WEALTH PLANNING&MANAGEMENT, LLC
REPORT TO CLIENTS AND TO PROSPECTS
FEBRUARY, 1998

The composite rate of return of 18 accounts managed by WP&M was 4.34 percent for the last quarter of 1997.* During that period, the S&P earned 2.44 percent. These figures are simple rates of return, not annualized. (Clients and prospects are discouraged from using data from one quarter to judge an investment organization. In general, past performance is not a reliable indicator of future performance, or of risk assumed.)

The WP&M team continues to grow. Susan Donohue prepares performance presentations. Susan was a sales assistant at Dean Witter Reynolds, Inc. Lois Sherman edits Thoughtful Wealth Planning&Management. She is publications director of the Indiana University Center on Philanthropy. Kathleen Nering designed the web page, WPAM.COM. Kathleen is from Indianapolis and has worked for Microsoft in Seattle.

The search for a full-time, professional associate continues. The associate should be an experienced professional investor who believes that clients benefit by acquiring quality securities having positive three- to five-year outlooks.

Operating from a home office has worked well. Advantages include a quiet environment conducive to independent thought. Absence of a lease obligation removes one source of upward pressure on fees. Internet connections provide continuous information. Sources are Hoover’s, Quote.com, Standard & Poor’s, Bloomberg On Line, The Federal Reserve Economic Data Base, the Ohio State University Virtual Finance Library, and EDGAR, the SEC’s library of company filings. Company web sites have been useful. Additional information is provided by brokerage firms.

Disadvantages of a home office are lack of continuous interaction with other investment professionals, and occasional intrusions by domestic constituents.

Modern communication technologies might be important to growth of WP&M. For example, investment professionals could work together though each is situated in a different office. Portfolio data could be gathered in one office and electronically transmitted to the other offices. Call forwarding could assure clients of immediate responses, and telephone conferencing could permit associates to share ideas. In this way, each professional could serve while maintaining his/her preferred life style.

In November, John Guy spoke to a national meeting sponsored by The Common Fund and The Association of Governing Boards of Universities and Colleges. The subject was how to improve efficiency and effectiveness of investment committees. John also submitted articles for publication in national periodicals. Subjects include "What Do Trustees Think of Investment Consultants," and "Confidentiality and Investment Results." Articles from Thoughtful Wealth Planning& Management were sent for republication. Examples are the October article about individual securities compared to investment packages, and the February article about costs of anger.

A challenge has been learning how to administer WP&M. Systems are in place and working well. Portfolio record keeping is accomplished on "Centerpiece" that is owned and serviced by Performance Technologies, a division of Schwab. "Centerpiece" tracks securities and cash flows, provides performance presentations, security cross references, and sophisticated data about risk (beta and standard deviation). WP&M income and expense accounts are kept on Lotus 123. Letters and articles are on Lotus Word Pro. Backup storage is on Iomega zip drive disks; one backup disk is stored away from the office.

Money management organizations invest large amounts in brochures and presentation technologies. WP&M uses basic materials, such as this report and a plain brochure containing Form ADV, Part II. Competition will require improvement in the appearance of these materials.

Private professional money management is effective and inexpensive. A private manager maintains personal relationships to a depth impossible for a mutual fund manager and difficult for private managers in distant cities. Each portfolio is individually designed according to personal objectives. Conservative investors want more bonds, a request easily accommodated by a private manager. In addition, sell decisions are based both on knowledge of securities and of the investor’s income tax and estate planning circumstances. For these reasons, WP&M believes that private, local, confidential money management will be an important business.

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