Permanent Value

President’s Message

Bruce Doole
May 8th, 2014

Measure Progress Toward Your Long-Term Goals

While investment performance is important, long-term financial success depends on a lot more than what “the market” does from year to year.

Step 1: Benchmark your portfolio’s performance

First, assess the performance of your portfolio as a whole, including all your taxable and tax-deferred accounts. Compare your portfolio’s actual performance in 2013 (accounting for any deposits or withdrawals during the year) to a benchmark return of appropriate market indexes weighted to match your target asset allocation.

To get an idea of how your portfolio performed relative to the market, compare the benchmark return to your portfolio’s actual return. Chances are some areas of your portfolio did better than others, which is fine. It’s not likely every area will do well at the same time—that’s why it’s critical to be well diversified across (and within) asset classes.

This is also a good time to rebalance your asset allocation back to your long-term target if you haven’t already done so. With the tax-law changes we’ve seen over the past few years, you may be able to give yourself an additional edge by knowing how to allocate your assets between taxable and tax-advantaged accounts.

Step 2: Measure the performance of individual investments

Once you see the big picture, you’ll want to see how each of your stocks, bonds and mutual funds performed in 2013 relative to their appropriate peer group and index.

Step 3: Assess your personal net worth

Start calculating your personal net worth by totaling up all your assets. When you’re calculating your liabilities, you should examine what you currently owe, but also what you’ll owe if you sell any of your assets. Finally, complete the picture with a statement of personal cash flows—all sources of annual income minus expenses.

Remember, the amount you save is critical to achieving your long-term goals and growing your personal net worth over time. That’s why it’s smart to budget in your savings target as a non-discretionary line item on your cash flow statement.

Step 4: Make or update your savings and investment plan

Measuring progress toward your goals is difficult, if not impossible, when you don’t have a plan. Putting one in place involves assessing your current situation, identifying your goals—retirement, college funding for children and so on—then formulating a savings and investment plan to help you reach them, as well as a distribution plan to fulfill your goals. Of course, no matter how good your plan is, it won’t be of much help unless you take action.

A sound plan, properly implemented and monitored along the way, can increase your chances of achieving your goal—as you find the right balance between working toward your future goals, including a secure retirement, and enjoying the here and now.


Bruce W. Doole, President

Source: Charles Schwab

President’s Message

Bruce Doole
January 2nd, 2013

Fiscal Cliff

Over the past two weeks you have probably seen a lot of information in the news regarding the “Fiscal Cliff.”  This was term coined by the Federal Reserve Chairman, Ben Bernanke, to describe the laws affecting tax rates and government spending going into effect at the beginning of 2013. The resulting laws to avert the “Cliff” were passed as a result of the negotiation between Congress and the Administration on New Year’s Eve a week or so ago.  

The original Fiscal Cliff resulted from negotiations between Congress and the Administration in 2011 regarding raising the debt ceiling when a newly elected Congress with a House Republican majority was looking to cut spending to prevent ballooning deficits. The debt ceiling needs to be re-negotiated again this year. The compromise addressed taxes and the expiring Bush Tax Cuts, but not spending cuts. The compromise bill extended the pending spending cuts by two months to give Congress more time to negotiate and avoid sequestration, the process where Congress holds back money appropriated by the Treasury to Federal Agencies. Below we have detailed some of the key points of this deal.

A Few High-lights

  • The Fiscal Cliff bill indexes the alternative minimum tax to inflation, which is geared to help millions of middle-class taxpayers avoid being hit with a higher tax bill averaging to be roughly $3,000.
  • College tuition has a five-year extension on up to a $2,500 tax credit while earned income and child tax credits will also be carried-out for five years.
  • Families with taxable earnings under $450,000 have an extended tax rate.
  • Tax-free distributions from an IRA account to a charity fund, consisting of $100,000 or less, is being extended. Some featured provisions include that individuals may use their December 2012 IRA distributions for a charity and appropriate it as a charity distribution, and that individuals are allowed to create a tax-free charitable IRA distribution during January of 2013 and treat it as if it was prepared in 2012.


  • Race track owners, including NASCAR, will receive approximately $78 million in tax breaks.
  • Lower payroll tax rates have been extended.
  • Reduce government spending.

Investor Advice

  • Spend more focus on buy-and-hold investment strategies and on your harvesting losses.
  • Consider tax-advantaged investment strategies.
  • Pay down mortgage.
  • Consider investing in annuities and life insurance.

We hope you and your families have enjoyed your holidays and we look forward to seeing you and discussing your goals for the New Year with you.


Bruce W. Doole, President