The Top Ten Money Excuses

In his article, “The Top Ten Money Excuses,” Dimensional Funds Vice President Jim Parker suggests that we often deceive ourselves when it comes to our own money. How can this happen, one might ask? It can happen by constructing a façade of logical-sounding arguments that can often lead to decisions that are counter to our own long-term interests. Read on to learn about those top ten arguments and excuses along with how to avoid them.

 

Portfolio Advisors' On-line Tools for Your Financial Questions

From time to time, you may have the need to calculate the cost of a loan, or you may need to calculate the impact of increasing or decreasing contributions to your retirement plan.   You may be interested in knowing if it is better to lease or buy a new vehicle.  Perhaps you are curious about whether an auto rebate is a preferable choice versus securing a lower interest rate. 

A wide variety of on-line tools can be found on our website and can be helpful with these and other common financial questions.  In addition to those mentioned, you can also find a 1040 tax calculator, an amortizing loan calculator and a Roth IRA Conversion calculator to name a few.  These useful tools can all be found on the Portfolio Advisors website at Online Tools.       

While these tools can be a useful resource, they are not intended to replace professional advice.  Your advisor is always willing to assist you with these and other services that you may require.  Please feel free to contact us at any time at 559 432 8400 or by visiting our website at www.portadvisors.com .

Sharing the Wealth: The Case for Equities

Quiz Question: What do these companies have in common—Whitbread of the United Kingdom, Molson Coors of North America, Qantas of Australia, Honda of Japan, and Adidas of Germany?

Dimensional Funds Vice President, Jim Parker, provides the answer in his column “Sharing the Wealth:  The Case for Equities”.

Special Announcement

Portfolio Advisors, Inc. is proud to announce that Tina Mistry has completed her financial planning training and has passed the CFP® Certification Exam.  She has obtained her Certified Financial Planner^TM certification, demonstrating that she has met the standards required by the CFP® Board.

As a result, Tina’s role with the firm will be expanded from that of Support Advisor to Financial Advisor.  In her new capacity, Tina will have more direct client involvement and will also assist clients directly in the financial planning process.  

Tina graduated from California State University, Fresno in May, 2007 where she received a B.S. in Business with an emphasis on finance.  She began her career with Portfolio Advisors in April, 2006, serving as an administrative assistant and then became a support advisor in January, 2009. 

We hope that you join us in congratulating Tina and wishing her much success in her new role. 

What Will You Remember From 2011?

The year 2011 could be remembered for the unsettling volatility seen in the S&P 500 index, a measure of large company US stocks. January offered a promising start with a 2% gain and by April, the S&P was up 8%. Wobbling followed during May and June, and volatility really began in mid-July with the index diving 17% in just 11 days. In August, the index rose or fell 4%+ on 5 of 6 consecutive days.

Stocks hit their bottom in October (down 13% at that point) as the WALL STREET JOURNAL ran an article citing a number of professional advisors who recently sold all their stocks and did not expect to repurchase them anytime soon. This article appeared on the second day of a powerful rally in stock prices, with the market moving into positive territory again in 19 days.

In the end, stock investors around the world saw disappointing 2011 returns with 37 of 45 tracked markets ending in negative territory. The US was the only major market with a positive return, with the S&P 500 ending 2011 up 2.1%.

With 2011 fresh in our minds, it’s easy to remember the volatility and below average investment returns. A thought is “are these the right things to remember for your investment management over the years?” After all, volatility and below average return years do happen and will, no doubt, happen again.

I suggest the right thing to remember now is that, while it’s emotionally difficult to ignore market volatility, doing so by remaining invested per your diversified investment strategy will serve you very well. Some of the coming years will be difficult (as was 2011), others good or great; however, over those years, you can expect better investment returns than those who give up during volatile times.


William M. Thompson, CFP®

New 1099 Schwab Reports

Happy New Year! We hope you and your family had a wonderful holiday season.

With the New Year comes along new reporting from Schwab for taxable accounts. The purpose of this posting is to address some new IRS tax reporting requirements and to explain how the changes might affect you.

The goal of the Emergency Economic Stabilization Act of 2008 is to make sure that investors accurately report gains and losses of securities in their annual tax filings. This year will be the first time that custodians like Schwab will report cost basis information to the IRS, as well as to you, the taxpayer.

For tax year 2011, Schwab will report cost basis for equities acquired on or after January 1, 2011. Next year Schwab will report cost basis on mutual funds, ETFs, and dividend reinvestment plan (DRIP) shares acquired on or after January 1, 2012.
To help facilitate the reporting process and make your tax preparation easier, Schwab has redesigned its Form 1099 Composite to include cost basis and gain/loss information. Now the Year-End Summary, Form 1099-B, and other 1099 forms you might receive will be consolidated into one report, which will indicate cost basis for both covered and uncovered securities. Please note that cost basis will be reported to the IRS only for covered securities, but Schwab is providing cost basis on uncovered securities as well, as a courtesy, because you are still required to report this information to the IRS.

The Form 1099 Composite has a new layout to allow for additional data fields. The date in the Year-End Summary (formerly Account Summary) is now grouped by Form 1040 schedules. The summary includes a table of contents to help you locate information you need.

New Information on Form 1099-B
• Cost basis
• Date the security was acquired
• Holding periods –assets are grouped by short-term and long-term to make it
easier to identify holding periods
• Wash sale information
• An indication if the cost basis provided is not covered by the legislation

New Information in Year-End Summary
• Realized gain/loss calculations
• Summary of management fees

With all of your tax information sent in one report, you’ll no longer receive a separate Year-End Gain/Loss Report from Schwab.

These reports will be arriving from Schwab starting in early February and will be mailed out in phases.

If you have any questions, please feel free to contact our office.