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Carolyn McClanahan, M.D., CFP® 

Tim Utecht, CFA

 

Carrie Jones, CFP® 

   

Krissy Di Candia 

Article1
Remind Me Once Again...Bonds Aren't So Bad

With paltry yields getting even paltrier (yes, it's a word), it's reasonable to ask whether bonds are still worth owning. That question was addressed in "The Intelligent Investor" column of the Wall Street Journal just last month.

The article titled " Bonds Aren't as Awful As Some May Believe" by Jason Zweig covered common misperceptions when it comes to bonds.
 
First, context is everything when it comes to investments. Zweig points out that returns should always be measured relative to inflation, which is something we have focused on in recent discussions. Keeping ahead of rising prices is really the ultimate goal of investing. The "real" (after inflation) yield on bonds is actually better than it has been at other times in history due to the fact that inflation remains very low. Investors often long for the higher yields of the past despite the fact they often ended up being negative after inflation. It's easy to focus on nominal "top-line" returns without considering the circumstances, but real returns are what truly matter.

Second, the fear of rising interest rates should not preclude anyone from owning bonds. It's true that bond prices decline when interest rates go up, but that's only part of the story. Rising rates also mean that interest income can be reinvested at higher yields. Falling bond prices in the short-term are paired with higher yields in the long-term, and the benefit of attractive reinvestment grows over time.

Zweig's final point regarding bond ownership is arguably the most important. High quality bonds are still the safest way to counteract the risk of holding stocks. It is your safety net. It's a point we've made a number of times over the years, but it's a good reminder nonetheless. Bonds still make sense, even at today's skimpy yields.

Article2
Happenings This Fall

A great deal is happening at Life Planning Partners, Inc. this fall and we want to catch you up.
  • Put it on the calendar - September 30th is our Shred Party and Krissy will be sending out notices soon. The week before the party, you are welcome to drop off your documents to be shredded at our office. Of course, we would love to have you the day of the party - we'll have snacks and appetizers while the shred truck turns those old documents into future toilet paper.
  • Welcome Vickie Taylor to the Life Planning Partners, Inc. family! Vicky is our new assistant to Krissy and will help with client services and many of the other duties Krissy has on her plate.
  • We are still working on our big software change for portfolio reporting. You'll see the results the end of next quarter. During the remainder of the year, Krissy will reach out to those of you with 401k assets so these can be imported into the software to provide a complete picture of your invested assets. We are excited this is finally happening.
  • For those of you who were with us in 2009, you may remember that Tim worked as a consultant with LPP for three months before he committed to move here from Wisconsin. We are so grateful we made the cut! We have the opportunity to try out another potential great hire. Harlan Freeman is an accountant and financial planner, and is considering moving from Chicago to Jacksonville to join LPP and to be closer to his mother in Florida. He will be helping Carolyn with tax planning starting September 5th for six weeks.  If all works out, he'll come back and cross train with Carolyn, Tim, and Carrie to make our bench even deeper. 
As always, let us know your questions, comments, and anything we can do to serve you better.

The LPP Team