“We all need lots of powerful long-range goals to help us past the short-term obstacles.”
Jim Rohn, leading business author and philosopher on success
WHAT WILL YOUR FINANCIAL LIFE LOOK LIKE IN 20 YEARS?
Similar to Jim Rohn, many of our clients have had modest beginnings and found financial success through hard work and determination. Often times, it’s hard to see the effects of this work and focus until you look back over a long period of time. One characteristic we have seen with our clients that lies at the core of this success is the tendency to develop and continually revisit vivid, powerful long-range goals. Inevitably we all encounter obstacles that would serve as a distraction to these goals, yet revisiting a meaningful plan allows us to maintain focus on what truly matters.
While interesting, it is also unfortunate that so many individuals and families do not find the same long-term success in this area of their lives. In fact, according to a study titled Were They Prepared for Retirement? nearly half of U.S. retirees die broke. The study was published by the National Bureau of Economic Research in February this year and found that 46% of retirees have $10,000 or less of total savings at death. The full study can be found here: http://tinyurl.com/ccc2lsq
We will continue to work hard to provide a wealth planning platform on which our clients can maintain a long-term vision of what financial success should be for themselves and their families.
MARKET COMMENTS & OBSERVATIONS
The global financial markets have been quite volatile over the past 12 months resulting in a mixed bag of returns (please refer to index performance chart below). U.S. focused investors have experienced positive stock and bond returns, while globally diversified investor returns have been affected by the debt problems of Europe and slower growth rates from the emerging economies of the world. Although we can run into periodic obstacles that test our patience, we continue to believe that it takes global diversification to form a solid foundation for long-term investment portfolios. We are committed to the positions we hold in emerging country stocks as we believe these countries and their equities will benefit from higher economic growth rates over the next three to five years. Further, we think historically low valuations in European equities will provide future return opportunities.
Payne Wealth Partners Investment Process
This month we thought it would be helpful to review our investment process and how we differentiate our service offering. We believe our investment approach is unique when compared to the advice given by many “financial advisors” because we are not product salesmen. This should provide you with peace of mind as you realize that we don’t have any type of hidden agenda. Your best interest is at the heart of our work.
We bring you value through our fund manager selection process, portfolio risk controls, and tax efficient trading practices (so you keep more and Uncle Sam gets less). Our five different globally diversified portfolios are constructed generally with institutional-class or no-load mutual funds and exchange-traded funds (ETF’s). We utilize top-notch research from independent and industry leading firms and take into consideration:
- The specific investment style of the fund
- Experience of the fund manager & his research team
- The manager’s personal investment in their fund
- The risks being taken and potential for price volatility
Our work is done by an investment committee that brings a wealth of experience and training to you. Our team conducts deep and ongoing due diligence on the investments we select by speaking directly with money managers, conducting quarterly manager conference calls, visiting fund manager offices, and through purchasing impartial research. We continually evaluate each fund manager against his peer group and appropriate benchmarks for assurance that he is providing competitive returns for his investment category. Studies have shown that the best money managers “eat their own cooking.” So, we believe it is very important for the fund managers we use to have a significant investment in their own fund alongside their shareholders.
Because we believe strongly in our process, each member of our team has selected one of our five different globally diversified portfolios for their personal investment dollars. We truly “eat our own cooking” by investing in the same securities we use to build client portfolios. Therefore, everyone’s interests are firmly aligned.
Financial Market Indices as of August 31, 2012
Last 3 Months
Year to Date
Last 12 Months
|S&P 500 Total Return (US stocks)||2.3%||-3.5%||7.9%||18.0%|
|MSCI Developed EAFE (foreign stocks)||2.7%||11.2%||7.4%||0.5%|
|MSCI Emerging Mkt. Equities (emerging country stocks)||-0.5%||4.3%||3.4%||-8.3%|
|Barclays Capital Aggregate Bond – Intermediate Term||0.2%||1.2%||3.1%||4.0%|
|Barclays Capital Municipal Bond Index||0.1%||1.6%||5.4%||8.8%|
IN THE NEWS
Terry is quoted under #10 in an article at marketwatch.com. Read it here.
Perry was quoted in Evansville Business. Read it Here.