The 2010 Callan Periodic Table of Investment Returns was recently published. A link to the Periodic Table is here.  BlackRock has a periodic table tool, which supports the creation of customized reports.  I prefer the BlackRock tool because the table includes a Diversified Portfolio. A link to the BlackRock 2010 table is here.  You can also click on the thumbnail image below.

Some observations:

• Large Cap Core, AKA S&P 500 Index, continued the recovery from 2008 with a 15.06% gain in 2010, while fixed income, AKA Aggregate Bond Index, provided a steady return of 5.2% in 2008, 5.9% in 2009, and 6.5% in 2010.
• The Diversified Portfolio is composed of 35% of the Barclays Capital US Aggregate Bond Index, 10% of the MSCI EAFE Index, 10% of the Russell 2000 Index, 22.5% of the Russell 1000 Growth Index and 22.5% of the Russell 1000 Value Index.
• It’s impossible to predict with any certainty which asset class will “win” in 2011.
• The Diversified Portfolio returned 12.99% in 2010, or 86.25% of the S&P 500 all equity asset class.
• The Diversified Portfolio produced annualized returns of  8.89% , 97.26% of the S&P 500 all equity asset class.

The table is a pictorial view of the benefit of a diversified portfolio, which consistently provides relative returns in the middle of the pack.  It’s important to own a mix of stocks, bonds, and cash, diversified across multiple asset classes to reduce the volatility of returns in a portfolio.  You can see this by comparing the Diversified Portfolio returns to those of any single asset class over the years.

Cedar Financial Advisors charges a flat fee for Financial Planning Services, and provides Wealth Management Services (ongoing financial planning and investment management services) on a Retainer or Assets Under Management (AUM) basis.

Amy Buttell, a freelance writer and editor, describes creative strategies for saving money in retirement in an article for Fox Business. I provided background information and am quoted in the article.

“By the time people are ready to retire, or have already retired, they should have a very current picture of what their spending is,” says Tim Kober, a certified financial planner with Cedar Financial Advisors in Portland, Ore. “There’s the problem of spending going up in the initial part of retirement when people do all the deferred things that they’ve been wanting to, and it’s important that they don’t overdraw their nest egg to make all those nice things happen.”

Drive a Bargain

After housing, cars are one of a consumer’s biggest expenses. “People don’t think about operating costs and the total costs of owning a car, including repairs, insurance and maintenance,” Kober says.

Kober notes that couples can save money by cutting back to one vehicle. Also, retirees might employ other creative strategies like renting a cheap car for long trips instead of putting more wear and tear on their own set of wheels.

Oregon 2011 Medicare Fast Facts

• 32 Medicare Prescription Drug Plans (PDPs) available
• 85% of people with Medicare have prescription drug coverage (including 64% with Part D)
• 27% of people with Part D get Extra Help (also called the low-income subsidy, or LIS)
• 92% of people with Part D can pay a lower premium in 2011 than they did in 2010
• 81% of people with Medicare have access to a MA plan for a $0 premium
• 14 PDPs have $0 deductibles
• $14.80 is the lowest monthly premium for a PDP
• $42.90 is the lowest monthly premium for a PDP with any generic coverage in the Coverage Gap
• 8 PDPs have a premium of $0 for people who qualify for Extra Help

Source: CMS
Plan costs and coverage change each year, so all people with Medicare should check to make sure their plan still meets their needs and budget. There may be a Medicare health or drug plan available with better coverage or a lower deductible in 2011.

2011 Open Enrollment Important Dates

October
• Watch your mail for notices from Medicare, Social Security, and health and drug plans with information about changes in 2011
• Compare plans online at www.medicare.gov starting October 15
November
• “Medicare & You” 2011 arrives in your mail
• Open Enrollment starts November 15
December
• Open Enrollment ends December 31

Amy Buttell, a  freelance writer and editor, tackled the complex issue of when to claim Social Security Benefits in an article for Bankrate.com.  I provided background information and am quoted in the article.

“Retirement planning is complicated, beginning with the decision about when to begin taking your Social Security benefits. On one hand, if you need the money and don’t expect to live into your 80s, it is tempting to take Social Security as early as possible — at age 62 — to benefit from the income stream. On the other hand, you can increase your monthly payment considerably by waiting until age 70. Most people underestimate how long they are going to live.

“I like to frame the Social Security benefits issue discussion with my clients by offering a definition of it as an inflation-protected joint and survivor annuity backed by the U.S. government,” says Tim Kober, a Certified Financial Planner with Cedar Financial Advisors in Portland, Ore.

“This provides context for the ‘when to claim’ question,” he says. “The present value of Social Security payments is equal over your expected lifetime, regardless of when you claim it. If, as Clint Eastwood would say, ‘You’re feeling lucky,’ claiming late makes sense.”

You can read the full article here When should you apply for Social Security? – Bankrate.com

The article was syndicated at Yahoo! Finance.  Given that it is election season,  there are plenty of comments on the health of the Social Security system and the wisdom of the Government continuing the program.  You can read the full article and comments here When should you apply for Social Security? – Yahoo! Finance

When you have your ducks in a row, you have an investment plan, which includes an asset allocation that is aligned with your goals, time horizon, risk tolerance, and need to take risk.  Russ Thornton, an Atlanta-based wealth manager at Thornton Wealth Management, provides some timely advice  on When To Buy & When To Sell.  This post, inspired by a recent voicemail from a client, about how emotions creep into our financial decision making and can lead otherwise smart people to potentially make some dumb and costly mistakes.  That’s where an independent, objective advisor can add a lot of value – by providing a consistent voice of reason in the face of emotional influences.  You can also find Russ on Twitter @RussThornton

Another benefit of having your ducks in a row is peace of mind.  Roger Wohlner, is a Chicago-area Fee-Only Financial Advisor and Twitter devotee(addict?) @rwohlner. His recent post, Financial Conferences and Stock Market Drops, describes how most of his clients are reacting to the recent market volatility.  As luck would have it, he has been away from the office attending financial conferences twice now on days when the stock market experienced sizeable drops.  Rather than a lot of voice mails from frantic clients, he generally receives few if any calls on days like this.

By now you’re curious how to find a trusted advisor to help you get YOUR ducks in a row.  Nathan Gehring CFP®, who is based in Appleton WI, illustrates how by way of a medical analogy in his latest post And About That Free Financial Plan.  Would you select a doctor who was paid by a pharmaceutical company? Yet, this is what people do every day when selecting a financial professional. There is a better way.

When considering changing your tax withholding, it is important to separately consider your federal and state tax situation. For example, if you received a federal refund last year and owed Oregon tax, raising your allowances COULD mean that you would be subject to a Oregon underpayment penalty.

Good news – you can adjust your federal and state withholding allowances separately. The Oregon income tax withholding brochure from the Oregon Department of Revenue describes situations where your withholding may differ from your tax liability

• You are in a dual-earner household filing a joint return;
• You have more than one job;
• You have large amounts of nonwage income;
• You have large deductions;
• You claim federal credits that don’t apply to Oregon,
such as federal child tax credit; or
• You claim Oregon credits not accounted for on the
federal tax form, such as Oregon Working Family
Child Care Credit.

You can change your Oregon allowances by submitting a form W-4 and writing “for Oregon only” on the top of the form. The brochure includes Oregon adjustment guidelines, and a calculator for high-income earners.

Disclosure: I’m a member of the CMBA and currently serve on the Board of Directors as Treasurer