Friday, June 19, 2009


Pathways Advisory Group, Inc.
David L. Williamson, CFP®

Here’s the deal. I commit to two blog entries per month. My due dates are the 1st and 3rd Fridays of each month. More frequently is okay, less often – not. Topics are of two sorts:

Thoughts relating directly to financial matters. Anything related to financial planning, investments, retirement, estate planning – the usual suspects. Could be hot news items, general principles, issues clients raise during meetings.

Anything else. Musings, reflections, experiences. If the fancy is stricken – go for it. This gives me full freedom. I do tend to muse and reflect. (My wife Sandra says, perhaps, a tad too much.) So here, under the guise of work, I may muse away. And I like to write, so it works out well for me.

From your perspective, all you have to do is read. Or not. Up to you. Feel free to comment if you like. It’s easy.

Here’s how:

Click on “Comments”, below the blog entry.
Read any comments of others.
Enter your comment.
Type in the special set of letters you see.
Click on one of the identity buttons:
Google Account – for those with a Blogger or Google username.
Open ID – for those with a LiveJournal, WordPress, TypePad, or AIM username.
Name/URL – for anyone who would like their name to show with their comment. (You do not have to enter anything in the URL box.)
Anonymous – for anyone not comfortable posting their identity.
After you submit, we review & then post.

One other thing – on the right, you see “Labels”. Labels refer to blog subject matter or identify all entries by a particular author. So, this can help you navigate.

Well, that’s the deal. Let’s have some fun.

Thursday, June 18, 2009

The Dow Jones (not so) Industrial Average

Pathways Advisory Group, Inc.
Dustin Smith, CFP®

The Dow Jones Industrial Average is not as industrial as it once was. When most people think of Industry, they think of production – the manufacturing of goods. The Dow has experienced a transformation, of sorts, over the past 20 to 30 years. Today, the Dow is more of a “Blue Chip” Index than the traditional “Industrial” Index that it once was. A closer look at the history of the index and its 30 components reveals some fascinating insights about major industry in this country – where we have been and where we are going.

On June 8th General Motors was officially removed from the Dow Jones Industrial Average and replaced by Cisco Systems. Dow components have changed many times over the years; however, the removal of General Motors is of particular significance. General Motors was the only remaining automobile manufacturer in the Dow, ending an 85-year presence of the industry. It’s a sad day – as the automobile is as American as baseball and apple pie. The Dow used to be dominated by industries like steel, railroads, and automobile manufacturing - it is no longer.

However, it’s also fascinating to ponder the future of innovation. Nearly half of the Dow is comprised of the following industries: Telecommunications (Verizon and AT&T), Information Systems (IBM, Microsoft, Intel, Cisco Systems, and Hewlett-Packard), Aerospace (Boeing and United Technologies Corp.) and Pharmaceuticals (Pfizer, Merck and Johnson & Johnson). And what doesn’t General Electric do? The Dow is full of innovative companies and industries. Traditional manufacturing and production is this country is not lost, but it has certainly given way to innovation. We live in interesting times…

What will the Dow Jones Industrial Average look like in 2025?

For a complete history of the Dow Jones Industrial Average and a current component listing, click the link below.

Thursday, June 11, 2009

The "Other Risk"

Each of you has decided how much "bounce" you are willing to bear to achieve higher returns. This is an individual decision about principal risk (the risk of volatility in the market) versus potential reward. The other risk we touch on in meetings is purchasing power risk: Will my rate of return keep pace with increasing costs each year (inflation)? Purchasing power risk is often the forgotten cousin of principal risk.

When market volatility scares an investor out of the stock market, principal risk may decrease, but purchasing power risk may increase. Investors need to account for both of these risks when making investment decisions. This brief presentation addresses this issue, using real returns - defined as the amount by which returns exceed inflation.

Friday, June 5, 2009

Perfecting the Image

Pathways Advisory Group, Inc.
David L. Williamson, CFP®

Recently, I attended a client’s funeral. This was a good lady. I liked her very much. I knew her fairly well. I will miss her. But funerals can give one pause, can’t they. They tend to induce a bit of reflection. Reflection about one’s own mortality, certainly. Thoughts and questions about living life – accomplishments, intentions, regrets.

Unfortunately, I have attended more than a few client funerals. Each time, I am struck by how little I knew about the person. During this service, people were invited to share memories – funny, sad, bittersweet. How many dimensions I didn’t know! How complex we can be!

We were treated to a slideshow. Here she was as a baby, a toddler, a schoolgirl. There she is at graduation, at her wedding, at a family picnic in the park. We see her with her parents, with her grandchildren, with her friends. There’s the last photo, taken just a week ago…

Just before the slideshow began we saw a test slide. Nothing special, quite nondescript – just a slide to adjust the focus. At the bottom right, in small print were the words: Perfect the Image. I shivered. Yes, I thought, the slideshow, the memories, and the funeral service itself all help us “perfect the image” of the person. To see this person more clearly, more fully, even if a bit late.

I take these words – Perfect the Image – as a caution to me to adjust my focus. To see the whole person, the complexity, the fullness. To look beyond the label, beyond the role - whether client, spouse, child, or friend – to see the person.

The funeral service is often called “a celebration of life”. This service held true. We had the slideshow, the stories, and a few tears. And, to top it off, pallbearers and family sported bright, wild, crazy, Hawaiian Aloha shirts!

Perfect The Image. Celebrate each other. Find joy in the slideshow of life. Aloha!