1

NEWSLETTERIntegrating Your Values, Vision & Wealth

OCTOBER 2015

www.omegawealthmanagement.com | 703.387.0919

Year End Tax Planning. See Page 2

Celebrating the Passing of a Life and the Power of Planning On September 29, 2015, Omega lost a relatively new client and friend of Lisa’s, Benjamin Hutto. Ben died at 67 after a relatively short battle with gallbladder cancer. He was not only the Music Director and organist at St. John’s Church, Lafayette Square, but also the Director of the Choirs for St. Alban’s and National Cathedral Schools. He had an illustrious career and touched many lives. Ben came to Omega, like many clients, interested in seeing how he had done in his

planning for retirement. What was unique was that he didn’t know how long he would actually get to be in retirement or whether he would make it to retirement next year. In the short time that we had the opportunity to work with Ben, there were some great lessons to be learned for us and, we believe, you. Saving consistently for years: This had certainly paid off in Ben’s case. He was set for retirement even without a pension. His assets were pretty well-diversified and he had sufficient cash to weather the market uncertainties we are currently facing. Planning your legacy: Part of our work with Ben was to help him get his financial house in order. Had we not recommended getting his estate planning documents in order and then as his fate became clear…followed up with him on getting the documents executed and the beneficiaries changed, his legacy wishes would not have been fulfilled. Getting clarity on your life vision: Although Ben was not going to get to live out his complete vision for the future, we certainly had clarity on what was important. That clarity helped us, and Ben (we hope) decide what to do regarding his treatment and the end of life decisions.

Discussing your end of life planning before it’s imminent: One of the trickier, but most important discussions, is to talk with your loved ones about any arrangements that you would like to have considered. Yes, you won’t be there, but leaving your family to try to determine “what would he/she want?” is stressful and not a gift to those you leave behind. One of the discussions that Ben had with our Rector days before he died became part of the homily and a moment of laughter and relief for those at his funeral service. Understanding that hospice is not just for the very end of life: This was a harder discussion to have. Most people assume that hospice is only for those dying very soon. The reality is that hospice can provide “palliative” care long before the end thus lessening the suffering and providing support to those around you. Ben was one of the most positive people I have ever met. He wasn’t willing to take “no” for an answer until he had tried every possible treatment. That positive attitude forced me to have to think about how I approach the end of life and to have the patience to let Ben craft the end in his own way. The lessons of watching someone gracefully prepare for the end of their life is one that I plan to share and bring to our work with our clients. Dying gracefully has not been fully embraced in this country. Through life planning, sound financial planning, and patience, the journey can be easier for all involved. Godspeed Ben,

Lisa A. K. Kirchenbauer, CFP®, RLP®

President

2

Planning Updates

As we wrap up 2015, the Team and I have our sights set on some important year-end work for you…

Tax Returns & Tax Planning: If you or your CPA has not sent us your 2014 return, now is the time! We need to see if you have any investment losses that you are carrying forward (and could be used to offset any gains this year). We will be researching which mutual funds are paying capital gains distributions-even a down market year (see the Investment Outlook section on the next page for more details), assessing any realized gains/losses from the transition to SEI, as well as looking at any issues unique to your situation which might impact your 2015 tax planning. Risk Tolerance: This summer, Joey Loss and Jared Jones may have reached out to you to ask you to update your risk tolerance profile. For

many of our clients, it has been 5-6 years since assessing this important benchmark. If you have received one of those emails and have not had a chance to respond, please help us help you by taking 15-20 minutes to complete the online assessment, Finametrica. Once we have your results, we will be reviewing your portfolio to determine if we need to recommend changes in your investment strategy.

Required Minimum Distributions/Charitable Giving: For clients over 70½ or who have inherited an IRA account, we need to make sure that all required distributions are taken by year-end. We will be in touch as needed to get those completed. If you are interested in more significant charitable contributions for tax planning purposes and/or would like to have a charitable “fund” to utilize on an on-going basis, please contact us to discuss setting up a donor-advised gift fund.

Do you know about Giving Tuesday?Giving Tuesday was created in response to “Black Friday” and “Cyber Monday”. It’s a movement at the holiday season to support giving back. If you are looking for a way to make the holidays more meaningful or also trying to do some research on charities, here are some websites to check out:

• GivingTuesday.org• CharityNavigator.org – to research charities and their effectiveness.• DonorsChoose.org – if you’d like to help students and teachers in public schools short on resources.• VolunteerMatch.org – to volunteer your time in your community.

3

Investment OutlookThe information below is a compilation of market commentary from SEI, Fidelity and Morningstar… “It was hardly a relaxing summer for global investors. The summer solstice came with Greece in full-blown economic and political crisis, leading to sharp moves in European stock and bond markets. But Greece, as it turned out, was just a warm-up to the main event. The bursting of the stock market bubble in China in late June, followed by an unexpected depreciation of the renminbi against the U.S. dollar in mid-August, has led to substantial financial market reverberations in investable markets, both developed and developing. Indeed, the volatility has been so intense that investors and market pundits alike are wondering whether a new bear market has begun in global equities and other risky assets.” (excerpted from SEI’s Economic Outlook for Third Quarter 2015). This commentary was written at the very beginning of the new quarter, and even since that period of time while September statements and performance reports came out showing losses, we have experienced a move up that has left people’s heads spinning. What has added to the unknowns and volatility has been our own Federal Reserve’s hesitancy to raise rates as expected. While creating continued opportunity for inexpensive financing on houses and other assets, the fear of the unknown generally has a negative impact on financial markets. It’s important to understand that the U.S. stock mar-ket hasn’t had its standard pullback or “correction” since 2011, and average time between pullbacks is 18-24 months. So, as we had been saying at Omega…we were over-due. It’s never fun when it happens but it’s something that needs to be planned for in one’s investment plan. Omega’s goals-based approach generally allows for, and protects against the impact of these short-term fluctuations, especially when you’re at a point that waiting for recovery is harder to do. What has challenged the portfolios created at Schwab (which we are now closing down and moving to SEI’s strate-

Continued on next page...

gies) is that with an equal-weighting to areas such as com-modities and emerging markets, we were more negatively impacted by the global markets’ recent events. And we haven’t even talked about the strong U.S. dollar and its impact on U.S. multinational companies doing significant business overseas. And did you understand how strongly emerging market countries are tied to the impact of U.S. interest rates? It’s certainly a much more global investing climate in 2015 and one that is much more complex than even 20 years ago. So, what do we see on the horizon? Here’s what SEI will be focused on (and in turn, we will too.): Investment weightings:• Large company stocks vs. smaller company stocks • Value vs. growth orientation• Developed vs. developing/emerging countries• Expanded diversification beyond the U.S.• Higher quality vs. higher yield bonds As far as concerns to watch… • Global growth disappointments. If we don’t see global growth pick up in China, then it falls to Europe and the U.S. to create that growth. The challenge is whether the U.S. economy can expect stronger growth in the years ahead. • A severe monetary policy mistake occurs. Between the Chinese Central Bank’s unexpected move and our own Fed’s delay in starting to raise rates, it’s hard to know what to expect. Although a significant mistake in monetary policy seems unlikely, waiting too long to raise rates or another surprise move could throw the global financial markets off. • A severe fiscal policy mistake is made. Whether it’s U.S. gridlock threatening to shut down the government, the Chinese’s inability to unwind their debt prudently or overly austere European policies…all could serve to upset the apple cart in unexpected ways.

2015 3rd Quarter performance by Index:Benchmark Q3 Year to Date CategoryS&P 500 TR USD (6.44%) (5.29%) U.S. Large Cap StocksRussell 2000 TR USD (11.92%) (7.73%) U.S. Small Cap StocksMSCI EAFE NR USD (10.23%) (5.28%) International StocksBarclays US Agg. Bond TR USD 1.23% 1.13% Intermediate Term Bonds

4

Continued from page 3.

• The more stringent regulatory environment affecting banks and brokers could lead to market liquidity concerns during times of stress. Interest- ingly, the same action that is being taken to provide better protections for investors and depositors could also come back to haunt us in the next financial crisis. This is a building issue that remains under the radar unless you read between the lines in publications like the “Wall Street Journal”. • Angry electorates vote populists into power. We have already seen this in the U.K., and Canada, and who knows what our own political process may bring. The challenge is the uncertainty and the perception that less market/business friendly policies could hurt investor confidence. But the news is not all bad…U.S. housing continues to recover well, we are finally see-ing small signs of wage growth, and low infla-tion. SEI ends their own commentary by saying… “For now, we remain in the buy-the-dip camp.Easy central bank policies, modest economic growth in most parts of the world and improved equity-market valuations should overcome the great wall of worry built by investors.” It’s hard to know when and if those “dips” will continue to come, but for the time being, it certainly seems like a good time to stay invested, diversified and not too focused on the day to day.

Business Owners’ Corner This quarter brings some ideas &

resources to help you focus ON your business, not just IN your business. Michael Gerber wrote a famous book called “eMyth” a number of years ago. In short, it told the story of how many busi-ness owners come to own a business…they have a skill/talent, they get tired of working for someone else (or are forced out) and end up starting their business. It’s not always as intentional as it could be and then all of

a sudden, the “business” has gone from a 1-2 person organization to larger organization needing management, not just the work being produced. Many business owners are not ready for this stage and don’t how to run a business. “eMyth” helps you understand this evolution and take action to learn to be a better manager/owner. Over the years, I have come across a number of resources to help me be a better manager/owner and here are 2 I can recommend:

Strategic Coach: Strategic Coach is a group entrepreneurial coaching program based in Chicago and Toronto (they have other gathering sites as well). They have great resources for business owners/entrepreneurs to both become a better owner and to live a more enriching life. Once a quarter, you have the chance to get away for a day to work ON your business, think strategically and network with other successful people. Without this time away, many owners never take the time to reflect, plan and learn. For more information, go to: www.StrategicCoach.com The second resource is one that I recently discovered… “TED: The Empowerment Dynamic” by David Emerald. This is a great book for anyone in an organization that wants to create a positive culture and more personal accountability. It’s a quick read and may seem a bit basic but very powerful. It’s even useful in personal relationships!

Michael Gerber

How Can Mutual Funds Make a Capital Gains Distribution in a Down Year?We are starting to see mutual fund companies give notice that they will be paying out capital gains distributions at year-end. Those capital gains distributions are a taxable event to you. You may wonder how that can happen given the stock market’s performance this year. First, you need to understand how mutual funds work. During the calendar year, mutual fund managers buy and sell stocks and bonds (or whatever their fund invests in), taking losses and gains that can be offset against each other. At year end, they must pay out any gains to shareholders (that’s you) but can hold the losses to offset gains in future years. After 2008/2009, fund managers had years of realized losses that offset gains until the last couple of years. Now, as they sell investments at a gain (perhaps earlier this year), those gains must be distributed to you even though the fund’s value has gone down in the second half of the year. At Omega, we are already beginning the research to determine which funds may pay out a capital gains distribution in the next 2 months, and the early signs are that there will be some impact. That said, since we are moving most clients from Schwab to SEI, we may avoid some of those unwanted distributions, but we will be checking SEI funds to see if there could be any impact there as well. Once we know what to expect, we will assess our individual client’s situations to determine if there is any action to take. From there, we will be in touch with you, if needed.

5

CLIENT SPOTLIGHTStephen DiCicco and Brisket

3 Barbecue and building my business are very important to me now. Every day I take on new challenges and receive great rewards as a business owner, but the barbecue is a source of comfort and satisfaction. It’s difficult to describe how special it is for me when I pull a perfectly juicy, jiggly brisket off the smoker or arrange a rack of ribs glistening with sauce in a tray, knowing that the next person to see that food will be enjoying the smell and taste as much as I enjoyed cooking it.

What are you passionate about?

1 I was born and raised in Arlington, the oldest of three brothers. My mother was from Colorado and my father is from Brooklyn. My brother, Martin, is a Cinematographer in Los Angeles, CA, and my youngest brother, John, is a Chef in Austin, TX. I graduated from George Mason University (B.A. Geography 2006), and worked for several government contracting firms before starting my own business in 2012. When I’m not working I like to spend time with my dog, Brisket, and catch a concert here and there.

Tell us about yourself personally (family, interests)

Tell us about your business/work and what led you to where you are today?2

I am the Chef/Co-Owner of Old Blue BBQ, a barbecue catering company based in Alexandria. I started doing barbe-cue competitions as a hobby around 2006 and won my first awards in 2009. My long-time friend, Kelly, joined me on the competition circuit in 2012 and by the end of the summer I decided that work was getting in the way of cooking barbe-cue, so I quit my job and Kelly and I founded Old Blue BBQ. Kelly and I are lucky to have a wealth of support from our friends and family who were our entire client base in the first year, and also acted as our street team, spreading the word about our company. Building on that support and a lot of hard work from our staff, we proudly opened our own 4,500 sq. ft. facility this summer, expanding our operation with a new barbecue pit that increased our capacity by 600%. We are happy to finally have a home for our equipment and our staff, who are the most important part of our business.

4 Glengarry Glen Ross. It has so many quotable lines and the performances by Al Pacino, Kevin Spacey, and Alec Baldwin are not to be missed. Remember, A. Always, B. Be, C. Closing.

Favorite movie and why?

5 We have a motto: “Bringing people together with exceptional barbecue” and I like the idea that my food is part of the ritual of people coming together to enjoy each other for a few moments. Whether it is for a wedding, a baby shower, or a corporate networking event, we play a small part in the important moments of people’s lives.

How do you hope to make difference on this planet?

6 When I hired OWM I had a high-paying job and very little savings. Lisa and her staff provided me with the basic tools and information that helped me understand my short-term spending and long-term goals. Without their help I don’t know that I could manage my savings and take on the burden of starting a business.

What’s the one thing that you have learned from working with OWM?

Thank You, Stephen & Brisket!

6

At this point, we are about 2/3 through the transition from Schwab Institutional to SEI Investments. The transition process has taken a while since we are working hard to try to make sure that accounts and instructions on those accounts are set up the right way at the beginning. As part of the transition, we have also created simple, socially responsible investment portfolios for our clients who prefer that approach in aligning their investment portfolios with their personal values. Once we get our clients’ accounts over to SEI, we are focused on the following next steps: • Get the portfolio repositioned (if we recommended changes). • Help you set up online access.

You can also go to SEI and set up access directly, rather than waiting for an email from SEI once your accounts are set up. Please go to: www.accessmyportfolio.com and below the Log In section, you can register for online access. It’s quick and easy and will allow you to review your accounts’ allocations and balances. Please keep in mind that spouses will need separate access. If there is a way we can connect access between people, we will let you know. • Reconnect your new accounts at SEI to the eMoney system. You can reach out to Joey Loss (Joey@ OmegaWealthManagement.com) or Jared Jones (Jared@ OmegaWealthManagement.com) for help with this.

• Address any tax planning needed as a result of the transition to SEI. See the Planning Updates section (page 2) for more on our annual process.

We appreciate your patience with this important step in provid-ing you with solid, top-notch investment management. Our goal is to complete the transition before the end of the year. In case you were wondering… we will be maintaining our relationship with Schwab Institutional for now. For “trading accounts” and various other reasons, we will still have a few accounts at Schwab, but will discontinue perfor-mance reporting on those accounts after Q1 of 2016.

SEI Transition Update

Late this summer, after our VA Tech financial planning student interns had returned to school, we were fortunate to bring on board, first as an intern and then as a full-time employee… Andrew Mehari. Andrew is also a VA Tech financial planning program graduate (see below for more on his background) and strong in detail and process. As a result, he has started at Omega as an Operations Associate and is not only assisting me with the SEI Transition paper-work, but also some of the day-to-day client service work. Andrew works in partnership with Vanessa Reyes our virtual Client Service Associate (VPG). By having Andrew on board, we are re-instituting in-house client service support which we believe is important.

Behind the scenes, Joey Loss and Jared Jones have each been assigned to an Omega client to help support me in working with you, preparing for meetings and following up on our actions post-meeting. If you have heard from one of them on tax returns, or meeting reminders then they are most likely assigned to you. This will also allow them to get to know you and your unique needs over time. As we move into 2016, we will be settling into more permanent roles and will continue to communicate these updates to you, as needed. In the meantime, if you’re not sure who to contact, you can always reach out to me and I’ll get the necessary people involved and responding to you.

TEAM UPDATES

Andrew started learning about financial planning in college, at Virginia Tech. Originally, he was solely a finance major, but as he furthered his education his third year he was able to gain exposure to the world of financial planning, and joined the CFP® Education Program at Pamplin Business School. He acquired a great deal of knowledge and skill in the areas of budgeting, cash flow analysis, risk management, investment management, retirement and estate planning. He applied those skills at Monument Wealth Management in the summer of 2014 in an internship where he was able to gain industry experience in client communication, financial planning and analysis with software, and back-office operations. He began his position at Omega Wealth Management the following August, where he works as an Operations Associate. He is currently in charge of the investment transition process from Schwab to SEI, and provides Lisa and our associate planners with materials they may need for their client meetings. He looks forward to working with you in the near future!

Meet Andrew Mehari!

7

The OWM Family

If you haven’t been in our new offices yet, you won’t have seen the big wall that we have left blank. We have decided that it might be fun to ask our clients to help decorate that wall with pictures of what’s most important to you. We are about helping our clients integrate their values, vision and wealth and what better way to symbolize that with pictures of what is most important and perhaps something that you have done as a result of your work with Omega. It might be a family picture, a travel photo to a place that is special to you or even a place that is important in your life. We look forward to filling that wall over time with meaningful people and places. We are looking for 8 x 10 size photos which can be framed or unframed (we will do it for you!) in either landscape or portrait orientation. Over time, we hope to fill the big wall with meaningful photos which may inspire our new & existing clients towards their “life without regrets”.

CALLING FOR FRAMED OR UNFRAMED PHOTOS OF WHAT’S MOST IMPORTANT TO YOU!

DON’T FORGET

November 26th - 27th - Thanksgiving DayDecember 25th - Christmas Day

OWM Offices closed December 24th - January 1st OWM Offices open Jan. 4th, 2016

Important Dates and Reminders

CONTACT US

Lisa A. K. Kirchenbauer, CFP®, RLP®

Certified Financial Transitionist™

President and Founder703-387-0919, ext. 500FAX: 703-387-0918Lisa@OmegaWealthManagement.com • Strategic advice on planning/investments• Business owner coaching and consulting• Prospective new client inquiries

Joey LossFinancial Planning Associate703-387-0919, ext. 502Joey@OmegaWealthManagement.com • Support Client Service & meeting preparation process• Assist in investment research & analysis process

Jared JonesFinancial Planning Associate703-387-0919, ext. 508Jared@OmegaWealthManagement.com • Support Client Service & meeting preparation process• Assist in investment research & analysis process

200 North Glebe Road, Suite 730, Arlington, VA 22203 Phone (703) 387-0919 Fax 703-387-0918www.omegawealthmanagement.com

Ingrid PineOffice Manager703-387-0919, ext. 501Ingrid@OmegaWealthManagement.com • Office Management• Greeting clients

8

OWM STRATEGIC PARTNER

Susan J. Chesney, MS, CFP® Delegated Planning, LLC

Elissa Tiprigan, MS, CFP® Delegated Planning, LLC

Andrew MehariOperations Associate703-387-0919, ext. 506Andrew@OmegaWealthManagement.com • Client Service Issues and SEI Transition Process (with VPG)