Client Newsletter: October 15, 2013

Market Update

During the third quarter, the major U.S. stock asset classes continued to post positive performances.  For the quarter, stock asset class returns ranged from 12.80% in small growth to 3.94% in large value. Small cap stocks outperformed large cap stocks and growth indices outperformed value indices.

Bond investors received a bit of good news this quarter as the US Federal Reserve continued the pace of bond buying in the latest quantitative easing program.  This was a big change from last quarter when the Fed announced it would begin to taper the purchase of quantitative easing by mid-2014.  The market reacted positively by reducing the 10-year bond yields from a two-year high of 3.00% to a close of 2.61%.  (Dimensional Fund Advisors, LP)

Third Quarter vs. YTD 2013 Index Returns









*  Indices mentioned are unmanaged and cannot be invested in directly.  Past performance does not guarantee future results.

Upcoming Seminar

As you might have heard, we are thrilled that Kathy Jones, Vice President and Fixed Income Strategist at Charles Schwab & Co, will be our featured speaker at our upcoming October 24th client educational event.  Kathy will be talking about rising interest rates and their impact on Fixed Income investments. We are excited to have such a dynamic and prestigious speaker provide us insight into the bond markets. We are confident that her expertise will be very valuable in helping to structure or position fixed income investments within portfolios.

We hope that you will attend this interesting client event. We also would like to encourage you to invite any business associates, friends or clients as our guest.

Chester County Food Bank

We wanted to thank all of you who have contributed to the Chester County Food Bank. So far, we have enjoyed a great response and we are well on our way to achieving our $7,500 goal. If you have not contributed, please feel free to send a donation to our office or bring with you to the seminar on October 24th. Our Fall Funds for Food drive will end on October 24th.

In October the HFA staff had the privilege of working at the Food Bank where we packed 272 back packs. The Back Pack program provides healthy food for children who otherwise would skip meals over the weekend. We also sorted through donated food and made 60 boxes of food for seniors.

Third Quarter Statements

Attached to this letter is your 3rd quarter statement. This is the first statement produced on our new client investment management software. As mentioned in previous letters, we have purchased new software to replace CIRStatements. Although we have made great progress in converting your data from the old system to the new software, we still are not ready to provide you the link to the new website. We expect it to be finished soon, but if you need any information regarding your accounts, please do not hesitate to contact us.

Our goal when this website is finished is for you to be able to access all of your investment accounts with one login. This would include your Charles Schwab brokerage accounts, as well as securities owned at the fund or within an annuity company where our office is the broker. We also should be able to link other investment accounts where a username and login have been established.

We will also be transferring all of the data from our Electronic File Cabinet to our new client portal, so you will be able to see all of your investment and financial data in one consolidated website.  We will be reviewing this website in more detail at upcoming review meetings.

Beneficiary Update

Every Schwab retirement account owner should have received a beneficiary update form from our office in the mail. With our recent transition from Pershing to Charles Schwab & Company as our primary custodian, we wanted to verify that the beneficiary information is accurate and complete. Please take the time to review your form and notify us immediately if there are any changes necessary. We are asking you to sign and return the form acknowledging confirmation and verification that the beneficiaries are accurate.

Please understand that the beneficiary designation on retirement accounts like an IRA, SEP-IRA, 401(k) or Profit-Sharing plans determine where monies pass upon the owner’s death. Your will does not provide instructions as to the dispositive provisions of those retirement accounts.  Therefore, it is extremely important that all of your retirement account beneficiaries be checked carefully. Additionally, be sure both primary and contingent beneficiaries are named. Please contact our office if you have not received your beneficiary form.

Family Pride

According to Family Firm Institute, only 30 percent of family-owned businesses make it to the second generation. HFA is happily now part of that statistic. My daughter Kelly recently became part of our team and Beth and I are glowing with pride. She is currently studying for the CFP® and providing planning support for myself, Phil and Jerry.

Before coming on board, Kelly was supervisor of the Fixed Income Fund Analysis Team at The Vanguard Group. She holds a master’s degree in Financial Services from St. Joseph’s University and an undergraduate degree in Finance from the University of Delaware. I am thrilled my daughter is a member of the firm. Family business is the backbone of America and with her on board, our second generation is poised for a healthy productive future. Please join me in welcoming Kelly.

A New Look

Kelly isn’t the only new face at HFA. Our corporate identity package makes a smart, contemporary statement, complete with a handsome updated logo. We are always up to the minute on financial planning, so all agreed it was time to bring our branding into the 21st century. With that in mind, we incorporated a modern image and striking blue font color into all of our materials.

You will see more of our new branding over the next few months. The new logo couples HFA’s Your Bridge to the Future with Solid…Secure…Timeless, a positioning message that defines our service and commitment. We also stress something you, as a client, are well aware of – Today’s Planning…Tomorrow’s Peace of Mind. The prudence of advance planning is vitally important and our materials emphasize this. In addition, a re-designed website will be launched before year’s end. It promises to be more user-friendly, informative and is sure to capture social media attention. I hope you will share our enthusiasm and be pleased with what you will soon see.

Please feel free to contact our office if you have any questions regarding your portfolio or any changes to your financial situation.  We sincerely appreciate the confidence you have placed in our firm and we will continue to serve you to the best of our ability.

Best Regards,

Peter K. Hoover, CFP®