Wealth Planning&Management, LLC
Report to Clients and To Prospects Year End, 2006 For the twelve months ended December, composite rates of return for all clients combined were as follows: Portfolios overall, including fixed income: 12.39 % Stocks alone: 14 % Standard & Poors Index of 500 Stocks: 13.62 % For the fun of it, we also ran the five-year record: Portfolios: 12.67 % Stocks: 15.46 % S&P: 12.68 % Presenting these statistics is not satisfying for two reasons. First, a standardized time period is not relevant to any individual client. The authentic investment start dates vary, and an offset of only one or two weeks from standardized start dates significantly changes real results. Second, a composite index is like an average, with some portfolios earning more than the index, others less. Some observers inappropriately compare these numbers to specific investments. For example, they compare our composite to the recent rate of return of an emerging markets mutual fund. This comparison is inappropriate and misleading because no wise investor places all his/her funds in a single investment, such as one mutual fund or one stock. Our function is to manage the entire net worths of individuals, including different asset classes that perform differently each year. In most cases, our results represent the entire improvement in the liquid net worth of our individual clients. Partner Paul Coan began his year as president of the Indianapolis Chapter of the Financial Planning Association, a role John Guy played years ago. John Guy completed preliminary work on a proposed novel, “Middleman,” which now is circulating for comment. With luck, the novel will appear in late 2008, provided, of course, a publisher is willing. WP&M will be ten years old in July. We will celebrate on September 26 with dinner and a dress rehearsal of a performance of the Indianapolis Opera Company. Jwg 12-3-2006 Wealth Planning&Management, LLC |