Year-End Tips for Investors

Retirement Savings

• Make sure you reach your target savings amount for your retirement plan at work (401k, 403b, TSP, etc.).
• Aim for 15% of your salary (gross pay), but do an Investment Plan with me to be more sure.
• $18k per year maximum for folks under age-50; $24k for 50+, thanks to the $6k "catch-up contribution" the IRS allows.
• If you are not there yet but can afford to reach those limits, call HR/Payroll at work and figure out how to make it happen in your final paychecks of this year.

529 college savings plans...

• Any contribution you want to count for 2015 should be made this month, before 12/31/15.
• Do NOT make check payable to the child--it messes things up; DO consult with the 529 Plan and your tax advisor for best method.
• If you give more than a certain amount per year, it can affect your estate tax deduction.
• If you are wealthy enough to have that "problem", let me help you optimize.

Employee Benefits

• Each employer offering healthcare insurance and other benefits has some schedule for renewing for next year and/or updating.
• Please make sure you are set up the way you want for 2016.
• Call HR for help (wish I could help directly).

Review Investments

• Know your risk tolerance profile, so you know how to allocate your investments strategically.
• Are you Moderate (60/40 stocks to bond), Aggressive (90+ % in stocks), Conservative (20/80)?  Is that right for you?
• Are the investments good enough, or do you need to use better mutual funds?
• If you are a stock investor, please keep me in the loop, as I have access to good research.
• Change your portfolios accordingly.

Taxes

• Make sure you pay your estimated taxes on time and as accurately as possible.
• Even if you don't need to make estimated tax payments, work with your tax advisor and HR/Payroll to make sure you are withholding enough to avoid a big tax bill later on.
• If you don't have a tax advisor, contact me for referrals--I have good people.

 Planning Ahead

• My most "successful" clients are those who are on track to meet their goals and understand why/how.
• It's not about how much they have so much as whether what they have is (or will be) enough to meet their personal goals.
• Most of them are using the Investment Plan my firm offers.
• It takes a little bit of extra effort (giving me statements for non-Schwab accounts, telling me about your goals/dreams for retirement...), but it's worthwhile.
• Let's schedule a call or meeting about your Plan!

Be well and make time to enjoy the holiday season even as you work hard at the office and/or home here at the end of the year.

Thank you for your business and your time!

--Gary P.

Year-End Money Moves to Consider

(Inspired by our friends at Fidelity Investments)

Portfolio Diversification
Review your risk tolerance, then rebalance your portfolio to the right mix.

Tax-loss Harvesting
In taxable accounts, sell losing investments if you don't love them.

Charity
Tax-deductible charitable donations help others while reducing your tax burden.

Retirement Plan Top-Off
Make sure you have contributed the minimum necessary to get the maximum free money from your employer, then max-out your Roth IRA or do a Roth Conversion, and then finish maxing-out your retirement plan at work.

Flexible Spending
Use it or lose it?  Use it!  Carry-over?  Double-check and make sure that's offered.

Beneficiaries
Your IRAs, 401(k), TSP, and insurance policies rule.  Whatever your Will or Trust says about who gets your money is trumped by what is designated on your actual accounts and policies.  Make sure it's all in sync.

RMD
Required Minimum Distribution from your IRA, inherited IRA, or employer-sponsored retirement plan.  DO NOT forget this--it will cost a 50% of the RMD in penalties, in addition to the taxes you already have to pay on the RMD.

Open Enrollment
If you have healthcare and other benefits at work, now may be the time to update/confirm your selections for the coming year.

College Savings
Review your 529, ESA, UGMA/UTMA accounts and make sure you know which to contribute to before year-end and in the coming year.

Financial Check-up
Review your investment/financial plan.  Are you on-track to meet long-term goals?  If not, what changes can you make now to help things work better down the road?

Portfolio Model Performance Through September 2015

Here are performance #s for the portfolios I run for most of my clients, and some alternatives for comparison.

I recommend moving from the Flex models to Strategic models.  Please contact me with any questions.

Thank you!

--Gary Partoyan

US and Foreign Indexes		3 mo	1 yr	3 yr	5 yr	10 yr	2008
Stock Markets (50-40-10)		-8.4%	-5.7%	7.9%	7.8%	5.0%	-39.7%
S&P 500		-6.4%	-0.6%	12.4%	13.3%	6.8%	-37.0%
MSCI EAFE		-10.2%	-8.7%	5.6%	4.0%	3.0%	-43.4%
US OE Diversified Emg Mkts		-15.9%	-18.8%	-4.1%	-3.4%	3.8%	-54.4%
Barclays Agg Bond--US		1.2%	2.9%	1.2%	3.1%	4.6%	5.2%
Barclays Agg Bond--Global		0.9%	-3.3%	-1.6%	0.8%	3.7%	4.8%
Aggressive		-7.4%	-4.1%	8.2%	8.0%	4.9%	-36.3%
95 Flex V		-7.5%	-6.0%	5.6%	6.4%		-19.1%
95 Strategic II		-8.3%	-3.1%	9.6%	10.3%	7.8%	-35.9%
95 Schwab index		-9.0%	-2.9%	9.4%	9.4%	5.7%	-37.2%
Confluence Value Opportunities		-5.7%	7.7%	22.9%	19.0%	12.2%	-22.3%
WealthFront 9		-9.7%	-7.3%	5.1%	5.9%		-38.0%
Moderately Aggressive		-6.4%	-3.6%	7.2%	7.4%	5.0%	-32.0%
80 Flex V		-7.0%	-5.6%	5.2%	6.1%	7.1%	-16.9%
80 Strategic II		-7.4%	-3.4%	7.7%	8.6%	7.3%	-30.0%
80 USA tilt		-6.7%	-2.4%	8.2%	9.0%	6.8%	-28.5%
80 Schwab index (muni)		-7.1%	-1.9%	8.3%	8.5%	5.5%	-32.3%
Moderate		-4.5%	-2.6%	5.4%	6.0%	4.9%	-23.1%
60 Flex V		-6.2%	-5.0%	4.7%	5.9%		-13.1%
60 Strategic II		-6.0%	-3.0%	6.2%	7.5%	6.9%	-23.9%
60 Schwab index (muni)		-4.9%	-0.5%	7.2%	7.8%	5.5%	-26.4%
Goldman Sachs Income Builder		-5.0%	-4.4%	5.7%	7.8%	5.7%	-23.3%
American Funds Balanced Port		-4.2%	-0.8%	7.6%	8.2%	5.9%	-28.2%
Moderately Conservative		-2.6%	-1.6%	3.6%	4.6%	4.8%	-13.3%
40 Flex V		-5.4%	-4.6%	4.4%	5.9%		-13.3%
40 Strategic II		-4.7%	-2.5%	6.1%	7.0%	6.9%	-17.7%
40 Schwab Index (muni)		-2.8%	0.8%	5.8%	6.8%	5.2%	-20.1%
Conservative		-0.6%	-0.7%	1.7%	3.2%	4.5%	-2.5%
20 Flex V		-4.4%	-3.8%	3.6%	5.5%		-5.2%
20 Strategic II		-3.3%	-2.1%	4.5%	5.5%	6.1%	-10.5%
20 Schwab index (muni)		-0.8%	1.8%	4.3%	5.4%	4.7%	-13.7%
NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.
NOTE 2:  "Flex", "Strategic", and "Index" models are crafted/run by Potomac Wealth Strategies.  They show history of better returns, lower volatility, or both--or, with the Index models, closer tracking--vs benchmarks and competitors.
NOTE 3:  "XX Schwab index" models are low-cost portfolios.  They are comprised of index funds available free of transaction charges to my clients at Schwab.  This is what many might recommend due to low-costs and portfolio efficiency.
NOTE 4:  Nothing on this blog post represents investment advice to any individual or organization.  If the information hereon is of interest to you, please contact me at Garo.Partoyan@PotomacWealthStrategies.com for a consultation.

Market Decline Perspective From Gary P and Bill O'Grady

Good morning.  The U.S. stock market has declined significantly this week, reacting to several factors.  I believe the markets must "correct" occasionally (dropping 10% or so from recent highs), and it's been a long time since that has happened (~mid-2011).  This may be the time for it, and we could be a good deal of the way through it already.

Still, I recommend long-term investors remain invested and diversified.

Trying to time the market is risky and the results are usually not successful.  There is Nobel Prize-winning research supporting the "asset allocation" methodology I employ for most of my clients' long-term money (retirement, college savings).

As is often the case, Bill O'Grady of Confluence Investment Management offers a brief and helpful view of current conditions:  http://confluenceinvestment.com/assets/docs/2015/daily_Aug_21_2015.pdf

If you have any questions, please contact me.  Thank you, and happy Friday!

--Gary

P.S.--Are you prepared for financial emergencies?  Let's make sure we're evaluating your cash reserves, your Disability Insurance, your Life Insurance, and your estate plan.  I don't sell insurance and I don't draft legal documents, but I will coach you on how to make sure you buy the right product and have the right documents in place.  No charge--it's part of the value I want to add to the investment advice already being provided.

Garo Linck Partoyan

Potomac Wealth Strategies, LLC

(703) 746-8195 direct

Visit us online for helpful ideas and information!

Portfolio Model Performance through June 2015

US and Foreign Indexes		3 mo	1 yr	3 yr	5 yr	10 yr	2008
Stock Markets (50-40-10)		0.3%	1.1%	13.5%	12.9%	6.8%	-39.7%
S&P 500		0.3%	7.4%	17.3%	17.3%	7.9%	-37.0%
MSCI EAFE		0.6%	-4.2%	12.0%	9.5%	5.1%	-43.4%
US OE Diversified Emg Mkts		0.7%	-6.7%	3.8%	3.5%	7.3%	-54.4%
Barclays Agg Bond--US		-1.7%	1.9%	1.8%	3.4%	4.4%	5.2%
Barclays Agg Bond--Global		-1.2%	-7.1%	-0.8%	2.1%	3.5%	4.8%
Ibbotson Aggressive		0.2%	3.2%	14.2%	13.7%	6.9%	-35.5%
Aggressive		0.4%	1.3%	13.2%	12.3%	6.4%	-36.3%
95 Flex V		-1.4%	-0.7%	10.0%	10.1%		-19.1%
95 Strategic II		-0.5%	2.2%	15.1%	14.8%	9.3%	-35.9%
95 Schwab index		0.5%	2.7%	15.1%	14.3%	7.3%	-37.2%
WealthFront 9		0.5%	-0.1%	10.9%	11.0%		-38.0%
Ibbotson Moderately Aggressive		-0.1%	2.7%	11.8%	11.9%	6.6%	-28.5%
Moderately Aggressive		0.1%	0.8%	11.7%	11.3%	6.3%	-32.0%
80 Flex V		-1.2%	-0.6%	9.5%	9.7%		-16.9%
80 Strategic II		-0.7%	1.3%	12.6%	12.5%	8.6%	-30.0%
80 Schwab index		0.1%	2.6%	12.6%	12.3%	6.7%	-32.1%
Ibbotson Moderate		-0.3%	2.4%	9.4%	10.0%	6.1%	-21.2%
Moderate		-0.3%	0.0%	8.7%	9.2%	5.8%	-23.1%
60 Flex V		-0.8%	-0.3%	8.7%	9.1%		-13.1%
60 Strategic II		-0.8%	0.9%	10.2%	10.6%	7.9%	-23.9%
60 Schwab index		-0.3%	2.7%	9.9%	10.2%	6.0%	-25.6%
Goldman Sachs Income Builder		-0.7%	-0.9%	9.3%	10.6%	6.4%	-23.3%
American Funds Balanced Port		-0.5%	3.1%	10.9%	11.3%	6.8%	-28.2%
Moderately Conservative		-0.6%	-0.8%	5.8%	7.0%	5.3%	-13.3%
40 Flex V		-0.6%	0.0%	8.2%	8.9%		-13.3%
40 Strategic II		-0.7%	1.4%	9.4%	9.5%	7.5%	-17.7%
40 Schwab Index		-0.8%	2.5%	7.2%	7.9%	5.1%	-18.8%
Conservative		-1.0%	-1.6%	2.9%	4.7%	4.6%	-2.5%
20 Flex V		-0.2%	0.3%	7.2%	8.0%		-5.2%
20 Strategic II		-0.8%	0.9%	6.9%	7.3%	6.5%	-10.5%
20 Schwab index		-1.2%	2.0%	4.3%	5.4%	4.0%	-11.7%
NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.
NOTE 2:  "Flex", "Strategic", and "Index" models are crafted/run by Potomac Wealth Strategies.  They show history of better returns, lower volatility, or both--or, with the Index models, closer tracking--vs benchmarks and competitors.
NOTE 3:  "XX Schwab index" models are low-cost portfolios.  They are comprised of index funds available free of transaction charges to my clients at Schwab.  This is what many might recommend due to low-costs and portfolio efficiency.
NOTE 4:  Nothing on this blog post represents investment advice to any individual or organization.  If the information hereon is of interest to you, please contact me at Garo.Partoyan@PotomacWealthStrategies.com for a consultation.

Strategic and Flex Model Performance Through May 2015

US and Foreign Indexes		3 mo	1 yr	3 yr	5 yr	10 yr	2008
Stock Markets (50-40-10)		1.4%	5.4%	16.5%	12.6%	7.2%	-39.7%
S&P 500		0.6%	11.7%	19.5%	16.4%	8.0%	-37.0%
MSCI EAFE		2.0%	-0.6%	15.5%	9.8%	5.5%	-43.4%
US OE Diversified Emg Mkts		1.3%	-2.1%	5.9%	3.9%	7.8%	-54.4%
Barclays Agg Bond--US		-0.1%	3.0%	2.2%	3.8%	4.5%	5.2%
Barclays Agg Bond--Global		-1.7%	-6.0%	-0.5%	2.5%	3.5%	4.8%
Ibbotson Aggressive		0.9%	7.0%	16.7%	13.4%	7.2%	-35.5%
Aggressive		1.2%	5.0%	15.9%	12.2%	6.7%	-36.3%
95 Flex V		-0.4%	3.0%	12.1%	10.0%	9.0%	-19.1%
95 Strategic II		0.2%	5.5%	17.2%	14.2%	9.6%	-35.9%
95 Schwab index		1.5%	6.9%	17.6%	13.6%	7.6%	-37.2%
WealthFront 9		0.9%	4.0%	13.3%	10.7%	7.5%	-38.0%
Ibbotson Moderately Aggressive		0.7%	6.0%	13.8%	11.8%	6.8%	-28.5%
Moderately Aggressive		0.9%	4.2%	14.1%	11.3%	6.6%	-32.0%
80 Flex V		-0.2%	2.9%	11.5%	9.7%	8.9%	-16.9%
80 Strategic II		0.1%	4.2%	14.5%	12.2%	8.8%	-30.0%
80 Schwab index		1.2%	6.2%	14.8%	11.9%	7.0%	-32.1%
Ibbotson Moderate		0.5%	5.1%	11.0%	9.9%	6.3%	-21.2%
Moderate		0.4%	2.8%	10.5%	9.3%	6.1%	-23.1%
60 Flex V		0.2%	2.7%	10.6%	9.2%	8.9%	-13.1%
60 Strategic II		0.0%	3.5%	11.7%	10.5%	8.2%	-23.9%
60 Schwab index		0.8%	5.7%	11.6%	10.0%	6.2%	-25.6%
Goldman Sachs Income Builder		0.8%	2.9%	11.0%	10.5%	6.6%	-23.3%
American Funds Balanced Port		0.5%	6.0%	12.8%	11.3%	7.1%	-28.2%
Moderately Conservative		0.0%	1.3%	7.1%	7.2%	5.4%	-13.3%
40 Flex V		0.3%	2.6%	10.0%	9.0%	8.9%	-13.3%
40 Strategic II		0.0%	3.8%	10.8%	9.5%	7.7%	-17.7%
40 Schwab Index		0.5%	4.8%	8.3%	7.9%	5.3%	-18.8%
Conservative		-0.4%	-0.1%	3.6%	5.1%	4.7%	-2.5%
20 Flex V		0.8%	2.4%	8.8%	8.3%	8.6%	-5.2%
20 Strategic II		-0.2%	2.9%	8.1%	7.4%	6.7%	-10.5%
20 Schwab index		0.2%	3.7%	5.1%	5.7%	4.2%	-11.7%
NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.
NOTE 2:  "Flex", "Strategic", and "Index" models are crafted/run by Potomac Wealth Strategies.  They show history of better returns, lower volatility, or both--or, with the Index models, closer tracking--vs benchmarks and competitors.
NOTE 3:  "XX Schwab index" models are low-cost portfolios.  They are comprised of index funds available free of transaction charges to my clients at Schwab.  This is what many might recommend due to low-costs and portfolio efficiency.
NOTE 4:  Nothing on this blog post represents investment advice to any individual or organization.  If the information hereon is of interest to you, please contact me at Garo.Partoyan@PotomacWealthStrategies.com for a consultation.