Money Matters MALLARD Financial Partners INC

MALLARD Financial Partners INC

Getting Organized,

by Susan Lehnerd, CFP®, Director of Financial Planning

You’ve likely been told to create documents so your wishes are followed: a will,

power of attorney, and a healthcare directive. You’ve probably also heard to

keep these in one place and make sure people know their location.

Hopefully, you’ve followed that advice. But have you included your financial

and personal documents? Will your executor or family member know where to

look in order to settle your affairs?

A will directs where your assets go; it doesn’t mention where to find them. If

your loved ones can’t find your assets, how will they get them? We know of

cases where wealth transfers took years because the beneficiaries didn’t know

which firms held their loved one’s assets.

We’ve begun providing clients a binder to help them organize their

important information. It includes many sections, including:

• bank accounts • credit cards • emergency contacts • legal information • retirement income • insurance policies • pet information • real estate records • funeral arrangements

You should also document your online accounts, including usernames and pass-

words. Many people use social media to communicate their loved one’s passing

and share funeral arrangements. Your online accounts may be the only way ex-

ecutors can access information, especially if other documents aren’t organized.

However you gather this information, safeguard it in a fireproof lockbox in your

home. Since you put valuable time compiling it; you don’t want to risk it being

destroyed.

Just as your will, power of attorney and healthcare directive provide guidance

for your family and responsible parties, an organizer directs them to more per-

sonal information. So don’t stop at the legal documents – go a step further and

get organized! You’ll go a long way towards granting your loved ones some

peace of mind at a time when they will really appreciate it.

Mallard Gold and Platinum clients can get an organizer at their Spring

or Fall financial planning meetings. If you’re not yet a Mallard client, we

encourage you to create your own organizer soon.

Mallard Money Matters July 2019 Page 2

Most investors recognize the connection between the business cycle and the changing value of their stock in-

vestments. But in my experience, few investors recognize factors that influence the changing values of their

bond investments. Factors such as creditworthiness, duration, supply/demand, yield, as well as inflation. To

give you a behind-the-scenes look at our bond strategies, I’m going to explore what we call our ‘Home Base’

for bond fund selections. I’ll explain why we’ve been returning bond fund selections to Home Base the

last few months. For context, I’ll review where markets have been the last few years, and what our bond

fund selections have been in response.

We start with a focus on studying current economic conditions in order to anticipate the most likely future

economic paths, and to position our clients’ portfolios to maximize return, within their given risk tolerance.

One factor that impacts bonds is the Federal Funds

Rate (fed rate). Put simply, the fed rate is the interest

rate banks are allowed to charge one another over-

night while banks are closed, so that banks can keep

their books balanced if the day’s deposits and loans

don’t net. The Federal Reserve has been steadily

raising this rate since late 2015/early 2016. In

that rising interest rate environment, we positioned

portfolios into bond categories which do better when

interest rates go up, which in turn, reduced our bond exposure in categories which get hurt when interest rates

go up. A rising interest rate environment is a special economic environment; it isn’t Home Base.

We anticipate interest rates will stay steady, or potentially drop, over the next year or two. So dur ing

the last few quarters, we’ve been transitioning from our rising-interest-rate-style toward a neutral stance, our

Home Base. This has included reducing our exposure to Opportunity Bonds (higher-risk, higher-reward

bonds), including eliminating exposure to floating-rate bonds. The result has been increasing exposure to

Quality Bonds (lower-risk, lower reward bonds) from its low point of 65% of bonds, up to our stated Home

Base of 80% of bonds. We are always looking forward, and if we appear to enter a falling-interest-rate-

environment next, we will consider increasing Quality Bonds beyond our Home Base, up to a maximum of

100% of bonds.

The fed rate is just one of numerous factors which impact bond markets, bond investor’s returns, and our bond

portfolio strategies. I’ve been occasionally asked by clients, “Why should I care about bond fund selections

when I’m actually relying on my stocks for growth?” My answer is simple, “If stocks are your accelerator,

bonds are your brake pedal. You need the whole car in working condition to safely ar r ive home at the

end of the day.” After all, an investor’s nest egg is constructed from stocks and bonds and no matter what is

inside your portfolio, one day it has to translate to cash to pay the bills.

Managing Bonds Matters to Your Nest Egg, by Joseph Daigle, CFEI, Investment Analyst

Mallard Money Matters July 2019 Page 3

Mallard will be introducing a new quarterly report format for our

Gold and Platinum clients this year. The streamlined Quarterly

Investment Portfolio Review will feature more graphs and charts

and fewer text-heavy paragraphs. This should help clients better

understand their portfolio’s holdings and performance.

The first time clients receive this new report format, we’ll include a

handy “how to read your report” guide which will serve as a road-

map for reading the report. It will provide an overview of the infor-

mation being presented and should be kept for future reference.

The two page image on the right shows a new Comprehensive

Overview of a sample portfolio. It includes the:

Portfolio value

Asset allocation breakdown

Cash flow details

Portfolio performance over multiple time periods

Portfolio returns versus benchmark data

In addition to these two Comprehensive Overview pages, clients

will continue to receive market commentary, review, and outlook

information from our Investment Department, along with a detailed

billing summary by account.

As always, please give us a call at 302-737-4546 (or toll free at 888-

737-4546) if you have any questions about your portfolio, quarterly

reports, or anything else in your financial life.

And remember, all Gold and Platinum clients are entitled to two

meetings per year with their Financial Planners. Call our office to

schedule an appointment today!

If you’re not yet a Gold or Platinum client, please contact us to

learn more.

Please join us in welcoming Nick Gaetani! He will be part of the Financial Planning Division, serving as

Support Advisor. He brings to Mallard nine years of experience in relationship management and providing

financial planning to individuals.

A New Look for Your Reports,

by Jacqie Thompson, AAMS®, Investment Operations Manager

Welcome Nicholas (Nick) Gaetani, CFP®, ChFC®, Support Advisor

For illustration only—your report will be much less blurry!

750 Barksdale Road, Suite 3

Newark, DE 19711-3245

Working together, building your financial security

We are currently accepting new clients. If you know someone who is looking for financial advice, please think of us!

We offer a free 60 minute meeting — as a

nice way to get to know each other without

making a firm commitment.

We work with individuals, small businesses,

family trusts, estates, and nonprofits. Our

clients’ portfolios range from $20,000 to

$10 million. We can offer financial advice

on specific topics, such as retirement, tax

planning, education planning, estate planning,

financial planning, etc. We also offer full-

service Fee-Only investment management.

Your questions and comments

are always welcome.

Contact us at 302-737-4546 or

info@mallardfinancial.com

At Mallard Financial Partners,

we are fiduciaries.

That means we always put

our clients’ interests first.

Our business is about relationships,

not transactions.

Pam Baumbach, CFP®, IACCP® is our

President and Chief Operating Officer. On

May 29th, she was invited to be a corporate

grader for the “Me at 23” final projects at

Smyrna High School. The freshman and

sophomores made PowerPoint presentations of

their “Me at 23” projects and answered ques-

tions to a panel of industry judges. “I was so

impressed by the range of financial life skills

students could envision,” said Pam.

Referrals Welcome ! Fee-Only Advisors

www.mallardfinancial.com

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