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What's Happening at LPP

March 2012

In This Letter:

LPP Shredding Party


New Client Vaults


Hindsight Bias


Quick Links

Life Planning Partners, Inc.


Carolyn's Blog:

"The Quest for Simplicity" 



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Happy 2012.  We've been busy preparing tax reports, doing insurance planning, and preparing for the next quarter.  We have a lot of great things coming up, and of course, some words of wisdom from Tim.  We look forward to catching up with everyone soon.


LPP Shredding Party 


LPP will be holding a Shredding Party on March 16th for all of our clients, their family, and friends.  The party will be held at our office from 1:30pm to 3:30pm.  Everyone is invited to come and enjoy food and beverages while their documents are shredded on site!  For those of you that can't attend the event but would like to have documents shredded, simply bring them by the office between now and the 16th and we will make it happen.  This event will be a great opportunity for you to get rid of old documents that have sensitive information on them but you no longer need. Some great examples would be old bank statements, credit card statements or tax return supporting documents.  If you need a list of items which are okay to shred, contact Krissy at and she will send it to you.  We look forward to seeing you or your documents there!



New Client Vaults


We will be switching our client vaults from Family Office Network to NetDocuments around the beginning of April.  Family Office Network has been sold to another company, and we used this as an opportunity to look at other options for the company and our clients.  NetDocuments stands out as one of the industry's leaders for online document managing systems both in ease of use and security. 

Krissy has been working hard to set up the new vault for each client.  Each vault will contain all of your estate planning documents, tax returns, quarterly reports and much more.  Once all the vaults have been set up Krissy will send out an email with instructions on how to access and use your vault.  These instructions will also be posted on our website along with the link to NetDocuments log in page.  Additionally, we will review this information as we meet with each of you. 



Hindsight Bias

by Tim Utecht, CFA


Many events seem obvious in hindsight. This is known as "hindsight bias," a documented psychological phenomenon where people claim that an outcome was obvious or predictable after the fact. It's also known as the "I knew-it-all-along" effect.

Unfortunately, hindsight bias can have a real detrimental effect on investing. Since people overestimate how predictable the past was, they also tend to be overconfident in their forecasts of the future. Yet, time and time again, reality doesn't match expectations.

In December of 2010, Barclays Capital released a Global Macro Survey featuring the collective forecasts of over 2,000 institutional investors. The consensus pick was that equities (stocks) would be the top-performing asset for 2011 (with 40% support), followed by commodities (34%). Fewer than 10% of the institutional "experts" surveyed selected bonds as their choice for the winning asset. As for how well stocks would perform, the consensus prediction for the S&P 500 index was a gain of 15% for the year.    

Looking back, we know that reality turned out quite differently than these experts predicted. Global stocks and commodities both had negative returns for the year, while bonds were the hero asset class for 2011. The S&P 500 had a return of just over 2%, nearly 13 percentage points below the survey consensus. Simply put, following the expert forecasts for 2011 was not a good approach.

Certainly investing would be so much more profitable if we only owned the "good stuff." But therein lies the rub. Past winners are quite easy to identify, but the future isn't at all clear. Hindsight may be 20/20, but the past is gone and it's the future that matters when it comes to investing.

We (along with the experts) may think we have a good idea of what to expect in the months or even years ahead, but reality has a way of messing up even the most logical forecast. When it comes to anticipating changes in interest rates, currencies, and overall economies, all of the analysis and assumptions can go out the window pretty quickly.

The bright side is that we don't need a crystal ball for successful investing. Trying to guess the top asset class for the year ahead isn't necessary (thank goodness). What is necessary is a sound investment policy and a properly structured portfolio to prepare for life's curveballs. It may not be as exciting as trying to forecast the future, but it's clearly the right approach.


As always, thank you for allowing us to have wonderful jobs and letting us help you find financial peace so you can make a great life.




Carolyn, Tim, Victoria & Krissy
Life Planning Partners