1Q13 Stuart and Susan
Preston
Agenda
Global Market Review Your WealthPath Quarterly Portfolio Review
ƒ
Global Market Review
Ladies and Gentlemen, the train is leaving the station… As a young boy growing up in New Jersey, I frequently rode the train into New York to visit my father at his office in lower Manhattan. As the train was just about to leave the station there would be a loud hissing sound accompanied by a lurch of the train and a conductor shouting “all aboard” while urging the crowd to get on the train or step back on the platform. As I watched the financial press earlier today, it seemed as if one could hear that same hissing sound as talking heads alternately instructed their viewers to step on or step back‐from the US Stock Market. It is true that bull markets climb a wall of worry as we have witnessed for many decades but many of those bull markets have come with frothy tops, particularly during the tech boom in the late 1990’s. Regardless of the financial media we are more than casual observers of US stocks and other financial markets around the globe as well. We do not attempt to time markets, nor do we rotate through sectors attempting to improve returns and thereby amplify risks. Rather, we practice the age‐old ritual of maintaining our discipline while rebalancing portfolios along the way. Therein lies the tricky part. Most investors do not want to sell bonds when stocks are declining nor do they want to sell stocks when the pundits are clamoring for investors to get in. But that is exactly what asset allocation is all about. When stocks go above targeted exposure it is indeed time to take a few chips off the table as a matter of discipline, not as a reaction to random predictions or an attempt to time markets or sectors. As one of my ranching clients once told me, occasionally you have to sell part of the herd for the good of the ranch. As we hit new highs in the Dow Jones Industrial Average and break through that magical level of 14,000 on an index of just 30 stocks, no doubt many will feel it is time to jump off the platform and get on the train before it leaves the proverbial station. Rarely in the history of financial markets or train travel for that matter, has it been a good idea to jump on board when the risks are highest. If this turns out to be one of those frothy tops it will not matter to us as we will continue to calmly disembark in an orderly fashion as our discipline dictates and rebalance our portfolios back to their intended targets. Not as a matter of whim or fancy, but rather as a matter of knowing in advance what works and it is wise to invest rather than gamble. As our clients avoid the commensurate emotions that come with feeling like the train is leaving the station we have the confidence of knowing that we will reach our destination safely. Rest assured, we are prepared to do what we have always done and believe that when it comes to investing, slow and steady wins the race.
Quarterly Market Review First Quarter 2013
•
•
This report features world capital market performance and a timeline of events for the last quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.
The report also illustrates the performance of globally diversified portfolios and features a topic of the quarter.
•
Overview: –
Market Summary
–
Timeline of Events
–
World Asset Classes
–
US Stocks
–
International Developed Stocks
–
Emerging Markets Stocks
–
Select Country Performance
–
Real Estate Investment Trusts (REITs)
–
Commodities
–
Fixed Income
–
Global Diversification
–
Quarterly Topic: Betting against the House
Market Summary
First Quarter 2013 Index Returns
US Stock Market +11.07%
International Developed Stocks
Emerging Markets Stocks
Global Real Estate
US Bond Market
Global Bond Market
+4.70%
‐1.62%
+7.66%
‐0.12%
+0.57%
STOCKS
BONDS
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), International Developed Stocks (MSCI World ex USA Index [net div.]), Emerging Markets (MSCI Emerging Markets Index [net div.]), Global Real Estate (S&P Global REIT Index), US Bond Market (Barclays US Aggregate Bond Index), and Global Bond Market (Barclays Global Aggregate Bond Index [Hedged to USD]). The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved. MSCI data copyright MSCI 2012, all rights reserved. Barclays data provided by Barclays Bank PLC. US long‐term bonds, bills, and inflation data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).
Timeline of Events: A Quarter in Review First Quarter 2013
Fiscal cliff – US House of Representatives adopts US Senate’s budget bill.
US Federal Reserve announces it will continue purchasing $40 billion of mortgage‐backed securities and $45 billion of Treasury securities each month.
World Bank cuts 2013 forecast for global growth from 3% to 2.4%.
12/31/2012
Data show US retail sales increased 1.1% in February, the largest rise since FOMC minutes signal debate September 2012. on scaling back US central Data show US bank’s bond buying program. GDP rose 0.4% in Q4 2012, Haruhiko Kuroda revised from named governor prior estimate of Bank of Japan. of 0.1% decrease. Euro zone’s Dow Jones closes at recession deepens Cyprus reaches record high of 14,253, as exports from €10B rescue topping record set in leading economies deal with IMF, October 2007. suffer and Q4 GDP EU, and ECB. falls 0.6%. Italy’s election ends in deadlocked parliament.
03/29/2013
The graph illustrates the MSCI All Country World Index (net div.) daily returns over the quarter. Source: MSCI data copyright MSCI 2012, all rights reserved. The events highlighted are not intended to explain market movements. The index is not available for direct investment. Past performance is not a guarantee of future results. 5
World Asset Classes
First Quarter 2013 Index Returns The US market led equity returns vs. developed ex US and emerging markets after strong performances in both January and February. The US yield curve steepened and remained upwardly sloped.
Barclays US Aggregate Bond Index MSCI Emerging Markets Index (net div.) MSCI Emerging Markets Value Index (net div.)
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: US Large Cap (S&P 500 Index), US Small Cap (Russell 2000 Index), US Value (Russell 1000 Value Index), US Real Estate (Dow Jones US Select REIT Index), Global Real Estate (S&P Global ex US REIT Index), International Developed Large, Small, and Value (MSCI World ex USA, ex USA Small, and ex USA Value Indexes [net div.]), Emerging Markets Large, Small, and Value (MSCI Emerging Markets, Emerging Markets Small, and Emerging Markets Value Indexes), US Bond Market (Barclays US Aggregate Bond Index), and Treasury (One‐Month US Treasury Bills). The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved. MSCI data copyright MSCI 2012, all rights reserved. Dow Jones data (formerly Dow Jones Wilshire) provided by Dow Jones Indexes. Barclays data provided by Barclays Bank PLC. US long‐term bonds, bills, and inflation data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).
US Stocks
First Quarter 2013 Index Returns All major US asset classes posted positive results in the first quarter, with the broad market returning 11.07%. Asset class returns ranged from 9.54% for large growth stocks to 13.21% for small growth stocks. Across the size spectrum, small caps outperformed large caps. There was a positive value premium marketwide in the US, driven by the performance of large value and midcap value stocks; however, small cap value stocks underperformed small cap growth stocks. Period Returns (%) Asset Class Marketwide Large Cap Large Cap Value Large Cap Growth Small Cap Small Cap Value Small Cap Growth
* Annualized 1 Year 14.56 13.96 18.77 10.09 16.30 18.09 14.52
3 Years** 12.97 12.67 12.74 13.06 13.45 12.12 14.75
5 Years** 10 Years** 6.32 9.15 5.81 8.53 4.85 9.17 7.30 8.62 8.24 11.52 7.29 11.29 9.04 11.61
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Marketwide (Russell 3000 Index), Large Cap (S&P 500 Index), Large Cap Value (Russell 1000 Value Index), Large Cap Growth (Russell 1000 Growth Index), Small Cap (Russell 2000 Index), Small Cap Value (Russell 2000 Value Index), and Small Cap Growth (Russell 2000 Growth Index). World Market Cap: Russell 3000 Index is used as the proxy for the US market. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved. The S&P data are provided by Standard & Poor's Index Services Group.
International Developed Stocks First Quarter 2013 Index Returns International developed equities maintained strong performances, with all major asset classes posting positive absolute numbers in US dollars for the quarter. Consistent with the fourth quarter, the US dollar appreciated relative to most major foreign developed currencies. Across the size and style spectra, small beat large and growth outperformed value.
Period Returns (%) Asset Class Large Cap Small Cap Value Growth
* Annualized 1 Year 10.43 10.87 10.35 10.41
3 Years** 4.78 7.80 3.57 5.92
5 Years** 10 Years** ‐0.75 9.95 2.05 13.14 ‐1.16 10.28 ‐0.39 9.53
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Large Cap (MSCI World ex USA Index), Small Cap (MSCI World ex USA Small Cap Index), Value (MSCI World ex USA Value Index), and Growth (MSCI World ex USA Growth). All index returns are net of withholding tax on dividends. World Market Cap: Non-US developed market proxies are the respective developed country portions of the MSCI All Country World IMI ex USA Index. Proxies for the UK, Canada, and Australia are the relevant subsets of the developed market proxy. MSCI data copyright MSCI 2012, all rights reserved.
Emerging Markets Stocks First Quarter 2013 Index Returns
Many emerging markets posted negative returns for the quarter. There was a significant size premium, with small caps outperforming large caps by 5.8%. The value premium was negative across all size segments. The US dollar appreciated vs. most emerging markets currencies.
Period Returns (%) Asset Class Large Cap Small Cap Value Growth
* Annualized 1 Year 1.96 9.20 ‐1.08 5.00
3 Years** 3.27 3.93 2.43 4.09
5 Years** 10 Years** 1.09 17.05 4.13 18.18 1.58 18.47 0.54 15.60
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Large Cap (MSCI Emerging Markets Index), Small Cap (MSCI Emerging Markets Small Cap Index), Value (MSCI Emerging Markets Value Index), and Growth (MSCI Emerging Markets Growth Index). All index returns are net of withholding tax on dividends. World Market Cap: Emerging markets proxies are the respective emerging country portions of the MSCI All Country World IMI ex USA Index. MSCI data copyright MSCI 2012, all rights reserved.
Select Country Performance First Quarter 2013 Index Returns
The majority of developed markets posted positive returns. Japanese stocks gained 12.27%, as the local government continued to implement its stimulus program. After receiving its first investment‐grade rating, the Philippines posted the highest performance among emerging markets.
Country performance based on respective indices in the MSCI All Country World IMI Index (for developed markets), Russell 3000 Index (for US), and MSCI Emerging Markets IMI Index. All returns in USD and net of withholding tax on dividends. MSCI data copyright MSCI 2012, all rights reserved. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved.
Real Estate Investment Trusts (REITs) First Quarter 2013 Index Returns International REITs outperformed US REITs by 38 basis points in the beginning of 2013. International REITs continued to post positive returns for the sixth consecutive quarter, while US REITs had their second consecutive quarter of positive returns.
Period Returns (%) Asset Class US REITs Global REITs (ex US)
* Annualized 1 Year 13.19 27.46
3 Years** 16.94 14.93
5 Years** 10 Years** 6.07 12.10 1.31 10.38
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Number of REIT stocks and total value based on the two indices. All index returns are net of withholding tax on dividends. Dow Jones US Select REIT Index data provided by Dow Jones ©. S&P Global ex US REIT Index data provided by Standard and Poor’s © 2012.
Commodities
First Quarter 2013 Index Returns
Commodities settled slightly lower during the first quarter, somewhat offsetting a strong comeback at the end of 2012. The energy complex advanced, with natural gas providing significant total return during the period. Precious metals finished lower, as investors’ sensitivity to economic and geopolitical risks eased. Soft commodities generally finished lower. One exception was cotton, as the market incorporated projections from the US Department of Agriculture that indicated a reduction in production capacity.
Past performance is not a guarantee of future results. Index is not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. All index returns are net of withholding tax on dividends. Dow Jones‐UBS Commodity Index Total Return data provided by Dow Jones ©.
Fixed Income
First Quarter 2013 Index Returns Bond yields crept higher during the period, as fixed income sold off and equities pursued record levels.
3/31/12 3/31/13 12/30/12
Global monetary policy remained accommodative, as central banks sought to maintain high levels of liquidity. These actions were taken to spur economic growth and protect the global financial system. Yield‐seeking behavior has been rewarded over the past year, as lower credit‐quality investments have outper‐ formed.
Period Returns (%) Asset Class 1 Year One‐Month US Treasury Bills (SBBI) 0.06 Bank of America Merrill Lynch Three‐Month Treasury 0.12 Bank of America Merrill Lynch One‐Year US Treasury N 0.31 Ci group World Government Bond 1−5 Years (hedged 1.83 US Long‐Term Government Bonds (SBBI) 5.99 Barclays Corporate High Yield 13.13 Barclays Municipal Bonds 5.25 Barclays US TIPS Index 5.68
* Annualized 3 Years** 5 Years**10 Years** 0.07 0.30 1.62 0.11 0.34 1.75 0.49 1.01 2.15 1.96 2.66 3.27 12.14 8.11 7.16 11.24 11.65 10.12 6.23 6.10 5.01 8.57 5.89 6.32
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Yield curve data from Federal Reserve. State and local bonds are from the Bond Buyer Index, general obligation, 20 years to maturity, mixed quality. AAA‐AA Corporates represent the Bank of America Merrill Lynch US Corporates, AA‐AAA rated. A‐BBB Corporates represent the Bank of America Merrill Lynch US Corporates, BBB‐A rated. Barclays data provided by Barclays Bank PLC. US long‐term bonds, bills, inflation, and fixed income factor data © Stocks, Bonds, Bills, and Inflation (SBBI) Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield). Citigroup bond indices copyright 2012 by Citigroup. The Merrill Lynch Indices are used with permission; copyright 2012 Merrill Lynch, Pierce, Fenner & Smith Incorporated; all rights reserved.
Global Diversification
First Quarter 2013 Index Returns
These portfolios illustrate the performance of different global stock/bond mixes and highlight the benefits of diversification. Mixes with larger allocations to stocks are considered riskier but also have higher expected returns over time.
Stock/Bond Mix 100% Stocks Period Returns (%)
* Annualized
Asset Class 1 Year 3 Years** 5 Years** 0 Years** 100% Stocks 11.19 8.35 2.63 9.92 75/25 8.46 6.50 2.50 8.09 50/50 5.69 4.50 2.05 6.08 25/75 2.89 2.35 1.32 3.92 100% Treasury Bi 0.06 0.07 0.30 1.62
75/25 50/50 25/75 100% Treasury Bills
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect expenses associated with the management an actual portfolio. Asset allocations and the hypothetical index portfolio returns are for illustrative purposes only and do not represent actual performance. Global Stocks represented by MSCI All Country World Index (gross div.) and Treasury Bills represented by US One‐Month14 Treasury Bills. Globally diversified portfolios rebalanced monthly. Data copyright MSCI 2012, all rights reserved. Treasury bills © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).
Betting Against the House First Quarter 2013
It’s New Year’s Day 2012. In addition to overdosing on televised college football, you’re spending part of the holiday working on the family finances. Armed with a laptop and various online financial tools, you’re on the hunt for appealing stock market opportunities. To prune the list of candidates to a manageable size, you decide to focus on firms that are leaders in their respective industries and exhibit above‐average scores on various measures of financial strength. As you work your way through the alphabet, you come to the “P” stocks, and another candidate appears. It’s a prominent player in a major industry (good), but operates in a notoriously cyclical industry (not so good), is currently losing money (definitely not good), pays no dividend, and has a junk‐bond credit rating of BB‐ minus. Next! You push the “delete” key and move on. Congratulations. You just passed up the best‐performing stock in the entire S&P 500 Index for 2012. Shares of PulteGroup, a Michigan‐based homebuilder with a 60‐year history, jumped 187.8% last year amid strong performance for the entire industry. For
the year ending December 31, 2012, all 13 homebuilding firms listed on the New York Stock Exchange outperformed the S&P 500 Index by a wide margin, with total returns ranging from 34.1% for NVR to 382.8% for Hovnanian Enterprises. The Standard & Poor’s SuperComposite Homebuilding Sub‐Index rose 84.1% in 2012 compared to 13.4% for the S&P 500 Index. The point? For those seeking to outperform the market through stock selection, underweighting the market’s biggest winners can be just as painful as overweighting the biggest losers. Investors are often caught flat‐footed by stocks that do much better or much worse than the broad market, and the problem is not limited to individuals. Not one of the 10 seasoned professionals participating in Barron’s annual Roundtable stock‐picking panel in early January 2012 mentioned homebuilding stocks or any housing‐related firms. The recent surge in housing shares also serves as a reminder that stock prices are forward‐looking and tend to rise or fall well in advance of clear changes in company fundamentals.
Investors who insist on waiting for evidence of healthy profits before investing are often frustrated to find that a firm’s stock price has appreciated dramatically by the time the firm begins to report cheery financial results. Shares of Hovnanian Enterprises, for example, rose 580% between October 7, 2011, and December 31, 2012, even though the firm continued to report losses. Similarly, it is not unusual for a firm’s stock price to decline long before signs of trouble become obvious. Many observers in recent years predicted that a recovery in the housing industry would be agonizingly slow, and they were right. Many investors in recent years have avoided housing stocks as a consequence, and they’ve been wrong: Housing stocks have outperformed the broad US stock market by a healthy margin from the market low in March 2009 to the present day. BOTTOM LINE: Markets have 101 ways to remind us of Nobel laureate Merton Miller’s observation—diversification is the investor’s best friend.
Diversification does not eliminate the risk of market loss. Past performance is no guarantee of future results . Adapted from “Betting against the House” by Weston Wellington, Down to the Wire column on Dimensional’s website, February 2013. This information is provided for educational purposes only and should not be considered investment advice or a solicitation to buy or sell securities. Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.
Your WealthPath
WealthPath Process X Discovery Meeting
Complete discovery process
[
Regular Progress Meetings
Y
Progress & implementation of your Wealthpath
Investment Planning Meeting
Presentation of investment plan
Z Initial Follow-up Meeting Risk Management Review
.
Your WealthPath
Stuart and Susan Preston
Prepared by: Brian Murphy President
April 11, 2013
Table Of Contents Personal Information and Summary of Financial Goals Current Financial Goals Graph Resources Summary Net Worth Summary - All Resources Net Worth Detail - All Resources What If Worksheet Life Expectancy Table and Graph Insurance Inventory Tax and Inflation Assumptions
1 2 3-6 7 8 9 - 14 15 16 17
Personal Information and Summary of Financial Goals Stuart and Susan Preston Needs 10
Retirement - Living Expense Stuart Susan Both Retired (2014-2045) Susan Alone Retired (2046-2049)
61 / 2014 60 / 2014 $360,000 $288,000 Base Inflation Rate (3.10%)
Wants 7
College - Steven 4 years starting in 2012
7
$18,000 Base Inflation Rate plus 2.90% (6.00%)
College - Sean 4 years starting in 2013
$18,000 Base Inflation Rate plus 2.90% (6.00%)
Personal Information Stuart Male - born 12/25/1953, age 59 Employed - $350,000 Susan Female - born 01/25/1954, age 59 Homemaker Married, US Citizens living in AZ • This section lists the Personal and Financial Goal information you provided, which will be used to create your Report. It is important that it is accurate and complete.
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 1 of 17
Current Financial Goals Graph This graph shows the annual costs for your Financial Goals, as you have specified. Because these costs will be used to create your Plan, it is important that they are accurate and complete. All amounts are in after-tax, future dollars.
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 2 of 17
Resources Summary Investment Assets Description
Owner
Preston PSP
Stuart
Current Value $465,566
Account Total Preston, Sean
Custodial
Stuart
$20,475
College - Steven
$2,971,765
Fund All Goals
$154,099
Fund All Goals
$488,640
Fund All Goals
$97,140 $119,581 $348,870 $490,883 $320,478 $139,956 $129,326 $1,069,152 $24,491
PROSHARES ULTRASHORT LEHMAN 20YR TREAS
$21,959
PROSHARES ULTRASHORT S&P 500
$24,443
SPDR GOLD TR GOLD SHS ETF
$45,315
Preston, Stuart and Susan
College - Steven
$140,171
No Name Passed
Account Total
$20,475
$20,475
DFA 1 YEAR FIXED INCOME PORTFOLIO DFA COMMODITY STRATEGY PORTFOLIO DFA EMERGING MARKETS CORE EQUITY FUND DFA FIVE YEAR GLOBAL FIXED INCOME PORTFOLIO DFA INTERNATIONAL CORE EQUITY PORTFOLIO DFA INVESTMENT GRADE PORTFOLIO I DFA REAL ESTATE SECURITIES PORTFOLIO DFA SHORT TERM EXTENDED QUALITY PORTFOLIO DFA U.S. CORE EQUITY 2 PORTFOLIO
Preston, Stuart 401(k)
Fund All Goals
$20,475 Custodial
No Name Passed Preston, Stuart
Assign to Goal
$465,566
No Name Passed Preston, Steven
Additions
Stuart $154,099 Joint Survivorship
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 3 of 17
Resources Summary Investment Assets Description
Owner
DFA 1 YEAR FIXED INCOME PORTFOLIO DFA COMMODITY STRATEGY PORTFOLIO DFA EMERGING MARKETS CORE EQUITY FUND DFA FIVE YEAR GLOBAL FIXED INCOME PORTFOLIO DFA INTERNATIONAL CORE EQUITY PORTFOLIO DFA INVESTMENT GRADE PORTFOLIO I DFA REAL ESTATE SECURITIES PORTFOLIO DFA SHORT TERM EXTENDED QUALITY PORTFOLIO DFA U.S. CORE EQUITY 2 PORTFOLIO DFA U.S. SMALL CAP VALUE PORTFOLIO
$9,872 $110,124 $14,722 $31,120 $3,919 $29,507 $42,701 $15,963 $60,720 $4,572
PROSHARES ULTRASHORT S&P 500
$21,255 Stuart
Account Total
Fund All Goals
$91,345
Fund All Goals
$128,740
Fund All Goals
$20,619
Fund All Goals
$90,227 $1,118 Susan
Account Total DFA GLOBAL EQUITY PORTFOLIO INSTITUTIONAL
$35,000
$337,104
No Name Passed
Preston, Susan IRA
$337,104
Stuart
DFA GLOBAL EQUITY PORTFOLIO INSTITUTIONAL Preston, Susan 401(k)
Assign to Goal
$88,857
No Name Passed
Preston, Stuart IRA
Additions
$55,308
ISHARES GOLD TRUST COM
Preston, Stuart INDIV
Current Value
$128,740 Susan $20,371
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 4 of 17
Resources Summary Investment Assets Description
Owner
No Name Passed
Current Value
Additions
Assign to Goal
Future Value
Assign to Goal
$248 Total Investment Assets :
$4,698,828
Other Assets Description
Owner
Current Value
Primary Home
Joint Community Property
$800,000
$2,631,349
Leave To Estate
Realestate 3
Stuart
$200,000
$638,057
Leave To Estate
Realestate 1
Joint Community Property
$200,000
$400,000
Fund All Goals
Realestate 2
Stuart
$400,000
$632,324
Fund All Goals
Insurance
Stuart
$110,644
Not Used In Plan
Universal Life Insurance
Stuart
$112,927
Not Used In Plan
Total of Other Assets :
$1,823,571
Insurance Policies Description
Owner
Insured
Cash Value Life Insurance Policies Summary (included in Assets) Insurance Stuart Stuart Universal Life Universal Life Insurance Universal Life
Stuart
Insurance Policies Summary (not included in Assets) Term Life Stuart Term Life
Beneficiary
Annual Premium
Unspecified - 100%
Stuart
Unspecified - 100%
Stuart
Unspecified - 100%
$3,853
Cash Value
Death Benefit Premium Paid
$110,644
$600,644 Until Insured Dies
$112,927
$363,000
$1,000,000
Group Disability Group
Stuart
$1,806
Disability Income Personal
Stuart
$2,944
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 5 of 17
Resources Summary Insurance Policies Description
Owner
Insured
Beneficiary
Annual Premium
Cash Value
Death Benefit Premium Paid
Total Death Benefit of All Policies :
$1,963,644
If the assets include a Variable Life Investment Asset, the value shown for this policy in the Premium column reflects only the assumed annual increase in the cash value of the insurance policy and not the total premium. Social Security Description
Owner
Value
Social Security
Stuart
$29,874 starting At Stuart's Normal Full Retirement Age
File Status
Assign to Goal Fund All Goals
Social Security
Susan
$14,937 starting At Susan's Normal Full Retirement Age
Fund All Goals
Description
Owner
Value
Assign to Goal
Real Estate Investment
Stuart
$10,000 from 2013 to 2027 No
Retirement Income Increase Rate
Fund All Goals
Liabilities Type
Description
Owner
1st Mortgage
Mortgage and LOC
Joint Total Outstanding Balance :
Outstanding Balance Interest Rate Monthly Payment $300,000 $300,000
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 6 of 17
Net Worth Summary - All Resources This is your Net Worth Summary as of 04/11/2013. Your Net Worth is the difference between what you own (your Assets) and what you owe (your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities.
Description
Total
Investment Assets Employer Retirement Plans
$3,437,331
Individual Retirement Accounts
$111,964
Annuities & Tax-Deferred Products
$282,839
Taxable and/or Tax-Free Accounts
$825,744
Total Investment Assets:
$4,657,878
Other Assets Personal Asset
$800,000
Business and Property
$800,000
Cash Value Life
$223,571
Total Other Assets:
$1,823,571
Liabilities Investment Assets Other Assets
$4,657,878 +
Total Assets Total Liabilities Net Worth
$1,823,571 $6,481,449
-
Personal Real Estate Loan:
$300,000
Total Liabilities:
$300,000
Net Worth:
$6,181,449
$300,000 $6,181,449
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 7 of 17
Net Worth Detail - All Resources This is your Net Worth Detail as of 04/11/2013. Your Net Worth is the difference between what you own (your Assets) and what you owe (your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities.
Description
Stuart
Susan
Joint
Total
Investment Assets Preston PSP Preston, Stuart Preston, Stuart IRA
$465,566
$465,566
$2,971,765
$2,971,765
$91,345
$91,345
Preston, Susan IRA Preston, Stuart 401(k)
$20,619 $154,099
Preston, Susan 401(k) Preston, Stuart INDIV
$154,099 $128,740
$128,740
$337,104
$337,104
Preston, Stuart and Susan Total Investment Assets:
$20,619
$4,019,879
$149,359
$488,640
$488,640
$488,640
$4,657,878
$800,000
$800,000
Other Assets Primary Home Realestate 3
$200,000
$200,000
Realestate 1
$200,000
$200,000
Realestate 2
$400,000
$400,000
Insurance
$110,644
$110,644
Universal Life Insurance
$112,927
$112,927
Total Other Assets:
$823,571
$0
$1,000,000
$1,823,571
$300,000
$300,000
$300,000
$300,000
Liabilities Mortgage and LOC Total Liabilities:
$0
$0
Net Worth:
$6,181,449
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 8 of 17
What If Worksheet This Worksheet allows you to analyze and compare the results of one or more scenarios that you created by varying the Plan assumptions. Estimated % of Goal Funded Goals
Ideal $360,000
Recommended $200,000
Acceptable $180,000
Average Return
Bad Timing
Average Return
Bad Timing
Average Return
Bad Timing
66%
50%
100%
100%
100%
100%
33%
32%
100%
100%
100%
100%
Current dollars (in thousands) :
$1,134
$1,134
$10,458
$8,101
$11,942
$9,977
Future dollars (in thousands) :
$3,508
$3,508
$32,361
$25,069
$36,952
$30,871
Needs 10 Retirement Wants 7
College - Steven
7
College - Sean
Safety Margin (Value at End of Plan)
Monte Carlo Results
Likelihood of Funding All Goals
Your Confidence Zone: 75% - 90%
Probability of Success: < 40%
Probability of Success: 91%
Probability of Success: 95%
Below Confidence Zone
Above Confidence Zone
Above Confidence Zone
Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 9 of 17
What If Worksheet Key Assumptions
Ideal $360,000
Recommended $200,000
Acceptable $180,000
Stress Tests Method(s)
Bad Timing Program Estimate Years of bad returns: 2014: -14.64% 2015: -2.84%
Bad Timing Program Estimate Years of bad returns: 2014: -14.64% 2015: -2.84%
Bad Timing Program Estimate Years of bad returns: 2014: -14.64% 2015: -2.84%
Funding Order Assets - Ignore Earmarks
No
No
No
Retirement Income - Ignore Earmarks
No
No
No
Custom PFP 60
Custom PFP 60
Custom PFP 60
Total Return :
9.96%
9.96%
9.96%
Standard Deviation :
11.80%
11.80%
11.80%
Total Return Adjustment :
-1.00%
-1.00%
-1.00%
Adjusted Real Return :
5.86%
5.86%
5.86%
Custom PFP 60
Custom PFP 60
Custom PFP 60
Hypothetical Average Rate of Return Before Retirement :
After Retirement : Total Return :
9.96%
9.96%
9.96%
Standard Deviation :
11.80%
11.80%
11.80%
Total Return Adjustment :
-1.00%
-1.00%
-1.00%
Adjusted Real Return :
5.86%
5.86%
5.86%
3.10%
3.10%
3.10%
No
No
No
0.00%
0.00%
0.00%
No
No
No
0.00%
0.00%
0.00%
Base inflation rate : Tax-Free Options Before Retirement Reallocate a portion of bonds to tax-free: Percent of bond allocation to treat as tax-free: After Retirement Reallocate a portion of bonds to tax-free: Percent of bond allocation to treat as tax-free:
Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 10 of 17
What If Worksheet Key Assumptions
Ideal $360,000
Recommended $200,000
Acceptable $180,000
Goals Living Expense Retirement Age Stuart
61
61
61
Stuart
92
92
92
Susan
95
95
95
$360,000
$200,000
$180,000
Susan Alone Retired
$288,000
$160,000
$144,000
Stuart Alone Retired
$288,000
$160,000
$144,000
$288,000
$160,000
$144,000
2012
2012
2012
4
4
4
$18,000
$18,000
$18,000
2013
2013
2013
4
4
4
$18,000
$18,000
$18,000
Planning Age
Both Retired Both Retired One Alone - Retired
One Alone - Employed Stuart Alone Employed College - Steven Year : Years of Education : Annual Cost : College - Sean Year : Years of Education : Annual Cost :
Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 11 of 17
What If Worksheet Key Assumptions
Ideal $360,000
Recommended $200,000
Acceptable $180,000
Retirement Income Real Estate Investment Annual Income :
$10,000
$10,000
$10,000
2013
2013
2013
Select Your Own Year
Select Your Own Year
Select Your Own Year
2027
2027
2027
Customize Benefits
Customize Benefits
Customize Benefits
Normal
Normal
Normal
Age to begin retirement benefits:
At Stuart's Full Retirement Age 66 yrs 0 mos
At Stuart's Full Retirement Age 66 yrs 0 mos
At Stuart's Full Retirement Age 66 yrs 0 mos
Select benefit to use:
Use the Program Estimate
Use the Program Estimate
Use the Program Estimate
Social Security Amount:
$29,874
$29,874
$29,874
Widower annual benefit:
$0
$0
$0
Reduce benefits by:
0%
0%
0%
Normal
Normal
Normal
Age to begin retirement benefits:
At Susan's Full Retirement Age 66 yrs 0 mos
At Susan's Full Retirement Age 66 yrs 0 mos
At Susan's Full Retirement Age 66 yrs 0 mos
Select benefit to use:
Use the Program Estimate
Use the Program Estimate
Use the Program Estimate
Social Security Amount:
$14,937
$14,937
$14,937
Widower annual benefit:
$0
$0
$0
Reduce benefits by:
0%
0%
0%
Start Year : Select when income will end : Year to end retirement income : Social Security Select Social Security Strategy Stuart Select Filing Method: Select when benefits will begin:
Susan Select Filing Method: Select when benefits will begin:
Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 12 of 17
What If Worksheet Key Assumptions
Ideal $360,000
Recommended $200,000
Acceptable $180,000
Asset Additions Preston, Stuart INDIV After-Tax Addition:
$35,000
$35,000
$35,000
Tax-Free Addition:
$0
$0
$0
2013
2013
2013
Stuart's Qualified
$0
$0
$0
Susan's Qualified
$0
$0
$0
Stuart's Roth
$0
$0
$0
Susan's Roth
$0
$0
$0
Stuart's Tax-Deferred
$0
$0
$0
Susan's Tax-Deferred
$0
$0
$0
Taxable
$0
$0
$0
Year additions begin: Stuart - Fund All Goals Extra Savings by Tax Category
Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 13 of 17
What If Worksheet Key Assumptions
Ideal $360,000
Recommended $200,000
Acceptable $180,000
Other Assets Primary Home Include in Plan :
Yes
Yes
Yes
When received :
2049
2049
2049
$2,631,349
$2,631,349
$2,631,349
Yes
Yes
Yes
Amount of cash received : Realestate 3 Include in Plan : When received : Amount of cash received :
2049
2049
2049
$638,057
$638,057
$638,057
Yes
Yes
Yes
Realestate 1 Include in Plan : When received : Amount of cash received :
2027
2027
2027
$400,000
$400,000
$400,000
Yes
Yes
Yes
Realestate 2 Include in Plan : When received :
2025
2025
2025
$632,324
$632,324
$632,324
Include Tax Penalties :
Yes
Yes
Yes
Change Tax Rate?
No
No
No
0.00%
0.00%
0.00%
Amount of cash received : Tax Options
Year To Change : Change Tax Rate by this % (+ or -) :
Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 14 of 17
Life Expectancy Table and Graph How long might you live? Stuart lives to age Chance you will live to age shown
Susan lives to age
Either lives to age
Non-Smoker
Smoker
Non-Smoker
Smoker
Non-Smoker
Smoker
50%
85
76
88
80
92
83
40%
87
79
90
83
93
85
30%
90
81
93
85
95
87
20%
93
84
95
87
98
89
10%
97
87
99
90
101
91
All calculations based on Annuity 2000 Mortality Table.
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 15 of 17
Insurance Inventory Life Description
Owner
Insured
Death Benefit
Cash Value
Annual Premium
Beneficiary
Policy Start Date
Universal Life Insurance
Stuart
Stuart
$363,000
$112,927
Unspecified - 100%
Insurance
Stuart
Stuart
$600,644
$110,644
$3,853 Unspecified - 100%
Term Life
Stuart
Stuart
$1,000,000
Unspecified - 100%
06/1999
If the assets include a Variable Life Investment Asset, the value shown for this policy in the Annual Premium column reflects only the assumed annual increase in the cash value of the insurance policy and not the total premium. Disability Description
Insured
Annual Premium
Tax Status
Monthly Benefit
Elimination Period
Benefit Period Inflation Option
Policy Start Date
Group Disability
Stuart
$1,806 pre-tax
$11,254
1 Years
Until Age 65
No Inflation
11/1994
Disability Income
Stuart
$2,944 pre-tax
$7,600
3 Years
Until Age 65
No Inflation
05/1994
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 16 of 17
Tax and Inflation Assumptions Base Inflation Rate
Tax Penalty
Inflation rate :
3.10%
Include penalties in Plan? :
Social Security Inflation rate :
3.10%
Tax Free Earnings - Options
Tax Assumption Inflation rate :
3.10%
Use Tax-Free returns by Asset Class, Marginal Tax Rate to use during Retirement is 40.00%
Marginal Tax Rates Before Retirement
Tax Rates :
Yes
Federal
State
Local
33.00%
4.54%
0.00%
Untaxed Gain on Taxable Earnings - Before Retirement What portion of your Annual Taxable Investment Earnings will not be taxed until withdrawn?
0.00%
Long Term Capital Gains (LTCG) - Before Retirement What portion of your Taxable Investment Earnings will be taxed at the LTCG rate?
20.00%
Long Term Capital Gains rate :
Use Program estimate
Tax Rates During Retirement Let the Program calculate taxes each year Local rate :
0.00%
Deduction estimate :
Use standard deductions
Untaxed Gain on Taxable Earnings - During Retirement What portion of your Annual Taxable Investment Earnings will not be taxed until withdrawn?
0.00%
Long Term Capital Gains (LTCG) - During Retirement What portion of your Taxable Investment Earnings will be taxed at the LTCG rate?
20.00%
Long Term Capital Gains rate :
Use Program estimate
Taxation of Social Security What portion of Social Security will be taxed?
85.00%
See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013
Company Name : Pathways Financial Partners
Prepared by: Brian Murphy Page 17 of 17
Notes
Â&#x192;
Quarterly Portfolio Review
Quarterly Statement Household:
Preston, Stuart and Susan
Period:
1/1/2013 to 3/31/2013
Activity Summary
Allocation Summary Period
YTD
Since Inception
(1/1/2013 to 3/31/2013)
(1/1/2013 to 3/31/2013)
(6/8/2005 to 3/31/2013)
$3,510,793.70
$3,510,793.70
$0.00
Contributions
$0.00
$0.00
$1,819,959.55
Distributions
$0.00
$0.00
($200,112.01)
Transfer In/Out
$0.00
$0.00
$782,941.24
Miscellaneous Charges
$0.00
$0.00
($2,022.73)
Bond Accrual
$0.00
$0.00
$0.00
$105,460.82
$105,460.82
$1,215,488.47
$3,616,254.52
$3,616,254.52
$3,616,254.52
Beginning Market Value (Including Bond Accrual)
Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)
Index Comparison
Risk Category Equity Fixed Income Unassigned Money Market
59.8 % 27.5 % 9.5 % 3.2 %
Returns are Net of Fees * The first 12 month returns are not annualized
for the period 1/1/2013 to 3/31/2013 (Including bond accrual)
Period
3/31/2013
QTD
YTD
1 Year
3 Year
5 Year
10 Year
Inception (6/8/2005)
Preston, Stuart and Susan
3.00 %
3.00 %
3.00 %
11.79 %
6.20 %
4.95 %
N/A
5.68 %
-2.09 %
-2.09 %
-2.09 %
1.26 %
4.52 %
3.66 %
N/A
4.81 %
5.15 %
5.15 %
5.15 %
11.27 %
5.00 %
-0.88 %
N/A
4.41 %
MSCI Emerging Markets
-1.84 %
-1.84 %
-1.84 %
1.73 %
3.20 %
1.04 %
N/A
10.78 %
S&P 500
10.61 %
10.61 %
10.61 %
13.96 %
12.67 %
5.81 %
N/A
5.76 %
Barclays Capital Global Agg Bond MSCI EAFE
Preston, Stuart and Susan
Quarterly Statement
Page 3 of 14
Account: Susan Preston (Individual Retirement Account), TD Ameritrade Activity Summary
Allocation Summary Period
YTD
Since Inception
(1/1/2013 to 3/31/2013)
(1/1/2013 to 3/31/2013)
(11/28/2008 to 3/31/2013)
$18,711.40
$18,711.40
$0.00
Contributions
$0.00
$0.00
$542.53
Distributions
$0.00
$0.00
$0.00
Transfer In/Out
$0.00
$0.00
$11,293.78
Miscellaneous Charges
$0.00
$0.00
($114.03)
Bond Accrual
$0.00
$0.00
$0.00
$1,559.65
$1,559.65
$8,548.77
$20,271.05
$20,271.05
$20,271.05
Beginning Market Value (Including Bond Accrual)
Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)
Performance Summary
Risk Category Equity Money Market
97.7 % 2.3 %
Returns are Net of Fees * The first 12 month returns are not annualized
for the period 1/1/2013 to 3/31/2013 (Including bond accrual)
Period
3/31/2013
QTD
YTD
1 Year
3 Year
5 Year
10 Year
Inception (11/28/2008)
TD Ameritrade
8.34 %
8.34 %
8.34 %
11.09 %
8.01 %
N/A
N/A
13.58 %
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Susan Preston (IRA) Equity Global Equity DFA I Global Equity
888888888
1,288.97
$15.37
$10,774.00
$19,811.45
97.73 %
Global Equity Total:
$10,774.00
$19,811.45
97.73 %
Equity Total:
$10,774.00
$19,811.45
97.73 %
Preston, Stuart and Susan
Quarterly Statement
Page 4 of 14
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC
888888888
459.60
$1.00
$459.60
$459.60
2.27 %
Money Market Total:
$459.60
$459.60
2.27 %
Money Market Total:
$459.60
$459.60
2.27 %
Susan Preston (IRA) Total:
$11,233.60
$20,271.05
100.00 %
Account Total:
$11,233.60
$20,271.05
100.00 %
* Including bond accrual
Preston, Stuart and Susan
Quarterly Statement
Page 5 of 14
Account: Stuart Preston (Individual Retirement Account), TD Ameritrade Activity Summary
Allocation Summary Period
YTD
Since Inception
(1/1/2013 to 3/31/2013)
(1/1/2013 to 3/31/2013)
(12/11/2008 to 3/31/2013)
$82,661.30
$82,661.30
$0.00
Contributions
$0.00
$0.00
$4,361.72
Distributions
$0.00
$0.00
$0.00
Transfer In/Out
$0.00
$0.00
$44,401.00
Miscellaneous Charges
$0.00
$0.00
($88.23)
Bond Accrual
$0.00
$0.00
$0.00
$6,745.78
$6,745.78
$40,732.59
$89,407.08
$89,407.08
$89,407.08
Beginning Market Value (Including Bond Accrual)
Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)
Performance Summary
Risk Category Equity Money Market
95.8 % 4.2 %
Returns are Net of Fees * The first 12 month returns are not annualized
for the period 1/1/2013 to 3/31/2013 (Including bond accrual)
Period
3/31/2013
QTD
YTD
1 Year
3 Year
5 Year
10 Year
Inception (12/11/2008)
TD Ameritrade
8.16 %
8.16 %
8.16 %
10.85 %
8.08 %
N/A
N/A
15.20 %
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Stuart Preston (IRA) Equity Global Equity DFA I Global Equity
999999999
5,575.02
$15.37
$46,826.00
$85,688.12
95.84 %
Global Equity Total:
$46,826.00
$85,688.12
95.84 %
Equity Total:
$46,826.00
$85,688.12
95.84 %
Preston, Stuart and Susan
Quarterly Statement
Page 6 of 14
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC
999999999
3,718.96
$1.00
$3,718.96
$3,718.96
4.16 %
Money Market Total:
$3,718.96
$3,718.96
4.16 %
Money Market Total:
$3,718.96
$3,718.96
4.16 %
Stuart Preston (IRA) Total:
$50,544.96
$89,407.08
100.00 %
Account Total:
$50,544.96
$89,407.08
100.00 %
* Including bond accrual
Preston, Stuart and Susan
Quarterly Statement
Page 7 of 14
Account: Stuart and Susan Preston (Joint), TD Ameritrade Activity Summary
Allocation Summary Period
YTD
Since Inception
(1/1/2013 to 3/31/2013)
(1/1/2013 to 3/31/2013)
(12/2/2008 to 3/31/2013)
$570,055.91
$570,055.91
$0.00
Contributions
$0.00
$0.00
($199,944.93)
Distributions
$0.00
$0.00
($200,088.01)
Transfer In/Out
$0.00
$0.00
$549,332.46
Miscellaneous Charges
$0.00
$0.00
($904.93)
Bond Accrual
$0.00
$0.00
$0.00
Market Value Increase/Decrease
($18,614.87)
($18,614.87)
$403,046.45
Ending Market Value (Including Bond Accrual)
$551,441.04
$551,441.04
$551,441.04
Beginning Market Value (Including Bond Accrual)
Performance Summary
Risk Category Fixed Income Equity Unassigned Money Market
41.0 % 27.5 % 27.2 % 4.2 %
Returns are Net of Fees * The first 12 month returns are not annualized
for the period 1/1/2013 to 3/31/2013 (Including bond accrual)
Period
3/31/2013
QTD
YTD
1 Year
3 Year
5 Year
10 Year
Inception (12/2/2008)
TD Ameritrade
-3.27 %
-3.27 %
-3.27 %
12.59 %
4.93 %
N/A
N/A
20.59 %
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Stuart and Susan Preston (JNT)
Specialty Proshares Ultra Short 500
987987987
2,000.00
$43.94
$71,442.47
$87,880.00
15.94 %
$71,442.47
$87,880.00
15.94 %
$71,369.59
$62,080.00
11.26 %
Commodity Total:
$71,369.59
$62,080.00
11.26 %
Total:
$142,812.06
$149,960.00
27.19 %
Specialty Total:
Commodity iShares Gold Trust
987987987
4,000.00
$15.52
Preston, Stuart and Susan
Quarterly Statement
Page 8 of 14
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Fixed Income Global Fixed Inc DFA 5-Year Global Fixed Income
987987987
9,823.77
$11.19
Global Fixed Inc Total:
$110,639.61
$109,927.94
19.93 %
$110,639.61
$109,927.94
19.93 %
Fixed Income DFA Short-Term Extended Quality
987987987
2,702.13
$10.93
$29,369.14
$29,534.29
5.36 %
DFA Inflation Protected
987987987
2,465.58
$12.77
$27,453.81
$31,485.46
5.71 %
$56,822.95
$61,019.75
11.07 %
$55,331.81
$55,307.81
10.03 %
Short Term Bond Total:
$55,331.81
$55,307.81
10.03 %
Fixed Income Total:
$222,794.37
$226,255.50
41.03 %
$105,048.00
$89,550.14
16.24 %
$105,048.00
$89,550.14
16.24 %
$31,024.00
$41,424.51
7.51 %
$31,024.00
$41,424.51
7.51 %
$13,024.00
$14,117.18
2.56 %
$13,024.00
$14,117.18
2.56 %
$3,024.00
$3,770.66
0.68 %
$3,024.00
$3,770.66
0.68 %
Fixed Income Total:
Short Term Bond DFA 1-Year Fixed Income
987987987
5,354.10
$10.33
Equity Commodity DFA Commodity Strategy
987987987
9,840.68
$9.10 Commodity Total:
All Cap Equity DFA US Core II
987987987
3,039.22
$13.63
All Cap Equity Total:
Intl Large Blend DFA International Core
987987987
1,269.53
$11.12
Intl Large Blend Total:
Real Estate DFA Real Estate
987987987
133.33
$28.28 Real Estate Total:
Preston, Stuart and Susan
Quarterly Statement
Page 9 of 14
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Emerging Mkt DFA Emerging Markets Core
987987987
149.93
$20.21
$3,024.00
$3,029.98
0.55 %
Emerging Mkt Total:
$3,024.00
$3,029.98
0.55 %
Equity Total:
$155,144.00
$151,892.47
27.54 %
$23,333.07
$23,333.07
4.23 %
Money Market Total:
$23,333.07
$23,333.07
4.23 %
Money Market Total:
$23,333.07
$23,333.07
4.23 %
Stuart and Susan Preston (JNT) Total:
$544,083.50
$551,441.04
100.00 %
Account Total:
$544,083.50
$551,441.04
100.00 %
Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC
987987987
23,333.07
$1.00
* Including bond accrual
Preston, Stuart and Susan
Quarterly Statement
Page 10 of 14
Account: Stuart Preston PSP 5/1/2005 (Qualified Plan), TD Ameritrade Activity Summary
Allocation Summary Period
YTD
Since Inception
(1/1/2013 to 3/31/2013)
(1/1/2013 to 3/31/2013)
(6/8/2005 to 3/31/2013)
$2,839,365.09
$2,839,365.09
$0.00
Contributions
$0.00
$0.00
$2,015,000.23
Distributions
$0.00
$0.00
($24.00)
Transfer In/Out
$0.00
$0.00
$177,914.00
Miscellaneous Charges
$0.00
$0.00
($915.54)
Bond Accrual
$0.00
$0.00
$0.00
$115,770.26
$115,770.26
$763,160.66
$2,955,135.35
$2,955,135.35
$2,955,135.35
Beginning Market Value (Including Bond Accrual)
Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)
Performance Summary
Risk Category Equity Fixed Income Unassigned Money Market
64.5 % 26.0 % 6.5 % 3.0 %
Returns are Net of Fees * The first 12 month returns are not annualized
for the period 1/1/2013 to 3/31/2013 (Including bond accrual)
Period
3/31/2013
QTD
YTD
1 Year
3 Year
5 Year
10 Year
Inception (6/8/2005)
TD Ameritrade
4.08 %
4.08 %
4.08 %
11.67 %
6.58 %
3.76 %
N/A
4.91 %
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Stuart Preston PSP 5/1/2005 (QUAL)
Specialty Proshares Ultrashort 20+ Yr Treasury
654654654
1,400.00
$65.71
$52,783.84
$91,994.00
3.11 %
Proshares Ultra Short 500
654654654
2,300.00
$43.94
$81,567.76
$101,062.00
3.42 %
Specialty Total:
$134,351.60
$193,056.00
6.53 %
Total:
$134,351.60
$193,056.00
6.53 %
Preston, Stuart and Susan
Quarterly Statement
Page 11 of 14
Portfolio Detail, As Of Date - 3/31/2013 Account Number
Units
Price
Cost
Portfolio Composition
Value *
Equity All Cap Equity DFA US Core II
654654654
76,095.99
$13.63
All Cap Equity Total:
$765,012.03
$1,037,188.38
35.10 %
$765,012.03
$1,037,188.38
35.10 %
$472,945.63
$470,727.15
15.93 %
$472,945.63
$470,727.15
15.93 %
Intl Large Blend DFA International Core
654654654
42,331.58
$11.12
Intl Large Blend Total:
Commodity SPDR Gold Trust
654654654
300.00
$154.47
$36,590.97
$46,341.00
1.57 %
DFA Commodity Strategy
654654654
10,758.00
$9.10
$105,048.00
$97,897.83
3.31 %
$141,638.97
$144,238.83
4.88 %
$106,906.65
$134,670.52
4.56 %
$106,906.65
$134,670.52
4.56 %
$97,667.41
$117,892.73
3.99 %
Emerging Mkt Total:
$97,667.41
$117,892.73
3.99 %
Equity Total:
$1,584,170.69
$1,904,717.61
64.45 %
Commodity Total:
Real Estate DFA Real Estate
654654654
4,762.04
$28.28 Real Estate Total:
Emerging Mkt DFA Emerging Markets Core
654654654
5,833.39
$20.21
Fixed Income Global Fixed Inc DFA Investment Grade Portfolio
654654654
4,708.10
$10.88
$50,024.00
$51,224.11
1.73 %
DFA 5-Year Global Fixed Income
654654654
31,121.35
$11.19
$340,233.49
$348,247.88
11.78 %
$390,257.49
$399,471.99
13.52 %
$85,690.19
$99,770.09
3.38 %
Global Fixed Inc Total:
Fixed Income DFA Inflation Protected
654654654
7,812.85
$12.77
Preston, Stuart and Susan
Quarterly Statement
Page 12 of 14
Portfolio Detail, As Of Date - 3/31/2013 Account Number DFA Short-Term Extended Quality
654654654
Units
Price
11,843.04
Cost $10.93
Portfolio Composition
Value *
$128,140.03
$129,444.41
4.38 %
$213,830.22
$229,214.50
7.76 %
$138,682.07
$140,170.86
4.74 %
Short Term Bond Total:
$138,682.07
$140,170.86
4.74 %
Fixed Income Total:
$742,769.78
$768,857.35
26.02 %
$88,504.39
$88,504.39
2.99 %
Money Market Total:
$88,504.39
$88,504.39
2.99 %
Money Market Total:
$88,504.39
$88,504.39
2.99 %
Stuart Preston PSP 5/1/2005 (QUAL) Total:
$2,549,796.46
$2,955,135.35
100.00 %
Account Total:
$2,549,796.46
$2,955,135.35
100.00 %
Fixed Income Total:
Short Term Bond DFA 1-Year Fixed Income
654654654
13,569.30
$10.33
Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC
654654654
88,504.39
$1.00
* Including bond accrual
Preston, Stuart and Susan
Quarterly Statement
Page 13 of 14
Report Disclaimer Performance Evaluation Disclosure This report has been prepared from data believed to be reliable, but no representation is made as to its accuracy or completeness. Past performance is no assurance of future results. Performance is reflected net of advisory and Orion audit fees. Total return and principal value will vary. This information is provided to you in combined form, solely for your convenience and ease of review. If your objective and/or risk classification has changed, please notify us immediately.
BENCHMARK INFO Barclays Capital 1-5 Year Gov-Credit The Barclays Capital 1-5 Year Gov/Credit Bond Index is a 1-5 year component of the U.S. Government/Credit Index. This index includes securities in the Government and Credit Indexes. The Government index includes Treasuries (public obligations of the U.S. Treasury that have remaining maturities of more than one year) and agencies (publicly issued debt of U.S. Government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. Government). The Credit index includes publicly issued U.S. corporate and foreign debentures and Securities notes that meet specified maturity, liquidation and quality requirements. Barclays Capital Global Aggregate Bond The Barclays Capital Global Aggregate Bond Index provides a broad-based measure of the global investment-grade fixed-rate debt markets. The Global Aggregate index contains three major components - the U.S. Aggregate Index, the Pan-European Aggregate Index, and the Asian-Pacific Aggregate index. The Global Aggregate Index family includes a wide range of standard and customized sub-indices by liquidity constraint, sector, quality and maturity. Standard & Poors 500 The Standard and Poors 500 Index (S&P 500) is a group of investments that can be used as a yardstick to measure other similar investments. The Standard & Poor's 500 is an index of 500 stocks measuring the performance of the growth and the value styles of investing in large cap U.S. Stocks. It is often used as a standard measure in assessing the performance of large company stocks. Russell 2000 Value The Russell 2000 Value index is constructed to provide a comprehensive and unbiased barometer of the small-cap value segment of the US Equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity and that the represented companies continue to reflect value characteristics. MSCI EAFE Morgan Stanley Capital International â&#x20AC;&#x201C; Europe, Australia, Far East. The MSCI EAFE International Index is compiled from 21 other stock market indexes representing the major markets of the world, excluding the United States. It is generally used as a measure of stock market performance outside of the US. MSCI EAFE Small Cap The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the US & Canada. The MSCI Small Cap Index targets 40% of the eligible Small Cap universe within each industry group within each country. MSCI defines the Small Cap universe as all listed securities with a market capitalization in the range of USD $200 â&#x20AC;&#x201C; $1,500 million. MSCI Emerging Markets The MSCI Emerging markets index is a US dollar denominated index comprised of stocks of countries with below average per capita GDP as defined by the World Bank, foreign ownership restrictions, a lax regulatory environment, and greater perceived market risk than in the developed countries. Within this index, MSCI aims to capture an aggregate of 60% of local market capitalization.
PATHWAYS FINANCIAL PARTNERS DISCLOSURE INFORMATION Form ADV Part II and Schedule F Offering
Preston, Stuart and Susan
Quarterly Statement
Page 14 of 14
Form ADV Part II and Schedule F comprise our part of our disclosure documents. These forms provide important information about our firm, business and personnel. By this notice we offer to send a copy of our most recent disclosure document to you upon request, since the current form may vary from your initial copy. Miscellaneous Charges Miscellaneous Charges include TD Ameritrade expenses such as trading and custody fees. Orionâ&#x20AC;&#x2122;s quarterly third party fee is also included within this category and includes auditing and administrative expenses that are charged to the clientâ&#x20AC;&#x2122;s account.
4/11/2013 4:29:19 PM
Preston, Stuart and Susan
How to Review Your Performance Report Online
If you are looking for a performance evaluation (which is what you see when you come in for your Regular Progress meetings); you will want to go to the website for our 3rd party review service, Orion. The web address is: www.advisorlynx.com
If you need a new login /password for either client site, please email Christina Boyd (cboyd@2pathways.com)
How to Review Your TD Ameritrade Accounts Online
Go straight to TD Ameritrade for copies of statements, trade confirmations, or 1099s The web address is: www.advisorclient.com
If you need a new login /password for either client site, please email Christina Boyd (cboyd@2pathways.com)
Disclosure Information
All portfolio performance data was directly obtained from TD Ameritrade and Orion Advisor Services. Pathways Financial Partners is not responsible for inaccurately reported data. Portfolio performance data is reported net of annual investment expenses and all advisory fees that apply. All portfolio performance and market value data is for the time period ending March 31, 2013. Past performance is no guarantee of future results, and there is always the risk that an investor may lose money.