Integrating Your Values, Vision & Wealth
www.omegawealthmanagement.com | 703.387.0919
New Year, New You!
Ah, it’s 2017…Happy New Year! A lot has
happened since we last communicated
with you. Although some people mark time
based on a school calendar,
most of us use
January as the beginning of the year to
reset, recommit or just change things
up. Perhaps this year will be set by the
November election? The question is, can
you stay on track?
As the years move on, it has become clear to us
matters in financial life planning:
• What you care about
• What you are committed to
• What’s worth spending money on
• What you spend
Understanding these four elements can be the difference
between a successful & meaningful financial plan or a
situation where money has driven one to an unsatisfying
end result. These four elements are also things that you can
control vs. the economy or financial markets. As we continue to
provide our financial life planning services to you,
we hope you’ll
think about these elements and reach out to us to help you
clarify and articulate them so that we can incorporate your
answers into our planning process for you.
In this quarter’s issue, we have some planning-related
updates from our newest team member, Kathy Frakes.
Jared provides our thoughts on how the markets and
SEI models finished for 2016 and what might lie ahead.
Finally, Andrew shares some tips on navigating access
to the two websites more critical to our work with you:
eMoney and SEI.
And so back to “New Year, New You”….
more and more we
are finding that one of our most valuable services to our
clients is helping them stay on track! As we meet with you at
the beginning of the year,
please be thinking about what you
are hoping to achieve personally & financially. Where appro-
priate, we will try to provide ideas and ongoing support to help
you achieve these goals as soon as possible.
To that end,
please check out our Books & Resources section for a link
to my recent appearance on WJLA NewsChannel 8 where
I provided “7 Tips to Get Financially Fit in 2017” as well as
some other resources.
2017 looks to be a year of great change and transition. Omega
is committed to helping you navigate the financial ramifications
along the way! Please don’t hesitate to reach out as needed.
With appreciation for the opportunity to work with you,
Lisa A. K. Kirchenbauer, CFP
L-R: Andrew Mehari, Carol Martz, Lisa Kirchenbauer, Kathy Frakes and Jared Jones
Happy New Year! James Mackintosh recently had a column in
The Wall Street Journal where he shared the old joke: “Why did
God create economists? To make weather forecasters look good!”
All joking aside, Mr. Mackintosh makes an important point—
forecasting the future is challenging especially when the
economic forecast can actually cause people to take actions that
change the economy.
Since none of us can see into the future,
it is important to have a plan that will help you achieve your
goals regardless of what the economy does this year. That’s
why the work we do together with you is so vital!
As we meet together with you this year, we will ask about
your personal and financial goals for 2017. It is important for us
to consider both, not just the money, as personal goals may have
a financial component. In addition, often, if your personal goals
aren’t being met, your financial goals will not be as compelling or
One common goal for many of our clients is education planning
for their students. January marks the beginning of the period of
time when students will start receiving notifications about their
If education planning is one of your goals,
there are many factors to discuss—in-state vs. out-of-state;
public vs. private; 4-year vs. 2-year vs. trade school; brick-and-
mortar vs. online. If your high school or college student has
not yet taken a Kolbe assessment, this could be a useful tool
for them as they are contemplating these decisions. The Kolbe
assessment looks at how we each instinctually take action—it’s not
a personality assessment. Lisa is a Certified Kolbe Consultant and
is happy to interpret results for you or your children.
education costs, the 529 Savings plans are still tax-advanta-
geous ways to save and pay for college costs. January is also
the time to start thinking about filing the Free Application for
Federal Student Aid (FAFSA). This form is used to determine the
Expected Family Contribution toward college expenses. The
formula (for students who are tax dependents of their parents)
is mostly driven by parental income but also factors in parental
assets, student income and student assets.
Lisa recently found
by Kathy Frakes
The OWM Financial Planning
If you are due for an update of your planning analysis
work with us, you will begin to notice that we will be
using a more collaborative, technology-supported
approach. As always,
it will be important to help us
keep eMoney updated and to have a good handle
on your expenses and future cash flow needs, to
make the analysis as accurate as possible.
A new year brings with it the hope of possibilities.
We look forward to journeying together with you
as we discover what is to come!
that when you declare your business value on it, it can
dramatically impact the amount of aid for which your student
qualifies. While you don’t have a choice in whether to declare
the business value on the FAFSA or not, you can make an appeal
to the financial aid office at the college(s) making the offer of aid.
Tax Filing Preparation
This time of year is also the time to start gathering tax
documents for tax filing. Although the IRS will begin accepting
tax returns on January 23rd, we highly encourage you to wait until
mid-March when the investment 1099s should have all been
received. The final due date for tax filing this year is April 18th
unless you file for an extension. We expect this year will bring
changes to the tax law and we are working to stay up with the
latest from Capitol Hill.
We’ll be working with you and your
accountant to get your tax preparations done, looking for
planning opportunities, staying vigilant in monitoring changes
in the tax law as they relate to your individual situations and
will send our annual Tax Preparation letter to help guide you
with your filing.
Investment Q4 Review
The final quarter of 2016 offered several large developments.
The election of Donald Trump and firm control of the Federal
Government handed to the Republicans came as a surprise to
many people. This led to a substantial rally in U.S. stocks and
a downturn in bond markets. Major central banks made head-
lines, most notably with the Federal Reserve’s rate increase and
three potential rate hikes in 2017. Many people had predicted
two rate increases and were surprised to hear the Fed aiming for
three after their last meeting in December. Further, the U.S. dollar
has had a strong run in 2016 and many Wall Street analysts are still
trying to make sense of how that will play out across the globe. Labor
market conditions continued to improve as the unemployment rate
dropped 0.3% to 4.6% in November.
So what were the primary drivers behind our portfolios? An
overweight toward financials was the top contributor in U.S.
large-company equity performance this quarter. The equity
portions of the portfolios were also boosted by deeper-value
companies that benefited from Donald Trump’s pro-business
campaign victory. Small value companies led all asset classes
as they benefited from higher interest rates and energy prices.
Fixed-income performance, except high-yield (risky) bonds and
emerging market bonds which performed well, brought the per-
formance of the portfolios slightly down. International equities and
fixed income both struggled throughout 2016.
When you receive
your Q4 statements, you may notice your accounts did not
seem to match the Dow or S&P indexes. That’s because SEI
strategies are diversified beyond the 30 stocks in the Dow or
the 500 large companies in the S&P 500
. We believe in deeply
diversified strategies across many asset classes. Further, we
noticed that opposite of recent years, the non tax-managed
strategies (often used on IRA accounts) performed better than the
tax-managed strategies. This was a result of increased volatility
early in the year and a broader selection of investments for the non
tax-managed strategies. Overall the portfolios performed well this
year and beat our expectations from the beginning of the year.
Looking ahead, we are reminded of a quote by Vladimir
Lenin. “There are decades where nothing happens, and there
are weeks when decades happen.” After six years of political
gridlock in Washington, it could feel like decades are about to
happen in the next few months. Below I’ll outline some of the
impacts SEI believes the new Administration could bring that
could affect the economy.
One of the largest items on the new Administration’s list is tax
reform. Currently at a top corporate rate of 35%, the U.S. is among
the highest corporate tax rates in advanced nations.
Administration has suggested they would like the top rate
reduced to as little as 15%, bringing the U.S. to among the
lowest corporate tax rates among developed nations.
There is speculation a 15% tax rate may be hard to achieve
2016 4th Quarter performance by Index:
S&P 500 TR USD
U.S. Large Cap Stocks
Russell 2000 TR USD
U.S. Small Cap Stocks
MSCI EAFE NR USD
Barclays US Agg. Bond TR USD
Intermediate Term Bonds
by Jared Jones
given corporate tax lobbyists’ power to maintain beneficial tax
loopholes for their clients. However, cutting the rate to even 20%
and reforming the tax code would be a large improvement to the
current corporate tax regime. Also, the Trump Administration has
proposed a one-time “tax holiday,” in which corporate cash held
abroad would be subject to a reduced 10% tax (down from the
current rate of 35%). The holiday is meant to entice international
companies to bring some of their dollars held abroad back to the
There has also been widely publicized talk of individual tax reform.
Individual tax reform could be good for both the economy and your
bottom line. Lower capital gains rates will mean greater take-home
on investment sales.
“Trumpanomics” is not without its problematic policies, most-
ly its focus on trade. In regards to NAFTA, SEI feels pragmatism
will prevail. They cited Texas’ economy—a state that provided 36
electoral votes to Trump—as a reason why NAFTA may stick around.
Texas’ trade with Mexico accounted for 40% of all U.S. exports to
Mexico in 2015.
SEI’s main fear is a decline in relations with
China. They feel the Treasury Department is moving closer to
labeling China as a currency manipulator. A tit-for-tat trade
war with China could lead to a downturn in global markets.
President-elect Trump has also expressed a willingness to tear
up the newly minted TPP. (As we go to press, he has just signed
an executive order to this effect.) Doing so has the potential
to cause damages with nations around the Pacific Rim and
opens the door for China to extend its economic and political
influence in the region.
It’s important to note that a policy of increased spending with
lower revenue may have effects that are not positive for the
economy and markets in the long-run. It will be interesting to
see how these policies are perceived by the markets once Trump
takes office and we have actual action.
Finally, as stated before, the Fed raised interest rates by one-
quarter of a percent in December. The rise bumped the Fed’s
target overnight rate (the rate at which banks lend to each other)
from 0.25%-0.50% to 0.50%-0.75%. The Fed also increased the
number of rate hikes it expects in 2017 from two to three. SEI feels
that this is a reasonable guess.
Overall, SEI does not anticipate a
sharp rise in interest rates during the year ahead. The strength
of the dollar provides some braking to economic growth and
should slow any further increase in inflation that may occur.
As a result, we expect to see bond fund prices go down slightly,
but as long as monthly income is being reinvested the impact
should be muted.
2017 provides for another year of market uncertainties for
many reasons. As always, OWM will be keeping a watchful eye on
the markets and any headlines we feel may be important to our
clients’ portfolios. We will be reviewing all of our clients’ allocations
formally during the first meeting of the year. However, if you have
any concerns, please do not hesitate to contact us in the interim.
by Andrew Mehari
Online Client Interfaces
Some of our clients recently had questions as to how the financial software and websites we use pertain to their financial
information. In the table below, I will provide a simple breakdown of how our two main tools, SEI’s client website and eMoney’s
client interface, contain all the information you will need.
• up-to-date account values,
holdings/positions in each
account, and asset allocations
• access to the “vault” – can store
files for advisor to view or for
capability – must link your bank
and/or checking accounts to
You can reset your
by clicking on
at login page
(advisor can also
do this for you)
Advisor has complete
access to your client
interface (can make
changes as requested).
Some other important items to note when periodically logging into eMoney and SEI client websites:
• Your SEI client user ID will expire after a year if you do not log in at least once a year
• Your SEI login will prompt you to answer your security questions after 3 months of inactivity
• Your eMoney password will expire after a year regardless how many times you log in that year – simply a security measure
that they take
SEI Online Access
– If you haven’t received an e-mail inviting you
to signup for online access yet from SEI, or if the e-mail is hiding
somewhere in your spam folder,
you should take advantage of SEI’s
online client interface. Enter the following URL in your browser:
www.accessmyportfolio.com. That should take you to the main page
where below the “User ID” box, is the option to
“Register for online
access.” Clicking the link will register you for SEI online access, which
allows you to view your account transactions, performance, state-
ments, tax documents, and more (as mentioned in the table above).
• transaction details
• account performance
• copies of statements and tax
documents (ex: 1099)
• realized gain-loss info
• goal tracking
You will have to call
SEI to reset your
734-1003 ext. 0
Advisor has read-only
access to your client
Business Owners’ Corner
As we begin a new year for most businesses,
encourage you to take some time before the year
gets away from you to do some strategic planning.
Taking this time can be part of an intentional
approach to guiding and leading your business even
when you have a lot coming at you at the beginning of
the year. One point that we wanted to mention to our
business owner clients is that
if you happen to be filling
out a FAFSA or CSS form for financial aid, keep in mind that
when adding your business as an asset, it may especially
have a negative impact on your student’s ability to get any
aid. While you must disclose all assets, it may require a
discussion with the Financial Aid office and further documen-
tation to support the impact that being a business owner
really has on your financial situation.
A few other important points/questions for our
business owner clients:
• Do you have a clear sense of ALL the benefits business
ownership can offer?
• Do you have a succession plan? Are you clear on the kind
of business you have? (lifestyle or equity-based)
• Are you saving as much as you can? What can you do
financially and strategically to increase that savings?
As you come in or talk with us this year, let’s discuss these
questions. If you don’t know, no worries, let’s get a plan to
figure it out. Let us help you find resources and support to
get the most out of your business and to help it integrate with
your personal goals!
2017 Annual Contribution Limits Relating to Financial Planning
$62,000 - $72,000
$99,000 - $119,000
$0 - $10,000
$186,000 - $196,000
Elective Deferrals to 401(k), 403(b), 457 and SARSEPS
Catch-up contribution (age 50 or older)
IRA or Roth IRA contribution limit
IRA or Roth IRA catch-up contribution (age 50 or older)
IRA deduction AGI phaseout limits for active participants
Married filing jointly
Married filing separately
Non-active participant married to active participant
Annual Gift Tax Exclusion
Health Savings Account
Minimum Deductible Amount:
Maximum Out-of-Pocket Amount:
HSA Statutory Contribution Maximum:
Catch-up contributions (age 55 or older)
If you caught our Fall newsletter, then you know that
we have added a new team
member: Kathy Frakes, CFP
, who joins us as an Associate Financial Advisor. (For
more on Kathy, please check out her bio on our website.) Recently,
we have divided up
support duties between her and Jared Jones to balance out the work in preparing
for and following up after meetings. In most cases, one or the other of them will sit in
client meetings with me. As we prepare for our meeting with you, Jared or Kathy will be in
touch to follow up on any outstanding homework that you have and to get updates that
we may need to include in our meeting materials.
Kathy will also be leading on our
overall financial planning & tax planning/preparation process (Jared is the point
person on investments). Andrew Mehari, our Operations Associate, continues to
handle requests for money, transfers, new accounts, address changes and fee
processing. Feel free to reach out to him directly for these requests, rather than going
through me, Jared or Kathy. We work as a team, keep good records and communicate
regularly with each other. As many of you know, Carol Martz, our Office Manager, handles appointment scheduling. Right
now, she is reaching out to clients who had their last meeting in the late Summer/early Fall, to get their first 2017 meeting
If you need a meeting sooner than the cycle we are following, please reach out to Carol directly.
Important Dates and Reminders
Lisa’s NewsChannel 8 appearance on
“7 Tips to Get Financially Fit
Need a new, simpler, cashflow management tool? Check out
www.YNAB.com (You Need a Budget). We love the educational and
motivational aspect of the tool and if you don’t need all the bells
and whistles of a Mint.com, try YNAB.
President’s Birthday Holiday (markets/OWM closed)
A book recommendation from Jared…
“The Undoing Project: A Friendship That Changed Our Minds” by Michael Lewis
It’s a fascinating story about Nobel-prize winning psychologist Daniel Kahneman and psychologist Amos Tversky,
their friendship and what they discovered about the human decision-making process. Their impact has been felt in
behavioral economics, Big Data analysis and understanding the biases that we bring to investments and decisions
in general. Fascinating!
Lisa A. K. Kirchenbauer,
Certified Financial Transitionist
President and Founder
703-387-0919, ext. 500
• Strategic advice on planning/investments
• Business owner coaching and consulting
• Prospective new client inquiries
Financial Planning Associate
703-387-0919, ext. 508
• Support Client Service & meeting
• Coordinate investment research &
200 North Glebe Road, Suite 730, Arlington, VA 22203
Phone (703) 387-0919 Fax 703-387-0918
7 0 3 - 3 8 7 - 0 9 1 9 ,
• Office management
• Greeting clients
• Appointment scheduling
703-387-0919, ext. 506
• Client Service Issues: cash needs,
transfers, new accounts
• eMoney assistance
• Pay Simple fee payment support
Associate Financial Advisor
703-387-0919, ext. 502
• Support Client Service & meeting
• Coordinator for financial planning
• Prospective new client inquiries