After a 10-hour plane trip in one of the new first-class jets, you might forget about all the activity that occurs to get you to your destination on time and pleasantly refreshed. In fact, that’s the intent of the airlines for their first-class passengers, who enjoy sleeper beds, hosts at the ready, refreshments in the lounge, movies, music, and food. You can settle in with a meal and a drink, stretch out in bed, fall asleep, and wake up at your destination. There’s not much you really need to do, so it might seem like a very passive experience.

The reality is that there’s an enormous amount of activity taking place to make it seem like a smooth ride. Pilots with years of experience continually train to maintain their skills in order to get the plane flying in the right direction. Thousands of components, including fuel, hydraulic, navigation, and electrical systems, are continually working, monitored, and adjusted. Networked computer systems monitor and implement efficient strategies from routing to pricing. I think you get the picture. You could never deliver this experience on your own; it’s just too complicated. But it seems so easy lying there with a glass of wine…

You might feel a similar ease as the client of a quality wealth manager and investment advisor, especially one who uses academic-based and time-tested “passive” investment strategies. But, are these strategies really so “passive”?

In my opinion, the greatest misnomer with respect to investing is the term “passive.” This is the oft-described nomenclature of an investment strategy that I (and some of the largest investment firms in the world) utilize for clients, and it implies that nothing much is done. Like the experience of the first-class passenger, nothing could be further from the truth. Unfortunately, a term originally meant to describe a buy and hold strategy for individual stocks has come to represent the science of investing that in part affirms that certain activities haven’t consistently added value in terms of investment performance.

Instead of “passive,” I’ll throw out a better term for our investment strategies: “enhanced indexing.” Let’s get a glimpse as to why that’s preferable with respect to investment tax efficiency.

Your taxes have increased. Allow me the luxury of assuming that this is a true statement. Taxes are usually an important issue for investors because ultimately, the goal of investing is to maintain or grow your wealth above inflation after tax.

As a wealth manager, there are essentially three levels I utilize with my clients to engineer tax strategies as shown in the diagram below. In this discussion, I’ll focus on the fund level to touch on some of the activities that are ongoing in our enhanced indexing investment strategies.

Our enhanced index strategies are extremely active at the fund level on a daily basis. Let’s look first at some of the activities that may take place at the fund/investment level with respect to tax-efficiency:

Tax-Lot Accounting

• Sell highest-cost lots first
• Avoid short-term gains

Capital Gains

• Avoid realizing gains
• Harvest and inventory short- and long-term losses

Dividends

• Structure portfolio to manage dividends

Transaction Costs

• Patient, price-conscious trading to reduce transaction costs
• Quantitative model to evaluate trade-off between transaction costs and tax-loss harvesting

Hopefully, you get a sense that there’s a lot going on at the fund level. Our enhanced indexed strategies tend to be naturally tax-efficient compared to “active” funds. Many “active” funds are not tax efficient at all. Although the performance might seem good before-tax, their after-tax returns may suffer, leaving you with a higher tax bill and less wealth.

Glenn S. Freed, Ph.D., former vice president of tax-managed investment services at Dimensional Fund Advisors, is quoted in an interview by the Association for Investment Management and Research: “Tax-efficient investing dictates low-portfolio-turnover strategies implemented with broad market-like portfolios combining stocks in value-weighted proportions.”

As Dr. Glenn Freed indicated, turnover is an important measure of a mutual fund that tells us what portion of the securities (stocks, bonds, or both) in its portfolio are bought and sold during the course of a year. It’s also an indicator of fund tax-efficiency.

Turnover is measured as a percentage from 0% to 100% and higher. The higher the number, the more trading occurs within the fund over a given year, which may lead to a higher tax burden at the fund level. Why can this be problematic? According to a study by Joel Dickson and John Shoven, “Taxes and Mutual Funds: An Investor Perspective,” in James M. Poterba’s (ed.) Tax Policy and the Economy, as much as a quarter of a mutual fund investor’s annual returns are consumed by the taxes paid on dividend and capital gains distributions.

You’ll often find that after-tax returns of funds that have high turnover rates are much less impressive than those that accomplish the same or slightly lower annual returns with low turnover rates.

How do your investments compare? One study shows that the average turnover rate for large cap actively managed equity mutual funds is 88%! (http://www.indexuniverse.com/publications/journalofindexes/joi-articles/1158.html) That’s not a very comforting statistic if you’re concerned about taxes. In contrast, the average turnover rate for all the equity funds typically found in most of my globally diversified client portfolios was only 9.54% through December 31, 2012.

The Bottom Line: Our enhanced index strategies are very active on a daily basis, finding efficiencies that often help improve after-tax return relative to other “active” investment strategies.

At the portfolio level, in addition to the activities at the fund level, there are enhanced tax-efficient strategies I utilize such as tax-loss harvesting and differentiating investment strategies between a Roth IRA and a taxable account, for example.

Finally, at the estate planning level, there are many strategies for tax planning, and often the type of investments held in various trusts can make a difference. I incorporate an expert team into my wealth management process to ensure the best ideas are carefully reviewed and implemented.

2013 Quarterly Review

Index Proxy & Trovena Model Portfolio Returns

* & **: Performance for periods greater than one year are annualized. Selection of funds, indices and time periods presented chosen by client’s advisor. Indices are not available for direct investment and performance does not reflect expenses of an actual portfolio. Past performance is not a guarantee of future results. * 100% globally diversified stock portfolio net of expenses and fees ** 60% stock 40% bond portfolio net of expenses and fees

With the exception of emerging markets, this was a stellar quarter to have been invested in equities. Small cap stocks led the quarter with a 12.31% return, while returning 16.36% for the last year. I’ve said before that many investors have inadequate exposure to small companies in their portfolios and over time, small company stocks have performed better than large company stocks. This is an asset class from which my clients have definitely benefited.

It’s also amazing to see how well international real estate continues to do, with a 6.38% return for the quarter and 26.87% for the year. This was an asset class I touched on in my last quarterly newsletter that’s often not found in investor portfolios. Again, my clients have definitely benefited from this asset class in the last few years.

In the last two lines of the table, I’ve included Trovena 100% equity and Trovena 60% equity 40% bond portfolio performance as a benchmark. These portfolios have performed well in all indicated periods and might be a starting point to compare how your investments are doing.

Your wealth will be directly affected by the advice you’re given. The science of investing tells us it’s not easy to time both exit and entry points into the market, and timing only one of those points correctly is a fail. Our investment strategies take this into account and our clients have not missed the recent wealth creating cycle. On the contrary, they have benefited significantly. But, if you’re still convinced there’s a seer with a crystal ball who will help you get better returns, you’re welcome to walk into the casino with the other gamblers who get advice from these folks. Here are three examples of prominent advisors who rolled the dice with their clients recently as related by Jim Parker, vice president at Dimensional Fund Advisors:

1. In early February, strategists at a global investment bank were becoming alarmed at political events in Europe, the sequestration “crisis” in the U.S. Congress, and what they saw as an unseemly rush into equities. The word went out to their clients to put a tactical alert on stock investing for the next one to six months.

A month later, however, the bank strategists decided to reverse course. The problems in Europe, they now discerned, were not systemic, and the likelihood was that continuing easy monetary policy would support investor sentiment globally.

That’s a shame for the clients, because at time of writing, the Global MSCI was up by 8.6% in U.S. dollar terms this calendar year. The U.S. S&P 500 was up 10.7%, the FTSE-100 9.9%, and Australia’s S&P/ASX 300 10.7% in local currency terms.
“Credit Suisse Reverses Cautious Stand on Equities,” Reuters, March 12, 2013.

2. In December 2011, the veteran U.S. newsletter writer Richard Russell, author of the Dow Theory Letters, told his clients in unequivocal terms to “get out of stocks.”

“I believe we’re going to see a brutal stock market that will shock the Fed and the bulls and the public—and all who insist on remaining in this bear market,” he said. Richard Russell: Get Out of Stocks,” Business Insider, December 15, 2011

But 15 months later, Russell has changed his tune, telling his clients to buy stocks after a rally that has taken the broad U.S. market to more than double the levels prevailing at its bottom in March 2009.

3. In Australia, one of the most recognized market gurus, writer Alan Kohler, issued an ominous warning to his subscribers in a regular note in December 2011: “The conditions are in place for a panic sell-off,” he said. “It is not certain that it will happen…but the risk is now such that you must take action. I will be significantly reducing my already reduced exposure to equities, possibly to zero.” Alan Kohler, “The Eureka Report,” December 19, 2011

Explaining his mistake later, Kohler said he had not foreseen the extent to which central banks would continue to pump cheap money into the financial system.

That’s all very well, but the fact is anyone who followed his advice and went to term deposits missed a rally in the Australian share market of more than 20%.

The article ends with a quote that’s worth repeating: “Running inside a moving bus won’t get you to your destination any quicker.”

I ask those of you who are “bus runners” to consider relaxing in first class. My clients have, and we are working together to have them arrive at their destinations on time and in style.

If I had to use two words to describe myself, they’d be “compassionate warrior.” In life and as a trusted advisor, for those in your care you must have both compassion and a desire to fight for those things you believe in. I’m sure that’s part of the reason I’m drawn to Samurai warrior movies, much as I was drawn to “Band of Brothers.”

The definition of Samurai is, “those who serve in close attendance to nobility” (http://en.wikipedia.org/wiki/Samurai). That’s a close description of my perspective as it relates to my relationship with clients.

Furthermore, the tenets for the Way of the Warrior (Bushido) are fine principles to guide a trusted advisor. They are:

1. Rectitude (morally correct behavior or thinking)
2. Courage
3. Benevolence
4. Respect
5. Honesty
6. Honor
7. Loyalty
8. Filial Piety (respect owed to parents and ancestors)
9. Wisdom
10. Care for the Aged

A good trusted advisor might have a difficult time doing right for clients without these virtues. And, they must be more than just thoughts; they must be delivered via an intelligent investment and wealth management process that adds value…and some advisors do this better than others.

Now let’s see how this all ties in with investment results, and I’ll continue the analogy. My firm and I have been battling on our clients’ behalf for many years. We may have blood on our sword, but our clients do not. What do I mean by this? As you may know, when I report performance numbers, I normally list negative returns in red.

As you can see in our comprehensive investment results through December 2012 below, there are no red numbers!

See Standardized Performance Data & Disclosures
Performance for periods greater than one year are annualized unless marked with an asterisk (*). Selection of funds, indices and time periods presented chosen by client’s advisor. Indices are not available for direct investment and performance does not reflect expenses of an actual portfolio. Past performance is not a guarantee of future results.

(Reading The Chart: Each row represents a Trovena standardized portfolio. The number in each row in the first column represents the percentage of stocks in the portfolio. For example, “TI70” represents a portfolio consisting of 70% stocks and 30% bonds, globally diversified via Trovena’s unique investment allocation strategy.)

The TI 100 portfolio returned a 10.80% annualized return since the indicated inception date. If you don’t remember the math behind compound returns, let me sharpen the pencil for you. If you had invested $1 million in the TI 100 portfolio on inception date, your investment would have grown to $9,633,700 on December 31 2012! That is the power of intelligent investing and compound returns. Although there are countless ways to gamble with your money, in my professional opinion there is no better way to invest.

These are results to be very proud of. These results are net of Trovena’s advisory fees and fund expenses. More importantly, they should give you an idea of the strength of long-term investment results. Most certainly, those trying to invest on their own might find a significant difference in results and might also be staring at a lot of red.

This is not to say that there won’t be some scratches and bruises from time to time. That’s a given. That’s life. My goal is to protect my clients from unrecoverable fatal blows to their financial health. Referencing the “Since Inception” performance numbers in the chart above, historically, we’ve not only accomplished this goal, but have significantly strengthened clients’ financial positions.

There is a large body of academic literature that provides the basis for our investment advice. It’s sometimes counterintuitive, often flies against emotion, and recognizes that “advisors” often aren’t able to predict the future as well as they thought.

One of the foundations of our investment success is to provide broad yet precise exposure to specific global asset classes that have historically provided return commensurate with their risk.

One such asset class found in many of our client portfolios is international real estate. There are many difficulties in buying international real estate properties on your own, such as fraud, illiquidity, maintenance and management costs, legal pitfalls, government takeover, and lack of diversification, to name a few. Buying property in a foreign country might be a risky proposition.

We provide specific international real estate allocation to our client portfolios while lowering the probability of encountering the pitfalls listed above. Recent performance has been exceptional, as noted below, providing a boost to to portfolios holding this asset class.

(Through December 31 2012. Source: DFA Advisor Website)

We provide our clients with exposure to this asset class via Dimensional Fund Advisors’ (Dimensional’s) international REIT fund, DFITX. This fund invests in “a broad range of securities of non-US companies principally engaged in the real estate industry with a focus on non-US real estate investment trusts (REITs) and companies that Dimensional considers REIT-like entities. It is well diversified with respect to both geography and property type. The Portfolio invests in securities associated with a diverse group of developed and emerging market countries that Dimensional has designated as approved markets.” (Source: Dimensional Fund Advisors Prospectus)

Some interesting facts about the fund taken directly from Dimensional’s advisor website:

> Expense ratio is only 0.42% and has no load.
> Turnover (a reflection of tax efficiency) is only 7% (as of 10/30/11).
> It’s invested in 209 securities in approved markets around the world (as of 10/31/12).

Low-cost. Tax-efficient. Global Diversification. These are three qualities I look for in an investment portfolio. For me, the most important benefit is that you can sell the investment any day the market’s open and have the cash in your bank account in a couple days. Try doing that with real estate owned outright, especially in a foreign country!

In summary, our investment strategies enhance our wealth management process. It really is the Samurai creed of the compassionate warrior that best serves my clients. I realize you sometimes need a scalpel instead of a sword, and you won’t have much luck bringing a sword to a gunfight. Fortunately, I have many tools at my disposal to help keep my clients out of the red over the long run.

I’m looking forward to another great year. I hope you are, too.

Sincerely

Morgan H. Smith Jr. IMBA CFP©
Trovena Wealth Management
3655 Nobel Drive • Suite 340
La Jolla • California 92122
800.620.4232 ext. 708
Blog: http://www.trovena.com/blog/category/by-morgan-smith-cfp/
www.trovena.com

Judging by the headlines in the financial press, investors spent much of the past year anxiously awaiting one calamity after another that failed to occur. The plunge off the so-called fiscal cliff was averted. The euro zone did not fall apart. China’s economy and stock market did not crash. The bond market did not implode. The re-election of President Barack Obama did not derail the US market. The “flash glitch” in early August did not lead to further trading disruptions. Doomsday did not arrive on December 21, as some interpreters of the Mayan calendar suggested it would.

Instead, the belief that owning a share of the world’s businesses is a sensible idea appears to be alive and well, despite suggestions from some observers that the “cult of equity” is dead. For the year, total return was 16.42% for the MSCI World Index in local currency, and 16.00% for the S&P 500 Index. Among forty-five global stock markets tracked by MSCI, only three posted negative results in local currency (Chile, Israel, and Morocco), and twelve markets had total returns in excess of 25%, with Turkey leading the pack at 55.8%. Although much of the financial news over the past year highlighted Europe’s fragile financial health, most of the region’s equity markets outperformed the US, including Austria, Belgium, Denmark, France, Germany, the Netherlands, Sweden, and Switzerland. For US dollar-based investors, results were further enhanced by a modest decline in the US dollar relative to the euro, the Danish krone, and the Swiss franc.

As is so often the case, earning the rewards offered by the world’s capital markets may have required a combination of discipline and detachment that eluded many investors.

2012 Index and Country Performance

Total return (gross dividends) for 12-month period ending December 31, 2012.

Additionally, this issue discusses special provisions that have been established by the IRS and the Treasury for victims of Hurricane Sandy.

To read this month’s Trust Connection in full, please click here.

It also breaks down four techniques that can be done if a person is interested in reducing estate tax by the end of the year. These four techniques include Spousal Lifetime Access Trust, Roth IRA Conversion, Qualified Personal Residence Trust, and Grantor Retained Annuity Trusts.

In order to read the full edition, please follow this link: Trust Connection.

The conversation drifted enjoyably from finance, investing and politics to religion, health, and relationships, complemented by spicy green curry and other local delicacies. Ms. Mon manages her own portfolio and was explaining her state of mind during the recent economic crisis, calling it “monkey mind.” Her mind was agitated and jumping around all over the place with no clear direction, so she closed her eyes and hoped for the best. Fortunately for her, when she opened her eyes and account statements, her investments were fine.

I thought the term monkey mind is a very good description of how many of us feel when we’re unbalanced. Many investors have monkey mind; when volatility in the market increases, they tend to start swinging from the trees with no clear direction and often end up falling hard on the ground.

With the ubiquity of the Internet and cable news, many investors have become information junkies with attention-deficit tendencies. In a recent article aimed at financial advisors, “Why Communication is the ‘Secret Sauce,’ ” MFS referenced an investor sentiment survey of its “Gen X” and “Gen Y” clients:

• 63% of Gen Y investors and 44% of Gen Xers have increased the amount of information they ask for from their financial adviser over the last 12 months. That compares with just 32% of Boomers who’ve increased their information requests.
• 51% of Gen Y investors said they expect their adviser to call, email or visit them right away if the Dow Industrials drop significantly, by say 5%. By contrast, 24% of Gen X investors and 7% of Baby Boomers expect that kind of immediate communication.
• Across all age groups, about 70% of investors expect their adviser to contact them regularly during times of market volatility.

I suppose these younger investors think that the more information they have, the better decisions they can make. Unfortunately, it has to be the right information.

Financial advisors can also have monkey mind, and based on the survey results, those stricken with it may be tempted to rush into a communication program of information overload for their clients; many already do in an attempt to justify their value. Is that really wise? I think it just facilitates continued bad investor behavior.

The key for wise financial advisors is to communicate information of value that holds true through market cycles and attempt to refocus clients on enjoying the people, places, and activities that bring them happiness and health. Facilitating an addiction to information that adds no real value can hurt long-term investors’ wealth and their enjoyment of life.

Q3 2012 Index Proxy Returns

The third quarter for 2012 was extremely solid for stocks, with a continuation of what can only be described as a stellar one-year period of wealth creation for investors. Emerging markets came back to life in a big way, returning 11.10% for the leading asset class (iShares MSCI Emerging Markets), with international real estate following close behind at 8.57%. Interestingly, many non-Trovena client portfolios I see are minimally or not at all allocated to these two asset classes. I think this speaks well to the idea of creating intelligent globally diversified portfolios with great ideas built into them at the outset, so investors reap the rewards over the long term.

The Russell 2000 and S&P 500 (SPX) returns for one year rose 30.38% and 30.20%, respectively. (Pause for effect.) These numbers are extraordinary (outliers from a statistical standpoint) and we may never see similar one-year increases again in our lifetime. This supports our ongoing reliance on the science of investing, which says it’s extremely difficult to predict these positive return periods. When investors try to time the market and end up missing these periods, their long-term wealth may be significantly reduced.

Below, I’ve listed performance for a globally diversified 60% stock 40% bond portfolio similar to our invested portfolios. This gives some perspective on performance after putting all the pieces together. As a note, remember if you’d begun an investment program in March or April of this year, there was a significant decline shortly thereafter, so many of the returns for the short period through Q3 reflect “catch-up.”

For longer time frames and disclosures, please click this link: http://www.trovenainvestments.com/portfolios/precision-portfolios/#p5

Looking Forward

I’ve recently seen predictions of a stock market collapse (“Odds of Global Recession Are 100%”; Marc Faber, Aug. 23, 2012, http://www.cnbc.com/id/48768746/Odds_of_Global_Recession_Are_100_Marc_Faber) and a bond market collapse (“Will Bonds Be Burnt To A Crisp?”; David Schawel, Oct. 16, 2012). It would be highly unlikely that both are right, but we’re not in the business of advocating decision-making based on predictions.

What we do advocate is turning to science and academics for insight. A recent research paper published by Dr. James L. Davis, Vice President Research for Dimensional Fund Advisors, “Stocks, Bonds, and Volatility Jumps,” provides some perspective.

His research, based on 84 years of market data, essentially concludes that:

• Surges in equity market volatility tend to be accompanied by declining stock prices.

• In contrast, fixed income returns have been positive, on average, during the month of a large increase in volatility—another confirmation of the diversification benefits of fixed income securities.

Although derived from complex statistical analysis, these are fundamentally simple investment policy fundamentals that Trovena understands and implements for our clients.

In closing, it’s this kind of in-depth academic research that leads us to solid  fundamentals as we continue to guide our clients and their families’ wealth and well- being through economic cycles–supporting peace of mind as opposed to monkey mind. It’s even in our firm’s tagline and is our commitment to our clients: “Trovena: Where Prosperity Finds Peace of Mind.”

If you still have monkey mind, it might be time to give in to evolution and quit swinging from the trees. My clients have, their results have been robust, and I’m confident they’ll tell you they’re better off for it.

Click here to read the full report.

For the twelve-month period ending September 30, 2012, 40 markets had positive returns, with six countries—including the US—delivering a total return in excess of 30%, according to MSCI.

Investors have been confronted with a steady drumbeat of discouraging news over the past year—a feeble economic recovery here and abroad, staggering budget deficits with no solution in sight, the prospect of a Eurozone breakup, an acrimonious presidential election campaign, banking scandals, and a punishing drought across the US. Considering all the uncertainty, it’s not difficult to explain why mutual fund investors have generally favored fixed income strategies rather than equities over this past twelve-month period.

Many investors are easily persuaded that successful investing requires constant attention to current events and frequent adjustment of their equity exposure. The news excerpts below represent just a small sample of the issues investors might have dwelled on. We suspect that many investors not only failed to achieve their respective market rate of return over the past twelve months but would be surprised to learn how well stock prices have done in many markets over that period.

• “Unless politicians act more boldly, the world economy will keep heading toward a black hole… At a time of enormous problems, the politicians seem Lilliputian. That’s the real reason to be afraid.”

“The World Economy: Be Afraid,” Economist, October 1, 2011.

• “Investors also are nervous because October historically has been one of the more volatile months for stocks.”

E.S. Browning. “Market Nears Bear Territory,” Wall Street Journal, October 4, 2011.

• “The Dow Jones Industrial Average turned in its worst Thanksgiving-week performance since markets began to observe the holiday in 1942.”

Steven Russolillo. “Investors Go Shopping—Just Not for Stocks,” Wall Street Journal, November 26, 2011.

• “Over the past three months, investor uncertainty about the soundness of bank balance sheets, manifested in the daily volatility of stock prices, is back up to levels seen historically only in advance of two great crises… This dynamic has played out twice before in the past 85 years—in the Great Depression and the panic of 2008-09—with devastating consequences for the broader economy.”

Andrew Atkeson and William E. Simon, Jr. “The Rising Fear in Bank Stock Prices,” Wall Street Journal, November 28, 2011.

• “The managing director of the International Monetary Fund has raised fears that the world faces the risk of economic retraction, rising protectionism, isolation, and… what happened in the ’30s (Depression).”

Hugh Carnegy and George Parker. “IMF Chief Warns over 1930s-Style Threats,” Financial Times, December 16, 2011.

• “It is hard to avoid the conclusion that stock prices are levitating at over-inflated values, thanks to the herd-like behavior and collective fear of investment institutions.”

Financial Times, December 30, 2011.

• “An escalation of the crisis would spare no one. Developed and developing country growth rates could fall by as much or more than in 2008-09.”

Quotation attributed to Andrew Burns, head of macroeconomics, World Bank. Chris Giles. “World Bank Warns on the Risk of Global Economic Meltdown,” Financial Times, January 18, 2012.

• “This may be the unhappiest bull market ever. We love to hate it, but that may be just egging it on.”

Tom Petruno. “The Unhappiest Bull Market Ever,” Los Angeles Times, February 12, 2012.

• “US companies are more uncertain about the future than at any point since the financial crisis, with just one in five of the biggest corporations making any predictions as they published quarterly results.”

Ajay Makan. “Doubt Haunts US Company Results,” Financial Times, February 21, 2012.

• “For nearly a decade, it turns out, the most accurate forecasts have come from the fringe. So it’s upsetting to learn that many of these Cassandras now believe, for different reasons, that we are on the brink of another catastrophe that may be far worse.”

Adam Davidson. “Sorry to Break It to You,” New York Times, February 5, 2012.

• “It remains clear that this almost uninterrupted equity market lacks substance and conviction. The rally’s volume has been very weak, and institutional operators have been absent from the market. There has been very little participation from the retail investor, based on data from Lipper, a provider of information and ratings on mutual funds. Corporate insiders have been big sellers of stock, exceeding $6 billion last month (with the ratio of selling to buying hitting the astronomical 13-to-1 mark).”

David Rosenberg, chief economist and strategist, Gluskin Sheff. “The World is Not Fixed and This Equity Rally Lacks Conviction,” Financial Times, March 15, 2012.

• “No one sees a growth rate fast enough for the American economy to return to full employment any time soon.”

Joseph Stiglitz, Nobel laureate 2001. “The American Labour Market Remains a Shambles,” Financial Times, March 13, 2012.

• “We think that most of the US market is just not worth investing in… And it’s our belief that profitability will have to come down and the market isn’t priced for it.”

Quotation attributed to Ben Inker, head of asset-allocation group, Grantham, Mayo, Van Otterloo. Jonathan Cheng. “Two Pros Weigh In on US Stocks,” Wall Street Journal, April 2, 2012.

• “It’s simple arithmetic and it leads to a simple yet alarming conclusion that unless current law is amended before year-end, the stock market has to fall by at least 30%.”

Donald J. Luskin. “The 2013 Fiscal Cliff Could Crush Stocks,” Wall Street Journal, May 4, 2012.

• “Stocks have not been so far out of favor for half a century. Many declare the ‘cult of the equity’ dead.”

John Authers and Kate Burgess. “Out of Stock,” Financial Times, May 24, 2012.

• “The US economy is continuing to lose momentum just as global events that could derail the recovery gather steam… The downshift couldn’t come at a worse time. Experts warn that a breakup of the euro zone could spark the worst credit freeze since the collapse of Lehman Brothers in 2008.”

Ben Casselmann and Phil Izzo. “Recovery Slows as Global Risks Rise,” Wall Street Journal, June 16, 2012.

• “‘Dr. Doom’, Nouriel Roubini, says the ‘perfect storm’ scenario he forecast for the global economy earlier this year is unfolding right now as growth slows in the US, Europe, as well as China.”

Ansuya Harjani. “Roubini: My ‘Perfect Storm’ Is Unfolding Now,” CNBC, July 9, 2012.

• “Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Co., says stock investors should rethink the age-old investing mantra of buying and holding stocks for the long run… Stocks, he says, operate much like a Ponzi scheme, showing returns that have no real bearing on reality.”

Steven Russolillo and Kirsten Grind. “Bill Gross: Stocks Are Dead and Operate Like a Ponzi Scheme,” Wall Street Journal, August 1, 2012.

Contributed by Guest Blogger:
Weston Wellington, Down to the Wire
Vice President

The report breaks down the trust options that a person has into the following: Individual trustee, a bank’s trust department, and an Independent Trust Company.

The report further goes into detail to discuss the advantages of each and what options you have if you choose a trustee. Trustee options include: Agent for trustee, co-trustee, forever trustee, and interim trustee.

In order to read the full report, follow this link, Trust Connection.