Rural Water - Quarter 2, 2011 - (Page 18)

Are You THERE YET? BY RANDE SPIEGELMAN, CPA, CFP®, VICE PRESIDENT OF FINANCIAL PLANNING, SCHWAB CENTER FOR FINANCIAL RESEARCH FOR U.S. STOCK investors, the year 2010 came in well above the longterm historical averages, with the broad-based Dow Jones Wilshire 5000 Composite Index up 17.7 percent on a total return (dividends and appreciation) basis. As usual, some categories did better than others, with diversified international stocks returning 7.8 percent and intermediate domestic bonds delivering 6.5 percent.1 But how did your portfolio do? And more importantly, what progress did you make toward your long-term fi nancial goals? While investment performance is important, long-term fi nancial success depends on a lot more than what “the market” does from year to year. In this article, we’ll walk through four key steps to help you get a handle on just how you’re doing vis-à-vis the market and your fi nancial goals. 18 • Second Quarter 2011 Step 1: Benchmark your portfolio’s performance First, assess the performance of your portfolio as a whole, including all your taxable and tax-deferred accounts. Compare your portfolio’s actual performance in 2010 (allowing for any portfolio deposits or withdrawals during the year) to a benchmark return of appropriate market indexes weighted to match your target asset allocation. For example, say you’re a moderately conservative investor and your target asset allocation is 25 percent large-cap stocks, 5 percent small-cap stocks, 10 percent international stocks, 50 percent bonds and 10 percent cash. To calculate your benchmark return, follow the Key points • Understanding how well your portfolio performed over the past year will help as you assess your progress toward achieving your long-term goals. • Four key steps to help you get a handle on just how you’re doing vis-à-vis the market and your fi nances. • Helpful information for all investors.

Table of Contents for the Digital Edition of Rural Water - Quarter 2, 2011

Rural Water - Quarter 2, 2011
From the President
Reducing Energy Costs for Public Water Systems
Are You There Yet? Evaluating Your Portfolio
Where the Dollars Are: The Low Hanging Fruit in Money and Energy Savings
Information Technology and Water Systems
Stormwater Solution
The Next Workforce
Water University Graduates
The Voice of Rural Water: Rural Water Rally 2011
Regulatory Update
Throwing My Loop
Index to Advertisers/
From the CEO

Rural Water - Quarter 2, 2011