® and Laurie Renchik, CFP®, MBA were quoted in Financial Planning Magazine on April 2, 2013 in an article titled, "Safer Strategies for Leveraged Investing" by Donald J. Korn.

Morningstar Advisor

Melissa Joy, CFP® was quoted in the April 2013 Morningstar Advisor in an article titled, "Risk Preparedness."

Raymond James® AUDIOFILE

Daniel Boyce, CFP® was interviewed for the April 2013 edition of Raymond James® AUDIOFILE titled Multigenerational Planning to Enable Enduring Family Legacies.

The 3 Missing Bull Market Killers

 Every day I get questions from clients regarding the market being high.  Yes, the market’s nominal price is at an all-time high.  But consider the following situation: Over 20 years, with an average annual gain of 9% per year, the equity market could be looking at a DOW JONES average in the 80,000 range.  Twenty years ago the Dow Jones was hovering around 3,500 and since then we have had a 12 year period when the Dow did not make a new high, but still averaged almost 9% a year.   

The three things that tend to kill a bull market are inflation, interest rates, and valuations, and none of them are present yet.

A Look at Inflation

Notice that we are tracking at one of the lowest rates in history. You’ll see the Consumer price Index is well below the 10-year average. Just compare the difference between the price level of consumer goods and services in 2013 and in early 1980’s:

Sources: Bloomberg and Legg Mason. Past performance is no guarantee of future results. Please note that an investor cannot invest directly in an index, and index performance does not include transaction costs or other fees, which will affect actual investment performance.  Individual investor’s results will vary. The graph above is for illustrative purposes only and is not reflective an actual investment.

I don’t think I would be the first to remind you that interest rates are still at the lowest levels in history. This chart tracks interest rates and inflation as both trended down in recent years.

Interest Rates and Inflation

And when looking at the final potential bull killer, equity valuations, you’ll see the measures are in line with historical averages.  Not expensive and not cheap.

Equity Valuations

History as our guide would tell us that until all three or at least one of the bull market killers are present this bull is still alive and well.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  The Dow Jones Industrial Average (DJIA) is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal.

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Matt Chope Attends Due Diligence Meeting

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 Matt Chope, CFP® recently traveled to California to attend due diligence meetings at PIMCO. This was an opportunity for Matt to attend informational sessions where members of the PIMCO management team and mutual fund managers led discussions and investment forums.  He was impressed with the organization and their global perspective.

The most interesting views Matt gleaned from the meetings were commentary about the healing housing market as well as a presentation focused on the strides America is making toward energy independence in the near future.

Meetings like this help Center team members keep a pulse on the managers and corporate cultures of the companies we use to build client investment portfolios.

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