Did You Know?


January 16, 2015

   "Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism.  If high profits do not attract competition, there is something wrong with the system and it is not functioning properly."
Jeremy Grantham of GMO

When profit growth peaks, the next 4 years almost always show a decline of 10% to 20%.  Adjusting corporate earnings to reflect this tendency to decline would suggest sub-par returns for the S&P 500 for the next many years, through at least 2020.
 

     
 


   As a Registered Investment Advisor, Just Plans Etc. has a fiduciary duty to each and every client of the firm.  The policy of Just Plans Etc. is to protect the interests of each of the firm's clients and to place the client's interests first and foremost in every situation.
   The firm's fiduciary duty includes providing full and fair disclosure of all relevant facts and any potential or actual conflicts of interest, a duty of loyalty and good faith, providing recommendations that are suitable, and seeking best execution of all client transactions.

    equity market returns.  It smoothes the valuation by calculating the P/E ratio using average earnings over the last ten years.

It is both noteworthy and alarming that while the historical median Shiller P/E ratio is just under 16, the current ratio is 26.8.  Only twice higher:  1997-99 and October 1929.  That doesn't bode well for US equity investors.  If the Shiller P/E ratio reverts to its historical average in the next ten years, annualized stock returns will be less than 1%!

 
       
   

       Please do not hesitate to call us with questions or comments as we are here to serve you.  Welcome to our website!

 

The Shiller P/E ratio is widely regarded as one of the best predictors of ten-year

     
 
     
Why Use An Advisor?

   People use financial planners because they don't have the time, interest, or ability to create a plan by themselves, or they do have the time and ability and want a second opinion.

   Clients of Just Plans are mostly of the first group, and are generally overwhelmed by the multitude of options with which they are confronted.  The #1 item most are concerned with is having an adequate retirement income.  Number two is funding their children's college costs.  While college costs can be paid from current income or monies accumulated beforehand, retirement income can only be provided by setting money aside ahead of time and investing it wisely.

   Our business is built on relationships.  We work with you to identify and quantify your objectives.  The first step involves gathering personal and financial information.  Goals are established and constraints identified.  Relationships prosper when expectations are realistic. Investments are based on what is needed to reach your goals, taking into consideration your ability to tolerate market volatility.

   When you choose to have us manage your investments, the accounts are 100% discretionary. We allocate portfolio assets to CDs, Treasuries, separate accounts, exchange traded and traditional mutual funds and individual stocks. Depending on the size of the account, up to 60% may be allocated to core holdings, with the balance allocated to industry specific or asset class specific positions. Monthly statements are provided by the custodian. Just Plans provides quarterly performance reports and we are available for personal reviews.

 
History

    In 1982 Just Plans was formed to provide investment products for retirement plans, and to provide financial counseling to business owners and retirement plan participants. The predecessor insurance firm (started in 1967) designed and implemented retirement plans for closely held businesses. It provided estate-planning strategies for the business owners, their key people, and other individuals.

   Just Plans refers to its services as "ABEL Strategy." Conceived in 1991, the concept was initially a non-discretionary investment account using no load mutual funds held at Charles Schwab & Co. A 1% fee was charged. The program is now 100% discretionary, using CDs, Treasuries, exchange traded and traditional mutual funds and individual stocks, with accounts at Schwab or TD Ameritrade.

   We can be a resource for any situation that has to do with finances. For services in which we do not specialize, we refer our clients to many other partner professionals and firms with whom we network.

Just Plans Etc., 1399 Ygnacio Valley Rd., Ste. #24, Walnut Creek, CA 94598          Tel:  925.988.0330     Contact Us
 

 

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