RANDOM GLEANINGS
MISCELLANEOUS
EXCERPTS, FACTS,
TRIVIA & MORE
A handpicked sampling of interesting headlines published throughout the first quar ter
MARKET PULLBACKS, INCLUDING POTENTIALLY
SIGNIFICANT ONES, ARE COMMON, EVEN
Volume: 2 Issue: First Quarter, 2012
KNEED TO KNOW
Up, Up and Away We Go
DURING BROAD MARKET RALLIES. WHILE IT
MAY BE TEMPTING TO SIT OUT THE PULLBACKS,
ATTEMPTING TO TIME THE MARKET IS DIFFICULT AND
MARKET PERFORMANCE AS OF 3.31.2012
20%
COULD MEAN MISSING OUT ON THE BEST DAYS.
18.67%
18%
16%
HEADLINES
14%
12.59%
12.44%
12%
10.98%
DROPS HAPPEN… Since the S&P 500 bottomed
on 3.09.09, the stock index has gained +106.5%
through the close of trading last Friday 3.23.12
10%
S&P 500
Russell 2000
NASDAQ
MSCI EAFE
(change of the raw index not counting the
Source: Morningstar
Market Performance
The elephant is the only mammal that
cannot jump. They are also the only animal
with four knees.
impact of reinvested dividends). Even though
the index has more than doubled there have
WITH AND WITHOUT THE IMPACT OF INFLATION
been 11 different pullbacks of 5% or more
since the 3.09.09 bottom. The average depth of
the pullbacks has been 8.8% over an average
of 18 days. The deepest tumble was a 17.2%
drop over the 24 days that ended on 8.10.11.
MISSING THE BEST… The total return for the
S&P 500 was +2.1% (total return) in 2011. If you
missed the 3 best percentage gain days last
year, the +2.1% gain falls to a 10.7% loss.
Sources: BTN Research; Random Facts, Jennifer Li
The nominal (i.e., non-inflationadjusted) price of an ounce of
gold hit an all-time high of $1,889
on 8.22.11. The all-time record for
the price of gold (on an inflationadjusted basis) was $850 an
ounce set on 1.21.80 (i.e., 32 years
ago), equal to $2,472 an ounce in
today’s dollars.
The sound of E.T. walking, from the
movie E.T.: The Extra-Terrestrial was
made by someone squishing her
hands in jelly.
market commentary
| Q1 12
Too Far, Too Fast? Capital markets start the year on a buoyant note,
but a host of issues await the remainder of 2012
Eric Freedman
CAPTRUST Chief Investment Officer
2012 began with a bang for riskier asset classes with U.S. Equities registering their best
first quarter performance since 1998 (+12.6%) and their strongest quarterly return since
the third quarter of 2009. International Equities shrugged off a lackluster March to register
strong gains led by the MSCI Emerging Markets Index which closed up over 14%. Building
off of three straight up years, U.S. Real Estate Investment Trusts (REITs) continued
their strong return profile (+10.5% in the first quarter of 2012). Comparatively, two
sluggish performers were bonds (Barclays Capital Aggregate +.3% in the first quarter) and
Commodities (Dow Jones UBS Commodity Index +.9%). Irrespective, investors will gladly
accept positive absolute returns across major asset classes given 2011’s turbulence.
Global asset classes continue to be driven by two interrelated key variables; liquidity and
low interest rates. First, liquidity remains a key theme with central banks striving for easier
Major Asset Class Returns, 1st Quarter 2012
15%
12.59%
12.90%
Q1-12
12.44%
12%
10.98%
2011
10.79%
9.24%
9%
7.84%
6%
2.11%
3.36%
1.50%
0.30%
-0%
0.89%
0.01% 0.10%
-3%
-4.18%
-6%
-5.51%
-9%
-12%
-11.73%
-13.32%
-15%
S&P 500
Large
Cap
Stocks
(R1000)
Small
International
Fixed
Cap
Equities
Income
Stocks
(MSCI
(BC
(R2000)
EAFE)
Aggregate)
Real
Commodities Fund of
Cash
Estate
(DJ-UBS)
Funds (Merrill Lynch
(Wilshire
(HFRI
3-month
REIT
Composite)
T-Bill)
Index)
Source: MPI Stylus Pro
3%
financial conditions facilitated by more
capital flowing within economies. The U.S.
Federal Reserve’s balance sheet grew from
$870 billion in early August 2007 to $2.9
trillion at this past March’s month end.
The European Central Bank responded to
concerns about Euro financial institutions’
health by allowing cheap financing to the
tune of $672 billion in capital through the
Long Term Refinancing Operation (LTRO)
program. The Bank of Japan surprised
markets in mid-February by boosting its
existing bond buying program by ¥10 trillion,
complementing existing asset purchase and
credit loan obligations. The Bank of England
also strengthened their existing asset
purchase program to total £325 billion.
Subdued interest rates, which some
attribute to the asset purchase activities
highlighted above, are also key
macroeconomic drivers. Central banks
have targeted low borrowing rates in
what has been almost four years of highly
accommodative monetary policy. Bonds
have retained a “fear premium” as evidenced
by the fact that global Equity market
performance has more than doubled in total
return since March 2009, yet bond yields
(as measured by the U.S. 10-year Treasury
Index) actually fell over the same period.
Investors hope 2012 neglects to follow
2011’s price patterns when riskier asset
classes rose early in the year only to fall from
May through October. Issues looming large
include the end of the Federal Reserve’s
“Operation Twist” program as well as U.S.
election results, the status of the Bush
Era tax cuts, and further clarity regarding
U.S. Healthcare policy. Markets will digest
European austerity’s impact on consumer
sentiment and corporate earnings, plus the
magnitude of Emerging Markets’ recent
slowing trends. Given strong asset price
returns so far in 2012, investors are torn
between committing fresh capital to an
already ebullient capital market environment
or being left out of potential rallies induced
by additional liquidity measures. „
market review
| Q1 12
U.S. EQUITIES
Market Performance, 1st Quarter 2012
Q1’12
2011
11.12%
0.39%
Large Blend (S&P 500)
12.59%
2.11%
Large Growth (R1000 Growth)
14.69%
2.64%
Mid Value (Russell)
11.41%
-1.38%
the sole negative sector. Standout performing sectors included Financials (+22%),
Mid Blend (Russell)
12.94%
-1.55%
Technology (+21.5%) and Consumer Discretionary (+16%) as economically sensitive
Mid Growth (Russell)
14.52%
-1.65%
Small Value (R2000 Value)
11.59%
-5.50%
Small Blend (R2000 Blend)
12.44%
-4.18%
Small Growth (R2000 Growth)
13.28%
-2.91%
its best first quarter performance since 1998 and its strongest quarterly return since the
third quarter of 2009.
• Nine of the ten major S&P 500 sectors increased in the first quarter with Utilities being
sectors ramped higher in the first quarter.
Source: MPI Stylus Pro
Large Value (R1000 Value)
• U.S. Equities recorded a second straight positive quarter, with the S&P 500 registering
• Since the U.S. Equity market peaked in October 2007, Mid and Small Cap stocks have
fully recovered their losses when incorporating reinvested dividends. At the end of the
quarter, Large Cap stocks were a mere 0.7% lower than their October 2007 peak level,
despite returning 122% since their March 2009 low.
INTERNATIONAL EQUITIES
Market Performance, 1st Quarter 2012
Q1’12
2011
10.98%
-11.73%
first quarter, closing the second straight quarter of positive returns for international
11.31%
-12.67%
stocks. Both Developed and Emerging have been higher ten out of the last twelve and
European Stocks (MSCI Europe Ex-UK)
12.58%
-14.49%
Japanese Stocks (MSCI Japan)
11.35%
-14.19%
UK Stocks (MSCI UK)
7.64%
-2.52%
Emerging Markets (MSCI EME)
14.14%
-18.17%
Pacific Stocks (MSCI Pacific Ex-Japan)
ten out of the last thirteen quarters respectively.
Source: MPI Stylus Pro
International Equities (MSCI EAFE)
• Developed and Emerging International Equities both registered positive returns in the
• Developed International Equities posted an 11% return in dollar terms and 10.3% in local
currency terms behind standout performers Germany (+21%) and France (+12.3%). The
Dollar weakened relative to the Pound and Euro but strengthened against the Yen.
• Emerging markets had strong performance, up 14.1% in Dollars and 10.8% in local currency
terms, with a weakening Dollar helping the former’s returns. India and Brazil posted 20.1%
and 18.6% returns, respectively, while China returned just under 10% for the quarter.
market review
| Q1 12
FIXED INCOME
Market Performance, 1st Quarter 2012
Q1’12
2011
Broad Market (Barclays Capital U.S. Aggregate)
0.30%
7.84%
fourteen, closing up a scant at 0.3% in the first quarter of 2012. The index was up every
Barclays Capital U.S. Treasuries
-1.29%
9.81%
quarter in 2011.
Barclays Capital Mortgage Backed Securities
0.57%
6.23%
Barclays Capital Municipals
1.75%
10.70%
Barclays Capital Intermediate Corporates
2.75%
5.52%
Barclays Capital High Yield
5.34%
4.98%
Source: MPI Stylus Pro
• The Barclays Aggregate Bond Index had its thirteenth positive quarter in its past
• Within the broad Fixed Income space, High Yield and Emerging Market bonds were
the strongest returning sectors for the second straight quarter, and returned 5.3% and
5.5% respectively. Treasury bonds turned in a -1.3% quarter and were the sole negative
performing sub-asset class within Fixed Income as Mortgages and Investment Grade
Corporates were also positive performers.
• Despite weakness in Treasuries, the 10-year bond still managed to close the quarter only a
few basis points higher than its all-time quarterly closing low in yield terms, with investors
still wary of rotating out of historical safe-haven securities like government bonds.
HEDGE FUNDS
Market Performance, 1st Quarter 2012
Q1’12
2011
HFRI Fund Weighted Composite Index
4.94%
-5.24%
Composite Index up 4.9% through the end of March and the HFRI Fund of Funds
HFRI Equity Hedge Index
7.32%
-8.37%
Conservative Index also posting a positive quarterly return.
HFRI Relative Value Index
4.29%
0.15%
HFRI Fund of Funds Composite Index
3.36%
-5.73%
HFRI Fund of Funds Conservative Index
2.28%
-3.56%
• Hedge Fund strategies started 2012 on an upbeat note, with the HFRI Fund Weighted
Source: HFRI
• As noted over the prior two quarters, volatility fluctuations had been very difficult for
most investment managers to navigate as we experienced high correlation across asset
classes. With most asset classes reflecting more consistent price biases in the first
quarter, managers were able to add more value than in prior quarters.
• Private Equity research firm Prequin notes that the first quarter of fundraising likely
mirrored the fourth quarter of last year, with some momentum in certain regions but
in general at lower levels than historic norms. With bond yields near historic lows and
public Equities already having ramped higher, we would expect to see more interest in
private Equity as the year progresses.
market review
| Q1 12
COMMODITIES
Market Performance, 1st Quarter 2012
2011
Dow Jones UBS Commodity Index
0.89%
-13.32%
S&P GSCI Commodity Index
5.88%
-1.18%
Gold (Spot, $/oz)
6.69%
10.06%
-32.77%
-29.55%
4.24%
8.15%
Natural Gas (U.S. Spot Henry Hub)
Crude Oil (U.S. Spot, WTI Cushing)
• The first quarter continued on the theme of recent Commodity market volatility, with
Source: MPI Stylus Pro, Bloomberg
Q1’12
the Dow Jones UBS Commodity Index posting a 0.9% gain, making a small dent in
2011’s -13.4% total returns. Sub asset class volatility was again prevalent, with the
Energy, Agriculture and Livestock complexes mixed while metals were mostly higher in
the first quarter with the exception of Nickel.
• Although Brent Crude and Gasoline were strong performers in the first quarter (up over
14% and 25%, respectively), WTI Crude was up just over 4% and Natural Gas continued
its price slide, falling over 28% in the first quarter alone.
• Gold and Silver continue to attract attention and questions, with both metals in positive
territory in the first quarter. However, their correlations to other assets have been
volatile, with many asset allocators puzzled about what to expect from either asset in a
portfolio context.
REAL ESTATE
Q1’12
2011
MSCI U.S. REIT Index
10.73%
8.69%
Wilshire REIT Index
10.79%
9.24%
Source: MPI Stylus Pro
Market Performance, 1st Quarter 2012
• Public Real Estate, as measured by the NAREIT Equity REIT Index, increased 10.5% in
the first quarter following a 15.3% rise in the fourth quarter of 2011. REITs outperformed
U.S. Equities every quarter in 2011 and only underperformed bonds in the third quarter.
• Based on NAREIT data, REITs raised a record amount of capital ($51.3 billion) in 2011
and raised over 41% of that total ($21.2 billion) in the first quarter of 2012.
• REITs continue to have attractive income profiles relative to Treasuries and their capital
raising efforts last year and so far this year provide them with flexibility. One interesting
statistic is that NAREIT estimates that $20 billion in 5-year commercial real estate loans
made at the 2006 peak will come due this year, providing opportunities for selective
capital deployment as those properties seek refinancing. „
Asset Class Returns
2000
International
Commodities
Equities
31.84%
30.98%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
YTD
Real
Estate
Commodities
Small Cap
Stocks
Real
Estate
Commodities
Real
Estate
International
Equities
Fixed
Income
International
Equities
Real
Estate
Real
Estate
Mid Cap
Stocks
47.25%
31.49%
35.92%
17.12%
5.24%
42.14%
28.48%
8.69%
12.94%
Cash
Mid Cap
Stocks
Small Cap
Stocks
Fixed
Income
Large Cap
Stocks
40.48%
26.85%
7.84%
12.90%
12.83%
25.90%
21.36%
Fund of
Funds
Real
Estate
Fixed
Income
Fixed
Income
26.47%
26.81%
8.44%
10.25%
Commodities
Fixed
Income
Cash
Real
Estate
Mid Cap
Stocks
Mid Cap
Stocks
Mid Cap
Stocks
Small Cap
Stocks
Fund of
Funds
Fund of
Funds
Real
Estate
Mid Cap
Stocks
Large Cap
Stocks
Small Cap
Stocks
3.64%
40.06%
20.22%
12.65%
18.37%
10.26%
-21.34%
28.61%
25.48%
1.50%
12.44%
Cash
Real
Estate
Small Cap
Stocks
Real
Estate
Large Cap
Stocks
Fixed
Income
Small Cap
Stocks
Large Cap
Stocks
Commodities
Cash
International
Equities
36.74%
18.33%
12.13%
15.46%
6.97%
-33.79%
28.43%
16.83%
0.10%
Commodities
Small Cap
Stocks
Large Cap
Stocks
Mid Cap
Stocks
Real
Estate
27.17%
16.10%
-1.55%
10.73%
Commodities
International
Equities
Small Cap
Stocks
Fund of
Funds
11.60%
-4.18%
3.36%
Commodities
24.35%
11.63%
3.64%
International International International International
Commodities
Equities
Equities
Equities
Equities
16.23%
27.16%
41.41%
17.11%
21.36%
1.51%
Small Cap
Stocks
Mid Cap
Stocks
Fund of
Funds
21.26%
8.25%
2.79%
Large Cap
Stocks
Cash
Small Cap
Stocks
Fund of
Funds
Large Cap
Stocks
Large Cap
Stocks
Fund of
Funds
Mid Cap
Stocks
Large Cap
Stocks
2.49%
1.01%
29.89%
11.40%
7.45%
15.26%
5.77%
Large Cap
Stocks
Fund of
Funds
Mid Cap
Stocks
Large Cap
Stocks
6.27%
10.34%
5.60%
-37.60%
Small Cap
Stocks
Cash
Cash
Real
Estate
Fund of
Funds
Fixed
Income
Fund of
Funds
5.08%
4.71%
-37.97%
11.16%
6.54%
-5.51%
Fixed
Income
Small Cap
Stocks
Mid Cap
Stocks
Fixed
Income
Fund of
Funds
Commodities
4.33%
-1.57%
-41.46%
5.93%
5.70%
Commodities
Real
Estate
International
Equities
Cash
Cash
0.21%
0.13%
20.91%
6.36%
Mid Cap
Stocks
Fund of
Funds
Mid Cap
Stocks
18.23%
4.08%
-5.62%
Cash
Small Cap
Stocks
Large Cap
Stocks
5.01%
1.68%
International
Commodities Commodities
Equities
9.15%
23.93%
-14.67%
Mid Cap
Stocks
Fund of
Funds
Fund of
Funds
-3.02%
-12.45%
-16.19%
11.62%
6.79%
4.55%
Fixed
Income
Large Cap
Stocks
International
Equities
Small Cap
Stocks
Fixed
Income
Fixed
Income
Cash
-0.82%
-7.79%
-19.50%
-20.48%
4.10%
4.34%
Large Cap
Stocks
Cash
Cash
1.05%
1.44%
Real
Estate
-4.55%
International
Commodities
Equities
-19.51%
-15.11%
-21.65%
3.35%
Fixed
Income
2.43%
2.07%
-16.82%
-35.65%
-45.25%
18.91%
„ Small Cap Stocks (Russell 2000 Index)
„ Real Estate (MSCI US REIT Index)
„ International Equities (ACWI Ex-US Index)
„ Large Cap Stocks (Russell 1000 Index)
„ Fund of Funds (HFRI FoF Composite Index)
„ Fixed Income (Barclay’s Capital US Aggregate Index/Credit)
„ Commodities (Dow Jones UBS Commodity Index)
„ Mid Cap Stocks (Russell Mid Cap Index)
„ Cash (Merrill Lynch 3-Month Treasury Bill)
The information contained in the report is from sources believed to be reliable, but not warranted by CAPTRUST Financial Advisors to be accurate or complete.
-13.32%
International
Equities
-13.33%
11.34%
0.89%
Fixed
Income
0.30%
Cash
0.01%
Source: Markov Processes, Inc., Bloomberg, Mobius
1999
| Q1 12
index performance
MANAGER UNIVERSE
Average Large Cap Growth Fund
Average Large Cap Blend Fund
Average Large Cap Value Fund
Average Mid Cap Blend Fund
Average Small Cap Value Fund
Average Small Cap Blend Fund
Average Small Cap Growth Fund
Average Foreign Fund
Average Emerging Market Fund
Average Conservative Allocation
Average Moderate Allocation
Average Diversified Pacific/Asia Fund
Average Fixed Income Fund
Average Municipal Bond Fund
Average High Yield Bond Fund
Average Real Estate Fund
Average Aggressive Growth Fund
Q1-12
YTD 2012
2011
2010
2009
2008
2007
1 YEAR
3 YEAR
5 YEAR
10 YEAR
12.59%
8.84%
18.67%
12.90%
14.69%
11.12%
12.94%
12.44%
13.28%
11.59%
11.34%
3.36%
10.79%
-0.38%
2.08%
0.30%
0.61%
1.75%
5.34%
0.01%
0.97%
12.59%
8.84%
18.67%
12.90%
14.69%
11.12%
12.94%
12.44%
13.28%
11.59%
11.34%
3.36%
10.79%
-0.38%
2.08%
0.30%
0.61%
1.75%
5.34%
0.01%
0.97%
2.11%
8.38%
-1.80%
1.50%
2.64%
0.39%
-1.55%
-4.18%
-2.91%
-5.50%
-13.33%
-5.73%
9.24%
6.08%
8.15%
7.84%
5.80%
10.70%
4.98%
0.10%
3.24%
15.06%
14.06%
16.91%
16.10%
16.71%
15.51%
25.48%
26.85%
29.09%
24.50%
11.60%
5.70%
28.07%
4.98%
9.00%
6.54%
5.89%
2.38%
15.12%
0.13%
1.50%
26.46%
22.68%
43.89%
28.43%
37.21%
19.69%
40.48%
27.17%
34.47%
20.58%
42.14%
11.47%
28.46%
-0.32%
18.68%
5.93%
5.24%
12.91%
58.21%
0.21%
2.72%
-37.00%
-31.93%
-40.54%
-37.60%
-38.44%
-36.85%
-41.46%
-33.79%
-38.54%
-28.92%
-45.24%
-21.37%
-39.20%
10.43%
-4.94%
5.24%
5.08%
-2.47%
-26.16%
2.06%
0.09%
5.49%
8.88%
9.81%
5.77%
11.81%
-0.17%
5.60%
-1.57%
7.05%
-9.78%
17.12%
10.25%
-17.55%
8.47%
4.56%
6.97%
7.39%
3.36%
1.87%
5.00%
4.08%
8.54%
10.18%
11.16%
7.86%
11.02%
4.79%
3.31%
-0.18%
0.68%
-1.07%
-6.75%
-3.41%
13.39%
5.66%
9.45%
7.71%
6.09%
12.07%
6.45%
0.06%
1.96%
23.42%
23.55%
26.46%
24.03%
25.28%
22.82%
29.13%
26.90%
28.36%
25.36%
19.65%
4.59%
44.69%
3.44%
13.35%
6.83%
5.88%
7.70%
23.87%
0.13%
2.32%
2.01%
4.18%
5.01%
2.19%
5.10%
-0.81%
3.03%
2.13%
4.15%
0.01%
-1.11%
-0.71%
-0.67%
5.46%
6.94%
6.25%
5.67%
5.42%
8.10%
1.23%
2.10%
4.12%
5.02%
5.30%
4.53%
4.28%
4.58%
7.85%
6.45%
6.00%
6.59%
7.74%
3.49%
10.41%
4.87%
6.62%
5.80%
5.29%
5.46%
9.24%
1.91%
2.45%
Q1-12
YTD 2012
2011
2010
2009
2008
2007
1 YEAR
3 YEAR
5 YEAR
10 YEAR
15.80%
12.48%
11.05%
12.52%
11.90%
12.28%
13.96%
12.08%
13.62%
5.09%
8.09%
13.05%
2.41%
2.21%
5.47%
10.51%
13.22%
15.80%
12.48%
11.05%
12.52%
11.90%
12.28%
13.96%
12.08%
13.62%
5.09%
8.09%
13.05%
2.41%
2.21%
5.47%
10.51%
13.22%
-2.50%
-1.22%
-0.70%
-3.72%
-4.41%
-4.07%
-3.54%
-14.13%
-19.90%
1.71%
-0.19%
-17.99%
6.48%
9.41%
2.82%
7.47%
-5.64%
15.73%
14.05%
13.72%
22.39%
25.84%
25.96%
27.04%
11.66%
19.33%
9.72%
11.87%
16.91%
5.60%
1.80%
14.26%
27.35%
16.39%
36.05%
28.56%
24.13%
37.84%
32.73%
32.18%
35.69%
35.91%
73.81%
20.60%
23.52%
35.10%
17.68%
16.04%
46.57%
31.43%
35.64%
-40.66%
-38.02%
-36.88%
-39.81%
-32.49%
-36.07%
-41.35%
-44.85%
-54.31%
-18.38%
-27.41%
-41.63%
-7.89%
-7.74%
-25.94%
-39.37%
-41.21%
14.02%
5.74%
1.65%
4.67%
-6.24%
-1.44%
8.25%
13.39%
36.66%
4.68%
6.15%
18.61%
3.42%
1.59%
1.52%
-17.10%
12.14%
6.89%
5.13%
3.96%
0.33%
-0.02%
-0.33%
0.58%
-6.51%
-9.28%
4.04%
3.82%
-6.33%
7.98%
11.81%
4.64%
11.88%
1.38%
22.94%
21.93%
21.23%
25.91%
28.51%
27.47%
27.50%
18.08%
24.25%
13.82%
16.71%
18.11%
9.65%
7.94%
20.42%
41.37%
21.35%
3.57%
1.16%
-0.11%
1.98%
2.17%
1.96%
3.50%
-2.57%
2.52%
3.61%
2.70%
-0.55%
4.77%
4.04%
5.81%
-0.51%
1.49%
4.13%
3.84%
4.22%
6.60%
7.41%
6.62%
5.87%
6.45%
12.93%
4.81%
4.78%
7.46%
5.13%
4.43%
7.51%
9.67%
4.88%
The opinions expressed in this report are subject to change without notice. This material has been prepared or is distributed solely for informational purposes and is not a solicitation or an offer to buy any security or to participate in any
investment strategy. The performance data quoted represents past performance and does not guarantee future results. Index averages are provided for comparison purposes only. The information and statistics in this report are from sources
believed to be reliable but are not guaranteed to be accurate or complete. CAPTRUST Financial Advisors is an investment adviser registered under the Investment Advisers Act of 1940 and a member FINRA/SIPC.
Source: Morningstar, Mobius, MPI
INDICES
S&P 500
Dow Jones Industrial Average
NASDAQ Composite
Russell 1000
Russell 1000 Growth
Russell 1000 Value
Russell Mid Cap Index
Russell 2000
Russell 2000 Growth
Russell 2000 Value
AC World Index Free Ex-U.S.
HFRI Fund of Funds
Wilshire REIT Index
Barclays Govt. Intermediate Bond
Barclays Corporate IG Bond
Barclays Aggregate Bond
Barclays Intermediate Govt./Credit
Barclays Muni Bond
Barclays High Yield
90-Day U.S. Treasury
Consumer Price Index (Inflation)
| Q1 12
current wealth marketplace
| Q1 12
DIVIDE AND CONQUER
Mark Paccione, CFA, CFP®
Director, CAPTRUST Investment Research
R. Michael Gray, CPA, PFS
Senior Vice President, CAPTRUST Financial Advisor
Mental accounting is a concept that explores
how individuals perceive and experience financial
outcomes, how decisions are made and subsequently
evaluated, and how financial activities are assigned to
specific accounts or “buckets.”
One approach is to split an overall portfolio into
three buckets including:
YOUR FEDERAL ESTATE
AND GIFT TAX EXEMPTION—
USE IT OR LOSE IT?
Contributed by Gregory T. Peacock
Attorney, Ward and Smith, P. A.
Individual taxpayers face a window of opportunity
for passing their assets to family members or other
individuals with less gift tax than ever before under
current tax law. However, this window is more than
“half-way shut” and immediate action is necessary to
take advantage of this opportunity. Individuals tend to
not concentrate on gifting strategies until the end of
the year; however, waiting in 2012 may eliminate the
ability to structure gifting in the most advantageous
manner. Unless Congress acts, the federal gift and
estate tax exemption will decrease from $5,000,000
to $1,000,000 on January 1, 2013, so those interested
in making gifts should begin formulating a gifting plan
sooner than later in 2012.
© 2012,
Ward and Smith, P.A. For further information
regarding the issues described above, please contact
Gregory T. Peacock. [email protected]
This article is not intended to provide legal advice
in any particular circumstance. No action should be
taken based upon the information contained in this
article without seeking the advice of an attorney.
1. A liquidity bucket to support basic standards
of living and immediate expenditures
2. An income bucket designed for yield that
seeks to maintain a standard of living
3. A growth bucket for long-term,
aspirational goals
An investor who uses distinct buckets with specific
objectives may be able to construct a portfolio better
suited to his or her needs and thought processes by
potentially reducing the mental noise that distracts
and often prevents investors from achieving their
overall portfolio goals. „
CAPTRUST Financial Advisors does not render legal, accounting or tax advice.