Financial Planning 2014 Conference Recap

Michelle recaps the highlights of her experience at the FPA Conference in Seattle this September. [Read more…]

Dave writes for the Washington CPA Magazine Summer 2014

Dave writes about the new Statement on Standards in Personal Financial Planning Services that went into effect on Jul 1, 2014.

See the Article Here: WSCPA Article 2014

Dave’s Front Page Article in The News Tribune

Dave’s article was on the front page of The News Tribune this morning (June 3, 2013).  It was an article that spoke on the importance of having conversations with your signifant other about your finances.  Click on the link to read more!!

When Warren Buffett Talks…

I am old enough to remember the E. F. Hutton ads that said, “When E. F. Hutton talks, people listen.”  (It’s interesting to note that E. F. Hutton had a few scandals and, in 1988, they merged with Lehman – who is also now gone).   The modern day ad would read, “When Warren Buffett talks, people listen.”

Earlier this month, Mr. Warren made the headlines by saying that bonds are a “terrible” investment at the moment and that owners of long-term bonds may see big losses when interest rates eventually rise.

So this seems like a good time to talk about bonds.

First – a few definitions.  A bond is an investment where an investor loans money to an entity (a corporation or a government) for a defined period of time at a fixed interest rate.  Bonds are commonly referred to as fixed income and, generally, bonds that have a duration of ten years or more are considered long term.  The risk with a bond can come from a couple of places.  First, the corporation or government that you loaned the money to may not be able to pay you back as originally agreed.  Second, if you want to sell the bond before the end of the term, it may be worth less (or more) than you originally paid for it.  Warren Buffett was referring to this second risk of the bonds being worth less than you paid for them.

Q – Are there any recent examples of bond values fluctuating up and down?

A – In 2008, the S&P 500 stock index dropped 37%.  This caused many people to sell their stocks and purchase long-term government bonds (thinking they were safer).  This led to a bond market increase of 25.7%.  The next year, the S&P 500 advanced 26.5%, causing investors to sell out of bonds and repurchase stocks.  This led to a decline in long term government bonds of 14.9%.  While this is more extreme than normal, it is a recent example of large fluctuations in long-term bond values.

Q – What is our position on bonds and why do we have bonds in our portfolios?

A – First, we do not use long-term bonds as part of our portfolios.  The research suggests to us that the risk of a long-term investment in bonds is not worth the reward.  Second, the reason we use bonds is to reduce the volatility in the overall portfolio and to add income.  In the example above, most people are not comfortable seeing their portfolio decline 37% in one year (which would have been the case if they were invested with a 100% allocation in the S&P 500 in 2008).  A diversified portfolio that included some fixed income would not have been impacted so drastically.

Q – How are we managing the current bond environment that Warren Buffett was referring to?

A – The challenge today is that we need to stay short on the duration to minimize the risk of a decline in value when interest rates start to rise.  However, the shorter we go, the less we will earn in today’s market.  Our approach is to maintain the same strategy as we have in the past, however, we are being very diligent about keeping the fixed income short-term.  We agree with Warren that long term bonds could be in for some declines when rates begin to rise, but we still value the benefit of having shorter-term fixed income as a part of your total portfolio.

Dave in The News Tribune

Dave was recently mentioned in the News Tribune! Here is what the article said…


Washington Society of CPAs has named David Stolz, president of Stolz & Associates in Tacoma, as chairman of the society’s personal financial planning committee.

The Washington Society of Certified Public Accountants serves certified public accountants, educating consumers about CPAs and the services they provide, and encouraging students to study accounting and enter the CPA profession. Stolz has more than 20 years of experience working with high net worth individuals in tax preparation, investment consulting and financial planning.
Read more here:

Michelle’s Article – South Sound Magazine


Michelle has been published!  Her article has been published in the most recent South Sound Magazine.  The article is about planning for retirement in your later years, and it offers many helpful suggestions to consider when preparing for this important step in life. 

To view the full article, click the link below.

Michelle’s Article in South Sound Magazine!

Company Event With Ciscoe Morris

Ciscoe Morris from the King 5 television show “Gardening With Ciscoe” came and visited for our client event on July 26.  The evening was filled with fun facts on hummingbirds, gardening advice, wine, and appetizers.  It was a beautiful and relaxing afternoon, but most of all, it was a lot of fun.  If you weren’t able to make it, we have some pictures posted on our Facebook Site to fill you in on some of the action.  Ciscoe is an amazing story-teller, and he gave out several prizes including plants, garding gloves, books, t-shirts, and garden tools.

Are You Paying Too Much In 401(k) Fees?

According to this article, “An ordinary American household with two working adults will cough up almost $155,000 in 401(k) fees over a lifetime…”  401(k) plans have been under a lot of scrutiny for the fees they have been charging, and this article talks about why.  The new trend is toward low-cost solutions with quality, passively-managed investments.  This is the type of plan we offer here at Stolz & Associates.

To read the entire article, click HERE.

The Cost of Safety…

During volatile times in the market, it is tempting to take your money and go somewhere “safe” with it.  However, there are additional factors to consider when analyzing the safety of an investment.

For more information, click on the link to this article.

The Cost of “Safety”

Yale’s Swensen Says Index Funds Best Plan for Most Investors (2)

This article talks about the advantages of passively managed index funds.  This is the style of investing we believe in and implement at Stolz & Associates…

To view the article click HERE .